FOR IMMEDIATE RELEASE 26 November 2009 Not for release, publication or distribution in or into the United States, Canada, Australia or Japan or any other jurisdiction where it would be unlawful to do so Recommended cash offer by ASTRA 5.0 LIMITED a company controlled by investment partnerships advised by INFLEXION PRIVATE EQUITY PARTNERS LLP for FDM GROUP plc at 141 pence per FDM Share Summary • The Independent Director of FDM and the board of Astra announce that they have reached agreement on the terms of a recommended cash offer by Astra for the entire issued and to be issued share capital of FDM. Astra is a newly incorporated company which has been formed for the purposes of making the Offer and is ultimately controlled by investment partnerships advised by Inflexion. • Under the terms of the Offer, FDM Shareholders will be entitled to receive 141 pence per FDM Share in cash. The Offer values the entire issued and to be issued share capital of FDM at approximately £33.3 million. • The Offer Price represents a premium of approximately: • 42.4 per cent. to the Closing Price of 99.0 pence per FDM Share on 3 June 2009, the last business day prior to the announcement by FDM that it had received an approach from the Executive Management Team and Ivan Martin regarding a possible offer for FDM; • 64.9 per cent. to the average Closing Price of 85.5 pence per FDM Share for the six month period ending on 3 June 2009; and
Transcript
FOR IMMEDIATE RELEASE
26 November 2009
Not for release, publication or distribution in or into the United States, Canada, Australia
or Japan or any other jurisdiction where it would be unlawful to do so
Recommended cash offer
by
ASTRA 5.0 LIMITED
a company controlled by investment partnerships advised by
INFLEXION PRIVATE EQUITY PARTNERS LLP
for
FDM GROUP plc
at
141 pence per FDM Share
Summary
• The Independent Director of FDM and the board of Astra announce that they
have reached agreement on the terms of a recommended cash offer by Astra for
the entire issued and to be issued share capital of FDM. Astra is a newly
incorporated company which has been formed for the purposes of making the
Offer and is ultimately controlled by investment partnerships advised by
Inflexion.
• Under the terms of the Offer, FDM Shareholders will be entitled to receive 141
pence per FDM Share in cash. The Offer values the entire issued and to be issued
share capital of FDM at approximately £33.3 million.
• The Offer Price represents a premium of approximately:
• 42.4 per cent. to the Closing Price of 99.0 pence per FDM Share on 3
June 2009, the last business day prior to the announcement by FDM
that it had received an approach from the Executive Management
Team and Ivan Martin regarding a possible offer for FDM;
• 64.9 per cent. to the average Closing Price of 85.5 pence per FDM
Share for the six month period ending on 3 June 2009; and
• 72.1 per cent. to the Closing Price of 99.0 pence per FDM Share on 3
June 2009, as adjusted for cash on the balance sheet as at 30 June
2009, which equates to 40.7 pence per FDM Share. The cash adjusted
Offer Price is 100.3 pence (being 141.0 pence less 40.7 pence). The
cash adjusted Closing Price on 3 June 2009 was 58.3 pence (being
99.0 pence less 40.7 pence).
• FDM is an international IT services company with sales offices in London, New
York, Frankfurt, Zurich and Luxembourg which specialises in the provision of
outsourced IT solutions predominantly to large blue chip organisations. As of 31
October 2009, the business employed 322 full time IT consultants (known as
Mounties) and had a further 131 in training at its Brighton, London and
Manchester training academies specialising in application development (java and
.net), support, project management and testing. FDM also operates an IT
staffing business which had over 340 contractors on assignment as of 31
October 2009.
• Astra has entered into arrangements with the Management Team under which
they will, in aggregate, through a rollover of their Management FDM Shares and
Management Option Shares, additional cash investment or a mixture of the two,
invest in Astra and Astra Topco an amount equal to approximately £3.42 million
at the Offer Price. Further details of the proposed arrangements between Astra
and the Management Team are set out in paragraph 4 of this announcement.
• Under the Code, the Panel requires the proposed arrangements with the
Management Team to be approved by ordinary resolution of the Independent
Shareholders and the Offer is conditional on, inter alia, such approval being
obtained.
• A committee of the board of FDM, comprising the Independent Director, has
been established for the purposes of considering the Offer and making
recommendations to FDM Shareholders in relation to the Offer.
• The Independent Director of FDM, who has been so advised by Brewin
Dolphin, considers the terms of the Offer to be fair and reasonable. In
providing its advice to the Independent Director, Brewin Dolphin has
taken into account the commercial assessments of the Independent
Director.
• Accordingly, on the basis of the information contained in the paragraph
in this announcement headed “Background to and reasons for
recommending the Offer”, the Independent Director intends to
recommend that FDM Shareholders accept the Offer and that
Independent Shareholders vote in favour of the Resolution, as he has
irrevocably undertaken to do in respect of his entire beneficial holding of
15,000 FDM Shares, representing approximately 0.06 per cent. of the
existing issued share capital of FDM.
• The Offer will be subject to the Conditions and certain further terms referred to
in Appendix 1 to this announcement and to be set out in the Offer Document. To
become effective, the Offer will require, amongst other things, the passing, on a
poll, of an ordinary resolution approving the arrangements between Astra and
the Management Team.
