TIDMSTM
RNS Number : 4877P
STM Group PLC
10 October 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
10 October 2023
RECOMMED ACQUISITION
for
STM Group PLC ("STM" or the " Company " )
by
Jambo SRC Limited ("Bidco")
to be effected by means of a Court-sanctioned scheme of
arrangement under Part X of the Isle of Man Companies Act 2006
Summary
-- The board of Bidco and the Independent STM Directors of STM
are pleased to announce that they have reached agreement on the
terms of a recommended offer pursuant to which Bidco will acquire
the entire issued and to be issued ordinary share capital of STM
(the "Acquisition").
-- The Acquisition is intended to be effected by means of a
Court-sanctioned scheme of arrangement between STM and the Scheme
Shareholders under Part X of the Companies Act.
-- Under the terms of the Acquisition, which shall be subject to
the further conditions and terms set out in Appendix I to this
Announcement and to be set out in the Scheme Document, Scheme
Shareholders will be entitled to receive:
o 60 pence per share in cash ("Cash Consideration"); and
o In addition to the Cash Consideration, under the terms of the
Acquisition, Scheme Shareholders will be entitled to receive a
Deferred Consideration Unit which may deliver up to 7 pence per
share in cash (and, together with the Cash Consideration, the
"Maximum Acquisition Value").
-- The Cash Consideration values the entire issued and to be
issued ordinary share capital of STM at approximately GBP35.6
million and delivers 60 pence in cash per share, which represents a
premium of approximately:
o 118.2 per cent. to the closing price of 27.5 pence per STM
Share on 10 July 2023 (being the last Business Day prior to the
commencement of the Offer Period);
o 130.9 per cent. to the volume weighted average price of 25.9
pence per STM Share for the one-month period ended on 10 July 2023
(being the last Business Day prior to the commencement of the Offer
Period); and
o 130.5 per cent. to the volume weighted average price of 26
pence per STM Share for the three-month period ended on 10 July
2023 (being the last Business Day prior to the commencement of the
Offer Period).
-- The Maximum Acquisition Value, which assumes full value is
delivered by the Deferred Consideration Units, values the entire
issued and to be issued ordinary share capital of STM at
approximately GBP39.8 million and delivers up to 67 pence in cash
per share, which represents a premium of approximately:
o 144 per cent. to the closing price of 27.5 pence per STM Share
on 10 July 2023 (being the last Business Day prior to the
commencement of the Offer Period);
o 158 per cent. to the volume weighted average price of 25.9
pence per STM Share for the one-month period ended on 10 July 2023
(being the last Business Day prior to the commencement of the Offer
Period); and
o 157 per cent. to the volume weighted average price of 26 pence
per STM Share for the three-month period ended on 10 July 2023
(being the last Business Day prior to the commencement of the Offer
Period).
-- If, on or after the date of this Announcement, any dividend
and/or other distribution and/or other return of capital is
declared, made or paid or becomes payable in respect of the STM
Shares (in each case with a record date prior to the Effective
Date), Bidco has the right to reduce the amount of the
consideration payable under the Acquisition by an amount equal to
the amount of such dividend and/or distribution and/or return of
capital. Where the consideration is so reduced, any reference in
this Announcement to the consideration will automatically be deemed
to be a reference to the consideration as so reduced by the amount
of such dividend and/or distribution and/or return of capital. In
such circumstances, STM Shareholders would be entitled to receive
and retain any such dividend or other distribution and/or return of
capital. Any reduction of the consideration shall be the subject of
an announcement and, for the avoidance of doubt, not be regarded as
constituting any revision or variation of the terms of the
Acquisition or the Scheme.
-- The STM Board is also pleased to announce the entry into an
agreement to sell the SIPPs Companies to Pathlines Holdings Limited
(a company controlled by Alan Kentish, the STM CEO) for a total
cash consideration of GBP4.5 million (the "MBO Sale"). Completion
of the MBO Sale is conditional on, amongst other things, the
sanction of the Scheme by the Court.
Information on STM
-- STM was admitted to trading on AIM in 2007.
-- STM was originally formed to consolidate corporate and
trustee service providers operating in international jurisdictions,
and the STM Group subsequently expanded into the international
pensions arena. The growth in the STM Group pensions division has
been accompanied by an increase in demand for the range of STM's
life assurance bonds, some of these available as complementary
products to the STM Group pension and trust products. As such, the
Company has become recognised as a leading player in administration
of client assets in relation to retirement, estate and succession
planning and wealth structuring, to a global market.
-- Today, the STM Group has operations in the UK, Gibraltar,
Malta, Spain and Australia and employs some 290 staff, with offices
in the UK, Malta, Gibraltar and Spain. STM has developed a range of
pension products for UK nationals and internationally domiciled
clients; and has two Gibraltar life assurance companies which
provide life insurance bonds and pension annuities.
-- STM currently trades under the names 'STM' (including 'STM
Fidecs', 'STM Life' and 'STM Malta'); 'Options'; and 'London &
Colonial' across the following products and services:
o Life Assurance: With two Gibraltar-based life assurance
companies, the STM Group offers a broad range of pension and
investment solutions.
o Qualifying Recognised Overseas Pension Schemes ('QROPS'):
pensions exported by UK expatriates, administered via Malta and
Gibraltar.
o UK Workplace pensions: the provision of Defined Contribution
('DC') pensions for UK employers and members, auto-enrolled via the
Master Trust.
o Self-Invested Personal Pension schemes ('SIPPs') & Small
Self-Administered Schemes ('SSAS'): SIPPs are products regulated in
the UK by the Financial Conduct Authority, whereas SSAS fall under
the purview of the UK Pension Regulator. STM has products
specifically tailored to serve both the UK and international
market.
o Group Pension Plans ('GPP').
o Pension Consultancy: administration and pension consultancy
services to defined benefit pension funds as well as DC funds.
o An Australian pension administration company.
-- On 28 September 2023, STM reported its interim results for
the period ended 30 June 2023. Against a challenging macro-economic
backdrop, STM Group delivered total revenue in the six months to 30
June 2023 of GBP13.2 million (2022: GBP11.3 million), which
included GBP0.9 million of interest income. Profit before other
items was GBP1.5 million (six months ended 30 June 2022: GBP1.4
million) and profit before tax was approximately GBP0.1 million
(six months ended 30 June 2022: GBP0.5 million). The core business
remained stable with recurring operating revenue remaining
resilient when compared to the first half of 2022, with overall
revenue for the business up from the prior year. For the twelve
months ended 31 December 2022, STM reported revenues of GBP24.1
million, profit before other items of GBP3.3 million and profit
before tax of GBP1.6 million.
-- Further information on STM is available on its website at www.stmgroupplc.com.
STM recommendation, irrevocable undertakings and letters of
Intent
-- The Independent STM Directors, who have been so advised by
Cavendish Capital Markets Limited ("Cavendish") as to the financial
terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing its financial advice to the
Independent STM Directors, Cavendish has taken into account the
commercial assessments of the Independent STM Directors. Cavendish
is providing independent financial advice to the Independent STM
Directors for the purposes of Rule 3 of the Takeover Code.
-- As required by, and solely for the purposes of, Rule 16.1 of
the Takeover Code, Cavendish has (in its capacity as independent
adviser to the Independent STM Directors for the purposes of Rule 3
of the Takeover Code) advised the Independent STM Directors that
the terms of the MBO Sale are fair and reasonable. In providing its
advice to the Independent STM Directors, Cavendish has taken into
account the commercial assessments of the Independent STM
Directors.
-- Accordingly, the Independent STM Directors intend to
recommend unanimously that the Independent STM Shareholders vote in
favour of (i) the Scheme at the Court Meeting (the "Scheme
Resolution"); (ii) the resolution to be proposed at the General
Meeting to approve the MBO Sale for the purposes of Rule 16 of the
Takeover Code (the "Rule 16 Resolution"); and (iii) the other
resolutions to be proposed at the General Meeting in connection
with the Scheme and MBO Sale (the "Other GM Resolutions" and
together with the Rule 16 Resolution, the "GM Resolutions"), as
Therese Neish (being the only Independent STM Director holding STM
Shares, directly or indirectly) has irrevocably undertaken to do in
respect of her own entire beneficial holdings of 492,756 STM Shares
representing, in aggregate, approximately 0.83 per cent. of the STM
Shares in issue on the Latest Practicable Date and approximately
0.94 per cent. of STM Shares (excluding STM Shares held by the MBO
Shareholders) in issue on the Latest Practicable Date .
-- In addition to the irrevocable undertaking from Therese Neish
(being the only Independent STM Director holding STM Shares,
directly or indirectly) , Bidco has also received irrevocable
undertakings from Alan Kentish and Clifton Participations Limited
(the " MBO Shareholders ") to vote or procure votes in favour of
the Other GM Resolutions only, in respect of, in aggregate,
7,078,900 STM Shares representing approximately 11.92 per cent. of
the STM Shares in issue on the Latest Practicable Date. At the same
time, the MBO Shareholders have each agreed to support the
Acquisition and to be bound by the terms of the Scheme.
-- In addition, Bidco has received irrevocable undertakings to
vote in favour of the Scheme Resolution and the GM Resolutions from
certain Independent STM Shareholders in respect of, in aggregate,
13,889,810 STM Shares representing approximately 23.38 per cent. of
the STM Shares in issue on the Latest Practicable Date and
approximately 26.54 per cent. of STM Shares (excluding STM Shares
held by the MBO Shareholders) in issue on the Latest Practicable
Date .
-- In total, therefore, Bidco has procured:
o irrevocable undertakings from Therese Neish (being the only
Independent STM Director holding STM Shares, directly or
indirectly) and certain Independent STM Shareholders to vote in
favour of the Scheme Resolution and the Rule 16 Resolution in
respect of, in aggregate, 14,382,566 STM Shares, representing
approximately 24.21 per cent. of STM Shares in issue on the Latest
Practicable Date and approximately 27.48 per cent. of STM Shares
(excluding STM Shares held by the MBO Shareholders) in issue on the
Latest Practicable Date ; and
o irrevocable undertakings from Therese Neish (being the only
Independent STM Director holding STM Shares, directly or
indirectly) , the MBO Shareholders and certain Independent STM
Shareholders to vote in favour of the Other GM Resolutions in
respect of, in aggregate, 21,461,466 STM Shares representing
approximately 36.13 per cent. of the STM Shares in issue on the
Latest Practicable Date.
Information on Pension SuperFund Capital and Bidco
-- Bidco is an English private company limited by guarantee that
was established on 4 July 2023. Bidco was formed for the purposes
of the Acquisition and is funded by Pension SuperFund Capital. It
has not traded since its date of incorporation, nor has it entered
into any obligations other than in connection with the
Acquisition.
-- The mission of Pension SuperFund Capital is to provide a
complete solution to pension savers and ultimately improve member
outcomes. With an unparalleled team track record in creating and
overseeing pension businesses and solutions, Pension SuperFund
Capital has access to significant lines of capital and assets with
which to help provide a safe and secure home to both pensioners and
pension savers. Pension SuperFund Capital has in place substantial
capital to safely support further pension risk transfers. Pension
SuperFund Capital is creating a new strategic opportunity for the
global US$61 trillion pension market. Pension SuperFund Capital's
pension solutions include:
o Go 'on risk' for the liability and investment risks inherent
in pensions, to underpin the certainty of pension outcomes for
employers, members and pension trustees;
o Pioneering Pension SuperHaven to provide defined contribution
pension savers with a chance to transfer into a decent 'defined
benefit' pension for life; and subsequently a share of the
investment upside; and
o Pension SuperFund Capital is the controlling shareholder of
Long Term Assets, a vehicle intended to give pension savers access
to private market investments in line with the Mansion House
Reforms.
-- Long Term Assets' biggest asset, Global InterConnection Group
Limited , listed its shares on the Euronext Amsterdam on 7 July
2023.
-- Pension SuperFund Capital has a world-class management team
with an unparalleled track record in pension consolidation and
fostering pension solutions.
o The Bidco and PSF Capital teams include: former CEOs of
Pension Insurance Corporation, Hannover Re; CIO Greater London
Authority; former Chairman and CFRO at London Pension Fund
Authority; CRO and chair Risk and Audit Committee Pension Insurance
Corporation; Head of Risk at Insight and LGIM; CIO Hermes; SG
Hambros Private Banking
o Private and public pension consolidation; architects of the
GBP260 billion Local Government Pension Schemes' SuperPools and
Pension Protection Fund; pioneers of the longevity risk transfer
market and medical annuity underwriting; eminent pension
trustees
o Completed GBP8 billion of 'capital backed funding
arrangements', pension sponsor acquisitions and PPF+ deals,
improving pension benefits for over 100,000 individuals;
o Best-in-class partners to provide insurance solutions,
fiduciary management, member experience, asset and liability
management.
Acquisition Structure, Timetable and Conditions
-- The Cash Consideration of 60 pence per share will be paid,
conditional on the Scheme becoming Effective, within 14 days of the
Scheme becoming Effective.
-- Under the terms of the Scheme, each Scheme Shareholder will
receive one Deferred Consideration Unit for each Scheme Share.
Under the terms of the DCU Deed Poll, subject to the DCU Conditions
having been satisfied, each Deferred Consideration Unit shall
entitle its holder to one Loan Note. The principal value of each
Loan Note that the DCU Holder may be entitled to ("Loan Note
Principal Value"), and therefore the amount of cash ultimately
payable to a Loan Note holder upon redemption of their Loan Notes
on the Loan Note Payment Date, shall be determined by way of an
Assessment Process in accordance with the terms of the DCU Deed
Poll.
-- The Deferred Consideration Units are complex instruments and
a number of factors will determine whether any amount will actually
be paid to Scheme Shareholders by way of the Loan Notes. The Loan
Note Principal Value is capped at a maximum of 7 pence and the
minimum payment under the Loan Notes is zero.
-- The Loan Note Principal Value will be determined by an
Assessment Process set out in the DCU Deed Poll and summarised in
paragraph 12 of this Announcement, following which, each DCU Holder
will receive one Loan Note for each Deferred Consideration Unit
held by such DCU Holder. If the results of the assessment process
are such that the Loan Note Principal Value is agreed or determined
to be zero, no Loan Notes will be issued, and in these
circumstances the DCU Holders will not receive any additional
consideration under the terms of the DCU Deed Poll. In these
circumstances, the value of each Deferred Consideration Unit would
be zero.
-- No interest shall be payable on the Loan Note , other than in
circumstances where Bidco is in default of its payment obligations
under the terms of the Loan Note Instrument . Each Loan Note shall
have a term which ends on the date falling one year after the
Effective Date. On redemption the Loan Note Principal Value will be
repaid to the holders of the Loan Notes and the Loan Notes will be
automatically cancelled. Further details in respect of the Deferred
Consideration Units and Loan Notes will be contained in the Scheme
Document. STM Shareholders are strongly advised to read paragraph
12 of this Announcement in full.
-- The Acquisition shall be put to the STM Shareholders at the
Court Meeting and at the General Meeting. In order to become
effective, the Scheme must be approved by a majority in number of
the Independent STM Shareholders voting at the Court Meeting,
either in person or by proxy, representing at least 75 per cent. in
value of the STM Shares voted. In addition, the GM Resolutions must
be passed by the requisite majority or majorities at the General
Meeting. The Scheme will also need to be sanctioned by the Court.
Finally, a certified copy of the Court Order must be delivered to
the Companies Registry for registration, and the Companies Registry
must register a certified copy of the Court Order, together with a
copy of the Scheme Document and all documents required to be
annexed thereto (if any), upon which the Scheme will become
effective in accordance with its own terms (including the
satisfaction or waiver of the Conditions).
-- The Acquisition is subject to the Conditions and certain
conditions and further terms set out in Appendix I to this
Announcement and the full terms and conditions of the Acquisition
which will be set out in the Scheme Document. In particular, the
Acquisition will be conditional upon regulatory approvals in Malta
and Gibraltar and the tPR Condition being satisfied. In addition,
the Acquisition is conditional on approval of the Rule 16
Resolution at the General Meeting and completion of the MBO Sale
(which is conditional on regulatory approval in the UK). Bidco
considers each of the Regulatory Conditions and the MBO Condition
to each be of material significance to it in the context of the
Acquisition. If any of the Regulatory Conditions or the MBO
Condition are not satisfied, Bidco may seek to invoke the relevant
condition in accordance with its terms as at the relevant date. It
is expected that, subject to the satisfaction of all such relevant
conditions, the Scheme will become Effective during the first half
of 2024.
-- The Scheme Document will contain further information about
the Acquisition, together with notices of the Court Meeting and the
General Meeting, and the expected timetable and will specify the
action to be taken by STM Shareholders. The Scheme Document will be
published and sent to STM Shareholders as soon as practicable and,
in any event, within 28 days of this Announcement (unless STM and
Bidco otherwise agree, and the Panel consents, to a later
date).
Commenting on the Acquisition, Nigel Birrell, the Chair of STM,
said:
"The STM Board is pleased to be recommending Bidco's offer for
the Company, which represents a significant premium in cash to the
STM share price prior to the commencement of discussion with Bidco
and offers certain value for our shareholders, and potential future
benefit through the Deferred Consideration Units. Whilst we believe
that there are significant growth and value realisation
opportunities for STM in the short to medium term, we recognise
that there are uncertainties and risks which may impact STM's
ability to both optimise growth as a stand-alone quoted entity, and
to execute a realisation strategy of certain parts of the business.
We acknowledge the additional commercial benefits which could be
obtained as part of a larger group such as Pension SuperFund
Capital, whose management team has a clear vision to deliver a
complete solution to pension savers and members."
Commenting on the Acquisition, Edmund Truell, the Co-Founder of
Pension SuperFund Capital, said:
"We are delighted to back Bidco to acquire STM Group plc after a
period of extensive diligence and strategic planning. This exciting
investment aligns with our wider market aim to provide a complete
solution, worldwide, to pension savers and sponsors and improve
pensioner outcomes in an aligned way.
