TIDMCAE
RNS Number : 2071T
Charteris PLC
15 November 2013
Not for release, publication or distribution, in whole or in
part, directly or indirectly in, into or from the united states,
australia, canada, the republic of south africa or japan or any
other jurisdiction where to do so would constitute a violation of
the relevant laws or regulations of such jurisdiction
15 November 2013
RECOMMENDED CASH offer by
SWORD SOFT LIMITED ("sword soft")
FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF
CHARTERIS PLC ("CHARTERIS")
Summary
The Charteris Board and the Sword Soft Board are pleased to
announce that they have reached agreement on the terms of a
recommended cash offer to be made by Sword Soft for the entire
issued and to be issued share capital of Charteris (the
"Offer").
Defined terms used in this Announcement have the meanings set
out in Appendix IV.
Highlights
-- The Offer is being made at a price of 4.5 pence in cash for each Charteris Share.
-- The Offer values the entire issued and to be issued share
capital of Charteris at approximately GBP2.26 million (and GBP2.31
million taking into account vested options which may be
exercised).
-- The Offer Price represents a premium of approximately 89.47
per cent. to the Closing Price of 2.375 pence per Charteris Share
on 30 September 2013 (being the last Business Day prior to the
commencement of the Offer Period) and a premium of 50 per cent. to
the Closing Price of 3 pence per Charteris Share on 14 November
2013 (being the last Business Day prior to making this
Announcement).
-- The cash consideration payable under the terms of the Offer
will be funded using existing cash resources of the Sword Group.
Full acceptance of the Offer would result in a maximum cash payment
by Sword Soft of approximately GBP2.31 million in cash.
-- Sword Soft has received Irrevocable Undertakings from those
Charteris Directors (and their associates) who have an interest in
the Charteris Shares to accept the Offer together with Cliff Preddy
in respect of their entire holdings of Charteris Shares,
representing approximately 58.84 per cent. of Charteris' existing
issued ordinary share capital.
-- In aggregate, therefore, immediately prior to the making of
this Announcement, Sword Soft had received Irrevocable Undertakings
in respect of 29,571,520 Charteris Shares, representing
approximately 58.84 per cent. of the existing issued ordinary share
capital of Charteris. Further details of the Irrevocable
Undertakings are set out in Appendix III to this Announcement.
-- Sword Soft Limited is a wholly owned subsidiary of Sword
Group SE. Sword Group SE is a NYSE-Euronext Paris listed
international IT services group operating in 15 countries globally
with over 1000 staff, and providing its customers with high
added-value advisory and integration services.
-- On 1 October 2013, the Charteris Directors announced that the
Charteris Board intended to work with Steve Vaughan, the newly
appointed Charteris Chairman, to carry out an in-depth review of
the business with a view to maximising value for all Shareholders.
This strategic review has concluded with the Offer.
-- The Charteris Directors, who have been so advised by Beaumont
Cornish, consider the terms of the Offer to be fair and reasonable.
In providing advice to the Charteris Directors, Beaumont Cornish
has taken into account the commercial assessments of the Charteris
Directors. Beaumont Cornish is providing independent financial
advice to the Charteris Directors for the purposes of Rule 3 of the
Code.
-- The Charteris Directors intend to recommend that Charteris Shareholders accept the Offer.
-- The Offer is conditional upon, amongst other things, valid
acceptances being received in respect of not less than 90 per cent.
(or such lower percentage as Sword Soft may, subject to the Code,
decide) of the Charteris Shares to which the Offer relates. Further
details are set out in Appendix I to this Announcement.
-- Sword Soft will despatch the Offer Document and the Form of
Acceptance to Charteris Shareholders and, for information only, to
holders of share options in Charteris, and publish it on Sword
Soft's website (http://sword-group.com) and the Charteris website
(www.charteris.com), as soon as practicable and in any event within
28 days of this Announcement.
-- The conditions and certain terms of the Offer are set out in
the attached Announcement together with information on Sword Soft
and Charteris.
Commenting on the Offer, Steve Vaughan, Chairman of Charteris
said:
"On behalf of the Board of Charteris and its staff, we are
pleased with the agreement reached with Sword Soft. We consider
this a good result for shareholders and look forward to a stronger
future as a combined business."
Enquiries
Sword Group SE/Sword Soft Limited Tel: +352 26
112 611
Jacques Mottard
Phil Norgate
Charteris plc Tel: 020 7600
9199
Allan Barr
Beaumont Cornish, Rule 3 Adviser Tel: 020 7628
to Charteris plc 3396
Roland Cornish
This summary should be read in conjunction with, and is subject
to, the following full Announcement and the appendices. In
particular the Offer will be subject to the terms and conditions
set out in Appendix I to this Announcement and to the further terms
and conditions of the Offer to be set out in the Offer Document and
the Form of Acceptance. Appendix II of this Announcement contains
further details of the sources of information and bases of
calculations set out in this summary and the Announcement. Appendix
III includes details of Irrevocable Undertakings received from
Charteris Shareholders to accept the Offer in respect of their
holdings of Charteris Shares and Appendix IV to this Announcement
contains definitions of certain expressions used in this summary
and in this Announcement.
Beaumont Cornish, which is authorised and regulated in the UK by
the Financial Conduct Authority, is acting exclusively for
Charteris and no one else in connection with the Offer and this
Announcement and will not be responsible to anyone other than
Charteris for providing the protections afforded to clients of
Beaumont Cornish nor for providing advice in connection with the
Offer or any matter referred to herein.
This Announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or an invitation to purchase or otherwise subscribe for any
securities or the solicitation of any offer to purchase, subscribe
for, sell or issue any securities pursuant to the Offer or
otherwise. The Offer will be made solely by means of the Offer
Document, and where appropriate, the related Form of Acceptance
which together will contain the full terms and conditions of the
Offer, including details of how the Offer may be accepted.
Charteris Shareholders who accept the Offer may only rely on the
Offer Document and, where appropriate, the related Form of
Acceptance for all the terms and the conditions of the Offer. In
deciding whether or not to accept the Offer in relation to their
Charteris Shares, Charteris Shareholders should rely only on the
information contained, and procedures described, in the Offer
Document and the accompanying Form of Acceptance. Charteris
Shareholders are strongly advised to read the Offer Document being
posted to them shortly, and in any event within 28 days of this
Announcement, which contains important information with respect to
the Offer.
Please be aware that addresses, electronic addresses and certain
other information provided by Charteris Shareholders, persons with
information rights and other relevant persons in connection with
the receipt of communications from Charteris may be provided to
Sword Soft during the Offer Period as required under Section 4 of
Appendix 4 of the Code.
This Announcement has been prepared for the purpose of complying
with English law, the Code and the AIM Rules and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws of jurisdictions outside the United Kingdom.
Overseas shareholders
The release, publication or distribution of this Announcement in
certain jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any
applicable requirements.
Unless otherwise determined by Sword Soft or required by the
Code and permitted by applicable law and regulation, the Offer will
not be made, directly or indirectly, in, into or from a Restricted
Jurisdiction where to do so would violate the laws in that
jurisdiction, and the Offer will not be capable of acceptance from
or within a Restricted Jurisdiction. Accordingly, copies of this
Announcement and all documentation relating to the Offer 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 Offer (including custodians, nominees and
trustees) must not mail or otherwise distribute or send them in,
into or from such jurisdictions as doing so may invalidate any
purported acceptance of the Offer.
The availability of the Offer to Charteris Shareholders who are
not resident in the United Kingdom may be affected by the laws of
the relevant jurisdictions in which they are resident. Persons who
are not resident in the United Kingdom should inform themselves of,
and observe, any applicable requirements.
Financial information included in the relevant documentation
will have been prepared in accordance with accounting standards
applicable in the UK that may not be comparable to the financial
statements of US companies.
Forward looking statements
This Announcement, any oral statements made by Sword Soft or
Charteris in relation to the Offer and other information published
by Sword Soft or Charteris may contain statements about Sword Soft
and Charteris that are or may be forward looking statements. All
statements other than statements of historical facts included in
this Announcement may be forward looking statements. Without
limitation, any statements preceded or followed by or that include
the words "targets", "plans", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "estimates", "projects" or
words or terms of similar substance or the negative thereof, are
forward looking statements. Forward looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Sword Soft's or
Charteris' operations and potential synergies resulting from the
Offer; and (iii) the effects of government regulation on Sword
Soft's or Charteris' business.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements. Due to such uncertainties and risks, readers
are cautioned not to place undue reliance on such forward looking
statements. Sword Soft and Charteris disclaim any obligation to
update any forward looking or other statements contained herein,
except as required by applicable law.
Not a profit forecast
No statement in this Announcement is intended as a profit
forecast or profit estimate. No statement in this Announcement
should be interpreted to mean that the profits or earnings per
share of: (i) the Sword Group as enlarged by the Offer; (ii) Sword
Soft; and/or (iii) Charteris for current or future financial years
will necessarily match or exceed the historical or published
profits or earnings per share of Sword Group, Sword Soft or
Charteris, as the case may be.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any paper 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 paper
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 paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code 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 tenth Business Day
following the announcement in which any paper offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a paper offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror during
the Offer Period must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any paper
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 paper offeror, save to the extent
that these details have previously been disclosed under Rule 8 of
the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of
the Code applies must be made by no later than 3.30 p.m. 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 paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, Charteris confirms
that on 14 November 2013 it had 50,254,411 ordinary shares of 1
penny each in issue and admitted to trading on AIM with ISIN
GB0001663557.
Publication on websites and availability of hard copies
A copy of this Announcement and the Offer Document, is and will
be available free of charge, subject to certain restrictions
relating to persons resident in Restricted Jurisdictions, for
inspection on Sword Group's website at http://sword-group.com and
the Charteris website www.charteris.com, by no later than 12 noon
(London time) on 18 November 2013 in the case of this Announcement
and in the case of the Offer Document by 12 noon (London time) on
the Business Day following its publication and will remain so
during the course of the Offer.
Neither the content of the websites referred to in this
Announcement nor the content of any website accessible from
hyperlinks on Charteris' website (or any other website) is
incorporated into, or forms part of, this Announcement.
You may request a hard copy of this Announcement by contacting
Richard Tall on 020 3465 4200 or Caroline Urban on 020 3465 4124,
or by submitting a request by email to
richard.tall@tltsolicitors.com or caroline.urban@tltsolicitors.com
or in writing to Richard Tall/Caroline Urban, TLT LLP, 20 Gresham
Street, London, EC2V 7JE. You may also request that all future
documents, announcements and information to be send to you in
relation to this Offer shall be in hard copy form.