• Under the Share Exchange Agreements, the Management Team have agreed,
conditional on the Offer becoming or being declared wholly unconditional, to sell
to Astra (i) the Management FDM Shares amounting to, in aggregate, 1,565,946
FDM Shares, representing approximately 6.74 per cent. of the existing issued
share capital of FDM and (ii) the Management Option Shares, amounting to, in
aggregate, 189,750 FDM Shares which certain members of the Management
Team will acquire when they exercise certain options granted to them pursuant
to the EMI Scheme.
• Astra has received an irrevocable undertaking from Rod Flavell to accept the
Offer in respect of a total of 780,142 FDM Shares (such FDM Shares being,
together with the FDM Shares which he has agreed to sell pursuant to the Share
Exchange Agreement, his entire legal and beneficial holding of FDM Shares).
• Astra has received an irrevocable undertaking from AXA Framlington, the equity
division of AXA Investment Managers UK Limited to accept the Offer and vote in
favour of the Resolution in respect of 2,578,217 FDM Shares.
• Astra has received an irrevocable undertaking from Hargreave Hale Limited to
accept the Offer and vote in favour of the Resolution in respect of 320,000 FDM
Shares.
• Astra has also received irrevocable undertakings from certain other parties who
are beneficially interested in or otherwise able to control FDM Shares to accept
the Offer and vote in favour of the Resolution or to procure that any other
person accepts the Offer and votes in favour of the Resolution in respect of a
total of 6,874,000 FDM Shares.
• In addition, Astra has received a non-binding letter of intent from Henderson
Global Investors Limited to accept the Offer and vote in favour of the Resolution
in respect of 317,916 FDM Shares.
• In aggregate, Astra has therefore:
• received irrevocable undertakings and a non-binding letter of intent to
accept the Offer or to procure that any other person accepts the Offer,
and has an agreement to acquire FDM Shares under the Share
Exchange Agreements in respect of a total of 12,436,221 FDM Shares
(excluding Management Option Shares), representing approximately
53.56 per cent. of the existing issued share capital of FDM; and
• received irrevocable undertakings and a non-binding letter of intent to
vote in favour of the Resolution or to procure that any other person
votes in favour of the Resolution in respect of a total of 10,090,133
FDM Shares representing approximately 48.54 per cent. of the FDM
Shares held by Independent Shareholders.
• Full details of the undertakings referred to above and the conditions under
which they lapse are set out in paragraph 5 of this announcement.
Commenting on the Offer, Karl Monaghan, the Independent Director of FDM, said:
“I am recommending the Offer Price of 141 pence per share as it allows
shareholders the opportunity to accept the Offer at a significant premium to the
pre announcement price. In my opinion, given the historic share price
performance, share register structure and trading environment, in the absence of
an offer for the Company, there can be no guarantee that shareholders (especially
those with a significant holding) will be able to sell their shares in the market at a
price of 141 pence or better in the short to medium term. The Offer Price is only
9.1 per cent. below the all time high share price of 155p which was achieved over
a period of three days more than two years ago.”
Commenting on the Offer, Rod Flavell, Chief Executive Officer of FDM and member of the
Management Team, said:
“Inflexion has a long track record of successful investing in the IT services space
and I am delighted to be forming this partnership with them in order to support
FDM in the next phase of its development.
Against the backdrop of current economic conditions and the challenging trading
conditions that we face, the Offer provides FDM Shareholders, a number of
whom have held their shares for many years, with the certainty of cash
consideration at an attractive premium.”
Commenting on the Offer, John Hartz, Managing Partner of Inflexion, said:
“Whilst the management team of FDM have successfully guided the business
through difficult trading conditions, we believe that FDM Shareholders have
suffered from the valuation and liquidity issues common to many small, closely-
held, AIM stocks.
In financing our offer, we intend to utilise debt finance at a level materially
above that which would be normal for a quoted company. This enables us to
deliver an offer value to FDM Shareholders that is significantly in excess of where
the Company’s share price has traded since mid 2007. We believe that a certain
cash offer at this level should be highly attractive against the backdrop of a
fragile economic, trading and stock market environment.”
This summary should be read in conjunction with the full text of the following
announcement (including its Appendices). Appendix III to the following announcement
contains definitions of certain terms used in this summary and the following
announcement.
In accordance with Rule 19.11 of the City Code, a copy of this announcement will be
published on the following websites: www.fdmgroup.com and www.inflexion.com.
The Offer Document containing further details of the Offer (including a notice of General
Meeting) together with Forms of Acceptance will be posted to FDM Shareholders and, for
information only, to participants in the FDM Share Schemes as soon as practicable and,
in any event, within 28 days of this announcement unless otherwise agreed with the
Panel.
Enquiries
Inflexion and Astra
Gareth Healy 020 7487 9888
Richard Swann
John Hartz
Ernst & Young (Financial adviser to Astra)
Tim Medak 020 7951 2000
Mark Harrison
Altium (Broker to Astra) Stephen Georgiadis 020 7484 4040 Tim Richardson Citigate Dewe Rogerson (PR advisor to Astra) Simon Rigby 020 7638 9571 FDM
Karl Monaghan, Independent Director 0870 060 3100
Brewin Dolphin (Financial adviser to FDM)
Matt Davis 0845 213 1000
Neil McDonald
Ernst & Young is acting exclusively for Astra in connection with the Offer and will not be
responsible to any person other than Astra for providing the protections afforded to
customers of Ernst & Young or for providing advice in relation to the Offer or any other
matter referred to in this announcement.