We strongly believe our track record and stewardship will enable
us to provide increased security and value-for-money benefits to
members, while also helping to deliver the upside that the Mansion
House reforms intend ."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement including its
Appendices.
The Acquisition is subject to the Conditions and certain further
terms set out in Appendix I to this Announcement and to the full
terms and conditions which will be set out in the Scheme Document.
Appendix II to this Announcement contains the sources of
information and bases of calculations of certain information
contained in this summary and this Announcement, Appendix III
contains a summary of the irrevocable undertakings and letters of
intent referred to in this Announcement and Appendix IV contains
definitions of certain terms and expressions used in this summary
and in this Announcement.
Enquiries:
Pension SuperFund Capital edmund.truell@psf.capital
Edmund Truell
Davy Capital Markets UK (Financial Adviser
to Pension SuperFund Capital and Bidco) +44 20 7448 8870
Will Smith / Graham Hertrich / Andrew
Beswick
(Corporate Finance)
EQ Corp (PR Adviser to Pension SuperFund
Capital and Bidco) +44 (0) 20 7223 1100
James Culverhouse +44 (0) 7912 508 322
James.culverhouse@eqcorp.com
STM via Walbrook PR
Nigel Birrell
Cavendish Capital Markets Limited (Financial
Adviser, Nominated Adviser and Broker
to STM) +44 20 7220 0500
Matt Goode / Emily Watts / Henrik Persson
/ Abigail Kelly / Trisyia Jamaludin (Corporate
Finance)
Tim Redfern (ECM)
Walbrook PR (PR Adviser to STM) +44 (0) 20 7933 8780
Tom Cooper +44 (0) 797 122 1972
STM@walbrookpr.com
Simpson Thacher & Bartlett LLP is retained as legal adviser
to Pension Superfund Capital and Bidco.
Pinsent Masons LLP is retained as legal adviser to STM.
Important Notice
Davy Capital Markets UK is a trading name of J & E Davy (UK)
Limited. J & E Davy (UK) Limited is authorised and regulated by
the Financial Conduct Authority. J & E Davy (UK) Limited is a
Davy Group company and also a member of the Bank of Ireland Group.
J & E Davy (UK) Limited is acting for Pension SuperFund Capital
and Bidco 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 Pension SuperFund Capital and
Bidco for providing the protections afforded to its clients or for
providing advice in relation to the matters described in this
Announcement
Cavendish Capital Markets Limited ("Cavendish"), which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom, is acting exclusively for STM and for no one else
in connection with the Acquisition and/or any other matter referred
to in this Announcement and will not be responsible to anyone other
than STM for providing the protections afforded to its clients or
for providing advice in relation to the Acquisition, the contents
of this Announcement, or another other matters referred to in this
Announcement. Neither Cavendish nor any of its subsidiaries,
affiliates or branches owes or accepts any duty, liability or
responsibility whatsoever (whether direct, indirect, consequential,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Cavendish in connection with this
Announcement, any statement or other matter or arrangement referred
to herein or otherwise.
This Announcement is for information purposes only and does not
constitute an offer to sell or an invitation to purchase any
securities or the solicitation of an offer to buy any securities,
or the solicitation of any vote or approval in any jurisdiction,
pursuant to the Acquisition or otherwise. The Acquisition shall be
made solely by means of the Scheme Document (or in the event that
the Acquisition is to be implemented by means of a Takeover Offer,
the takeover offer document) which will contain the full terms and
conditions of the Acquisition, including details of how to vote in
respect of the Acquisition. Any vote in respect of the Scheme or
other response in relation to the Acquisition should be made only
on the basis of the information contained in the Scheme Document
(or in the event that the Acquisition is to be implemented by means
of a Takeover Offer, the takeover offer document).
This Announcement has been prepared in connection with proposals
in relation to a scheme of arrangement pursuant to and for the
purpose of complying with English law and Isle of Man law, the
Takeover Code, the Aim Rules and MAR and the information disclosed
may not be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions outside the United Kingdom or the Isle of Man.
Nothing in this Announcement should be relied on for any other
purpose.
STM will prepare the Scheme Document to be distributed to STM
Shareholders. STM and Bidco urge STM Shareholders to read the
Scheme Document when it becomes available because it will contain
important information relating to the Acquisition.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
Overseas Shareholders
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom or the Isle of Man may
be restricted by law and/or regulations. Persons who are not
resident in the United Kingdom or the Isle of Man or who are
subject to the laws and regulations of other jurisdictions should
inform themselves of, and observe, any applicable requirements.
Unless otherwise determined by Bidco or required by the Takeover
Code, and permitted by applicable law and regulation, the
Acquisition shall not be made available, in whole or in part,
directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws or regulations in that
jurisdiction and no person may vote in favour of the Acquisition by
any such use, means, instrumentality or form within a Restricted
Jurisdiction or any other jurisdiction if to do so would constitute
a violation of the laws of that jurisdiction. Accordingly, copies
of this Announcement and all documents relating to the Acquisition
are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in, into or from a
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction, and persons receiving this Announcement and all
documents relating to the Acquisition (including custodians,
nominees and trustees) must not mail or otherwise forward,
distribute or send them in, into or from such jurisdictions where
to do so would violate the laws in those jurisdictions. If the
Acquisition is implemented by way of a Takeover Offer
(unless otherwise permitted by applicable law and regulation),
such Takeover Offer may not be made available directly or
indirectly, into or from or by the use of mails or any means or
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The availability of the Acquisition to STM Shareholders who are
not resident in the United Kingdom or the Isle of Man (and, in
particular, their ability to vote their Scheme Shares with respect
to the Scheme at the Court Meeting, or to appoint another person as
proxy to vote at the Court Meeting on their behalf) may be affected
by the laws of the relevant jurisdictions in which they are
resident. Persons who are not resident in the United Kingdom or the
Isle of Man should inform themselves of, and observe, any
applicable requirements, as any failure to comply with such
requirements may constitute a violation of the securities laws of
any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person. The Acquisition shall
be subject to the applicable requirements of the Companies Act, the
Court, the Takeover Code, the Panel, the London Stock Exchange, the
Financial Conduct Authority and the AIM Rules. Further details in
relation to Overseas Shareholders will be contained in the Scheme
Document.
Additional Information for US Investors
The Acquisition is being made to acquire the securities of an
Isle of Man company by means of a scheme of arrangement provided
for under Part X of the Companies Act. A transaction effected by
means of a scheme of arrangement is not subject to the proxy
solicitation or tender offer rules under the US Exchange Act.
Accordingly, the Scheme will be subject to disclosure requirements
and practices applicable to schemes of arrangement involving a
target company incorporated in the Isle of Man admitted to trading
on AIM, which are different from the disclosure requirements of the
US under the US proxy solicitation and tender offer rules. The
financial information included in this Announcement and the Scheme
documentation has been or will have been prepared in accordance
with accounting standards applicable in the Isle of Man and the UK
and thus may not be comparable to financial information of US
companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the
US.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disproved or passed
judgment upon the fairness or the merits of the Acquisition or
determined if this Announcement is adequate, accurate or
complete.
If Bidco were to elect to implement the Acquisition by means of
a Takeover Offer, such Takeover Offer would be made in compliance
with applicable US laws and regulations, including to the extent
applicable Section 14(e) of the US Exchange Act and Regulation 14E
thereunder, and in accordance with the Takeover Code. Such a
takeover would be made in the United States by Bidco and no one
else.
The receipt of cash pursuant to the Acquisition by a US holder
as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for United States federal
income tax purposes and under applicable United States state and
local, as well as foreign and other, tax laws. Each STM Shareholder
is urged to consult his independent professional adviser
immediately regarding the tax consequences of the Acquisition
applicable to him.
It may be difficult for US holders to enforce their rights and
any claims arising out of the US federal securities laws, since STM
is located in a country other than the US, and all of its officers
and directors are residents of countries other than the US. US
holders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws.
Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's judgement.
In accordance with normal UK practice and consistent with Rule
14e-5 under the US Exchange Act, Bidco, certain affiliated
companies and the nominees or brokers (acting as agents) may from
time to time make certain purchases of, or arrangements to
purchase, shares in STM outside of the US, other than pursuant to
the Acquisition, until the date on which the Acquisition and/or
Scheme becomes effective, lapses or is otherwise withdrawn. If such
purchases or arrangements to purchase were to be made they would
occur either in the open market at prevailing prices or in private
transactions at negotiated prices and will comply with applicable
law, including to the extent applicable the US Exchange Act. Any
information about such purchases or arrangements to purchase will
be disclosed as required in the United Kingdom, will be reported to
a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com . This
information will also be publicly disclosed in the US to the extent
that such information is made public in the UK.
Forward Looking Statements
This Announcement (including information incorporated by
reference in the Announcement), oral statements made regarding the
Acquisition, and other information published by Bidco and STM
contain certain statements, beliefs or opinions, with respect to
the financial condition, results of operations and business of
Bidco and STM which are or may be deemed to be "forward looking
statements". These forward-looking statements can be identified by
the fact that they do not relate only to historical or current
facts. Forward-looking statements often use words such as
"anticipate", "target", "expect", "envisage", "estimate", "intend",
"plan", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", or other words of similar
meaning. These statements are based on assumptions and assessments
made by STM and/or Bidco, in light of their experience and their
perception of historical trends, current conditions, future
developments and other factors they believe appropriate. 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 and the factors described in the context of
such forward-looking statements in this Announcement could cause
actual results and developments to differ materially from those
expressed in or implied by such forward-looking statements.
Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be
given by STM and Bidco that such expectations will prove to have
been correct and you are therefore cautioned not to place undue
reliance on these forward-looking statements which speak only as at
the date of this Announcement. The forward-looking statements speak
only at the date of this Announcement. All subsequent oral or
written forward-looking statements attributable to any member of
the Wider Bidco Group or STM Group, or any of their respective
associates, directors, officers, employees or advisers, are
expressly qualified in their entirety by the cautionary statement
above. Neither STM nor Bidco nor Pension SuperFund Capital assumes
any obligation and STM and Bidco and Pension SuperFund Capital
disclaim any intention or obligation, to update or correct the
information contained in this Announcement (whether as a result of
new information, future events or otherwise), except as required by
applicable law or regulation (including under the AIM Rules).
EXCEPT AS EXPRESSLY PROVIDED IN THE ANNOUNCEMENT, THE
FORWARD-LOOKING STATEMENTS HAVE NOT BEEN REVIEWED BY THE AUDITORS
OF STM, PENSION SUPERFUND CAPITAL OR BIDCO OR THEIR RESPECTIVE
FINANCIAL ADVISERS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN
AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT
EXPECTED RESULTS AND ARE BASED ON CERTAIN KEY ASSUMPTIONS. THERE
ARE SEVERAL FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN FORWARD-LOOKING
STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING
STATEMENTS IS THE SATISFACTION OF THE CONDITIONS, AS WELL AS
ADDITIONAL FACTORS SUCH AS CHANGES IN GLOBAL, POLITICAL, ECONOMIC,
BUSINESS, COMPETITIVE, MARKET AND REGULATORY FORCES, FUTURE
EXCHANGE AND INTEREST RATES, CHANGES IN TAX RATES AND FUTURE
BUSINESS COMBINATIONS OR DISPOSITIONS. SUCH FORWARD LOOKING
STATEMENTS SHOULD THEREFORE BE CONSTRUED IN THE LIGHT OF SUCH
FACTORS. NEITHER BIDCO NOR STM, 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.
No Profit Forecasts, Estimates or Quantified Benefits
Statements
No statement in this Announcement is intended as a profit
forecast, profit estimate or quantified benefits statement for any
period and no statement in this Announcement should be interpreted
to mean that earnings or earnings per share for STM for the current
or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for STM.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of: (i) the offeree
company; and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 p.m. (London time) on the 10th Business
Day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (London time) on the 10th
Business Day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each
of: (i) the offeree company; and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
information provided by STM Shareholders and other relevant persons
for the receipt of communications from STM may be provided to Bidco
during the Offer Period as requested under Section 4 of Appendix 4
of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Publication on Website and Availability of Hard Copies
A copy of this Announcement and the documents required to be
published by Rule 26 of the Takeover Code shall be made available
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions on STM'S website at
https://www.stmgroupplc.com/possible-offer-for-stm-group-plc b y no
later than 12 noon (London time) on the Business Day following this
Announcement. For the avoidance of doubt, the contents of this
website are not incorporated into and do not form part of this
Announcement .
STM Shareholders may request hard copies of this Announcement by
contacting Computershare Investor Services (Jersey) Limited at 13
Castle Street, St. Helier, Jersey CI, JE1 1ES or on +44 (0370) 707
4040 between 9:00 a.m. and 5:00 p.m. (London time) Monday to Friday
(public holidays excepted). Calls to this number from persons who
are not resident in Jersey are charged at the applicable
international rate. Calls from a mobile device may incur network
extras.
STM Shareholders may also request that all future documents,
announcements and information to be sent to them in relation to the
Acquisition should be in hard copy form. If an STM Shareholder has
received this Announcement in electronic form, copies of this
Announcement and any document or information incorporated by
reference into this Announcement will not be provided unless such a
request is made.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor accountant or independent financial adviser
duly authorised under the Financial Services and Markets Act 2000
(as amended) if you are a resident in the United Kingdom or, if
not, from another appropriately authorised independent financial
adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
10 October 2023
RECOMMED ACQUISITION
for
STM Group PLC ("STM" or the "Company")
by
Jambo SRC Limited ("Bidco")
to be effected by means of a Court-sanctioned scheme of
arrangement under Part X of the Isle of Man Companies Act 2006, as
amended
1. Introduction
The board of Bidco and the Independent STM Directors of STM are
pleased to announce that they have agreed the terms of a
recommended acquisition of the entire issued and to be issued
ordinary share capital of STM by Bidco.
The Acquisition is intended to be effected by means of a
Court-sanctioned scheme of arrangement under Part X of the
Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which shall be subject to
the further conditions and terms set out in Appendix I to this
Announcement and to be set out in the Scheme Document, Scheme
Shareholders who are on the register of members of STM at the
Scheme Record Time will be entitled to receive:
-- 60 pence per share in cash ("Cash Consideration"); and
-- In addition to the Cash Consideration, under the terms of the
Acquisition, Scheme Shareholders will be entitled to receive a
Deferred Consideration Unit which may deliver up to 7 pence per
share in cash (and, together with the Cash Consideration, the
"Maximum Acquisition Value").
In certain circumstances, the Deferred Consideration Unit will
have zero value.
The Cash Consideration values the entire issued and to be issued
ordinary share capital of STM at approximately GBP35.6 million and
delivers 60 pence in cash per share, which represents a premium of
approximately:
-- 118.2 per cent. to the closing price of 27.5 pence per STM
Share on 10 July 2023 (being the last Business Day prior to the
commencement of the Offer Period);
-- 130.9 per cent. to the volume weighted average price of 25.9
pence per STM Share for the one-month period ended on 10 July 2023
(being the last Business Day prior to the commencement of the Offer
Period); and
-- 130.5 per cent. to the volume weighted average price of 26
pence per STM Share for the three-month period ended on 10 July
2023 (being the last Business Day prior to the commencement of the
Offer Period).
The Maximum Acquisition Value, which assumes full value is
delivered by the Deferred Consideration Units, values the entire
issued and to be issued ordinary share capital of STM at
approximately GBP39.8 million and delivers up to 67 pence per
share, which represents a premium of approximately:
-- 144 per cent. to the closing price of 27.5 pence per STM
Share on 10 July 2023 (being the last Business Day prior to the
commencement of the Offer Period);
-- 158 per cent. to the volume weighted average price of 25.9
pence per STM Share for the one-month period ended on 10 July 2023
(being the last Business Day prior to the commencement of the Offer
Period); and
-- 157 per cent. to the volume weighted average price of 26
pence per STM Share for the three-month period ended on 10 July
2023 (being the last Business Day prior to the commencement of the
Offer Period).
If, on or after the date of this Announcement, any dividend
and/or other distribution and/or other return of capital is
declared, made or paid or becomes payable in respect of the STM
Shares (in each case with a record date prior to the Effective
Date), Bidco has the right to reduce the amount of the
consideration payable under the Acquisition by an amount equal to
the amount of such dividend and/or distribution and/or return of
capital. Where the consideration is so reduced, any reference in
this Announcement to the consideration will automatically be deemed
to be a reference to the consideration as so reduced by the amount
of such dividend and/or distribution and/or return of capital. In
such circumstances, STM Shareholders would be entitled to receive
and retain any such dividend or other distribution and/or return of
capital. Any reduction of the consideration shall be the subject of
an announcement and, for the avoidance of doubt, not be regarded as
constituting any revision or variation of the terms of the
Acquisition or the Scheme.
It is expected that the Scheme Document will be published as
soon as reasonably practicable and, in any event, within 28 days of
the date of this Announcement (unless STM and Bidco otherwise
agree, and the Panel consents). The Court Meeting and the General
Meeting are expected to be held during the fourth quarter of 2023 .
It is expected that , subject to the satisfaction of all relevant
conditions, the Scheme will become effective during the first half
of 2024.
3. Background to and reasons for the Acquisition
The mission of Pension SuperFund Capital is to provide a
complete solution to pension savers and members. The board of
Pension SuperFund Capital has stated that it intends for Pension
SuperFund Capital to be at the heart of consolidation and pension
risk transfer, building on its leadership team's success inter alia
at Pension Insurance Corporation, Hannover Re, and the London
Pension Fund Authority.
Worldwide, pension savers and sponsoring employers face
intractable issues managing pensions to provide for an adequately
funded retirement. In the UK, Chancellor Jeremy Hunt's Mansion
House Speech on 10 July 2023 laid out a new paradigm for pensions
and long-term investing in the UK. Defined contribution funds are
not generating the returns required for savers to support them in
retirement and defined benefit schemes are in accounting surplus,
but not generating sufficient returns, thus requiring cash
injections from industry, as opposed to investing in growth to top
them up.