Not for release, publication or distribution, in whole or in
part, directly or indirectly in, into or from the united states,
australia, canada, the republic of South Africa or Japan or any
other jurisdiction where to do so would constitute a violation of
the relevant laws or regulations of such jurisdiction
15 November 2013
RECOMMENDED CASH offer by
SWORD SOFT LIMITED ("SWORD SOFT")
FOR THE ENTIRE ISSUED AND TO BE ISSUED SHARE CAPITAL OF
Charteris PLC ("Charteris")
1. Introduction
The Charteris Board and the Sword Soft Board are pleased to
announce that they have reached agreement on the terms of a
recommended cash offer to be made by Sword Soft for the entire
issued and to be issued share capital of Charteris at a price of
4.5pence per Charteris Share (the "Offer").
2. The Offer
Sword Soft is offering to acquire, subject to the conditions set
out below and in Appendix I to this Announcement, and to the full
terms and conditions to be set out in the Offer Document and
accompanying Form of Acceptance, the entire issued and to be issued
share capital of Charteris, on the following basis:
for each Charteris Share 4.5 pence in cash
The Offer values the entire issued and to be issued share
capital of Charteris at approximately GBP2.26 million (and GBP2.31
million taking into account vested options which may be
exercised).
The Offer Price represents a premium of approximately 89.47 per
cent. to the Closing Price of 2.375 pence per Charteris Share on 30
September 2013 (being the last Business Day prior to the
commencement of the Offer Period) and a premium of 50 per cent. to
the Closing Price of 3 pence per Charteris Share on 14 November
2013 (being the last Business Day prior to the publication of this
Announcement).
The Offer is conditional upon, amongst other things, valid
acceptances being received in respect of not less than 90 per cent.
(or such lower percentage as Sword Soft may, subject to the Code,
decide) of the Charteris Shares to which the Offer relates. Full
details of the conditions to which the Offer is subject are set out
in Appendix I to this Announcement.
The Offer extends to any Charteris Shares which are
unconditionally allotted or issued fully paid (or credited as fully
paid) pursuant to the exercise of options granted under the
Charteris Share Option Scheme while the Offer remains open for
acceptance (or such earlier date as Sword Soft may, subject to the
Code, and in accordance with the conditions and further terms of
the Offer decide).
The Charteris Shares will be acquired by Sword Soft, pursuant to
the Offer, fully paid and free from all liens, equities, charges,
encumbrances, rights of pre-emption and any other interest of any
nature whatsoever and together with all rights now or hereafter
attaching thereto, including voting rights and the right to receive
and retain in full all dividends and other distributions (if any)
declared, made or paid on or after 15 November 2013 (being the date
of this Announcement).
Sword Soft will despatch the Offer Document and the Form of
Acceptance to Charteris Shareholders and, for information only, to
Charteris Optionholders and publish it on its website
(http://sword-group.com) and the Charteris website
(www.charteris.com) as soon as practicable and in any event within
28 days of this Announcement.
The availability of the Offer to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable legal or
regulatory requirements.
The Offer is being made in accordance with the requirements of
the Code and is subject to the terms and conditions to be set out
in the Offer Document and, where applicable, the Form of
Acceptance.
3. Background to and reasons for the Offer
The Sword Soft Directors believe that the Offer will allow the
Enlarged Group to:
-- leverage the development of the Charteris Group to date
through the application of the wider financial resources available
to the Sword Group;
-- enable the pooling of know-how currently available within the
Charteris Group and the Sword Group, giving rise to synergistic
benefits;
-- provide scale in the market for Charteris Group services, and
provide cross-selling opportunities for both Charteris Group and
Sword Group services and products; and
-- achieve revenue, cost and operational synergies.
4. The recommendation
The Charteris Directors, who have been so advised by Beaumont
Cornish, consider the terms of the Offer to be fair and reasonable.
In providing advice to the Charteris Directors, Beaumont Cornish
has taken into account the Charteris Directors' commercial
assessment of the Offer.
Accordingly, the Charteris Directors intend to recommend that
Charteris Shareholders accept the Offer. Sword Soft has received
Irrevocable Undertakings from those Charteris Directors who have an
interest in Charteris Shares under which they have irrevocably
undertaken to accept the Offer in respect of their entire holdings
of 14,653,309 Charteris Shares, representing, in aggregate,
approximately 29.16 per cent. of the existing issued share capital
of Charteris.
5. Irrevocable undertakings
Sword Soft has received the following Irrevocable Undertakings
to accept the Offer:
-- Those Charteris Directors who have an interest in Charteris
Shares have irrevocably undertaken to accept the Offer in respect
of their entire holdings of 14,653,309 Charteris Shares. These
Charteris Share interests, represent, in aggregate, approximately
29.16 per cent. of the existing issued share capital of
Charteris.
-- Sword Soft had received Irrevocable Undertakings from those
Charteris Directors (and their associates) who have an interest in
the Charteris Shares to accept the Offer together with Cliff Preddy
in respect of their entire holdings of Charteris Shares,
representing approximately 58.84 per cent. of the existing issued
ordinary share capital of Charteris.
-- In aggregate, therefore, immediately prior to the making of
this Announcement, Sword Soft had received Irrevocable Undertakings
in respect of 29,571,520 Charteris Shares, representing
approximately 58.84 per cent. of the existing issued ordinary share
capital of Charteris. Further details of the Irrevocable
Undertakings are set out in Appendix III to this Announcement.