Altium is acting exclusively for Astra in connection with the Offer and will not be
responsible to any person other than Astra for providing the protections afforded to
customers of Altium or for providing advice in relation to the Offer or any other matter
referred to in this announcement.
Brewin Dolphin is acting exclusively for FDM in connection with the Offer and will not be
responsible to any person other than FDM for providing the protections afforded to clients
of Brewin Dolphin or for providing advice in relation to the Offer or any other matter
referred to in this announcement.
This announcement does not constitute, or form part of, any offer for, or any solicitation
of any offer for, securities. Any acceptance or other response to the Offer should be
made only on the basis of information referred to in the Offer Document which Astra
intends to despatch shortly to FDM Shareholders and, for information only, to
participants in the FDM Share Schemes.
The availability of the Offer to persons who are not resident in the United Kingdom may
be affected by the laws of their relevant jurisdiction. Such persons should inform
themselves of, and observe, any applicable legal or regulatory requirements of their
jurisdiction. Further details in relation to overseas shareholders will be contained in the
Offer Document.
The Offer referred to in this announcement will not be made, directly or indirectly, in,
into or by use of the mails of, or by any means or instrumentality (including, without
limitation, telephonically or electronically) of interstate or foreign commerce of, or any
facilities of a national securities exchange of, the United States, Canada, Australia or
Japan or any other jurisdiction if to do so would constitute a violation of the relevant laws
of such jurisdiction. This announcement does not constitute an offer in the United
States, Canada, Australia or Japan or any such other jurisdiction and the Offer will not be
capable of acceptance by any such use, means, instrumentally or facilities or otherwise
from or within the United States, Canada, Australia or Japan or any such other
jurisdiction. Accordingly this announcement is not being, and should not be, mailed,
transmitted or otherwise distributed, in whole or in part, in or into or from the United
States, Canada, Australia or Japan or any such other jurisdiction.
FDM Shareholders (including, without limitation, nominees, trustee or
custodians) must not forward this announcement to the United States, Canada,
Australia, Japan or other such jurisdiction.
The Astra Directors accept responsibility for the information contained in this
announcement other than information for which the Investment Committee of Inflexion
alone accepts responsibility as set out below and the information for which the FDM
Directors and the Independent Director accept responsibility as set out below. To the
best of the knowledge and belief of the Astra Directors (who have taken all reasonable
care to ensure that such is the case), the information contained in this announcement for
which they accept responsibility is in accordance with the facts and does not omit
anything likely to affect the import of such information.
The Investment Committee of Inflexion (all of whose names will be set out in the Offer
Document) accepts responsibility for the information relating to Inflexion and the
Inflexion Funds. To the best of the knowledge and belief of the Investment Committee of
Inflexion (who have taken all reasonable care to ensure that such is the case), such
information for which they are responsible is in accordance with the facts and does not
omit anything likely to affect the import of such information.
The FDM Directors (all of whose names will be set out in the Offer Document) accept
responsibility for the information relating to FDM, the FDM Group, and themselves and
their immediate families, related trusts and connected persons. To the best of the
knowledge and belief of the FDM Directors (who have taken all reasonable care to ensure
that such is the case), such information for which they are responsible is in accordance
with the facts and does not omit anything likely to affect the import of such information.
The Independent Director accepts responsibility for his recommendation and the
background to and reasons for his recommendation of the Offer contained in this
announcement. To the best of the knowledge and belief of the Independent Director
(who has taken all reasonable care to ensure that such is the case), such information for
which he is responsible is in accordance with the facts and does not omit anything likely
This announcement contains certain forward looking statements with respect to the
financial condition, results of operations and business of FDM or FDM Group and certain
plans and objectives of the boards of directors of FDM and Astra and the Investment
Committee of Inflexion. These forward looking statements can be identified by the fact
that they do not relate to historical or current facts. Forward looking statements often
use words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”,
“believe”, “will”, “may”, “should”, “would”, “could” or other words of similar meaning.
These statements are based on assumptions and assessments made by the boards of
directors of FDM, Astra and the Investment Committee of Inflexion in the light of their
experience and their perception of historical trends, current conditions, expected future
developments and other factors they believe appropriate. By their nature, forward
looking statements involve risk and uncertainty and the factors described in the context
of such forward looking statements in this document could cause actual results and
developments to differ materially from those expressed in or implied by such forward
looking statements.
Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this document. FDM, the Independent Director, Astra and
Inflexion assume no obligation to update or correct the information contained
in this announcement.
DEALING DISCLOSURE REQUIREMENTS
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, “interested”
(directly or indirectly) in 1 per cent. or more of any class of “relevant securities” of FDM
or Astra, all “dealings” in any “relevant securities” of that company (including by means
of an option in respect of, or a derivative referenced to, any such “relevant securities”)
must be publicly disclosed by no later than 3.30 pm (London time) on the London
business day following the date of the relevant transaction. This requirement will
continue until the date on which the offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the “offer period” otherwise
ends. If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire an “interest” in “relevant securities” of FDM or
Astra, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all “dealings” in “relevant securities” of FDM
or Astra by FDM or Astra, or by any of their respective “associates”, must be disclosed by
not later than 12.00 noon (London time) on the London business day following the date
of the relevant transaction.
A disclosure table, giving details of the companies in whose “relevant securities”
“dealings” should be disclosed, and the number of such securities in issue, can be found
on the Panel’s website at www.thetakeoverpanel.org.uk.