The reforms (the " Mansion House Reforms ") are focused on
providing good value outcomes for investors and to combat the long
drift into Liability Driven Investing which has seen pension
allocation to UK equity and private companies decline to very low
levels.
Personal pensioners and small funds have high administrative
costs relative to assets under management and are particularly
susceptible to the problems of low liquidity investments, so the
reforms are also aimed at driving pension fund consolidation and
encouraging collective funds. This is designed to bring down costs,
but also enable portfolio balancing with higher growth investments,
especially accessing private markets such as infrastructure.
The key elements of the Mansion House Reforms are:
-- shift in regulatory emphasis towards value for money,
long-term investment returns as opposed to simply focusing on
costs;
-- pension funds to consolidate (both defined contribution and
defined benefit) and establish superfunds and collective investment
funds in order to bring down costs while enabling investments in
higher growth investments, including illiquid investments without
creating liquidity traps for smaller funds; and
-- pension funds to allocate at least 5% of funds to unlisted
growth companies (GBP50bn of new capital allocation to growth
companies in the UK, supported by 2/3rds of defined contribution
mastertrust funds already).
Pension Superfund Capital intends to be at the forefront of
driving this change in the UK pension market, aiming to create
better outcomes for pensioners; and freeing employers from the
burden of pension liabilities.
With deep and wide-ranging experience in pensions, Pension
SuperFund Capital has access to significant lines of capital and
assets, with which to help provide a safe and secure home to
pensioners and pension savers.
The STM Group business lines are complementary to Pension
SuperFund Capital's businesses. However, Bidco and Pension
SuperFund Capital believes that STM businesses lack sufficient
scale to enable investors to access the broadest range of
portfolios, including less liquid growth assets. In addition, they
are running on legacy technology systems which, if optimised, have
the potential to increase cost efficiency and improve investor
outcomes.
STM's operations in the UK, Malta, Gibraltar, Spain and
Australia provide Pension SuperFund Capital with a broad platform
for providing customers with products and services. Pension
SuperFund Capital brings strong regulatory relationships and the
capital required to make the required investments to maintain and
improve those regulatory relationships as the business grows in
breadth of product and scale of operations.
It is the belief of Bidco and Pension SuperFund Capital that a
combined business with STM's current customers and assets and
Pension SuperFund Capital's technology and access to capital, would
create a strong platform to consolidate defined contribution and
defined benefit pensions to provide better outcomes for
investors.
4. Background to and reasons for the recommendation
STM was admitted to trading on AIM in 2007. The business was
originally a strategic investment company operating in the
corporate and trustee service provider sector, and has since grown
and evolved into a multi-jurisdictional financial services group,
both organically and by acquisition.
Since its inception, STM has taken steps to diversify its
revenue from its origins as a corporate and trustee service
provider and has successfully acquired and integrated a number of
businesses and assets over the last decade, including London and
Colonial Holdings Ltd, Carey Administration Holdings Limited,
certain businesses providing SSAS administration and consultancy
services from Berkeley Burke and most recently the portfolio, net
assets and trustee companies of the SIPP and SSAS businesses from
Mercer Ltd. These businesses have allowed STM to enhance its
customer proposition into international pensions and life
assurance. Alongside these acquisitions, STM has launched organic
initiatives, such as the development of international retirement
solutions for the expatriate market and continuing development of
its in-house administration.
However, the STM Directors recognise that opportunities exist to
improve the operating performance of the business, in particular
through:
-- A review of technology in the context of the business's current capabilities;
-- A review of the areas of the business that are not likely to
materially grow in revenue and profitability in the short to medium
term, with a view to conducting a staged realisation programme
where appropriate; and
-- A general reduction of non-recurring costs across the business.
This following was stated in the Company's final results
announcement dated 27 June 2023:
"STM is at a cross-roads in its evolution, and whilst it is
fortunate to have a wide range of products and services it is
important that we focus on those areas that have the potential to
deliver a step-change in profitability. As part of this assessment
of our next steps, the Group board initiated a strategic review in
the first quarter of 2023, with the aid of external consultants. As
announced in May 2023, the external advisor engagement is complete,
and the Board have assessed the conclusions from it and have begun
to refine the Group's strategy. In particular, the review has
identified areas of the business where we are likely to struggle to
materially grow in revenue and profitability, but also areas with
the potential for future growth following further investment. The
Board is therefore considering whether we crystallise some of that
embedded shareholder value from those areas of the businesses which
may struggle to materially grow under the Group's ownership."
The strategic review demonstrates some of our competitors are
significantly more profitable than ourselves in certain areas, and
this in turn has initiated the natural next step of our strategic
review into our use of technology and our current capabilities.
There has been significant M&A activity in the UK pensions
sector driven by technology and trading platform capabilities. The
outcome of this technology review will inform our decisions of the
areas to focus on to drive the Group's future growth."
It is the view of the STM Directors that there are cost, timing
and execution risks attached to pursuing the above stated strategy,
and the Company will need additional financial flexibility in order
to unlock its full potential. Further, the STM Directors believe
that the financial and strategic support of Pension SuperFund
Capital, with its focus on creating a market leading pensions
offering, could assist in delivering longer-term value creation for
stakeholders.
Ahead of receiving an approach by Bidco, the STM Board was in
the process of negotiating terms in respect of the sale of the
Master Trust, in line with its ongoing strategy review. Following
this Announcement, the STM Board intends to approach the proposed
purchaser, with the consent of Bidco , working in collaboration
with the trustees of the Master Trust and the UK Pension Regulator
, to continue discussions around a proposed sale of the Master
Trust.
The STM Directors believe the Cash Consideration reflects an
attractive valuation for STM and provides a potential future
benefit through the Deferred Consideration Units. The STM Directors
believe that the Acquisition will provide all STM Shareholders with
the opportunity to obtain liquidity for their investment in STM's
shares and to crystallise the value of all of their holdings, which
the STM Directors consider may not otherwise be achievable in the
near-term or in a tax efficient way. The STM Directors believe that
the Acquisition will provide STM with enhanced operational
flexibility and financial resilience, enabling it to offer a more
attractive proposition to its customers and potential opportunities
for employees through pursuing its growth strategy.
Having taken into account all relevant factors, the STM
Directors believe that the terms of the Acquisition are compelling
and deliver attractive value for STM Shareholders for their STM
shares in cash.
As such, the Independent STM Directors intend to recommend
unanimously that the Independent STM Shareholders vote in favour of
the Scheme at the Court Meeting and the Scheme Resolution to be
proposed at the General Meeting.
5. Recommendation
The Independent STM 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 to the Independent STM Directors, Cavendish
has taken into account the commercial assessments of the
Independent STM Directors. Cavendish is providing independent
financial advice to the Independent STM Directors for the purposes
of Rule 3 of the Takeover Code.
Accordingly, the Independent STM Directors intend to recommend
unanimously that the Independent STM Shareholders vote in favour of
the Scheme at the Court Meeting (by voting in favour of the Scheme
Resolution) and the GM Resolutions to be proposed at the General
Meeting. Therese Neish (being the only Independent STM Director
holding STM Shares, directly or indirectly) has irrevocably
undertaken to do the same in respect of her own entire beneficial
holdings of 492,756 STM Shares representing, in aggregate,
approximately 0.83 per cent. of the STM Shares in issue on the
Latest Practicable Date and approximately 0.94 per cent. of STM
Shares (excluding STM Shares held by the MBO Shareholders) in issue
on the Latest Practicable Date .
6. MBO Sale
Bidco has confirmed to the Independent STM Directors that its
offer for STM would be conditional upon the completion of a
disposal of certain parts of STM, being the SIPPs Business. For the
avoidance of doubt, the MBO Sale no longer includes the entities
connected with the 'funder' of the Master Trust, as originally
referenced in the Company's announcement dated 8 September
2023.
As noted above, STM has entered into an agreement for the sale
of the SIPPs Companies to Pathlines Holdings Limited , a company
which is controlled by the STM CEO, Alan Kentish, for a total cash
consideration of GBP4.5 million. Pathlines Holdings Limited has
agreed to procure and guarantee the redemption and repayment in
full of the existing GBP1 million redeemable preference shares
issued by London & Colonial Services Limited (one of the SIPPs
Companies) to London & Colonial Holdings Limited (an entity in
the Wider STM Group that is not a SIPPs Company) by 1 March
2025.
Alan Kentish has personally guaranteed GBP4.1 million of the
GBP4.5 million consideration payment obligations of Pathlines
Holdings Limited pursuant to the agreement for sale of the SIPPs
Companies. Completion of the MBO Sale is conditional on, amongst
other things, the Rule 16 Resolution being passed at the General
Meeting and the sanction of the Scheme by the Court . The
consideration payable under the Acquisition takes into account the
proceeds of the MBO Sale, which will be retained by STM.
The MBO SPA details, inter alia , an intention between Pathlines
Holdings Limited and STM to agree a transitional services agreement
and collaboration agreement to be entered into on completion of the
MBO Sale in order to ensure the STM businesses and the SIPPs
Businesses continue to operate in the ordinary course. In addition,
if, in the future, Pathlines Holdings Limited wishes to dispose of,
directly or indirectly, all or any parts of the SIPPs Business, STM
will be afforded a right of first refusal to repurchase the SIPPs
Businesses, subject to certain terms. For the year ended 31
December 2022, the SIPPs Companies had revenue of GBP3.8 million
(unaudited) and profit after tax of GBP0.1 million (unaudited). The
net assets attributable to the SIPPs Companies were GBP3.3 million
(unaudited).
In connection with the MBO Sale, Clifton Participations Limited
has irrevocably and unconditionally directed the Receiving Agent to
pay GBP2.5 million of the consideration receivable by it under the
Acquisition directly to STM so as to partially satisfy Pathlines
Holdings Limited 's obligation to pay the purchase price to STM in
connection with the MBO Sale.
Alan Kentish is a director of STM and both he and his concert
parties are interested in STM Shares. As a consequence of this and
the provisions of Rule 16 of the Takeover Code, the MBO Sale will
be conditional on, amongst other things, the approval of the Rule
16 Resolution at the General Meeting. Alan Kentish and his concert
parties will be excluded from voting on the Rule 16 Resolution.
Alan Kentish along with his close relatives and through his
indirect holding in Clifton Participations Limited holds 7,078,900
STM Shares, representing 11.92 per cent per cent of STM's existing
issued share capital.
STM has received binding irrevocable undertakings to vote in
favour of the Rule 16 Resolution in respect of, in aggregate, a
total of 14,382,566 STM Shares, representing approximately 24.21
per cent. of the STM Shares in issue on the Latest Practicable Date
and approximately 27.48 per cent. of STM Shares (excluding STM
Shares held by the MBO Shareholders) in issue on the Latest
Practicable Date .
As required by, and solely for the purposes of, Rule 16.1 of the
Takeover Code, Cavendish has (in its capacity as independent
adviser to the Independent STM Directors for the purposes of Rule 3
of the Takeover Code) advised the Independent STM Directors that
the terms of the MBO Sale are fair and reasonable. In providing its
advice to the Independent STM Directors, Cavendish has taken into
account the commercial assessments of the Independent STM
Directors.
As Alan Kentish is a director of STM, the MBO Sale is also
classified as a related party transaction for the purposes of the
AIM Rules. The Independent STM Directors consider, having consulted
with Cavendish, the Company's nominated adviser, that the terms of
the MBO Sale are fair and reasonable in so far as the STM
Shareholders are concerned.
7. Irrevocable Undertakings and Letters of Intent
Bidco has received an irrevocable undertaking from Therese Neish
(being the only Independent STM Director holding STM Shares,
directly or indirectly) to vote in favour of the Scheme at the
Court Meeting and the GM Resolutions at the General Meeting in
respect of her own entire beneficial holdings of 492,756 STM
Shares, representing approximately 0.83 per cent. of the STM Shares
in issue on the Latest Practicable Date and approximately 0.94 per
cent. of STM Shares (excluding STM Shares held by the MBO
Shareholders) in issue on the Latest Practicable Date .
In addition to the irrevocable undertaking from Therese Neish
(being the only Independent STM Director holding STM Shares,
directly or indirectly) , Bidco has also received irrevocable
undertakings from the MBO Shareholders to vote or procure votes in
favour of the Other GM Resolutions only, in respect of, in
aggregate, 7,078,900 STM Shares representing approximately 11.92
per cent. of the STM Shares in issue on the Latest Practicable
Date. At the same time, the MBO Shareholders have each agreed to
support the Acquisition and to be bound by the terms of the
Scheme.
In addition, Bidco has received irrevocable undertakings to vote
in favour of the Scheme Resolution and the GM Resolutions from
certain Independent STM Shareholders in respect of, in aggregate,
13,889,810 STM Shares representing approximately 23.38 per cent. of
the STM Shares in issue on the Latest Practicable Date and
approximately 26.54 per cent. of STM Shares (excluding STM Shares
held by the MBO Shareholders) in issue on the Latest Practicable
Date .
In total, therefore, Bidco has procured:
-- irrevocable undertakings from Therese Neish (being the only
Independent STM Director holding STM Shares, directly or
indirectly) and certain Independent STM Shareholders to vote in
favour of the Scheme Resolution and the Rule 16 Resolution in
respect of, in aggregate, 14,382,566 STM Shares, representing
approximately 24.21 per cent. of STM Shares in issue on the Latest
Practicable Date and approximately 27.48 per cent. of STM Shares
(excluding STM Shares held by the MBO Shareholders) in issue on the
Latest Practicable Date ; and
-- irrevocable undertakings from Independent STM Directors, the
MBO Shareholders and certain Independent STM Shareholders to vote
in favour of the Other GM Resolutions in respect of, in aggregate,
21,461,466 STM Shares representing approximately 36.13 per cent. of
the STM Shares in issue on the Latest Practicable Date.
Further details of the irrevocable undertakings and letters of
intent are set out in Appendix III.
8. Information on Pension SuperFund Capital and Bidco
Bidco is an English private company limited by guarantee that
was established on 4 July 2023. Bidco was formed for the purposes
of the Acquisition, is funded by Pension SuperFund Capital, and has
not traded since its date of incorporation, nor has it entered into
any obligations other than in connection with the Acquisition.
The mission of Pension SuperFund Capital is to provide a
complete solution to pension savers and ultimately improve member
outcomes. With an unparalleled team track record in creating and
overseeing pension businesses and solutions, Pension SuperFund
Capital has access to significant lines of capital and assets with
which to help provide a safe and secure home to both pensioners and
pension savers. Pension SuperFund Capital has in place substantial
capital to safely support further pension risk transfers. Pension
SuperFund Capital is creating a new strategic opportunity for the
global US$61 trillion pension market. Pension SuperFund Capital's
pension solutions include:
-- Going 'on risk' for the liability and investment risks
inherent in pensions, to underpin the certainty of pension outcomes
for employers, members and pension trustees;
-- Pioneering Pension SuperHaven to provide defined contribution
pension savers with a chance to transfer into a decent 'defined
benefit' pension for life; and subsequently a share of the
investment upside; and
-- Pension SuperFund Capital is the controlling shareholder of
Long Term Assets, a vehicle intended to give pension savers access
to private market investments in line with the Mansion House
Reforms .
o Long Term Assets' biggest asset , Global InterConnection Group
Limited , listed its shares on the Euronext Amsterdam on 7 July
2023.
Pension SuperFund Capital has a world-class management team with
an unparalleled track record in pension consolidation and fostering
pension solutions.
-- The Bidco and PSF Capital teams include: former CEOs of
Pension Insurance Corporation, Hannover Re; CIO Greater London
Authority; former Chairman and CFRO at London Pension Fund
Authority; CRO and chair Risk and Audit Committee Pension Insurance
Corporation; Head of Risk at Insight and LGIM; CIO Hermes; SG
Hambros Private Banking
-- Private and public pension consolidation; architects of the
GBP260 billion Local Government Pension Schemes' SuperPools and
Pension Protection Fund; pioneers of the longevity risk transfer
market and medical annuity underwriting; eminent pension
trustees
-- Completed GBP8 billion of 'capital backed funding
arrangements', pension sponsor acquisitions and PPF+ deals,
improving pension benefits for over 100,000 individuals;
-- Best-in-class partners to provide insurance solutions,
fiduciary management, member experience, asset and liability
management.
9. Information on STM
STM was admitted to trading on AIM in 2007.
STM was originally formed to consolidate corporate and trustee
service providers operating in international jurisdictions, and the
STM Group subsequently expanded into the international pensions
arena. The growth in the STM Group pensions division has been
accompanied by an increase in demand for the range of STM's life
assurance bonds, some of these available as complementary products
to the STM Group pension and trust products. As such, the STM Group
has become recognised as a leading player in administration of
client assets in relation to retirement, estate and succession
planning and wealth structuring, to a global market.
Today, the STM Group has operations in the UK, Gibraltar, Malta,
Spain and Australia and employs some 290 staff, with offices in the
UK, Malta, Gibraltar and Spain. STM has developed a range of
pension products for UK nationals and internationally domiciled
clients and has two Gibraltar life assurance companies which
provide life insurance bonds and annuities - wrappers in which a
variety of investments, including investment funds, can be
held.
STM currently trades under the names 'STM' (including 'STM
Fidecs', 'STM Life' and 'STM Malta'), 'Options' and 'London &
Colonial', across the following products and services:
-- Life Assurance: With two Gibraltar-based life assurance
companies, the STM Group offers a broad range of pension and
investment solutions.
-- Qualifying Recognised Overseas Pension Schemes ('QROPS'):
pensions exported by UK expatriates, administered via Malta and
Gibraltar.
-- UK Workplace pensions: the provision of Defined Contribution
('DC') pensions for UK employers and members, auto-enrolled via the
Master Trust.
-- Self-Invested Personal Pension schemes ('SIPPs') & Small
Self-Administered Schemes ('SSAS'): SIPPs are products regulated in
the UK by the Financial Conduct Authority, whereas SSAS fall under
the purview of the UK Pension Regulator. STM has products
specifically tailored to serve both the UK and international
market.