6. Background to and reasons for the recommendation to Charteris
Shareholders
Charteris remains a relatively small AIM company, with a market
capitalisation (based on the Closing Price of 3 pence per Charteris
Share on 14 November 2013) of GBP1.51 million. Charteris' small
market capitalisation reduces the universe of potentially
interested investors in Charteris Shares which in turn keeps
trading liquidity low, in general making it difficult for existing
Charteris Shareholders to sell shares. The average daily trading
volume in Charteris Shares for the 12 months to 14 November 2013
was 31,149 shares, representing just 0.062per cent. of the existing
issued ordinary share capital of Charteris.
On 26 October 2012, Charteris announced its preliminary results
for the year ended 31 July 2012, reporting a 23.5 per cent. fall in
year on year revenues and trading at a loss. On 27 March 2013,
interim results for the six months ended 31 January 2013 indicated
that revenue had stabilised compared to the first half of the
preceding year and that, although still losing money, Charteris had
seen some improvements in the level of business won. The
announcement also highlighted that the sales pipeline of weighted
prospects for new business led to cautious optimism that further
improvement in revenue could be delivered during the remainder of
the year.
The recent transfer of the Dynamics business, which had been
loss-making for some time, to Hitachi Solutions Limited brought
some relief to the Charteris Group. However, the announcement of
this transfer on 27 September 2013 also highlighted that: trading
in the other parts of Charteris continued to be difficult; while
customer demand for services remained quite strong, delays in
projects and customer decisions made achievement of financial
objectives challenging.
The Charteris Directors believe that Charteris has one of the
strongest Microsoft Systems integration businesses in the UK and
the ongoing relationship with Microsoft as a supportive partner
provides Charteris with a pipeline of opportunities to solve
customer issues. In addition, Charteris has a long-standing
consultancy business with strong relationships in both public and
private sector. There are particular strengths in the local
government and retail sectors, recurring project management
contracts with government agencies, and a successful Expert Witness
practice.
However, the Charteris Directors also recognise that as a small
company with a limited balance sheet and illiquid shares, Charteris
is not ideally positioned to drive value for Charteris Shareholders
from these opportunities. Charteris' size constrains the number of
commercial opportunities it is able to pursue because potential
clients, which are predominantly large organisations, often demand
minimum scale or balance sheet criteria as a prerequisite to doing
business. In addition, for the reasons explained above, Charteris
does not have the access to capital or the financial strength to
undertake acquisitions which would diversify its product portfolio,
nor to invest fully in the development of its own service lines and
routes to market.
As a result, the Charteris Directors announced on 1 October 2013
that the Charteris Board intended to work with Steve Vaughan, the
newly appointed Charteris Chairman, to carry out an in-depth review
of the business with a view to maximising value for all Charteris
Shareholders. This strategic review has concluded with the
Offer.
The Charteris Directors note Sword Soft's reasons for the Offer,
as set out in paragraph 3 above, and recognise the value that
Charteris' business could bring to the Sword Group's businesses.
The Charteris Directors recognise that there would be advantages
from being part of a larger group with greater diversity of product
and a stronger balance sheet. The Charteris Directors believe that
this is reflected in the terms of the Offer, which provide
Charteris Shareholders with an opportunity to realise their entire
shareholding in cash at a substantial 50 per cent. premium to the
Charteris Share price prevailing on 14 November 2013 (being the
last Business Day prior to this Announcement). The Charteris
Directors note that there can be no guarantee that Charteris
Shareholders would otherwise be able to realise their shareholdings
in Charteris at a price of 4.5 pence per Charteris Share or higher
in the short to medium term.
Taking these factors into account, the Charteris Directors
intend unanimously to recommend that Charteris Shareholders accept
the Offer.
7. Information on Sword Soft and Sword Group
Sword Soft, a limited liability company, is a wholly owned
subsidiary of Sword Group and was incorporated in England and Wales
on 22 February 2007. Sword Soft's registered office is at 1000
Great West Road, Brentford, Middlesex TW8 9DW.
Sword Group shares have been traded on NYSE-Euronext Paris since
13 March 2002. Based on the Closing middle market price of EUR15
per Sword Group share on 14 November 2013 (being the latest
Business Day prior to this Announcement), Sword Group SE has a
market capitalisation of approximately EUR139.3 million.
The Sword Group operates in 15 jurisdictions and has over 1,000
employees. It was formed in 2000 through the acquisition of the
assets of Decan Group, a company specialising in secure payment and
payment automation via the SWIFT network. Sword Group SE became the
holding company of the Sword Group on 22 June 2001. On 30 January
2009, Sword Group became a societas europaea.
The audited consolidated accounts of Sword Group for the
financial period ended 31 December 2012 showed revenue and profit
before tax of EUR118 million (2011: EUR156 million) and EUR20
million (2011: EUR6.5 million) respectively, and net assets of
EUR267 million (2011: EUR301 million).
The Sword Group is headquartered at 105 Route d'Arlon, L-8009,
Strassen, Luxembourg.
The Sword Group has two major business sectors:
Software Products
Sword Group's software products business stream is centred on
the governance, risk and compliance sector for more strongly
regulated markets. Sword Achiever, a risk management and compliance
solution allowing for the management of corporate reporting,
controls and measurements is supplied to over 600 clients.