“Interests in securities” arise, in summary, when a person has long economic exposure,
whether conditional or absolute, to changes in the price of securities. In particular, a
person will be treated as having an “interest” by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel’s
website. If you are in any doubt as to whether or not you are required to disclose a
“dealing” under Rule 8, you should consult the Panel on telephone number +44(0)20
7382 9026 or fax number +44(0)20 7236 7005.
APPENDIX I
Conditions and Certain Further Terms of the Offer
A. Conditions Of The Offer
The Offer, which will be made by Astra, will be subject to the following conditions:
1. Acceptances
Valid acceptances being received (and not, where permitted, withdrawn) by no
later than 1.00 pm on the first closing date of the Offer (or, subject to the Code,
such later time(s) and/or dates(s) as Astra may decide) in respect of not less
than 90 per cent. of FDM Shares to which the Offer relates and not less than 90
per cent. of the voting rights carried by those shares (or, in either case, such
lower percentage as Astra may decide). However, this condition will not be
satisfied unless Astra and/or its wholly-owned subsidiaries have acquired or
agreed to acquire FDM Shares carrying, in aggregate, over 50 per cent. of the
voting rights then normally exercisable at general meetings of FDM including, for
this purpose, to the extent (if any) required by the Code, the voting rights
attaching to any FDM Shares which may be unconditionally allotted or issued
before the Offer becomes or is declared unconditional as to acceptances. In this
condition:
(a) the expression “FDM Shares to which the Offer relates” shall be
construed in accordance with sections 974 to 991 (inclusive) of the
Companies Act 2006; and
(b) FDM Shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights which they will carry when
they are issued; and
(c) valid acceptances shall be treated as having been received in respect of
any FDM Shares that Astra Group shall, pursuant to section 979(8) and,
if applicable, section 979(9) of the Companies Act 2006, be treated as
having acquired or unconditionally contracted to acquire by virtue of
acceptances of the Offer.
2. Shareholder Approval
The ordinary resolution required to approve and implement the arrangements
between the Management Team and Astra set out in the notice of General
Meeting being duly passed by the requisite majority at the General Meeting (or
at any adjournment thereof).
3. Authorisations
(a) FDM or any other member of the Wider FDM Group by any member of
the Wider Astra Group having been obtained in terms and in a form
satisfactory to Astra acting reasonably from any relevant person or from
any person or body with whom any member of the Wider FDM Group
has entered into contractual arrangements and all such authorisations
remaining in full force and effect; and
(b) all authorisations necessary to carry on the business of any member of
the Wider FDM Group remaining in full force and effect; and
(c) all filings which Astra reasonably considers necessary having been made
and all applicable waiting and other periods having expired, lapsed or
been terminated and all applicable statutory or regulatory obligations in
any jurisdiction having been complied with.
4. Regulatory Intervention
No relevant person having taken, instituted, implemented or threatened any
legal proceedings, or having required any action to be taken or otherwise having
done anything or having enacted, made or proposed any statute, regulation,
order or decision or taken any other step and there not continuing to be
outstanding any statute, regulation, order or decision that would or might
reasonably be expected to:
(a) make the Offer, its implementation or the acquisition or proposed
acquisition of any shares in, or control or management of, the Wider
FDM Group by Astra illegal, void or unenforceable; or
(b) otherwise directly or indirectly prevent, prohibit or otherwise materially
restrict, restrain, delay or interfere in the implementation of or impose
additional conditions or obligations with respect to or otherwise
challenge or require amendment of the Offer or the proposed acquisition
of FDM by Astra or any acquisition of shares in FDM by Astra; or
(c) require, prevent or delay the divestiture by Astra of any shares or other
securities in FDM; or
(d) impose any limitation on the ability of any member of the Wider Astra
Group or any member of the Wider FDM Group to acquire or hold or
exercise effectively, directly or indirectly, any rights of ownership of
shares or other securities or the equivalent in any member of the Wider
FDM Group or management control over any member of the Wider FDM
Group; or
(e) require, prevent or delay the disposal by FDM or any member of the
Wider Astra Group, or require the disposal or alter the terms of any
proposed disposal by any member of the Wider FDM Group, of all or any
part of their respective businesses, assets or properties or impose any
limitation on the ability of any of them to conduct their respective
businesses or own their respective assets or properties; or
(f) require any member of the Wider Astra Group or of the Wider FDM
Group to offer to acquire any shares or other securities (or the
equivalent) in any member of the Wider FDM Group or any member of
the Wider Astra Group owned by any third party (in each case, other
than in implementation of the Offer); or
(g) impose any material limitation on the ability of any member of the Wider
Astra Group or the Wider FDM Group to integrate or co-ordinate its
business, or any part of it, with the businesses or any part of the
businesses of any other member of the Wider Astra Group and/or the
Wider FDM Group; or
(h) result in any member of the Wider Astra Group or the Wider FDM Group
ceasing to be able to carry on business under any name under which it
presently does so; or
(i) otherwise materially adversely affect any or all of the businesses,
assets, prospects or profits of any member of the Wider Astra Group or
the Wider FDM Group to an extent which is material in the context of the
Offer or, as the case may be, in the context of the Wider Astra Group or
the Wider FDM Group taken as a whole,
and all applicable waiting and other time periods during which any such relevant
person could institute, or implement or threaten any legal proceedings, having
expired, lapsed or been terminated.