-- Group Pension Plans ('GPP').
-- Pension Consultancy: administration and pension consultancy
services to defined benefit pension funds as well as DC funds.
-- An Australian pension administration company.
Current trading
On 28 September 2023, STM reported its interim results for the
period ended 30 June 2023. Against a challenging macro-economic
backdrop, STM Group delivered total revenue in the six months to 30
June 2023 of GBP13.2 million (2022: GBP11.3 million), which
included GBP0.9 million of interest income. Profit before other
items was GBP1.5 million (six months ended 30 June 2022: GBP1.4
million) and profit before tax was approximately GBP0.1 million
(six months ended 30 June 2022: GBP0.5 million). The core business
remained stable with recurring operating revenue remaining
resilient when compared to the first half of 2022, with overall
revenue for the business up from the prior year.
For the twelve months ended 31 December 2022, STM reported
revenues of GBP24.1 million, profit before other items of GBP3.3
million and profit before tax of GBP1.6 million.
Since 30 June 2023 (being the date to which STM's interim
results were drawn up), STM has continued to demonstrate resilience
in its underlying business through its recurring revenue,
supplemented with strengthening interest income from its interest
sharing model. As a result, STM expects to be in line with
management's internal expectations for the year ending 31 December
2023.
10. Directors, management, employees, pensions, research and development and locations
Bidco's strategic plans for STM
As noted in paragraph 6 ( MBO Sale ) above, Bidco has confirmed
to the STM Directors that its offer for STM would be conditional
upon the completion of a disposal of certain parts of STM, being
the SIPPs Business. For the avoidance of doubt, the statements
included in this section do not include any intentions around the
SIPPs Business.
As set out in paragraph 3 ( Background to and reasons for the
Acquisition ) above, Bidco believes that the combination of Bidco
and STM will create a more scalable platform from which to grow and
consolidate pension funds to provide better outcomes for underlying
savers in line with the aims of the Chancellor's Mansion House
Speech on 10 July 2023.
Bidco has not yet fully formulated its specific plans and
detailed strategy for STM. Following the Acquisition, Bidco intends
to complete a full evaluation of STM and its operations in order to
determine how its short- and long-term objectives can be best
delivered both on a standalone basis and ultimately as part of the
Enlarged Group, in order to maximise value to the stakeholders of
the Enlarged Group (the " Review ").
The Review will include:
-- further analysis of STM's key products, regulatory relationships and initiatives;
-- engaging with the key stakeholders of the STM business,
including relevant regulatory bodies;
-- identifying and assessing the growth opportunities of the Enlarged Group;
-- continuing STM management's technology review, including
investigation into the potential benefits of using technology-based
third party solutions to provide administration services;
-- improvements of systems and processes in line with regulatory
standards and requirements;
-- subject to the outcome of STM's discussions regarding any
proposed sale of the Master Trust as referenced in paragraph 4 of
this Announcement, changes to the management, structure and/or
ownership of the Master Trust to ensure long term benefits to
members; and
-- considering how best to position STM's business to compete
more strongly, including evaluation of the optimum corporate,
organisational and office portfolio setup for the Enlarged
Group.
Bidco expects that the Review will be completed within
approximately three months of the Effective Date.
Employees and management
Bidco attaches importance to the skills and experience of STM's
management and employees and recognises that the employees and
management of STM will be key to the success of the Enlarged Group
. Bidco is looking forward to working with STM's management and
employees to support the future development of STM within the
Enlarged Group .
It was announced on 25 September 2023 that Therese Neish would
be departing as Interim Chief Financial Officer and board member on
31 December 2023. It is also intended that Alan Kentish will depart
as Chief Executive Officer from the Effective Date, as a result of
his involvement in the MBO Sale.
As at the date of this Announcement, other than in respect of
these senior management roles, Bidco has not identified significant
duplication of roles within the two businesses and does not expect
a significant number of headcount reductions from the creation of
the Enlarged Group . However, Bidco is appointing expert executive
leadership consultants to assist in their desire to create a
unified executive management team, blending the best skills within
both Bidco and STM, to be complemented by external hires. The exact
composition of this team will be finalised following completion of
the Review, following which Bidco will have had the opportunity to
identify the best talent in both organisations.
Bidco is not intending to change the terms and conditions of
employment of the management and employees of the Enlarged Group.
However, as a result of the Review, Bidco cannot be certain as to
what impact there will be on the employment of, and the balance of
skills and functions of, the management and employees of the
Enlarged Group.
Once the Review is complete, Bidco's expert executive leadership
consultants will provide assistance with the integration process,
with the intention of motivating and retaining the best talent
within the Enlarged Group.
Once STM ceases to be a listed company, public company-related
functions will be reduced in scope or become unnecessary, and as
such Bidco expects headcount in relation to these functions to be
reduced or eliminated (with staff effected reallocated internally
to the extent possible) . It is intended that, with effect from the
Effective Date, each of the Non-Executive Directors of STM shall
resign from their office as a director of STM.
Existing rights and pensions
Bidco confirms that, following completion of the Acquisition,
the existing contractual and statutory rights, including pension
rights, of all management and employees of STM and its subsidiaries
will be fully safeguarded in accordance with applicable law. In
addition, the Review and any headcount reduction will be subject to
applicable informing and consulting requirements and conducted in
accordance with applicable law.
Bidco (together with Pension SuperFund Capital) will review the
existing pension arrangements, which as pension experts, it may be
able to improve upon. STM operates defined contribution pension
arrangements for its management and employees and has no exposure
under any form of defined benefit pension scheme. Bidco does not
intend to make any adverse changes to the employer contributions in
the STM defined contribution pension plans, the accrual of benefits
to existing members or the admission of new members into such
pension plans following the completion of the Acquisition.
Headquarters, locations, fixed assets and research and
development
Bidco intends to retain the Enlarged Group's headquarters in the
City of London.
Bidco does not intend to make any immediate changes to the
operations, places of business or headquarters of STM, pending the
outcome of the Review.
Bidco does not intend there to be any material redeployment of
the fixed assets of STM, pending the outcome of the Review.
STM has no dedicated research and development function.
Management incentive arrangements
Other than set out below, Bidco has not entered into and has not
discussed any form of incentivisation arrangements with members of
STM's management. Bidco does not intend to discuss any form of
incentivisation agreement with members of STM's management team
before completion of the Acquisition. Following the Effective Date,
Bidco may have discussions and enter into appropriate arrangements
for certain members of the Enlarged Group's management team.
Additional Remuneration Arrangements
The Remuneration Committee of the STM Board has, with the
consent of Bidco, approved additional remuneration payments for
Therese Neish (Chief Financial Officer), Nigel Birrell
(Non-Executive Chair) and Peter Smith (Non-Executive Director) of
GBP70,000, GBP 50,000 and GBP50,000 respectively, and certain other
senior employees, in consideration and recognition of the
additional work carried out in connection with the Acquisition
(above and beyond their normal duties and responsibilities). These
bonuses are subject to the Acquisition becoming Effective. Further
details of these arrangements will be contained in the Scheme
Document.
As required by, and solely for the purposes of, Rule 16.2 of the
Takeover Code, Cavendish has (in its capacity as independent
adviser to the Independent STM Directors for the purposes of Rule 3
of the Takeover Code) reviewed the terms of the transaction bonuses
and has confirmed that, in its opinion, the transaction bonuses set
out above are fair and reasonable. In providing this advice to the
STM Directors, Cavendish has taken into account the commercial
assessments of the STM Directors.
The proposed additional remuneration payments in respect of
Therese Neish, Nigel Birrell and Peter Smith are related party
transactions under the AIM Rules. Alan Kentish (being the only
independent Director for the purpose of such assessment) having
consulted with Cavendish, considers the terms of the bonus
arrangements noted above to be fair and reasonable insofar as STM
Shareholders are concerned.
Trading Facilities
STM Shares are currently admitted to trading on AIM. Subject to
the Scheme becoming effective, an application will be made to the
London Stock Exchange for the cancellation of admission to trading
of the STM Shares on AIM.
The statements in this paragraph 10 are not "post-offer
undertakings" for the purposes of Rule 19.5 of the Takeover
Code.
Views of the STM Board
In considering the recommendation of the Acquisition to
Independent STM Shareholders, the Independent STM Directors have
given due consideration to Bidco's intentions for the business,
management, employees and locations of business of STM.
11. Financing
The Cash Consideration payable by Bidco under the terms of the
Acquisition will be funded from a loan from PSF Capital Reserve
L.P. (acting by its general partner Pension SuperFund Capital GP II
Limited) to Bidco. The source of funding of such loan advanced by
PSF Capital Reserve L.P. (acting by its general partner Pension
SuperFund Capital GP II Limited) to Bidco will be the proceeds of a
loan provided to PSF Capital Reserve L.P. (acting by its general
partner Pension SuperFund Capital GP II Limited) by NatWest under
the Facilities Agreement.
In accordance with Rule 2.7(d) of the Takeover Code, Davy, as
sole financial adviser to Bidco, is satisfied that sufficient
resources are available to Bidco to satisfy in full the Cash
Consideration payable to STM Shareholders under the terms of the
Acquisition.
Bidco has not been required to confirm, and has not confirmed,
that resources are available to satisfy payments under the Deferred
Consideration Units. It is anticipated that any payments under the
Deferred Consideration Units will be funded directly from the
ongoing cash flow and cash resources of STM (which will be
wholly-owned by Bidco following the Effective Date). Scheme
Shareholders will be at risk if, for any reason, these payment
obligations were unable to be satisfied by Bidco.
12. Details of the Deferred Consideration Units and Loan Notes
General
Under the terms of the Scheme, each Scheme Shareholder will
receive one Deferred Consideration Unit for each Scheme Share. The
Deferred Consideration Units have been constituted by a deed poll
entered into by Bidco on the date of this Announcement. Under the
terms of the DCU Deed Poll, subject to the DCU Conditions having
been satisfied, each Deferred Consideration Unit shall entitle its
holder to one Loan Note. The principal value of each Loan Note that
the DCU Holder may be entitled to (" Loan Note Principal Value "),
and therefore the amount of cash ultimately payable to a Loan Note
holder upon redemption of their Loan Notes on the Loan Note Payment
Date, shall be determined by way of an Assessment Process in
accordance with the terms of the DCU Deed Poll.
The Deferred Consideration Units will not represent any equity
or ownership interest in Bidco, and accordingly will not confer on
the DCU Holder any right to attend, speak at or vote at any meeting
of the shareholders of Bidco or right to any dividends or right to
any return of capital by Bidco.
The Deferred Consideration Units will be non-transferable. No
application will be made for the Deferred Consideration Units to be
listed or dealt in on any stock exchange. The Deferred
Consideration Units will be governed by English law and will be
issued in certificated form.
If the laws of any jurisdiction make it illegal for Scheme
Shareholders to hold or be issued Deferred Consideration Units or
would require any qualification of the Deferred Consideration Units
under any applicable laws or regulations, they may not be entitled
to the Deferred Consideration Units or the amounts which may be
payable thereon. In such circumstances, Bidco intends under the
terms of the Scheme to pay such Restricted Overseas Shareholders an
amount equal to the amount that such Scheme Shareholder would have
received (if any) under the Deferred Consideration Units and the
Loan Notes (subject to the terms and conditions of the DCU Deed
Poll as if they applied for determining and paying such
amount).
The Deferred Consideration Units are complex instruments and a
number of factors will determine whether any amount will actually
be paid to Scheme Shareholders by way of the Loan Notes. The Loan
Note Principal Value is capped at a maximum of 7 pence and the
minimum value under the Loan Notes is zero.
Subject to the satisfaction of the DCU Conditions and agreement
on, or determination of, the Loan Note Principal Value, Bidco shall
enter into the Loan Note Instrument. The Loan Note Principal Value
will be determined by the Assessment Process set out in the DCU
Deed Poll and summarised below, following which, each DCU Holder
will either receive one Loan Note for each Deferred Consideration
Unit held by such DCU Holder or, if the results of the Assessment
Process are such that the Loan Note Principal Value is agreed or
determined to be zero, no Loan Notes will be issued, and in these
circumstances the DCU Holders will not receive any additional
consideration under the terms of the DCU Deed Poll. In these
circumstances, the value of each Deferred Consideration Unit would
be zero.
No Interest shall be payable on the Loan Note , other than in
circumstances where Bidco is in default of its payment obligations
under the terms of the Loan Note Instrument . Each Loan Note shall
have a term which ends on the date falling one year after the
Effective Date. On redemption (being the Loan Note Payment Date)
the Loan Note Principal Value will be paid to the holders of the
Loan Notes and the Loan Notes will be automatically cancelled.
DCU Conditions
The Loan Notes shall only become capable of being issued
providing the following conditions have been satisfied in full (the
" DCU Conditions "), following which an assessment process (as
referenced below) will begin in order to determine the Loan Note
Principal Value:
1 the UK Pensions Regulator not having taken any action or
required a third party to take any action that would result in or
has resulted in (i) the winding up of the Master Trust; or (ii) the
Wider STM Group ceasing to operate the Master Trust, in either
case, prior to the Effective Date;
2 satisfaction in full of Conditions 2(b) and 2(c) (as set out
in Appendix I to this Announcement) by the Effective Date;
3 as at the Effective Date, no Regulator having given notice,
following the date of the DCU Deed Poll, of a decision to take,
institute or implement any action, proceeding, suit, investigation,
enquiry or reference (and in each case, not having withdrawn the
same) or having required any action to be taken or otherwise having
done anything which would result in, or has resulted in, in each
case, (i) the withdrawal or loss of any license, authorisation or
regulatory approval held by the Wider STM Acquisition Group as at
the date of the DCU Deed Poll and which is or would be material in
the context of the Wider STM Acquisition Group taken as whole; or
(ii) the imposition of any fine or penalty on any member of the
Wider STM Acquisition Group and which is or would be material in
the context of the Wider STM Acquisition Group taken as whole,
provided always that if, prior to the Effective Date, it is
agreed that the Master Trust and/or its associated Wider STM Group
funding entity is, with the agreement of the Master Trust trustees,
to be sold, novated or otherwise transferred (" MT Sale "), then,
DCU Condition 1 above and, solely in respect of the UK Pension
Regulator with regard to DCU Condition 3 above, shall be treated as
having been satisfied in full as at the date of public announcement
of such MT Sale, provided that the agreement to any MT Sale is not
thereafter rescinded prior to the Effective Date.
Assessment process (the " Assessment Process ")
Subject to the DCU Conditions being met, the calculation of the
Loan Note Principal Value shall be based on an assessment of change
in the net attrition rate of customer numbers, which means, the
netting off of new customer wins against customer losses on an
annualised basis across, in each case, the STM Group business
during the period from 30 September 2023 until the last day of the
month prior to the Effective Date. The net attrition calculation
shall not take into account: (i) any customer losses caused by
deaths; (ii) any customer wins and customer losses of the SIPPs
Companies; and (iii) any customer wins and customer losses of the
Master Trust in the event it is no longer owned by the STM Group as
at the Effective Date. Bidco shall prepare and deliver to a
representative appointed by STM the calculation of the Loan Note
Principal Value for review no later than 15 Business Days after the
Effective Date.
The principal value of each Loan Note to be issued pursuant to
the Loan Note Instrument will be calculated as follows:
LNPV = 7 - X
where:
LNPV = the " Loan Note Principal Value " in pence
X = a number between 7 and 0 and calculated on a straight-line
basis dependent upon the extent to which annualised
net attrition during the calculation period falls
between 5% and 10% and where, for the avoidance of
doubt:
annualised net attrition during the calculation period
is 5% or less, X shall equal 0; and
annualised net attrition during the calculation period
is 10% or more, X shall equal 7.
annualised net attrition is calculated as the net
attrition during the calculation period multiplied
by 12 and divided by the number of months in the
calculation period.
Within 14 days of determination of the Loan Note Principal Value
referred to above, Bidco shall issue the Loan Notes, each Loan Note
being in a principal amount equal to the Loan Note Principal
Value
Loan Notes
The Loan Notes will be governed by English law, will be issued,
credited as fully paid and will be issued in certificated form. The
Loan Notes will not be transferable and no application will be made
for them to be listed or dealt in on any stock exchange.
The Loan Notes will not bear interest other than in
circumstances where Bidco is in default of its payment obligations
under the terms of the Loan Note Instrument.
The Loan Notes will be issued in accordance with the terms of
the DCU Deed Poll and Loan Note Instrument. On the expiry of the
term, Bidco will redeem the outstanding Loan Notes for cash. A
holder of the Loan Notes may not opt to redeem any of his notes
prior to the expiry of the term.
Full details of the Loan Notes will be contained in the Scheme
Document.
The Panel has determined that an estimate of the value of the
Deferred Consideration Units and Loan Note in accordance with Rule
24.11 of the Code is not required to be included in the Scheme
Document.
13. Offer- related Arrangements
Pension SuperFund Capital and STM entered into a confidentiality
agreement on 14 July 2023 (the "Confidentiality Agreement")
pursuant to which Pension SuperFund Capital has undertaken to keep
confidential certain information related to the Acquisition and to
STM and not to disclose it to third parties (other than to
authorised recipients) unless required by law or regulation. These
confidentiality obligations shall remain in force until the first
to occur of (a) the completion of the Acquisition by Bidco or (b)
two years from the date of the Confidentiality Agreement.
Under the terms of the Confidentiality Agreement, Pension
SuperFund Capital has also agreed to customary standstill
provisions pursuant to which it has agreed that it will not (other
than in limited circumstances) acquire any STM Shares. This
restriction ceases immediately following the making of this
Announcement.
14. Structure of and Conditions to the Acquisition
It is intended that the Acquisition shall be effected by means
of a Court-sanctioned scheme of arrangement between STM and the
Scheme Shareholders under Part X of the Companies Act. Bidco
reserves the right to elect, however, with the consent of the Panel
(where necessary), to implement the Acquisition by way of a
Takeover Offer.