Sword Apak offers financial systems specialising in asset
management and retail banking, and the back and front office
management of debits and credits, handling transactions of values
in the region of EUR15 billion per annum.
Solutions
Sword Group's solutions business, an IT services and
communications technologies offering, centres on risk management
and compliance solutions.
Sword Group's solutions business strengthens its governance,
risk and compliance management offering through delivery of,
amongst other things, enterprise portals, customer relationship
management solutions and enterprise content management. Sword
Group's solutions business operates primarily in the Benelux region
of France and Switzerland.
8. Information on Charteris
Charteris was founded in October 1996. It is headquartered in
the City of London with an office in Scotland.
Charteris delivers IT integration solutions to clients by
providing expert IT advice, business consulting services and
implementation of Microsoft technologies products. These services
are delivered to blue chip international companies as well as
homeland security, local government and retail clients.
As set out in its annual report for the year ended 31 July 2012,
Charteris reported revenues of GBP9.57 million (2011: GBP12.51
million) and a loss before tax of GBP0.418 million (2011: GBP3.456
million). As at 31 July 2012, total assets were GBP6.56 million (31
July 2011: GBP7.75 million) and net assets were GBP4.19 million (31
July 2011: GBP4.41 million).
9. Charteris current trading and prospects
On 27 March 2013, the following statement was contained within
Charteris' announcement of unaudited interim results for the six
months ended 31 January 2013:
"The gradual improvement in the performance of Charteris
continued in the six-month period ended 31 January 2013. Given the
general economic backcloth, markets are likely to remain a
challenge for the rest of the financial year. However, the general
stabilisation of the Company's revenue over an eighteen month
period and the current sales pipeline of weighted prospects for new
business lead to cautious optimism that further improvement in
trading can be delivered during the remainder of the financial
year".
On 27 September 2013, Charteris announced the transfer of its
loss-making Dynamics business to Hitachi Solutions Ltd. That
announcement contained the following statement:
"Trading in the other parts of Charteris continues to be
difficult. While customer demand for services remains quite strong,
delays in projects and customer decisions makes achievement of
financial objectives challenging".
10. Management, employees and locations
The Sword Soft Directors have confirmed to the Charteris
Directors that the existing employment rights, including pension
rights, of all Charteris employees will be fully safeguarded on
completion of the Acquisition.
Each of the Charteris Directors, Steve Vaughan, David Mann,
Allan Barr and Chris Rees has agreed with Sword Soft to resign from
the board of Charteris upon the Offer becoming, or being declared,
unconditional in all respects.
Sword Soft intends to create further value for its shareholders
following completion of the Acquisition by the organic growth of
its existing IT consulting business, supplemented by the addition
of the Charteris offering. In particular Sword Soft intends its
strategy to be to:
-- continue to increase its IT consultancy market share through
a wider offering of IT consultancy services, including those
provided by Charteris;
-- utilise the cash resources available to Sword Soft to
accelerate the growth of the existing Sword Soft and Charteris IT
consultancy business; and
-- consider further acquisitions in the IT consultancy sector to
further enhance the combination of the Sword Soft and Charteris IT
consultancy businesses.
The Sword Soft Directors consider that their strategic plans for
Charteris will have no repercussions on the employment of Charteris
employees or the location of Charteris' places of business.
Additionally the Sword Soft Directors do not intend to redeploy any
of Charteris' fixed assets.
The Charteris Directors have given due consideration to Sword
Soft's stated intentions for the management, employees and
locations of Charteris when deciding to recommend acceptance of the
Offer.
11. Charteris Share Option Scheme
The Offer will extend to any Charteris Shares which are
unconditionally allotted or issued fully paid (or credited as fully
paid) pursuant to the exercise of options granted under the
Charteris Share Option Scheme or otherwise while the Offer remains
open for acceptance (or such earlier date as Sword Soft may,
subject to the Code, and in accordance with the conditions and
further terms of the Offer decide). To the extent that such options
are not exercised in full, Sword Soft will make appropriate
proposals to Charteris Optionholders in due course.
12. Compulsory acquisition and cancellation of Charteris Shares
trading on AIM
If the Offer becomes or is declared unconditional in all
respects and sufficient acceptances are received and/or sufficient
Charteris Shares are otherwise acquired, Sword Soft intends to
apply the provisions of sections 974 to 991 (inclusive) of the Act
to acquire compulsorily any outstanding Charteris Shares to which
the Offer relates and which have not been acquired or agreed to be
acquired pursuant to the Offer or otherwise.
If the Offer is declared unconditional in all respects with 75
per cent. or more acceptances, Sword Soft intends to procure the
making of an application by Charteris to the London Stock Exchange
for the cancellation of the admission of the Charteris Shares to
trading on AIM. It is anticipated that such cancellation of trading
will take effect no earlier than 20 Business Days after the Offer
becomes or is declared unconditional in all respects.
The cancellation of the trading of the Charteris Shares will
significantly reduce the liquidity and marketability of any
Charteris Shares not assented to the Offer and their value may be
affected in consequence.
It is also intended that, following the Offer becoming or being
declared unconditional in all respects, Charteris will be
re-registered as a private company.
13. Financing of the Offer
Full acceptance of the Offer, assuming the exercise of all
outstanding options under the Charteris Share Option Scheme with an
exercise price of less than 4.5 pence per Charteris Share under the
Charteris Share Option Scheme before the Offer closes, will result
in the payment of approximately GBP2.31 million in cash. The Offer
will be financed entirely from existing cash resources available to
the Sword Group.