5. Consequences Of The Offer
Save as Disclosed there being no provision of any agreements to which any
member of the Wider FDM Group is a party, or by or to which any such member,
or any part of its assets, may be bound, entitled or subject, which would or
might, as a consequence of the Offer or of the acquisition or proposed
acquisition of all or any part of the issued share capital of, or change of control
or management of, FDM or any other member of the FDM Group reasonably be
expected to result (in each case to an extent which is material in the context of
the Offer or, as the case may be, in the context of the Wider FDM Group taken
as a whole) in:
(a) any assets or interests of any member of the Wider FDM Group being or
falling to be disposed of or charged in any way or ceasing to be available
to any member of the Wider FDM Group or any rights arising under
which any such asset or interest could be required to be disposed of or
charged in any way or could cease to be available to any member of the
Wider FDM Group otherwise than in the ordinary course of business; or
(b) any monies borrowed by or other indebtedness (actual or contingent) of,
or any grant available to, any member of the Wider FDM Group being or
becoming repayable or capable of being declared repayable immediately
or earlier than the repayment date stated in such agreement or the
ability of such member of the Wider FDM Group to incur any such
borrowing or indebtedness becoming or being capable of becoming
withdrawn, inhibited or prohibited; or
(c) any such agreement or the rights, liabilities, obligations or interests of
any such member under it being terminated or adversely modified or
affected or any onerous obligation arising or any adverse action being
taken under it; or
(d) the interests or business of any such member in or with any third party
(or any arrangements relating to any such interests or business) being
terminated or adversely modified or affected; or
(e) the financial or trading position or prospects or value of any member of
the Wider FDM Group being prejudiced or adversely affected; or
(f) the creation of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any member of
the Wider FDM Group or any such security (whenever arising or having
arisen) becoming enforceable or being enforced; or
(g) any member of the Wider FDM Group ceasing to be able to carry on
business under any name under which or on the terms on which it
currently does so or any person presently not able to carry on business
under any name under which any member of the Wider FDM Group
currently does becoming able to do so; or
(h) the creation of material actual or material contingent liabilities by any
member of the Wider FDM Group; or
(i) the ability of any member of the Astra Group to carry on its business
being adversely affected,
and no event having occurred which, under any provision of any such agreement
to which any member of the Wider FDM Group is a party, or by or to which any
such member, or any of its assets, may be bound, entitled or subject, could
result, to an extent which is material in the context of the Offer or, as the case
may be in the context of the Wider FDM Group taken as a whole, in any of the
events or circumstances as are referred to in subparagraphs (a) to (i) inclusive.
6. No Corporate Action Taken Since The Accounting Date
Since the Accounting Date, save as Disclosed or pursuant to transactions in
favour of FDM or a wholly-owned subsidiary of FDM, no member of the Wider
FDM Group having:
(a) issued or agreed to issue or authorised or proposed the issue or grant of
additional shares of any class or securities convertible into or
exchangeable for, or rights, warrants or options to subscribe for or
acquire, any such shares or convertible securities (save pursuant to the
FDM Share Schemes or the EBT); or
(b) redeemed, purchased, repaid or reduced or proposed the redemption,
purchase, repayment or reduction of any part of its share capital or
made or proposed the making of any other change to its share capital;
or
(c) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any dividend, bonus issue or other distribution
whether payable in cash or otherwise; or
(d) merged or demerged with or from, or acquired, any body corporate or
authorised or proposed or announced any intention to propose any such
merger or demerger; or
(e) other than in the ordinary course of business acquired or disposed of,
transferred, mortgaged or charged, or created or granted any security
interest over, any assets (including shares and trade investments) or
authorised or proposed or announced any intention to propose any
acquisition, disposal, transfer, mortgage, charge or creation or grant of
any security interest (which in any case is material in the context of the
Wider FDM Group taken as a whole); or
(f) issued or authorised or proposed the issue of any debentures or incurred
or save in the ordinary course of business increased any borrowings,
indebtedness or liability (actual or contingent); or
(g) entered into or varied, or authorised or proposed the entry into or
variation of, or announced its intention to enter into or vary, any
transaction, arrangement, contract or commitment (whether in respect
of capital expenditure or otherwise) which is of a long term, onerous or
unusual nature or magnitude or could involve an obligation of such
nature or magnitude or which is or could be restrictive to the existing
business of any member of the Wider FDM Group or which is other than
in the ordinary course of business and which in any such case is material
in the context of the Wider FDM Group taken as a whole; or
(h) entered into, implemented, effected, authorised or proposed or
announced its intention to enter into, implement, effect, authorise or
propose any contract, reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in the
ordinary course of business which is material in the context of the Wider
FDM Group taken as a whole; or
(i) waived or compromised any claim other than in the ordinary course of
business; or
(j) entered into or varied or made any offer (which remains open for
acceptance) to enter into or vary the terms of any contract with any of
the directors or senior executives of FDM or any of the directors or
senior executives of any other member of the Wider FDM Group; or
(k) taken or proposed any corporate action or had any legal proceedings
instituted or threatened against it or petition presented for its
winding-up (voluntary or otherwise), dissolution or reorganisation or for
the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of all or any material part of its assets and
revenues or for any analogous proceedings or steps in any jurisdiction or
for the appointment of any analogous person in any jurisdiction; or
(l) been unable, or admitted in writing that it is unable, to pay its debts or
has 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; or
(m) made any alteration to its memorandum or articles of association, or
other incorporation documents; or
(n) in relation to the pension schemes established for its directors and/or
other employees and/or their dependants, made or consented to any
material change to:
(i) the terms of the trust deeds constituting such pension schemes or
to the benefits which accrue;
(ii) the pensions which are payable, under them;
(iii) the basis on which qualifications for or accrual of or entitlement to
such benefits or pensions are calculated or determined;
(iv) the basis upon which the liabilities (including pensions) of such
pension schemes are funded or made;
(v) or agreed or consented to any change to the trustees of such
pension schemes; or
(o) entered into any agreement or passed any resolution or made any offer
(which remains open for acceptance) or proposed or announced any
intention with respect to any of the transactions, matters or events
referred to in this condition 6.