The purpose of the Scheme is to provide for Bidco to become the
holder of the entire issued and to be issued ordinary share capital
of STM. This is to be achieved by the transfer of the Scheme Shares
to Bidco, in consideration for which the Scheme Shareholders who
are on the register of members of STM at the Scheme Record Time,
shall receive Cash Consideration on the basis set out in paragraph
2 of this Announcement and the Deferred Consideration Units.
The Scheme is subject to the Conditions and certain further
terms set out in Appendix I to this Announcement and to be set out
in the Scheme Document and the Forms of Proxy and will only become
effective if, among other things, the following events occur on or
before the Long Stop Date or such later date as may be agreed in
writing by Bidco and STM (with the Panel's consent and as the Court
may approve (if such approval(s) are required)):
(i) the approval of the Scheme by a majority in number of the
Independent STM Shareholders who are present and vote, whether in
person or by proxy, at the Court Meeting (or, if applicable any
separate class meeting which may be required by the Court or at any
adjournment of any such meeting) and who represent 75 per cent. or
more in value of the Scheme Shares voted;
(ii) the resolutions required to implement the Scheme as set out
in the Notice of General Meeting as will be included in the Scheme
Document, being duly passed by the requisite majority at the
General Meeting (or at any adjournment thereof);
(iii) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to STM and Bidco) and the delivery of a certified copy
of the Court Order to the Companies Registry and registration of
such Court Order together with a copy of the Scheme Document and
all documents required to be annexed thereto, by the Companies
Registry;
(iv) completion of the MBO Sale;
(v) satisfaction of the Regulatory Conditions; and
(vi) the Scheme becoming effective by the Long Stop Date.
The Scheme shall lapse if:
-- the Court Meeting and the General Meeting (and any
adjournment thereof) are not held by the 22(nd) day after the
expected date of such meetings as will be set out in the Scheme
Document (or such later date as may be agreed between Bidco and
STM, with the Panel's consent);
-- the Court Hearing to approve the Scheme is not held by the
22(nd) day after the expected date of such hearing as will be set
out in the Scheme Document (or such later date as may be agreed
between Bidco and STM, with the Panel's consent); or
-- the Scheme does not become effective by the Long Stop Date,
provided however that the deadlines for the timing of the Court
Meeting, the General Meeting and the Court Hearing to approve the
Scheme as set out above may be waived by Bidco, and the deadline
for the Scheme to become effective may be extended by agreement
between STM and Bidco (with the Panel's consent and as the Court
may approve (if such consent and/or approval is required)) .
If any Condition in paragraph 2 of Appendix I to this
Announcement is not capable of being satisfied by the date
specified therein, Bidco shall make an announcement through a
Regulatory Information Service as soon as practicable and, in any
event, by not later than 8.00 a.m. on the Business Day following
the date so specified, stating whether Bidco has invoked that
Condition (where applicable), waived that Condition or, with the
agreement of STM, specified a new date by which that Condition must
be satisfied.
The Acquisition will be conditional upon (as well as the other
Conditions set out in Appendix I) regulatory approvals in Malta and
Gibraltar by the relevant regulator and the tPR Condition being
satisfied. The MBO Sale is conditional on approval by the FCA in
the UK and the Acquisition will therefore not complete until such
condition has been satisfied (or, if legally permissible, waived)
in accordance with the terms of the MBO Sale.
Bidco considers each of the Regulatory Conditions and the MBO
Condition to each be of material significance to it in the context
of the Acquisition. If any of the Regulatory Conditions or the MBO
Condition are not satisfied, Bidco may seek to invoke the relevant
condition in accordance with its terms as at the relevant date.
Upon the Scheme becoming effective, it shall be binding on all
STM Shareholders, irrespective of whether or not they attended or
voted at the Court Meeting or the General Meeting.
Further details of the Scheme, including an indicative timetable
for its implementation, shall be set out in the Scheme Document,
which will specify the necessary actions to be taken by STM
Shareholders. It is expected that the Scheme Document and the Forms
of Proxy accompanying the Scheme Document will be published as soon
as reasonably practicable and, in any event, within 28 days of this
Announcement (unless STM and Bidco otherwise agree, and the Panel
consents) and the Court Meeting and the General Meeting are
expected to be held in the fourth quarter of 2023. The Scheme
Document and Forms of Proxy will be posted to all STM Shareholders
as soon as practicable, at no charge to them.
Any STM Shares issued before the Scheme Record Time will be
subject to the terms of the Scheme. The Other GM Resolutions will,
amongst other matters, provide that the Articles be amended to
incorporate provisions requiring any STM Shares issued after the
Scheme Record Time (other than to Bidco and/or its nominees) to be
automatically transferred to Bidco on the same terms as the
Acquisition (other than terms as to timings and formalities). The
provisions of the Articles (as amended) will prevent any person
(other than Bidco and its nominees) holding shares in the capital
of STM after the Effective Date.
15. De- listing and re-registration
Prior to the Scheme becoming effective, STM shall make an
application for the cancellation of admission to trading of the STM
Shares on AIM, to take effect from or shortly after the Effective
Date.
The last day of dealings in STM Shares on AIM is expected to be
the Business Day immediately prior to the Effective Date and no
transfers shall be registered after 6.00 p.m. on that date.
16. Disclosure of interests in STM
Save in respect of the irrevocable undertakings referred to in
paragraph 7 above and the interests of Alan Kentish and Clifton
Participations Limited referred to in paragraph 7 above, as at the
close of business on the Latest Practicable Date, neither Bidco,
nor any of its directors nor, so far as Bidco is aware, any person
acting in concert (within the meaning of the Takeover Code) with it
has: (i) any interest in or right to subscribe for any relevant
securities of STM; (ii) any short positions in respect of relevant
securities of STM (whether conditional or absolute and whether in
the money or otherwise), including any short position under a
derivative, any agreement to sell or any delivery obligation or
right to require another person to purchase or take delivery; (iii)
any dealing arrangement of the kind referred to in Note 11 on the
definition of 'acting in concert' in the Takeover Code, in relation
to the relevant securities of STM; nor (iv) borrowed or lent any
relevant securities of STM (including, for these purposes, any
financial collateral arrangements of the kind referred to in Note 4
on Rule 4.6 of the Takeover Code), save for any borrowed shares
which had been either on-lent or sold.
"relevant securities of STM" means STM Shares or securities
convertible or exchangeable into STM Shares.
"Interests in securities" for these purposes and within the
meaning of the Takeover Code arise, in summary, when a person has
long economic exposure, whether absolute or conditional, to changes
in the price of securities (and a person who only has a short
position in securities is not treated as interested in those
securities). In particular, a person will be treated as having an
"interest" by virtue of the ownership, voting rights or control of
securities, or by virtue of any agreement to purchase, option in
respect of, or derivative referenced to, securities.
17. General
Switching to a Takeover Offer
Bidco reserves the right to elect, with the consent of the Panel
(where necessary), to implement the Acquisition by way of a
Takeover Offer.
If the Acquisition is effected by way of a Takeover Offer and
such Takeover Offer becomes or is declared unconditional and
sufficient acceptances are received, Bidco intends to apply the
provisions of section 160 of the Companies Act to compulsorily
acquire any outstanding STM Shares to which such Takeover Offer
relates, and for the admission to trading of the STM Shares on AIM
to be cancelled.
Miscellaneous
The Acquisition is subject to the Conditions and certain further
terms set out in Appendix I to this Announcement and to the full
terms and conditions which will be set out in the Scheme Document.
Appendix II to this Announcement contains the sources of
information and bases of calculations of certain information
contained in this Announcement, Appendix III contains a summary of
the irrevocable undertakings and letters of intent referred to in
this Announcement, and Appendix IV contains definitions of certain
terms and expressions used in this Announcement. The Scheme will be
governed by the laws of the Isle of Man and be subject to the
jurisdiction of the Court and to the Conditions and certain further
conditions and terms set out in Appendix I to this Announcement and
to be set out in the Scheme Document. The Acquisition will also be
subject to the applicable requirements of the Companies Act, the
Court, the Financial Conduct Authority, the London Stock Exchange,
the Panel, the Takeover Code and the AIM Rules. This Announcement
does not constitute, or form part of, an offer or invitation to
purchase STM Shares or any other securities.
Davy and Cavendish have each given and not withdrawn their
consent to the publication of this Announcement with the inclusion
herein of the references to their names in the form and context in
which they appear.
18. Documents available on website
Copies of the following documents shall be made available,
subject to certain restrictions relating to persons residing in
Restricted Jurisdictions, on STM's website at
https://www.stmgroupplc.com/possible-offer-for-stm-group-plc by no
later than noon (London time) on the Business Day following this
Announcement until the end of the Acquisition:
-- this Announcement;
-- the agreement for the sale of the SIPP Companies between STM
and Pathlines Holdings Limited referred to in paragraph 6
above;
-- the direction letter from Clifton Participations Limited in
favour of Bidco, STM and the Receiving Agent referred to in
paragraph 6 above;
-- the irrevocable undertakings and letters of intent referred
to in paragraph 7 above and summarised in Appendix III to this
Announcement;
-- the Confidentiality Agreement;
-- the documents relating to the financing of the Acquisition
referred to in paragraph 11 above;
-- the DCU Deed Poll and Loan Note Instrument; and
-- the consents from Cavendish and Davy to being named in this Announcement.
Neither the contents of the websites referred to in this
Announcement nor the contents of any website accessible from
hyperlinks is incorporated in, or forms part of, this
Announcement.
Enquiries:
Pension SuperFund Capital edmund.truell@psf.capital
Edmund Truell
Davy Capital Markets UK (Financial Adviser
to Pension SuperFund Capital and Bidco) +44 20 7448 8870
Will Smith / Graham Hertrich / Andrew
Beswick
(Corporate Finance)
EQ Corp (PR Adviser to Pension SuperFund
Capital and Bidco) +44 (0) 20 7223 1100
James Culverhouse +44 (0) 7912 508 322
James.culverhouse@eqcorp.com
STM via Walbrook PR
Nigel Birrell
Cavendish Capital Markets Limited (Financial
Adviser, Nominated Adviser and Broker
to STM) +44 20 7220 0500
Matt Goode / Emily Watts / Henrik Persson
/ Abigail Kelly / Trisyia Jamaludin (Corporate
Finance)
Tim Redfern (ECM)
Walbrook PR (PR Adviser to STM) +44 (0) 20 7933 8780
Tom Cooper +44 (0) 797 122 1972
STM@walbrookpr.com
Simpson Thacher & Bartlett LLP is retained as legal adviser
to Pension Superfund Capital and Bidco.
Pinsent Masons LLP is retained as legal adviser to STM.
Important Notice
Davy Capital Markets UK is a trading name of J & E Davy (UK)
Limited. J & E Davy (UK) Limited which is authorised and
regulated by the Financial Conduct Authority. J & E Davy (UK)
Limited is a Davy Group company and also a member of the Bank of
Ireland Group. J & E Davy (UK) Limited is acting for Pension
SuperFund Capital and Bidco in relation to the matter described in
this Announcement and is not advising any other person, and
accordingly will not be responsible to anyone other than Pension
SuperFund Capital and Bidco for providing the protections afforded
to its clients or for providing advice in relation to the matters
described in this Announcement.
Cavendish Capital Markets Limited (" Cavendish "), which is
authorised and regulated by the Financial Conduct Authority in the
United Kingdom, is acting exclusively for STM and for no one else
in connection with the Acquisition and/or any other matter referred
to in this Announcement and will not be responsible to anyone other
than STM for providing the protections afforded to its clients or
for providing advice in relation to the Acquisition, the contents
of this Announcement, or another other matters referred to in this
Announcement. Neither Cavendish nor any of its subsidiaries,
affiliates or branches owes or accepts any duty, liability or
responsibility whatsoever (whether direct, indirect, consequential,
whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Cavendish in connection with this
Announcement, any statement or other matter or arrangement referred
to herein or otherwise.
This Announcement is for information purposes only and does not
constitute an offer to sell or an invitation to purchase any
securities or the solicitation of an offer to buy any securities,
or the solicitation of any vote or approval in any jurisdiction,
pursuant to the Acquisition or otherwise. The Acquisition shall be
made solely by means of the Scheme Document which shall contain the
full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any vote in respect of
the Scheme or other response in relation to the Acquisition should
be made only on the basis of the information contained in the
Scheme Document.
This Announcement has been prepared for the purpose of complying
with English law and Isle of Man law and the Takeover 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 the United Kingdom or the
Isle of Man.
STM shall prepare the Scheme Document to be distributed to STM
Shareholders. STM and Bidco urge STM Shareholders to read the
Scheme Document when it becomes available because it will contain
important information relating to the Acquisition.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
Overseas Shareholders
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom or the Isle of Man may
be restricted by law and/or regulations. Persons who are not
resident in the United Kingdom or the Isle of Man or who are
subject to the laws and regulations of other jurisdictions should
inform themselves of, and observe, any applicable requirements.
Unless otherwise determined by Bidco or required by the Takeover
Code, and permitted by applicable law and regulation, the
Acquisition shall not be made available, in whole or in part,
directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws or regulations in that
jurisdiction and no person may vote in favour of the Acquisition by
any such use, means, instrumentality or form within a Restricted
Jurisdiction or any other jurisdiction if to do so would constitute
a violation of the laws of that jurisdiction. Accordingly, copies
of this Announcement and all documents relating to the Acquisition
are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in, into or from a
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction, and persons receiving this Announcement and all
documents relating to the Acquisition (including custodians,
nominees and trustees) must not mail or otherwise forward,
distribute or send them in, into or from such jurisdictions where
to do so would violate the laws in those jurisdictions. If the
Acquisition is implemented by way of a Takeover Offer (unless
otherwise permitted by applicable law and regulation), such
Takeover Offer may not be made available directly or indirectly,
into or from or by the use of mails or any means or instrumentality
(including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or
foreign commerce of, or of any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the
Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.
The availability of the Acquisition to STM Shareholders who are
not resident in the United Kingdom or the Isle of Man (and, in
particular, their ability to vote their Scheme Shares with respect
to the Scheme at the Court Meeting, or to appoint another person as
proxy to vote at the Court Meeting on their behalf) may be affected
by the laws of the relevant jurisdictions in which they are
resident. Persons who are not resident in the United Kingdom or the
Isle of Man should inform themselves of, and observe, any
applicable requirements, as any failure to comply with such
requirements may constitute a violation of the securities laws of
any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the
violation of such restrictions by any person. The Acquisition shall
be subject to the applicable requirements of the Companies Act, the
Court, the Takeover Code, the Panel, the London Stock Exchange, the
Financial Conduct Authority and the AIM Rules. Further details in
relation to Overseas Shareholders will be contained in the Scheme
Document.
Additional Information for US Investors
The Acquisition is being made to acquire the securities of an
Isle of Man company by means of a scheme of arrangement provided
for under Part X of the Companies Act. A transaction effected by
means of a scheme of arrangement is not subject to the proxy
solicitation or tender offer rules under the US Exchange Act.
Accordingly, the Scheme will be subject to disclosure requirements
and practices applicable to schemes of arrangement involving a
target company in the Isle of Man admitted to trading on AIM, which
are different from the disclosure requirements of the US under the
US proxy solicitation and tender offer rules. The financial
information included in this Announcement and the Scheme
documentation has been or will have been prepared in accordance
with accounting standards applicable in the Isle of Man and the UK
and thus may not be comparable to financial information of US
companies or companies whose financial statements are prepared in
accordance with generally accepted accounting principles in the
US.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disproved or passed
judgment upon the fairness or the merits of the Acquisition or
determined if this Announcement is adequate, accurate or
complete.
If Bidco were to elect to implement the Acquisition by means of
a Takeover Offer, such Takeover Offer would be made in compliance
with applicable US laws and regulations, including to the extent
applicable Section 14I of the US Exchange Act and Regulation 14E
thereunder, and in accordance with the Takeover Code. Such a
takeover would be made in the United States by Bidco and no one
else.
The receipt of cash pursuant to the Acquisition by a US holder
as consideration for the transfer of its Scheme Shares pursuant to
the Scheme may be a taxable transaction for United States federal
income tax purposes and under applicable United States state and
local, as well as foreign and other, tax laws. Each STM Shareholder
is urged to consult his independent professional adviser
immediately regarding the tax consequences of the Acquisition
applicable to him.
It may be difficult for US holders to enforce their rights and
any claims arising out of the US federal securities laws, since STM
is located in a country other than the US, and all of its officers
and directors are residents of countries other than the US. US
holders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws.
Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's judgement.
In accordance with normal UK practice and consistent with Rule
14e-5 under the US Exchange Act, Bidco, certain affiliated
companies and the nominees or brokers (acting as agents) may from
time to time make certain purchases of, or arrangements to
purchase, shares in STM outside of the US, other than pursuant to
the Acquisition, until the date on which the Acquisition and/or
Scheme becomes effective, lapses or is otherwise withdrawn. If such
purchases or arrangements to purchase were to be made they would
occur either in the open market at prevailing prices or in private
transactions at negotiated prices and will comply with applicable
law, including to the extent applicable the US Exchange Act. Any
information about such purchases or arrangements to purchase will
be disclosed as required in the United Kingdom, will be reported to
a Regulatory Information Service and will be available on the
London Stock Exchange website at www.londonstockexchange.com and
via SENS . This information will also be publicly disclosed in the
US to the extent that such information is made public in
the UK.
Forward Looking Statements
This Announcement (including information incorporated by
reference in the Announcement), oral statements made regarding the
Acquisition, and other information published by Bidco and STM
contain certain forward-looking statements, beliefs or opinions,
with respect to the financial condition, results of operations and
business of Bidco and STM. These forward-looking statements can be
identified by the fact that they do not relate only to historical
or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "envisage", "estimate",
"intend", "plan", "goal", "believe", "hope", "aims", "continue",
"will", "may", "should", "would", "could", or other words of
similar meaning. These statements are based on assumptions and
assessments made by STM, and/or Bidco, in light of their experience
and their perception of historical trends, current conditions,
future developments and other factors they believe appropriate. 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 and the factors
described in the context of such forward-looking statements in this
Announcement could cause actual results and developments to differ
materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the
expectations reflected in such forward-looking statements are
reasonable, no assurance can be given by STM and Bidco that such
expectations will prove to have been correct and you are therefore
cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this Announcement.