TLT LLP confirms that it is satisfied that the necessary
financial resources are available to Sword Soft sufficient to
satisfy in full the cash consideration payment by Sword Soft under
the Offer.
Further information on the financing of the Offer will be set
out in the Offer Document.
14. Disclosures of interests in Charteris Shares
Other than pursuant to the Irrevocable Undertakings referred to
in paragraph 5 above, Sword Soft confirms that, as at close of
business on 14 November 2013, being the last Business Day prior to
this Announcement, none of Sword Soft or any of its directors or
any person acting or deemed to be acting in concert with Sword Soft
hold any interests in Charteris Shares.
15. Offer related arrangements
On 18 October 2013, Charteris and Sword Group SE entered into a
confidentiality agreement in a customary form in relation to the
Offer, pursuant to which Sword Group SE undertook, subject to
certain exceptions, to:
-- keep confidential information relating to Charteris and not
to disclose it to third parties;
-- for a period of 2 years from the date of the confidentiality
agreement, not use, and procure that no other member of the Sword
Group use, confidential information directly or indirectly to:
o solicit or entice away or endeavour to solicit or entice away
any person employed by Charteris or by any member of the Charteris
Group at any time during the course of discussions regarding the
Offer; or
o solicit or entice away or endeavour to solicit or entice away
any distributor, agent, customer, supplier of Charteris or of any
other member of the Charteris Group; or
o encourage, procure or assist any distributor, agent, customer
or member of the Charteris Group to restrict, vary or cease that
relationship.
The obligations in the confidentiality agreement terminate 2
years from the date of Sword Group SE's acceptance of the terms of
the confidentiality agreement.
16. Overseas shareholders
The availability of the Offer or the distribution of this
Announcement to Charteris Shareholders who are not resident in the
UK 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. Charteris
Shareholders who are in any doubt regarding such matters should
consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
This Announcement does not constitute an offer for sale for any
securities or an offer or an invitation to purchase any securities.
Charteris Shareholders are advised to read carefully the Offer
Document and related Form of Acceptance once these have been
despatched.
17. Structure of the Offer
The Offer is an offer for cash on the basis described in
paragraph 2 above.
The Offer is proposed to be implemented by way of takeover offer
within the meaning of Part 28 of the Act.
Sword Soft will despatch the Offer Document and the Form of
Acceptance to Charteris Shareholders and, for information only, to
Charteris Optionholders as soon as practicable and, in any event,
within 28 days of the date of this Announcement.
18. Other
Sword Soft confirms that it will, as soon as possible following
the release of this Announcement be making an Opening Position
Disclosure which discloses the details required to be disclosed by
Rule 8.1(a) of the Code.
19. Documents on display
Copies of this Announcement and the Irrevocable Undertakings
referred to in paragraph 5 above and summarised in Appendix III to
this Announcement will be made available, subject to certain
restrictions relating to persons resident in any Restricted
Jurisdiction, on Charteris' website (www.charteris.com) by no later
than 12 noon on the day following the date of this Announcement
until the end of the Offer Period.
20. General
The Offer Document, containing the full terms of the Offer, will
be posted to Charteris Shareholders and, for information only, to
Charteris Optionholders, as soon as possible, but in any event,
within 28 days of today's date. The Offer will be made subject to
the Conditions and further terms out in Appendix I to this
Announcement which will, together with certain further terms of the
Offer, also be set out in full in the Offer Document and, in the
case of certificated Charteris Shares, in the Form of Acceptance.
In deciding whether to accept the Offer, Charteris Shareholders
should rely on the information contained in, and follow the
procedures described in, the Offer Document and, if applicable, the
Form of Acceptance.
The Offer will be governed by English law and will be subject to
the jurisdiction of the courts of England and Wales. The Offer will
be subject to the applicable requirements of the Code, the Panel,
the London Stock Exchange and the FCA.
The bases and sources of certain financial information contained
in this Announcement are set out in Appendix II to this
Announcement. A summary of the Irrevocable Undertakings is
contained in Appendix III to this Announcement. Certain terms used
in this Announcement are defined in Appendix IV to this
Announcement.
This Announcement is for information purposes only and does not
constitute, or form part of, an offer or an invitation to purchase,
subscribe, sell or issue for any securities or a solicitation of
any offer to purchase, subscribe for, sell or issue any securities.
The Offer will be made solely by way of the Offer Document and,
where appropriate, the related Form of Acceptance which together
will contain the full terms and conditions of the Offer, including
details of how the Offer may be accepted.
Charteris Shareholders who accept the Offer may only rely on the
Offer Document and, where appropriate, the related Form of
Acceptance for all the terms and the conditions of the Offer. In
deciding whether or not to accept the Offer in relation to their
Charteris Shares, Charteris Shareholders should rely only on the
information contained, and procedures described, in the Offer
Document and the accompanying Form of Acceptance. Charteris
Shareholders are strongly advised to read the Offer Document being
posted to them shortly, and in any event within 28 days of this
Announcement, which contains important information with respect to
the Offer.
Beaumont Cornish, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively for Charteris and no one else in connection with the
Offer and will not be responsible to anyone other than Charteris
for providing the protections afforded to customers of Beaumont
Cornish or for providing advice in relation to the Offer or any
other matter referred to herein. The principal place of business of
Beaumont Cornish is Second Floor, Bowman House, 29 Wilson Street,
London EC2M 2SS.