7. Other Events Since the Accounting Date
In the period since the Accounting Date save as Disclosed:
(a) no litigation or arbitration proceedings, prosecution, investigation or
other legal proceedings having been announced, instituted, threatened
or remaining outstanding by, against or in respect of, any member of
the Wider FDM Group or to which any member of the Wider FDM Group
is or may become a party (whether as claimant, defendant or otherwise)
which is material in the context of the Wider FDM Group taken as a
whole; or
(b) no adverse change or deterioration having occurred in the business or
assets or financial or trading position or prospects, assets or profits of
any member of the Wider FDM Group which is material in the context of
the Wider FDM Group taken as a whole; or
(c) no enquiry or investigation by, or complaint or reference to, any
relevant person against or in respect of any member of the Wider FDM
Group having been threatened, announced, implemented or instituted or
remaining outstanding by, against or in respect of, any member of the
Wider FDM Group which in any such case is material in the context of
the Wider FDM Group taken as a whole; or
(d) no contingent or other liability having arisen or become apparent or
increased which is material in the context of the Wider FDM Group taken
as a whole.
8. Other Issues
Save as Disclosed Astra not having discovered that:
Information
(a) the financial, business or other information disclosed at any time by any
member of the Wider FDM Group, whether publicly or in the context of
the Offer either contained a material misrepresentation of fact or
omitted to state a fact necessary to make the information disclosed not
materially misleading; or
(b) any contingent liability disclosed in such disclosed information would or
might materially and adversely affect, directly or indirectly, the
business, profits or prospects of the Wider FDM Group taken as a whole;
or
(c) any information disclosed at any time by or on behalf of any member of
the Wider FDM Group is or becomes materially incorrect; or
(d) any information which affects the import of any information disclosed at
any time by or on behalf of any member of the Wider FDM Group to an
extent which is material in the context of the Wider FDM Group taken as
a whole;
Intellectual Property
(e) any member of the Wider FDM Group does not own or have licensed to
it or otherwise possess legally enforceable rights to use all intellectual
property that is:
(i) required or reasonably necessary for the conduct of business of
the relevant member of the Wider FDM Group as currently
conducted; or
(ii) under development for such business;
(f) any intellectual property held by any member of the Wider FDM Group
that is material in the context of the Wider FDM Group taken as a whole
is not valid and subsisting; or
Accounts
(g) any member of the Wider FDM Group is subject to any liability,
contingent or otherwise, which is material in the context of the Wider
FDM Group taken as a whole; or
Criminal Property
(h) any asset of any member of the Wider FDM Group constitutes criminal
property as defined by section 340(3) Proceeds of Crime Act 2002 (but
disregarding paragraph (b) of that definition).
B. Certain Further Terms of the Offer
The conditions are inserted for the benefit of Astra and no FDM Shareholder shall
be entitled to waive any of the conditions without the prior consent of Astra.
Subject to the requirements of the Panel, Astra reserves the right to waive all or
any of conditions 3 to 8 (inclusive) in whole or in part;
Each of conditions 1 to 8 shall be regarded as a separate condition and shall not
be limited by reference to any other condition.
The Offer will lapse and will not proceed if the proposed acquisition of FDM is
referred to the Competition Commission or if the European Commission either
initiates proceedings under Article 6(1)(c) of the European Counsel Merger
Regulation or makes a referral to a competent authority of the United Kingdom
under Article 9(1) of the ECMR before 1.00 pm on the first closing date or the
time and date on which the Offer becomes or is declared unconditional as to
acceptances (whichever is the later).
If the Offer lapses, it will cease to be capable of further acceptance and persons
accepting the Offer and Astra shall thereupon cease to be bound by acceptances
submitted before the time the Offer lapses.
The Offer will lapse unless all of the conditions relating to the Offer have been
fulfilled or (if capable of waiver) waived by, or, where appropriate, have been
determined by Astra to be and remain satisfied by, midnight on the twenty first
day after the later of:
(a) the first closing date; or
(b) the date on which the Offer becomes unconditional as to acceptances
or such later date as Astra may, with the consent of the Panel, decide. Astra
shall be under no obligation to waive or treat as satisfied any condition by a date
earlier than the latest date specified above for its satisfaction even though the
other conditions of the Offer may, at such earlier date, have been waived or
fulfilled and there are, at such earlier date, no circumstances indicating that any
such conditions may not be capable of fulfilment.
If Astra is required by the Panel to make an offer for FDM Shares under Rule 9 of
the Code, Astra may make such alterations to the conditions of the Offer set out
above, including condition 1, as are necessary to comply with that Rule;
FDM Shares will be acquired by Astra fully paid and free from all liens, equities,
charges, equitable interests, encumbrances, rights of pre-emption and any other
third party right and/or interests of any nature whatsoever and together with all
rights attaching to them, now or in the future, including the right to receive and
retain all dividends, interest and other distributions declared, paid or made after
the Announcement Date.