Neither STM nor Bidco nor Pension SuperFund Capital assumes any
obligation and STM and Bidco and Pension SuperFund Capital disclaim
any intention or obligation, to update or correct the information
contained in this Announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law or regulation (including under the AIM Rules).
EXCEPT AS EXPRESSLY PROVIDED IN THE ANNOUNCEMENT, THE
FORWARD-LOOKING STATEMENTS HAVE NOT BEEN REVIEWED BY THE AUDITORS
OF STM, PENSION SUPERFUND CAPITAL OR BIDCO OR THEIR RESPECTIVE
FINANCIAL ADVISERS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN
AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT
EXPECTED RESULTS AND ARE BASED ON CERTAIN KEY ASSUMPTIONS. THERE
ARE SEVERAL FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN FORWARD-LOOKING
STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING
STATEMENTS IS THE SATISFACTION OF THE CONDITIONS, AS WELL AS
ADDITIONAL FACTORS SUCH AS CHANGES IN GLOBAL, POLITICAL, ECONOMIC,
BUSINESS, COMPETITIVE, MARKET AND REGULATORY FORCES, FUTURE
EXCHANGE AND INTEREST RATES, CHANGES IN TAX RATES AND FUTURE
BUSINESS COMBINATIONS OR DISPOSITIONS. SUCH FORWARD LOOKING
STATEMENTS SHOULD THEREFORE BE CONSTRUED IN THE LIGHT OF SUCH
FACTORS. NEITHER BIDCO NOR STM, 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.
No Profit Forecasts, Estimates or Quantified Benefits
Statements
No statement in this Announcement is intended as a profit
forecast, profit estimate or quantified benefits statement for any
period and no statement in this Announcement should be interpreted
to mean that earnings or earnings per share for STM for the current
or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for STM.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is
interested in 1 per cent. or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of: (i) the offeree
company; and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 p.m. (London time) on the (1) 0th
Business Day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (London time) on the (1)
0th Business Day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or
becomes, interested in 1 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each
of: (i) the offeree company; and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the Business Day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Electronic Communications
Please be aware that addresses, electronic addresses and certain
information provided by STM Shareholders and other relevant persons
for the receipt of communications from STM may be provided to Bidco
during the Offer Period as requested under Section 4 of Appendix 4
of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Publication on Website and Availability of Hard Copies
A copy of this Announcement and the documents required to be
published by Rule 26 of the Takeover Code shall be made available
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions on STM's website at
https://www.stmgroupplc.com/possible-offer-for-stm-group-plc b y no
later than 12 noon (London time) on 10 October 2023. For the
avoidance of doubt, the contents of this website are not
incorporated into and do not form part of this Announcement.
STM Shareholders may request hard copies of this Announcement by
contacting Computershare Investor Services (Jersey) Limited at 13
Castle Street, St. Helier, Jersey CI, JE1 1ES or on +44 (0370) 707
4040 between 9:00 a.m. and 5:00 p.m. (London time) Monday to Friday
(public holidays excepted). Calls to this number from persons who
are not resident in Jersey are charged at the applicable
international rate. Calls from a mobile device may incur network
extras.
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. If you have received this Announcement
in electronic form, copies of this Announcement and any document or
information incorporated by reference into this Announcement will
not be provided unless such a request is made.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are a resident in the United Kingdom
or, if not, from another appropriately authorised independent
financial adviser.
This Announcement and any rights or liabilities arising
hereunder and the Acquisition will be governed by English law
and/or Isle of Man law (as applicable) and subject to the
applicable requirements of the Companies Act, the Court, the
Financial Conduct Authority, the London Stock Exchange, the Panel,
the Takeover Code and the AIM Rules.
APPIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE SCHEME AND THE
ACQUISITION
Part A: Conditions to the Scheme and the Acquisition
The Acquisition will be conditional upon the Scheme becoming
unconditional and effective in accordance with its terms, subject
to the Takeover Code, by not later than 11:59 p.m. (London time) on
the Long Stop Date or such later date as Bidco and STM may, with
the consent of the Panel, agree and (if required) the Court may
allow.
1. The Scheme shall be subject to the following conditions:
1.1.
(i) its approval by a majority in number of the Independent STM
Shareholders who are on the register of members of STM at the
Scheme Voting Record Time and who are present, entitled to vote and
voting, whether in person or by proxy, at the Court Meeting and, if
applicable, at any separate class meeting which may be required (or
any adjournment thereof) and who represent 75 per cent. or more of
the voting rights attaching to the Scheme Shares voted by those
Scheme Shareholders at each such meeting; and
(ii) the Court Meeting (and, if applicable, any separate class
meeting which may be required) being held on or before the 22nd day
after the expected date of such meeting as set out in the Scheme
Document (or such later date as may be agreed by Bidco and STM,
with the consent of the Panel and (if required) the Court may
allow);
1.2.
(i) the resolutions required to implement the Scheme as set out
in the notice of the General Meeting being duly passed by
Independent STM Shareholders representing the requisite majority or
majorities of the votes cast at the General Meeting (or any
adjournment thereof);
(ii) the resolutions to approve the MBO Sale as set out in the
notice of the General Meeting being duly passed by Independent STM
Shareholders representing more than 50 per cent. of votes cast at
the General Meeting (or any adjournment thereof); and
(iii) such General Meeting being held on or before the 22nd day
after the expected date of such meeting as set out in the Scheme
Document (or such later date as may be agreed by Bidco and STM,
with the consent of the Panel and (if required) the Court may
allow);
1.3.
(i) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to STM and Bidco) and the delivery of a certified copy
of the Court Order to the Companies Registry and registration of
such Court Order together with a copy of the Scheme Document and
all documents required to be annexed thereto, by the Companies
Registry; and
(ii) the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing as set out in the
Scheme Document (or such later date as may be agreed by Bidco and
STM and (if required) the Court may allow).
2. In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition shall be conditional
upon the following Conditions and, accordingly, the necessary
actions to make the Scheme effective will not be taken unless such
Conditions (as amended if appropriate) have been satisfied or,
where relevant, waived:
Regulatory
(a) the UK Pensions Regulator not having taken any action or
required a third party to take any action that would result in (i)
the occurrence of a triggering event within items 1, 2 or 3 of the
table set out in section 21(6) of the Pensions Schemes Act 2017;
(ii) the winding up of the Master Trust; or (iii) the STM Group
ceasing to operate the Master Trust;
(b) to the extent required in connection with the Acquisition,
in respect of Bidco and each other person required to give a notice
under section 111 of the FSA 2019 in connection with the
acquisition of control of each member of the Wider STM Group
pursuant to the Acquisition which is a regulated firm as authorised
under the FSA 2019, the GFSC (i) having determined to approve such
acquisition of control unconditionally having given notice pursuant
to section 122(4)(a) of the FSA 2019; (ii) having determined to
approve such acquisition of control subject to the fulfilment of
conditions having given notice pursuant to section 122(7)(a) of the
FSA 2019 (in terms which do not impose any conditions, obligations
or restrictions on the Wider STM Group or the Wider Bidco Group
which would materially and adversely affect the business, assets,
profits or prospects of the Wider STM Group or the Wider Bidco
Group); or (iii) having being treated, at the expiry of the
relevant assessment period by virtue of section 122(6) of the FSA
2019, as having approved such acquisition of control. For the
purposes of this sub-paragraph, "control" shall be defined and
construed in accordance with the FSA 2019;
(c) to the extent required in connection with the Acquisition,
the MFSA having provided regulatory approval in writing of the
Acquisition or its implementation (in terms which do not impose any
conditions, obligations or restrictions on the Wider STM Group or
the Wider Bidco Group which would materially and adversely affect
the business, assets, profits or prospects of the Wider STM Group
or the Wider Bidco Group) and all filings required for the approval
of the Acquisition or its implementation by the MFSA having been
made in accordance with the Retirement Pensions Act, Chapter 514 of
the laws of Malta (as amended and in force from time to time) and
the legislation and regulation issued thereunder;
MBO Sale
(d) completion of the MBO Sale pursuant to the terms of the MBO SPA;
Notifications, Waiting periods and Authorisations
(e) Excluding in relation to the matters referred to in Condition 2 (b) to (c):
(i) all material filings, applications and/or material
notifications which are necessary under applicable legislation or
regulation, in connection with the Acquisition, of any relevant
jurisdiction having been made;
(ii) all necessary waiting periods and other time periods
(including any extensions thereof) under any applicable legislation
or regulation of any relevant jurisdiction having expired, lapsed
or been terminated;
(iii) all applicable statutory or regulatory obligations in any
jurisdiction having been materially complied with in each case in
respect of the Acquisition or other acquisition of any shares or
other securities in, or control or management of, STM or any member
of the Wider STM Group by any member of the Wider Bidco Group;
(iv) all authorisations deemed reasonably necessary in any
jurisdiction by Bidco for or in respect of the Acquisition and any
other acquisition of any shares or other securities in, or control
or management of, STM or any member of the Wider STM Group by any
member of the Wider Bidco Group having been obtained in terms and
in a form reasonably satisfactory to Bidco from all appropriate
third parties or (without prejudice to the generality of the
foregoing) from any person or bodies with whom any member of the
Wider STM Group or the Wider Bidco Group has entered into
contractual arrangements; and
(v) all such authorisations reasonably necessary or appropriate
to carry on the business of any member of the Wider STM Group in
any jurisdiction having been obtained,
in each case where the consequence of a failure to make such
notification or filing or to wait for the expiry, lapse or
termination of any such waiting or other time period or to comply
with such obligation or obtain such authorisations, orders, grants,
recognitions, determinations, confirmations, consents, licences,
clearances, permissions, exemptions and approvals would be unlawful
in any relevant jurisdiction or have an adverse effect on the Wider
STM Group, any member of the Wider Bidco Group or the ability of
Bidco to implement the Acquisition; and
(f) A ll such authorisations referred to in Conditions 2(e)(iv)
and (v) remaining in full force and effect at the time at which the
Acquisition becomes otherwise unconditional and there being no
notice or intimation of an intention to revoke, suspend, restrict,
modify or not to renew such authorisations at the time at which the
Acquisition becomes otherwise unconditional;
General antitrust and regulatory
(g) excluding in relation to the matters referred to in
Condition 2 (a) to (c), no antitrust regulator or Third Party
having given notice of a decision to take, institute or implement
any action, proceeding, suit, investigation, enquiry or reference
(and in each case, not having withdrawn the same), or having
required any action to be taken or otherwise having done anything,
or having enacted, made or proposed to enact or make any statute,
regulation, decision, order or change to published practice (and in
each case, not having withdrawn the same) and there not continuing
to be outstanding any statute, regulation, decision or order which
would or might reasonably be expected to, in any case to an extent
or in a manner which is or would be material in the context of the
Wider STM Group taken as a whole:
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Wider Bidco Group or by any member of the Wider STM
Group of all or any part of its businesses, assets or property or,
impose any material limitation on the ability of all or any of them
to conduct their businesses (or any part thereof) or to own,
control or manage any of their assets or properties (or any part
thereof);
(ii) require any member of the Wider Bidco Group or the Wider
STM Group to acquire or offer to acquire any shares, other
securities (or the equivalent) or interest in any member of the
Wider STM Group or any asset owned by any Third Party (other than
in the implementation of the Acquisition);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Bidco Group
directly or indirectly to acquire, hold or to exercise effectively
all or any rights of ownership in respect of shares or other
securities in STM or on the ability of any member of the Wider STM
Group or any member of the Wider Bidco Group directly or indirectly
to hold or exercise effectively all or any rights of ownership in
respect of shares or other securities (or the equivalent) in, or to
exercise voting or management control over, any member of the Wider
STM Group;
(iv) otherwise adversely affect any or all of the business,
assets, profits or prospects of any member of the Wider STM Group
or any member of the Wider Bidco Group;
(v) result in any member of the Wider STM Group or any member of
the Wider Bidco Group ceasing to be able to carry on business under
any name under which it presently carries on business;
(vi) make the Acquisition, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control or management of, STM by any member of the Wider Bidco
Group void, unenforceable and/or illegal under the laws of any
relevant jurisdiction, or, otherwise directly or indirectly
materially prevent or prohibit, restrict, restrain, impede,
challenge or delay or otherwise or otherwise interfere with the
implementation of, or impose material additional conditions or
obligations with respect to, or otherwise materially challenge,
impede, interfere or require material amendment of the Acquisition
or the acquisition or proposed acquisition of any shares or other
securities in, or control or management of, STM by any member of
the Wider Bidco Group;
(vii) require, prevent or materially delay a divestiture by any
member of the Wider Bidco Group of any shares or other securities
(or the equivalent) in any member of the Wider STM Group or any
member of the Wider Bidco Group; or
(viii) impose any limitation on the ability of any member of the
Wider Bidco Group or any member of the Wider STM Group to conduct,
integrate or co-ordinate all or any part of its business with all
or any part of the business of any other member of the Wider Bidco
Group and/or the Wider STM Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such antitrust regulator, or
Third Party could decide to take, institute, or implement any such
action, proceeding, suit, investigation, enquiry or reference or
take any other step under the laws of any jurisdiction in respect
of the Acquisition or the acquisition or proposed acquisition of
any shares or other securities in, or control or management of, STM
or any other member of the Wider STM Group by any member of the
Wider Bidco Group or otherwise intervene having expired, lapsed or
been terminated;
Certain matters arising as a result of any arrangement,
agreement, etc.