The Sword Soft Directors accept responsibility for the
information contained in this document, save for the information
for which the Charteris Directors accept responsibility in
accordance with the following paragraph. Save as aforesaid, to the
best of the knowledge and belief of the Sword Soft Directors (who
have taken all reasonable care to ensure that such is the case) the
information contained in this document 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 Charteris Directors accept responsibility for the
information contained in this document relating to Charteris,
themselves and their immediate families, related trusts and
connected persons. To the best of the knowledge and belief of the
Charteris Directors (who have taken all reasonable care to ensure
that such is the case) the information contained in this document
for which they are responsible is in accordance with the facts and
does not omit anything likely to affect the import of such
information.
Forward looking statements
This Announcement, any oral statements made by Sword Soft or
Charteris in relation to the Offer and other information published
by Sword Soft or Charteris may contain statements about Sword Soft
and Charteris that are or may be forward looking statements. All
statements other than statements of historical facts included in
this Announcement may be forward looking statements. Without
limitation, any statements preceded or followed by or that include
the words "targets", "plans", "believes", "expects", "aims",
"intends", "will", "may", "anticipates", "estimates", "projects" or
words or terms of similar substance or the negative thereof, are
forward looking statements. Forward looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Sword Soft's or
Charteris' operations and potential synergies resulting from the
Offer; and (iii) the effects of government regulation on Sword
Soft's or Charteris' business.
Such forward looking statements involve risks and uncertainties
that could significantly affect expected results and are based on
certain key assumptions. Many factors could cause actual results to
differ materially from those projected or implied in any forward
looking statements. Due to such uncertainties and risks, readers
are cautioned not to place undue reliance on such forward looking
statements. Sword Soft and Charteris disclaim any obligation to
update any forward looking or other statements contained herein,
except as required by applicable law.
Not a profit forecast
No statement in this Announcement is intended as a profit
forecast or profit estimate. No statement in this Announcement
should be interpreted to mean that the profits or earnings per
share of: (i) the Sword Group as enlarged by the Offer; (ii) Sword
Soft; and/or (iii) Charteris for current or future financial years
will necessarily match or exceed the historical or published
profits or earnings per share of Sword Soft or Charteris, as the
case may be.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any paper 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 paper
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 paper offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code applies must be made by no
later than 3.30 p.m. (London time) on the tenth Business Day
following the commencement of the offer period and, if appropriate,
by no later than 3.30 p.m. (London time) on the tenth Business Day
following the announcement in which any paper offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a paper offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper 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 paper offeror, save to the extent that these details
have previously been disclosed under Rule 8 of the Code. A Dealing
Disclosure by a person to whom Rule 8.3(b) of the Code 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 paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3 of the Code.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
Information relating to Charteris Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Charteris Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Charteris may be provided to Sword Soft during
the Offer Period as required under Section 4 of Appendix 4 of the
Code to comply with Rule 2.12 (c) of the Code.
Publication on website
A copy of this Announcement and the Offer Document, is and will
be made available, free of charge subject to certain restrictions
relating to persons in Restricted Jurisdictions, for inspection at
Sword Soft's website at http://sword-group.com and the Charteris
website at www.charteris.com by no later than 12 noon (London time)
on the Business Day following the date of this Announcement.
Neither the content of these websites nor the content of any
website accessible from hyperlinks on Charteris' website (or any
other website) is incorporated into, or forms part of, this
Announcement.
You may request a hard copy of this Announcement by contacting
Richard Tall on 020 3465 4200 or Caroline Urban on 020 3465 4124,
or by submitting a request by email to
richard.tall@tltsolicitors.com or caroline.urban@tltsolicitors.com
or in writing to Richard Tall/Caroline Urban, TLT LLP, 20 Gresham
Street, London, EC2V 7JE. You may also request that all future
documents, announcements and information to be sent to you in
relation to this Offer shall be in hard copy form.