The Offer will be governed by and will be subject to the jurisdiction of the English
Courts.
The availability of the offer to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. People who are not resident
in the United Kingdom should inform themselves about and observe any
applicable requirements.
APPENDIX II
Sources and Bases of Information
(i) The value placed by the Offer on the existing issued share capital of FDM is based on 23,220,000 FDM Shares in issue and options over 417,850 FDM Shares granted under the FDM Share Schemes on 25 November 2009, the last dealing day prior to the date of this announcement.
(ii) The FDM Closing Price on 3 June 2009 is taken from the Official List.
(iii) Unless otherwise stated, the financial information relating to FDM is extracted from the audited consolidated financial statements of FDM for the year ended 31 December 2008.
(iv) The amount of cash on the balance sheet of FDM of £9.5m at 30 June 2009 is taken from FDM’s Interim Results for the 6 months to 30 June 2009. On the basis of 23,220,000 FDM Shares in issue on 25 November 2009, the last dealing day prior to the date of this announcement, this amount of cash is equivalent to 40.7 pence per FDM Share. The cash adjusted Offer Price is 100.3 pence (being 141.0 pence less 40.7 pence). The cash adjusted Closing Price on 3 June 2009 is 58.3 pence (being 99.0 pence less 40.7 pence).
(v) The number of FDM Shares to which the Offer relates is 21,654,054.
(vi) The number of FDM Shares held by Independent Shareholders is 20,787,450.
APPENDIX III Definitions
For the purposes of these conditions the following expressions have the following
meaning:
“Accounting Date” 31 December 2008
“agreements” arrangements, agreements, commitments, licences, permits, franchises, partnerships, joint ventures, authorisations or other instrument
“AIM” the AIM Market operated by the London Stock Exchange
“AIM Rules” the rules applicable to companies whose shares are traded on AIM published by the London Stock Exchange as amended from time to time
“Altium” Altium Capital Limited, a private limited company incorporated in England and Wales under company number 01072627
“Announcement Date” 26 November 2009
“Astra” Astra 5.0 Limited
“Astra Board” or “Astra Directors”
the board of directors of Astra
“Astra Group” Astra Topco, its subsidiaries and subsidiary undertakings
“business day” a day which is not a Saturday or Sunday or public holiday in England
“Closing Price” the closing middle-market quotation of a share as derived from the Official List
“Code” or “City Code” the City Code on Takeovers and Mergers as from time to time interpreted by the Panel
“the Companies Act 1985” the Companies Act 1985, as amended
“the Companies Act 2006” the Companies Act 2006, as amended
“Disclosed” fairly disclosed in writing by or on behalf of FDM to Astra or its advisers
“EBT” the FDM Group Employees Share Trust
“EMI Scheme” FDM Group plc Enterprise Management Incentive
Share Option Plan
“Ernst & Young“ Ernst & Young LLP, a limited liability partnership registered in England and Wales with registered number of OC300001
“Executive Management Team”
Rod Flavell, David Templeman, Sheila Flavell and Andrew Brown
“FDM” or the “Company” FDM Group plc
“FDM Board” or “FDM Directors”
the board of directors of FDM
“FDM Group” FDM, its subsidiaries and subsidiary undertakings
“FDM Shareholders” holders of FDM Shares
“FDM Shares” the existing unconditionally allotted or issued and fully paid ordinary shares of 1 penny each of FDM and any further such shares which are unconditionally allotted or issued fully paid, or credited as fully paid, before the date on which the Offer closes (or before such earlier date as Astra may, subject to the Code, decide, not being earlier than (a) the date on which the Offer becomes or is declared unconditional as to acceptances or (b), if later, the first closing date of the Offer)
“FDM Share Schemes” the FDM Group plc Share Option Scheme and the FDM Group plc Enterprise Management Incentive Share Option Plan
“first closing date” the date falling 21 days after the date on which the Offer Document is posted
“Form of Acceptance” the form of acceptance and authority relating to the Offer which will accompany the Offer Document
“FSA” the Financial Services Authority
“General Meeting” the general meeting of FDM Shareholders (and any adjournment thereof) to be convened for the purposes of considering and if thought fit, approving, the Resolution
“Independent Director” Karl Monaghan
“Independent Inconsistent Transaction”
either: (a) an offer, scheme of arrangement, recapitalisation or other transaction which involves a change of control (as defined in the Code) of FDM; or
(b) any arrangement or transaction which involves or contemplates the transfer of any interest in the whole, or a material part of the undertaking or assets and/or business of FDM or the FDM Group, which in each case is made or entered into by a third party which is not an associate of or acting in concert (each as defined in the Code) with Astra
“Independent Shareholders” the FDM Shareholders other than the Management Team and their connected parties
“Inflexion” Inflexion Private Equity Partners LLP
“intellectual property” all patents, trademarks, trade names, service marks, copyrights, designs, databases and any applications therefore, schematics, technology, know-how, computer software, programs or applications (in both source code and object code form), and tangible or intangible proprietary information or material
“ISIN Code” a UK international securities identification numbers
“legal proceedings” actions, suits, proceedings, investigations, references or enquiries
“Listing Rules” the listing rules made by the FSA under Part VI of the Financial Services and Markets Act 2000
“London Stock Exchange” London Stock Exchange plc
“Management Arrangements”