(h) except as Disclosed (including in respect of the Additional
Remuneration Arrangements), there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider STM Group is a party or
by or to which any such member or any of its assets is or may be
bound, entitled or be subject or any event or circumstance which,
as a consequence of the Acquisition or the acquisition or proposed
acquisition by any member of the Wider Bidco Group of any shares or
other securities (or the equivalent) in STM, could or might
reasonably be expected to result in, in each case to an extent
which is material in the context of the Wider STM Group taken as a
whole:
(i) any monies borrowed by, or any other indebtedness, actual or
contingent, of, or any grant available to, any member of the Wider
STM Group being or becoming repayable, or capable of being declared
repayable, immediately or prior to its or their stated maturity
date or repayment date, or the ability of any such member to borrow
monies or incur any indebtedness being withdrawn or inhibited or
being capable of becoming or being withdrawn or inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge, encumbrance or
other security interest over the whole or any material part of the
business, property or assets of any member of the Wider STM Group
or any such mortgage, encumbrance, charge or other security
interest (whenever created, arising or having arisen) becoming
enforceable;
(iii) any material arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or any
material rights, liabilities, obligations or interests of any
member of the Wider STM Group being adversely modified or adversely
affected or any onerous obligation or liability arising or any
adverse action being taken or arising thereunder;
(iv) any liability of any member of the Wider STM Group to make
any material severance, termination, bonus or other payment to any
of its directors or other officers other than in the ordinary
course of business;
(v) the interest or business of any such member of the Wider STM
Group in or with any other person, firm or company (or any
agreements or arrangements relating to such interest or business)
being or becoming capable of being terminated or adversely modified
or affected;
(vi) any member of the Wider STM Group, which is material in the
context of the Wider STM Group taken as a whole, ceasing to be able
to carry on business under any name under which it presently
carries on business;
(vii) the value of, or the financial or trading position or
prospects of, any member of the Wider STM Group being prejudiced or
adversely affected;
(viii) any assets or interests of, or any asset the use of which
is enjoyed by, any member of the Wider STM Group being or falling
to be disposed of or charged or any right arising under which any
such asset or interest could be required to be disposed of or
charged or could cease to be available to any member of the Wider
STM Group other than in the ordinary course of business; or
(ix) the creation or acceleration of any material liability
(actual or contingent) of any member of the Wider STM Group
(including any material tax liability or any obligation to obtain
or acquire any material Authorisation, notice, waiver, concession,
agreement or exemption from any Third Party or any person) other
than trade creditors or other liabilities incurred in the ordinary
course of business or in connection with the Acquisition,
and no event having occurred which, under any provision of any
arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider STM Group is a party or
by or to which any such member or any of its assets are bound,
entitled or subject, would or might reasonably be expected to
result in any of the events or circumstances as are referred to in
Conditions 2 (h) (i) to (ix) above, in each case to the extent
material in the context of the Wider STM Group taken as a
whole;
Certain events occurring since 31 December 2022
(i) except as Disclosed, no member of the Wider STM Group having since 31 December 2022:
(i) issued or agreed to issue, or authorised or proposed or
announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold, or agreed to
transfer or sell or authorised or proposed the transfer or sale of,
STM Shares out of treasury (except, where relevant, as between STM
and wholly owned subsidiaries of STM or between the wholly owned
subsidiaries of STM); and except for any issue or transfer out of
the employee benefit trust of STM Shares, where agreed in advance
in writing by Bidco, on the exercise of employee share options or
vesting of employee share awards;
(ii) recommended, declared, paid or made or proposed or agreed
to recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly owned subsidiary of
STM to STM or any of its wholly owned subsidiaries;
(iii) other than pursuant to the Acquisition and except for
transactions between STM and its wholly owned subsidiaries or
between the wholly owned subsidiaries of STM, and transactions in
the ordinary course of business, implemented, effected, authorised
or proposed or announced its intention to implement, effect,
authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment or acquisition or disposal of
assets or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings in any such case to an extent which is
material in the context of the Wider STM Group taken as a
whole;
(iv) other than in the ordinary course of business and except
for transactions between STM and its wholly owned subsidiaries, or
between the wholly owned subsidiaries of STM, disposed of, or
transferred, mortgaged, encumbered or created any security interest
over, any material asset or any right, title or interest in any
asset or authorised, proposed or announced any intention to do so,
in each case to the extent which is material in the context of the
Wider STM Group taken as a whole;
(v) other than in the ordinary course of business and except for
transactions between STM and its wholly owned subsidiaries or
between the wholly owned subsidiaries of STM, issued, authorised or
proposed or announced an intention to authorise or propose the
issue of or made any change in or to the terms of any debentures or
become subject to any contingent liability or incurred or increased
any indebtedness, in each case which is material in the context of
the Wider STM Group as a whole;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract,
arrangement, agreement, transaction or commitment (whether in
respect of capital expenditure or otherwise), except in the
ordinary course of business which: (i) is of a long term, unusual
or onerous nature or magnitude; or (ii) is reasonably likely to be
materially restrictive on the business of any member of the Wider
STM Group which in any such case is material and adverse in the
context of the Wider STM Group taken as a whole;
(vii) entered into or varied to a material extent the terms of,
or made any offer (which remains open for acceptance) to enter into
or vary to a material extent the terms of any contract, service
agreement , commitment or arrangement with any director or senior
executive of any member of the Wider STM Group, except for (in each
case) salary increases, bonuses or variations of terms in the
ordinary course of business or as a result of a promotion;
(viii) entered into any licence or other disposal of
intellectual property rights of any member of the Wider STM Group
which are material in the context of the Wider STM Group taken as a
whole and outside the ordinary course of business;
(ix) proposed, agreed to provide or modified in any material
respect the terms of any incentive scheme or other benefit relating
to the employment or termination of employment of any employee of
the Wider STM Group and which is material in the context of the
Wider STM Group when taken as a whole;
(x) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, except in respect of the matters mentioned in
sub-paragraph (i) above, made any other change to any part of its
share capital which is material in the context of the Wider STM
Group when takes as a whole;
(xi) except in the ordinary course of business, waived,
compromised or settled any claim which is material in the context
of the Wider STM Group taken as a whole;
(xii) terminated or varied the terms of any agreement or
arrangement between any member of the Wider STM Group and any other
person in a manner which is materially adverse to the Wider STM
Group taken as a whole;
(xiii) except in relation to changes made or agreed as a result
of, or arising from, changes to legislation, made or agreed or
consented to any material change to:
(a) the terms of the trust deeds, rules, policy or other
governing documents constituting the pension scheme(s) or other
retirement or death benefit arrangement established by any member
of the Wider STM Group for its directors, former directors,
employees, former employees or their dependents;
(b) the contributions payable to any such scheme(s) or
arrangement(s) or to the benefits which accrue, or to the pensions
which are payable, thereunder;
(c) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(d) the basis upon which the liabilities (including pensions) of
such pension schemes or arrangements are funded, valued, made,
agreed or consented to,
and which are materially adverse to the Wider STM Group taken as
a whole;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business
which is material in the context of the Wider STM Group taken as a
whole;
(xv) (other than in respect of a member of the Wider STM Group
which is dormant and was solvent at the relevant time) taken or
proposed any steps, corporate action or had any legal proceedings
instituted or threatened against it in relation to the suspension
of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the
appointment of a receiver, administrator, manager, administrative
receiver, trustee or similar officer of all or any material part of
its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed in each case
to an extent which is materially in the context of the Wider STM
Group taken as a whole;
(xvi) except for transactions between STM and its wholly owned
subsidiaries or between the wholly owned subsidiaries of STM, made,
authorised, proposed or announced an intention to propose any
change in its loan capital which is material in the context of the
Wider STM Group taken as a whole;
(xvii) other than with the consent of Bidco, taken (or agreed or
proposed to take) any action that requires, or would require, the
consent of the Panel or the approval of STM Shareholders in
accordance with, or as contemplated by, Rule 21.1 of the Takeover
Code;
(xviii) other than in the ordinary course of business, entered
into , implemented or authorised the entry into any joint venture,
asset or profit sharing arrangement, partnership, composition,
assignment, reconstruction, amalgamation, commitment, scheme or
other transaction or arrangement or merger of business or corporate
entities which is material in the context of the Wider STM Group
taken as a whole;
(xix) entered into any contract, transaction or arrangement
which would be materially restrictive on the business of any member
of the Wider STM Group or the Wider Bidco Group other than of a
nature and to an extent which is normal in the context of the
business concerned and which in any case is not material in the
context of the Wider STM Group taken as a whole;
(xx) except pursuant to the implementation of the Acquisition
and with Bidco's prior written consent, made any alterations to its
memorandum or articles of incorporation or other incorporation
documents (in each case, other than in connection with the
Acquisition); or
(xxi) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or proposed to, effect any of the transactions, matters or events
referred to in this Condition 2 (i) ;
No adverse change, litigation or similar
(j) except as Disclosed, since 31 December 2022 there having been:
(i) no adverse change and no circumstance having arisen which
would reasonably be expected to result in any adverse change in the
business, assets, financial or trading position or profits,
prospects or operational performance of any member of the Wider STM
Group which is material in the context of the Wider STM Group taken
as a whole;
(ii) other than pursuant to the Acquisition, no litigation,
arbitration proceedings, prosecution or other legal proceedings
having been threatened, announced or instituted by or against or
remaining outstanding against (and in each case, not having been
withdrawn and/or resolved) or in respect of any member of the Wider
STM Group or to which any member of the Wider STM Group is or may
become a party (whether as claimant, defendant or otherwise), in
each case which is or might be expected to have a material adverse
effect on the Wider STM Group taken as a whole;
(iii) no enquiry, review, investigation or enforcement
proceedings by, or complaint or reference to, any Third Party or
other investigative body, having been threatened, announced,
instituted or remaining outstanding by, against (and in each case,
not having been withdrawn and/or resolved) or in respect of any
member of the Wider STM Group, in each case which is material in
the context of the Wider STM Group taken as a whole;
(iv) other than in the ordinary course of business, no
contingent or other liability having arisen, materially increased
or become apparent which is reasonably likely to affect adversely
the business, assets, financial or trading position or profits or
operational performance of any member of the Wider STM Group to an
extent which is material in the context of the Wider STM Group
taken as a whole;
(v) no member of the Wider STM Group having conducted its
business in material breach of applicable laws and regulations and
which is material in the context of the Wider STM Group as a whole;
and
(vi) no steps having been taken and no omissions having been
made which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Wider STM Group which is necessary for the proper
carrying on of its business and the withdrawal, cancellation,
termination or modification of which is material and reasonably
likely to have a material adverse effect on the Wider STM Group
taken as a whole;
No discovery of certain matters regarding information,
liabilities and environmental issues
(k) except as Disclosed, Bidco not having discovered, in each
case to an extent which is material in the context of the Wider STM
Group taken as a whole, that:
(i) any financial, business or other information concerning the
Wider STM Group publicly announced prior to the date of this
Announcement is misleading, contains a misrepresentation of any
fact, or omits to state a fact necessary to make that information
not misleading where the relevant information has not subsequently
been corrected prior to the date of this Announcement by
disclosure, either publicly or otherwise to any member of the Wider
Bidco Group ;
(ii) that since 31 December 2022, any member of the Wider STM
Group (or partnership, company or other entity in which any member
of the Wider STM Group has a Significant Interest and which is not
a subsidiary undertaking of STM) is subject to any liability,
contingent or otherwise; or
(iii) any circumstance has arisen or event has occurred in
relation to any intellectual property owned or used by any member
of the Wider STM Group, including (A) any member of the Wider STM
Group losing its title to any intellectual property material to the
Wider STM Group taken as a whole, or any intellectual property
owned by the Wider STM Group and material to the Wider STM Group
taken as a whole being revoked, cancelled or declared invalid; (B)
any claim being asserted in writing or threatened in writing by any
person challenging the ownership of any member of the Wider STM
Group to, or the validity or effectiveness of, any intellectual
property of the Wider STM Group that is material to the Wider STM
Group taken as a whole; or (C) any agreement regarding the use of
any intellectual property licensed to or by any member of the Wider
STM Group, that is material to the Wider STM Group taken as a
whole, being terminated or varied;
Anti-corruption
(l) except as Disclosed, Bidco not having discovered, in each
case to an extent which is material in the context of the Wider STM
Group taken as a whole, that:
(i) any member of the Wider STM Group or any person that
performs or has performed services for or on behalf of any such
company is or has engaged in any activity, practice or conduct
which would constitute an offence under the UK Bribery Act 2010,
the United States Foreign Corrupt Practices Act of 1977, as
amended, or any other applicable anti-corruption legislation
applicable to the Wider STM Group;
(ii) any member of the Wider STM Group is ineligible to be
awarded any contract or business under section 23 of the UK Public
Contracts Regulations 2006 or section 26 of the UK Utilities
Contracts Regulations (2006) (each as amended);
(iii) any past or present member, director, officer, employee,
agent, consultant or designated representative of the Wider STM
Group is or has engaged in any activity or business with, or made
any investments in, or made any funds or assets available to or
received any funds or assets from: (A) any government, entity or
individual targeted by any of the economic sanctions administered
by the United Nations or the European Union (or any of their
respective member states) or the United States; or (B) any
government, entity or individual in respect of which US or European
Union persons, or persons operating in those territories, are
prohibited from engaging in activities or doing business, or from
receiving or making available funds or economic resources, by the
United States or European Union laws or regulations, including the
economic sanctions administered by His Majesty's Treasury;
(iv) a member of the STM Group has engaged in any transaction
which would cause any member of the Wider Bidco Group to be in
breach of any applicable economic sanctions laws upon its
acquisition of STM, including the economic sanctions of the United
States Office of Foreign Assets Control or any government, entity
or individual targeted by any of the economic sanctions of the
United Nations, the United States, the European Union or any of its
member states; or
(v) any member, director, officer or employee of the Wider STM
Group, or any other person for who any such person may be liable or
responsible: (A) has engaged in conduct which would violate any
relevant anti-terrorism laws, rules, or regulations, including but
not limited to the U.S. Anti-Terrorism Act; (B) has engaged in
conduct which would violate any relevant anti-boycott law, rule or
regulation or any applicable export controls, including but not
limited to the Export Administration Regulations administered and
enforced by the U.S. Department of Commerce or the International
Traffic in Arms Regulations administered and enforced by the U.S.
Department of State; (C) has engaged in conduct which would violate
any relevant laws rules, or regulations concerning human rights,
including but not limited to any law, rule, or regulation
concerning false imprisonment, torture or other cruel and unusual
punishment, or child labour; or (D) is debarred or otherwise
rendered ineligible to bid for or to perform contracts for or with
any government, governmental instrumentality, or international
organisation or found to have violated any applicable law, rule, or
regulation concerning government contracting or public procurement;
or
No criminal property
(m) except as Disclosed, Bidco not having discovered that any
asset of any member of the Wider STM Group constitutes criminal
property as defined by section 340(3) of the UK Proceeds of Crime
Act 2002 (but disregarding paragraph (b) of that definition) or
proceeds of crime under any applicable law, rule or regulation
concerning money laundering or proceeds of crime or any member of
the Wider STM Group is found to have engaged in activities
constituting money laundering under any applicable law, rule or
regulation concerning money laundering.
Part B: Certain further terms of the Acquisition
1. To the extent permitted by law and subject to the
requirements of the Panel in accordance with the Takeover Code,
Bidco reserves the right in its sole discretion to waive:
(i) the deadlines set out in any of the Conditions set out in
Condition 1 of Part A above for the timing of the Court Meeting,
General Meeting and the Court Hearing. If any such deadline is not
met, Bidco shall make an announcement by 8.00 a.m. on the Business
Day following such deadline confirming whether it has invoked or
waived the relevant Condition or agreed with STM to extend the
deadline in relation to the relevant Condition; and
(ii) in whole or in part, all or any of Conditions listed in
Part A above, except for Conditions 1.1(i), 1.2(i) and 1.3(i) which
cannot be waived.
2. Conditions 2(e) to (m) (inclusive) must each be fulfilled,
determined by Bidco to be or to remain satisfied or (if capable of
waiver) be waived by Bidco by no later than 11.59 p.m. on the date
immediately preceding the date of the Court Hearing (or any
adjournment thereof), (or such later date as Bidco, STM, the Panel
and, if required, the Court may allow) failing which the
Acquisition will lapse. Bidco shall be under no obligation to waive
or treat as satisfied any of the Conditions that it is entitled
(with the consent of the Panel) to invoke, by a date earlier than
the latest date specified above for the fulfilment or waiver
thereof, notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
3. Under Rule 13.5(a) of the Takeover Code, Bidco may only
invoke a Condition to the Acquisition that is subject to Rule
13.5(a) of the Takeover Code so as to cause the Acquisition not to
proceed, to lapse or to be withdrawn with the consent of the Panel.
The Panel will normally only give its consent if the circumstances
which give rise to the right to invoke the Condition are of
material significance to Bidco in the context of the Acquisition.
This will be judged by reference to the facts of each case at the
time that the relevant circumstances arise. The Conditions
contained in paragraph 1 of Part A of this Appendix 1 and, if
applicable, any acceptance condition if the Acquisition is
implemented by means of a Takeover Offer, are not subject to this
provision of the Takeover Code. Any Condition that is subject to
Rule 13.5(a) of the Takeover Code may be waived by Bidco.
4. Under Rule 13.6 of the Takeover Code, STM may not invoke, or
cause or permit Bidco to invoke, a Condition unless the
circumstances which give rise to the right to invoke the Condition
are of material significance to STM Shareholders in the context of
the Acquisition.
5. If Bidco is required by the Panel to make an offer for STM
Shares under the provisions of Rule 9 of the Takeover Code, Bidco
may make such alterations to any of the above Conditions and terms
of the Acquisition as are necessary to comply with the provisions
of that Rule.
6. Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as
fulfilled any of Conditions 2(a) to (m) (inclusive) of Part A above
by a date earlier than the latest date 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 of such
Conditions may not be capable of fulfilment.
7. The STM Shares to be acquired under the Acquisition shall be
acquired fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature and together with all
rights attaching or accruing to them after the Scheme becomes
effective in accordance with its terms, including, without
limitation, voting rights and the right to receive and retain in
full all dividends and other distributions (if any) declared, made
or paid, or any other return of capital (whether by reduction of
share capital or share premium account or otherwise) made, on or
after the Effective Date.
8. Subject to the terms of the Scheme, if, on or after the date
of this Announcement, any dividend and/or other distribution and/or
other return of capital is declared, paid or made or becomes
payable by STM in respect of the STM Shares (in each case with a
record date prior to the Effective Date) , (without prejudice to
any right of Bidco, with the consent of the Panel, to invoke
Condition 2 (i) (ii) in Part A above) Bidco has the right to reduce
the amount of the consideration payable under the Acquisition by an
amount equal to the amount of such dividend and/or distribution
and/or return of capital. Where the consideration is so reduced,
the relevant eligible STM Shareholders will be entitled to receive
and retain such dividend and/or distribution and/or other return of
capital declared, paid or made and any reference in this
Announcement to the consideration payable under the terms of the
Acquisition shall be deemed to be a reference to the consideration
as so reduced .
To the extent that such a dividend and/or other distribution
and/or other return of capital has been declared, paid, made or is
payable, and is or shall be: (i) transferred pursuant to the
Acquisition on a basis which entitles Bidco to receive the dividend
or distribution and to retain it; or (ii) cancelled, the
consideration payable under the terms of the Acquisition shall not
be subject to change in accordance with this paragraph.
Furthermore, Bidco reserves the right to reduce the
consideration payable under the Acquisition in respect of the STM
Shares in such circumstances as are, and by such amount as is,
permitted by the Panel.
Any reduction of the consideration payable under the Acquisition
referred to in this paragraph shall be the subject of an
announcement and, for the avoidance of doubt, shall not be regarded
as constituting any revision or variation of the Acquisition.
9. Bidco reserves the right to elect to implement the
Acquisition by way of a Takeover Offer as an alternative to the
Scheme (subject to the Panel's consent). In such event, the
Acquisition will be implemented on the same terms (subject to
appropriate amendments including (without limitation) the inclusion
of an acceptance condition set at more than 50 per cent. (or such
other percentage as Bidco may, subject to the rules of the Takeover
Code and with the consent of the Panel, decide) of the shares to
which the Acquisition relates, so far as applicable) as those which
would apply to the Scheme.
10. The availability of the Acquisition to persons not resident
in the United Kingdom or the Isle of Man may be affected by the
laws of the relevant jurisdictions. Persons who are not resident in
the United Kingdom or the Isle of Man should inform themselves
about and observe any applicable requirements.
11. The Acquisition is not being made, directly or indirectly,
in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any jurisdiction where to do so would
violate the laws of that jurisdiction.
12. The Scheme will be governed by the laws of the Isle of Man
and be subject to the jurisdiction of the Court and to the
Conditions and certain further conditions and terms set out in this
Appendix I to this Announcement and to the full terms which will be
set out in the Scheme Document. The Acquisition will also be
subject to the applicable requirements of the Companies Act, the
Court, the Financial Conduct Authority, the London Stock Exchange,
the Panel, the Takeover Code and the AIM Rules. This Announcement
does not constitute, or form part of, an offer or invitation to
purchase STM Shares or any other securities.
13. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used:
i. As at the Latest Practicable Date, there were 59,408,088 STM
shares in issue; and no shares held in treasury.
ii. Unless otherwise stated, financial information relating to
STM has been extracted or derived (without adjustment) from the
audited consolidated financial statements for STM for the financial
year ended 31 December 2022.
iii. Any references to the issued and to be issued ordinary
share capital of STM or fully diluted share capital will be
59,408,088 in total, which is based on the number of STM Shares in
issue as referred to in paragraph (i) above.
iv. Certain figures in this Announcement have been subject to
rounding adjustments.
v. The value of the Acquisition is calculated based on the total
issued and to be issued STM Shares as set out in point iii
above.
vi. Unless otherwise stated, all prices, closing prices and
volume average weighted share prices for STM Shares are derived
from FactSet.