the arrangements relating to the investment by the management Team in the Astra Group and the service agreements to be entered into by the Management Team with Astra and Astra Topco as will be set out in the Offer Document
“Management Option Shares”
the 6,750 FDM Shares which Shelia Flavell will acquire when she exercises the option granted to her pursuant to the EMI Scheme, 60,500 of the FDM Shares which Andrew Brown will acquire when he exercises the options granted to him pursuant to the EMI Scheme, the 47,500 FDM Shares which Heidi Taylor will acquire when she exercises the options granted to her pursuant to the EMI Scheme, the 25,791 of the FDM Shares which Jon Taplin will acquire when he exercises the options granted to him pursuant to the EMI Scheme, the 6,750 FDM Shares which Steve Buxton will acquire when he exercises the option granted to him pursuant to the EMI Scheme, the 8,250 FDM Shares which Ben Pattison will acquire when he exercises the option granted to him pursuant to the EMI Scheme, the 8,300 FDM Shares which Alistair Rutherford will acquire when he exercises the options granted to him pursuant to the EMI Scheme, 13,009 of the FDM
Shares which Catherine Cheek will acquire when she exercises the options granted to her pursuant to the EMI Scheme, the 4,500 FDM Shares which Lee Ballancore will acquire on the exercise of the option granted to him pursuant to the EMI Scheme and the 8,400 FDM Shares which Henry Duddy will acquire when he exercises the options granted to him pursuant to the EMI Scheme
“Management FDM Shares” 1,099,858 of the FDM Shares registered in the name of Giltspur Nominees Limited and beneficially held by Rod Flavell, the 15,000 FDM Shares registered in the name of and beneficially held by Ivan Martin, the 236,924 FDM Shares registered in the name of E*Trade UK Nominees Limited and beneficially held by Sheila Flavell, the 142,333 FDM Shares registered in the name of TD Waterhouse Nominees (Europe) Limited and beneficially held by Andrew Brown, 9,000 of the FDM Shares registered in the name of and beneficially held by Heidi Taylor, 13,500 of the FDM Shares registered in the name of and beneficially held by Jon Taplin, 19,000 of the FDM Shares registered in the name of and beneficially held by Steve Buxton, 8,000 of the FDM Shares registered in the name of TD Waterhouse Nominees (Europe) Limited and beneficially held by Nik Thorneley, 14,044 of the FDM Shares registered in the name of James Capel Nominees Limited and beneficially held by Ben Pattison and 8,287 of the FDM Shares registered in the name of and beneficially held by Henry Duddy
“Management Team” Rod Flavell, Sheila Flavell, Andrew Brown, David Templeman, Ivan Martin, Heidi Taylor, Jon Taplin, Steve Buxton, Nik Thorneley, Ben Pattison, Alistair Rutherford, Catherine Cheek, Lee Ballancore and Henry Duddy
“Offer” the recommended offer, to be made by Astra to acquire all of the issued and to be issued FDM Shares (other than the Management FDM Shares and Management Option Shares) on the terms and subject to the conditions to be set out in the Offer Document and the Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal thereof
“Offer Document” the document to be sent to FDM Shareholders which will contain amongst other things, the details of the Offer, the terms and conditions of the Offer, certain information about FDM, Inflexion and Astra and the notice of the General Meeting
“Offer Price” 141 pence per FDM Share
“Official List” the Official List maintained by the FSA
“Panel” the Panel on Takeovers and Mergers
“Regulatory Information Service”
as defined in the Listing Rules
“relevant asset” land, property or other asset now or previously owned, occupied or made use of by any past or present member of the Wider FDM Group
“relevant persons” governments, governmental, quasi-governmental, supranational, statutory, investigative, regulatory or administrative bodies or trade agencies, associations, institutions or courts, or professional or environmental bodies, or any other persons or bodies whatsoever in any jurisdiction
“Resolution” the ordinary resolution to be proposed at a general meeting of FDM to approve the proposed arrangements between Astra and the Management Team
“Share Exchange Agreements”
the share exchange agreements entered into between Astra and the Management Team on 25 November 2009 whereby, conditional on the Offer becoming wholly unconditional, Astra agrees, among other things, to purchase and each of the Management Team agrees to sell their respective Management FDM Shares and Management Option Shares in exchange for loan notes issued by Astra
“substantial interest” a direct or indirect interest in 20 per cent. or more of the equity capital of an undertaking
“third party” person, firm, company or body
“treasury shares” treasury shares (as defined in section 974(6) of the Companies Act 2006) of FDM
“United States” or “US” the United States of America, its territories and possessions, any state of the United States and the District of Columbia and all other areas subject to its jurisdiction
“US person” as defined in Regulation S under the US Securities Act
“US Securities Act” the US Securities Act 1933, and the rules and regulations promulgated under it
“Wider Astra Group” Astra and its subsidiaries, subsidiary undertakings, associated undertakings and any other undertakings in which Astra and/or such subsidiaries or undertakings (aggregating their interests) have a substantial interest
“Wider FDM Group” FDM and its subsidiaries, subsidiary undertakings, associated undertakings and any other undertakings
in which FDM and/or such subsidiaries or undertakings (aggregating their interests) have a substantial interest
In this document:
• the expression “subsidiary” has the meaning given by the Companies Act 1985
and the expressions “associated undertaking”, “subsidiary undertaking” and
“undertaking” have the meanings given by the Companies Act 2006; and