APPIX III
IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT
Therese Neish (being the only Independent STM Director holding
STM Shares, directly or indirectly) has given an irrevocable
undertakings to vote (or procure the voting, as applicable) in
favour of the Scheme Resolution at the Court Meeting and the GM
Resolutions at the General Meeting in respect of her beneficial
holdings of STM Shares.
Part A: Independent STM Directors' Irrevocable Undertakings
Name of STM Number of STM Percentage of
Director Shares in respect STM issued share
of which undertaking capital in respect
is given of which undertaking
is given
Therese Neish 492,756 0.83
---------------------- ----------------------
Part B: Independent STM Shareholder Irrevocable Undertakings
Each of the following Independent STM Shareholders have given
irrevocable undertakings to vote (or procure the voting, as
applicable) in favour of the Scheme Resolution at the Court Meeting
and the GM Resolutions at the General Meeting in respect of their
beneficial holdings of STM Shares.
Independent STM Shareholder Number of Percentage of
STM Shares STM issued share
in respect capital in respect
of which undertaking of which undertaking
is given is given
Timothy Revill (held
by Septer Limited) 6,450,000 10.86
---------------------- ----------------------
Peter Gyllenhammar (held
by HSBC Global Custody
Nominee UK Ltd) 5,900,000 9.93
---------------------- ----------------------
Elizabeth Plummer (held
by JIM Nominees Limited) 1,539,810 2.59
---------------------- ----------------------
Part C: Alan Kentish and Clifton Participations Limited
Irrevocable Undertakings
Each of Alan Kentish and Clifton Participations Limited have
given irrevocable undertakings to vote (or procure the voting, as
applicable) in favour of the Other GM Resolution at the General
Meeting in respect of their beneficial holdings of STM Shares.
STM Shareholder Number of STM Percentage of
Shares in respect STM issued share
of which undertaking capital in respect
is given of which undertaking
is given
Alan Kentish
and close family 1,526,750 2.57%
---------------------- ----------------------
Clifton Participations
Limited 5,552,150 9.35%
---------------------- ----------------------
* The shares in Clifton Participations Limited form part of the
assets of the Perros Trust, of which the settlor is Alan Kentish,
the independent trustee is Lesley Nuttall and the potential
beneficiaries are Alan Kentish, his wife Louise Kentish and their
immediate family.
APPIX IV
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise:
"Acquisition" the proposed direct or indirect
acquisition by Bidco of the
entire issued and to be issued
ordinary share capital of STM,
to be effected by means of the
Scheme (or by way of the Takeover
Offer under certain circumstances
described in this Announcement),
and, where the context admits,
any subsequent revision, variation,
extension or renewal thereof;
"AIM" AIM, a market operated by the
London Stock Exchange;
"AIM Rules" the rules of AIM as set out
in the "AIM Rules for Companies"
issued by the London Stock Exchange
from time to time relating to
AIM traded securities and the
operation of AIM;
"Alan Kentish" Alan Roy Kentish, a director
and shareholder of STM
"Announcement" this announcement;
"Articles" the articles of association
of STM from time to time;
"Authorisations" regulatory authorisations, orders,
recognitions, grants, consents,
clearances, confirmations, certificates,
licences, permissions or approvals;
"Bidco" Jambo SRC Limited, registered
in the United Kingdom with the
registration number: 14980177;
"Business Day" a day (other than Saturdays,
Sundays and public holidays
in the United Kingdom and the
Isle of Man) on which banks
are open for business in the
City of London or the Isle of
Man;
"Cash Consideration" the cash amount of 60 pence
payable by Bidco under the Acquisition
in respect of each STM Share,
as may be adjusted in accordance
with the terms of the Acquisition
as set out in this Announcement;
"Cavendish" Cavendish Capital Markets Limited;
"Companies Act" the Isle of Man Companies Act
2006, as amended;
"Companies Registry" the Registrar General in its
capacity as the registrar of
companies pursuant to section
205
of the Companies Act;
"Conditions" the conditions to the implementation
of the Acquisition, as set out
in Appendix I to this Announcement
and to be set out in the Scheme
Document and "Condition" means
any one of them;
"Confidentiality Agreement" the confidentiality agreement
entered into between Pension
SuperFund Capital and STM dated
14 July 2023, as described in
paragraph 13 of this Announcement;
"Court" the High Court of Justice of
the Isle of Man;
"Court Hearing" the hearing of the Court to
sanction the Scheme;
"Court Meeting" the meeting or meetings of the
Scheme Shareholders to be convened
pursuant to an order of the
Court pursuant to section 157
of the Companies Act, notice
of which will be set out in
the Scheme Document, for the
purpose of considering and,
if thought fit, approving the
Scheme, including any adjournment
or reconvening thereof;
"Court Order" the order of the Court sanctioning
the Scheme;
"Davy" Davy Capital Markets UK;
"DCU Conditions " as defined in paragraph 12 of
this Announcement;
"DCU Deed Poll" the deed poll constituting the
Deferred Consideration Units;
"DCU Holder" a holder of a Deferred Consideration
Unit;
"Dealing Disclosure" has the same meaning as in Rule
8 of the Takeover Code;
"Deferred Consideration Units" means the deferred consideration
units to be issued by Bidco;
"Disclosed" the information disclosed by
or on behalf of STM: (i) in
the annual report of the STM
Group for the year to 31 December
2022; (ii) in this Announcement;
(iii) in any other announcement
to a Regulatory Information
Service by or on behalf of STM
prior to the publication of
this Announcement; or (iv) as
otherwise fairly disclosed to
Bidco (or its respective officers,
employees, agents or advisers)
prior to the date of this Announcement
(including but not limited to
all matters fairly disclosed
in the written replies, correspondence,
documentation and information
provided in an electronic data
room created by or on behalf
of STM or sent to Pension SuperFund
Capital or any of its respective
advisers during the due diligence
process in connection with the
Acquisition and whether or not
in response to any specific
request for information made
by any such person);
"Effective Date" the date on which: (i) the Scheme
becomes effective in accordance
with its terms; or (ii) if Bidco
elects to implement the Acquisition
by way of a Takeover Offer,
the date on which such Takeover
Offer becomes or is declared
unconditional in accordance
with the requirements of the
Takeover Code and "Effective"
shall be construed accordingly;
"Enlarged Group" the enlarged group following
the Acquisition comprising STM
and its subsidiaries (excluding
the SIPPs Companies), and the
Wider Bidco Group;
"Euroclear" Euroclear UK and International
Limited;
"Excluded Shares" any STM Shares legally or beneficially
owned by Bidco, any member of
the Wider Bidco Group or any
of their respective members
or nominees or any other person
holding shares in Bidco; or
(ii) any STM Shares held as
treasury shares by STM (if any);
and (iii) any other STM Shares
which STM and Bidco agree will
not be subject to the Scheme
in each case at any relevant
time;
"Facilities Agreement" a facilities agreement originally
dated 11 August 2023 (as amended
and restated on or immediately
prior to the date of this Announcement)
between, amongst others, PSF
Capital Reserve L.P. (as borrower),
Pension SuperFund Capital GP
II Limited (as general partner
of PSF Capital Reserve L.P.)
and NatWest;
"FCA" or "Financial Conduct the Financial Conduct Authority
Authority" acting in its capacity as the
competent authority for the
purposes of Part VI of the UK
Financial Services and Markets
Act 2000 (as amended) or any
successor or regulatory body;
"Forms of Proxy" the forms of proxy in connection
with each of the Court Meeting
and the General Meeting, which
will accompany the Scheme Document;
"FSA 2019" Financial Services Act 2019
(as amended and in force in
Gibraltar from time to time);
"General Meeting" the general meeting of STM Shareholders
(including any adjournment thereof)
to be convened in connection
with the Scheme, notice of which
shall be set out in the Scheme
Document;
"GFSC" Gibraltar Financial Services
Commission (or its successor
body or bodies from time to
time);
"GM Resolutions" together, the Rule 16 Resolution
and the Other GM Resolution;
"Independent STM Directors" the directors of STM, excluding
Alan Kentish;
"Independent STM Shareholders" the STM Shareholders, excluding
the MBO Shareholders and any
person acting in concert with
them (other than any director
of the Company) for the purposes
of the Takeover Code;
"Latest Practicable Date" 9 October 2023 (being the latest
practicable date prior to the
publication of this Announcement);
"Loan Notes" any Loan Notes issued pursuant
to the DCU Deed Poll and Loan
Note Instrument;
"Loan Note Instrument" the deed poll constituting the
Loan Notes to be made by Bidco
in certain circumstances following
determination of the Loan Note
Principal Value;
"Loan Note Payment Date" means the date that is 12 months
after the Effective Date;
"Loan Note Principal Value" has the meaning given in paragraph
12 of this Announcement;
"London Stock Exchange" London Stock Exchange plc;
"Long Stop Date" 28 May 2024 or such later date
as may be agreed in writing
by Bidco and STM (with the Panel's
consent and as the Court may
approve (to the extent such
approval/consent is required));
"MAR" the UK version of the EU Market
Abuse Regulation (596/2014)
which forms part of UK law by
virtue of the European Union
(Withdrawal) Act 2018;
" Maximum Acquisition Value means the Cash Consideration
" and up to 7 pence per share
in cash which may be delivered
under the Deferred Consideration
Units;
"Master Trust" the Options Workplace Pensions
Trust established by a trust
deed dated 18 October 2012 and
governed by the rules scheduled
to that trust deed (as subsequently
amended);
"MBO Condition" Condition 2(d) of Appendix I
to this Announcement;
"MBO Shareholders" Alan Kentish and Clifton Participations
Limited;
"MBO SPA" a sale and purchase agreement
dated 9 October 2023 between
the Company, Pathlines Holdings
Limited and Alan Kentish in
connection with the sale of
the SIPP Businesses to Pathlines
Holdings Limited
"MFSA" Malta Financial Services Authority
(or its successor body or bodies
from time to time);
"NatWest" National Westminster Bank Plc;
"Offer Period" the offer period (as defined
by the Takeover Code) relating
to STM, which commenced on 11
July 2023;
"Opening Position Disclosure" has the same meaning as in Rule
8 of the Takeover Code;
"Other GM Resolution" the resolution proposed to be
passed at the General Meeting
in connection with the alteration
of the Articles and such other
matters as may be necessary
to implement the Scheme and
the MBO Sale;
"Overseas Shareholders" STM Shareholders (or nominees
of, or custodians or trustees
for STM Shareholders) not resident
in, or nationals or citizens
of, the United Kingdom or the
Isle of Man;
"Panel" the Panel on Takeovers and Mergers;
"Pathlines Holdings Limited" a company registered in England
& Wales under company number
15156320 which is controlled
by Alan Kentish, the STM CEO;
"Pension SuperFund Capital" PSF Capital Reserve L.P.;
"Receiving Agent" means Computershare Investor
Services PLC acting as receiving
agent to the Company for the
purposes of the Acquisition;
"Regulator" means each of any relevant central
bank, government or governmental,
quasi-governmental, supranational,
statutory, regulatory, environmental,
administrative, fiscal or investigative
body, court, trade agency, association,
institution, environmental body,
employee representative body
or any other similar body or
person whatsoever in any jurisdiction,
including without limitation
the UK Pensions Regulator;
"Registrar General" the office constituted by section
4 of the Isle of
Man Central Registry Act 2018
and, so far as is
necessary, includes the person
for the time
being holding that office under
section 4(2) of
that Act;
"Regulatory Conditions " Conditions 2(a) to (c) of Appendix
I to this Announcement;
"Regulatory Information Service" a service approved by the London
Stock Exchange for the distribution
to the public of announcements
and included within the list
maintained on the London Stock
Exchange's website;
"Restricted Jurisdiction" any jurisdiction into which,
or from which, making the Acquisition
or this Announcement available
would violate the laws of that
jurisdiction ;
"Restricted Overseas Shareholders" Scheme Shareholders whose registered
address is in a jurisdiction
in which it is illegal to issue
Deferred Consideration Units
to Scheme Shareholders or for
Scheme Shareholders to hold
Deferred Consideration Units;
"Rule 16 Resolution" the resolution approving the
MBO Sale to be proposed at the
General Meeting (or any adjournment
thereof) in accordance with
Rule 16 of the Takeover Code
"Scheme" the proposed scheme of arrangement
under Part X of the Companies
Act between STM and the Scheme
Shareholders in connection with
the Acquisition, with or subject
to any modification, addition
or condition approved or imposed
by the Court and agreed by STM
and Bidco;
"Scheme Document" the document to be sent to STM
Shareholders containing, amongst
other things, the full terms
and conditions of the Scheme,
and the notices convening the
Court Meeting and the General
Meeting;
"Scheme Record Time" the time and date specified
in the Scheme Document by reference
to which the entitlements of
Scheme Shareholders under the
Scheme will be determined, currently
expected to be 6.00 p.m. on
the Business Day immediately
prior to the Effective Date;
"Scheme Resolution" the resolution to be proposed
at the Court Meeting in relation
to the Scheme;
"Scheme Shareholders" holders of Scheme Shares from
time to time;
"Scheme Shares" STM 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 at or 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 excluding any Excluded
Shares and, in the case of references
to the "Scheme Shares" or "Scheme
Shareholders" in the context
of voting at the Court Meeting
only, any STM Shares held by
Alan Kentish and any person
acting in concert with him (other
than any director of the Company)
for the purposes of the Takeover
Code at the Scheme Voting Record
Time. For the avoidance of doubt,
any STM Shares held by the MBO
Shareholders and any person
acting in concert with them
(other than any director of
the Company) for the purposes
of the Takeover Code shall still
be subject to the terms of the
Scheme;
"Scheme Voting Record Time" the time and date specified
in the Scheme Document by reference
to which entitlement to vote
on the Scheme will be determined;
"Significant Interest" in relation to an undertaking,
a direct or indirect interest
of 20 per cent. or more of the
total voting rights conferred
by the equity share capital
of such undertaking;
"SIPPs Business " the business of (i) establishing,
operating and winding up personal
pension schemes, (ii) providing
administration and marketing
services in relation to personal
pension schemes, and (iii) providing
trustee services in relation
to personal pension schemes,
in each case as carried on by
the STM Group;
"SIPPs Companies " the SIPPs Target Companies and
the SIPPs Subsidiaries;
"SIPPs Subsidiaries" means (i) Options Group Services
UK Limited, the 70% interest
in Options UK Personal Pensions
LLP held by CAH Limited, Options
UK Personal Pensions LLP, MK
SIPP Trustees UK Limited, The
Fiduciary Corporation (Properties)
Limited, The Fiduciary Corporation
(Properties 5) Limited, The
Fiduciary Corporate (Properties
6) Limited, The Fiduciary Corporate
(Properties 7) Limited, The
Fiduciary Corporation (Properties
9) Limited, The Fiduciary Corporation
(Properties 10) Limited, The
Fiduciary Corporation (Properties
11) Limited, The Fiduciary Corporation
(Properties 16) Limited, and
The Fiduciary Corporation (Properties
8) Limited and (ii) L&C Gaudi
Limited, London & Colonial (Administration
Services) Limited and London
& Colonial (Trustee Services)
UK Limited to the extent such
entities are not liquidated
prior to completion of the MBO
Sale;
"SIPPs Target Companies" CAH Limited, London & Colonial
Services Limited, Gresham Pension
Trustees Limited, Personal Pension
Trustees Limited and the 30%
interest in Options UK Personal
Pensions LLP held by STM;
"STM" STM Group PLC, registered in
the Isle of Man with the registration
number: 005398V and, where the
context requires, the STM Group;
"STM Board" or "STM Directors" the board of directors of STM
from time to time and "STM Director"
shall mean any one of them;
"STM Group" STM and its subsidiary undertakings
and, where the context permits,
each of them, from time to time;
"STM Shareholders" or "Shareholders" the holders of STM Shares from
time to time;
"STM Shares" the existing issued and fully
paid ordinary shares with a
nominal value of GBP0.0001 each
in the share capital of STM
and any further such fully paid
ordinary shares issued before
the Scheme becomes Effective,
but in both cases excluding
any such shares held or which
become held as treasury shares;
"Takeover Code" the City Code on Takeovers and
Mergers;
"Takeover Offer" if the Acquisition is implemented
by way of a takeover offer,
the offer to be made by or on
behalf of Bidco, or an associated
undertaking thereof, to acquire
the entire issued and to be
issued ordinary share capital
of STM including, where the
context admits, any subsequent
revision, variation, extension
or renewal of such offer;
"Third Party" each of any relevant central
bank, government or governmental,
quasi-governmental, supranational,
statutory, regulatory, environmental,
administrative, fiscal or investigative
body, court, trade agency, association,
institution, environmental body,
employee representative body
or any other similar body or
person whatsoever in any jurisdiction;
"tPR Condition" Condition 2(a) of Appendix I
to this Announcement;
"United Kingdom" or "UK" the United Kingdom of Great
Britain and Northern Ireland;
"United States" or "US" the United States of America,
its territories and possessions,
any state of the United States
of America, the District of
Columbia and all other areas
subject to its jurisdiction
and any political sub-division
thereof;
"US Exchange Act" the US Securities Exchange Act
of 1934, as amended;
"Wider Bidco Group" Bidco and its subsidiaries,
subsidiary undertakings and
associated undertakings, and
any other body corporate, person
or undertaking (including a
joint venture, partnership,
firm or company) in which Bidco
and/or such undertakings (aggregating
their interests) have a Significant
Interest; and
"Wider STM Group" STM and its associated undertakings
and any other body corporate,
partnership, joint venture or
person in which STM and such
undertakings (aggregating their
interests) have a Significant
Interest.
For the purposes of this Announcement, "subsidiary", "subsidiary
undertaking", "undertaking" and "associated undertaking" have the
respective meanings given thereto by the UK Companies Act 2006.
All references to "pounds", "pounds Sterling", "Sterling",
"GBP", "pence", "penny" and "p" are to the lawful currency of the
United Kingdom.
All the times referred to in this Announcement are London (UK)
times unless otherwise stated.
References to the singular include the plural and vice
versa.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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END
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