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
The Offer, which will comply with the applicable rules and
regulations of the London Stock Exchange and the Code and will be
governed by English law and subject to the jurisdiction of the
courts of England, will be subject to the terms and conditions set
out below, in the Offer Document and (in respect of certificated
Charteris Shares) in the Form of Acceptance:
a) valid acceptances of the Offer being received (and not, where
permitted, withdrawn) by not later than 3.00 p.m. (London time) on
the First Closing Dateor such later time(s) and/or date(s) as Sword
Soft may, with the consent of the Panel or subject to the Code,
decide in respect of not less than 90 per cent. (or such lower
percentage as Sword Soft may decide) in nominal value of the
Charteris Shares to which the Offer relates and not less than 90
per cent. (or such lower percentage as Sword Soft may decide) of
the voting rights carried by the Charteris Shares to which the
Offer relates, provided that this condition will not be satisfied
unless Sword Soft and/or any of its wholly-owned subsidiaries shall
have acquired or agreed to acquire whether directly or indirectly
(whether pursuant to the Offer or otherwise), Charteris Shares
carrying, in aggregate, more than 50 per cent. of the voting rights
then normally exercisable at a general meeting of Charteris
(including for this purpose, to the extent (if any) required by the
Panel, any voting rights attaching to any Charteris Shares which
may be unconditionally allotted or issued before the Offer becomes
or is declared unconditional as to acceptances, whether pursuant to
the exercise of any outstanding conversion or subscription rights
or otherwise). For the purpose of this condition:
(i) the expression "Charteris Shares to which the Offer relates"
shall be construed in accordance with sections 974 to 991
(inclusive) of the Act;
(ii) Charteris Shares which have been unconditionally allotted
but not issued before the Offer becomes or is declared
unconditional, whether pursuant to the exercise of any outstanding
subscription or conversion right or otherwise, shall be deemed to
carry the voting rights which they will carry on being entered into
the register of members of Charteris; and
(iii) valid acceptances shall be treated as having been received
in respect of any Charteris Shares that Sword Soft shall, pursuant
to section 979(8) of the Act and, if applicable, section 979(9) of
the Act, be treated as having acquired or unconditionally
contracted to acquire by virtue of acceptances of the Offer;
b) no central bank, government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body, or any court, institution, investigative body, association, trade agency or professional or environmental body or any other similar person or body in any jurisdiction (each, a "Relevant Authority") having taken instituted, implemented or threatened (and, in each case, not having withdrawn the same) any action, proceeding, suit, investigation, enquiry or reference or enacted or made any statute, regulation, decision or order (and, in each case, not having withdrawn the same) which would or might reasonably be expected to be material in the context of the Charteris Group or the wider Sword Group in each case when taken as a whole to:
(i) restrict or restrain, prohibit, delay, impose additional
adverse conditions or obligations with respect to, or otherwise
interfere with the implementation of, the Offer or the acquisition
of any Charteris Shares by Sword Soft or any matters arising
therefrom;
(ii) result in a delay in the ability of Sword Soft, or render
Sword Soft unable, to acquire some or all of the Charteris
Shares;
(iii) require, prevent or delay the divestiture by any member of
the wider Sword Group or any member of the Charteris Group of all
or any portion of their respective businesses, assets or properties
or impose any limitation on the ability of any of them to conduct
their businesses or own their respective assets or properties or
any part thereof;
(iv) impose any limitation on, or result in a delay in, the
ability of any member of the wider Sword Group to acquire or hold
or exercise effectively, directly or indirectly, all or any rights
of ownership of shares or other securities of any member of the
Charteris Group or on the ability of any member of the Charteris
Group to hold or exercise effectively, directly or indirectly, all
or any rights of ownership of shares or other securities or to
exercise management control over any other member of the Charteris
Group;
(v) require any member of the wider Sword Group or the Charteris
Group (other than Charteris) to offer to acquire any shares or
other securities or rights thereover in any member of the Charteris
Group owned by any third party other than as required by the
Code;
(vi) make the Offer or its implementation or the proposed
acquisition by Sword Soft of any shares or other securities in
Charteris or the acquisition or control of Charteris or any member
of the Charteris Group, illegal, void or unenforceable in or under
the laws of any jurisdiction or directly or indirectly restrict or
delay, prohibit or otherwise interfere with the implementation of,
or impose additional conditions or obligations with respect to, or
otherwise challenge, the Offer or the acquisition of any shares in
Charteris, or control of Charteris, by Sword Soft;
(vii) result in any member of the Charteris Group ceasing to be
able to carry on business under any name under which it presently
does so;
(viii) impose any limitation on the ability of any member of the
wider Sword Group to conduct or co-ordinate or integrate its
business, or any part of it, with the business of any other member
of the wider Sword Group or the Charteris Group; or
(ix) otherwise adversely affect the business, assets or profits
of any member of the wider Sword Group or the Charteris Group,
and all applicable waiting and other time periods during which
any such Relevant Authority could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or otherwise intervene having
expired, lapsed or been terminated;
c) all authorisations, orders, grants, recognitions, consents,
confirmations, clearances, licences, permissions and approvals
("authorisations") required by law in any jurisdiction for or in
respect of the Offer and the proposed acquisition of any shares or
securities, directly or indirectly, in, or control of, Charteris or
any member of the Charteris Group by any member of the wider Sword
Group having been obtained in terms and/or form reasonably
satisfactory to Sword Soft from all appropriate Relevant
Authorities or (without prejudice to the generality of the
foregoing) from any persons or bodies with whom any member of the
Charteris Group has entered into contractual arrangements and such
authorisations remaining in full force and effect and there being
no notice of any intention to revoke, suspend, materially modify or
not to renew the same in each case where the absence of such
authorisations would have a material adverse effect on the
Charteris Group or the wider Sword Group in each case when taken as
a whole;
d) save as Disclosed, there being no provision of any agreement,
permit, lease, licence or other instrument to which any member of
the Charteris Group is a party or by or to which it or any of its
assets may be bound or subject which, as a consequence of the
making or implementation of the Offer or the acquisition by Sword
Soft directly or indirectly of Charteris or because of a change in
the control of Charteris or any member of the Charteris Group,
would or might reasonably be expected to result, to an extent in
each case which would be material in the context of the Charteris
Group taken as a whole, in:
(i) any monies borrowed by, or other indebtedness (actual or
contingent) of, or grant available to, any member of the Charteris
Group becoming repayable or capable of being declared repayable
immediately or earlier than the stated maturity or repayment date
or the ability of any member of the Charteris Group to borrow
moneys or incur indebtedness being or becoming capable of being
withdrawn or inhibited;
(ii) any such agreement, arrangement, permit, lease, licence or
other instrument or any right, interest, liability or obligation of
any member of the Charteris Group therein, being terminated or
adversely modified or affected or any adverse action being taken or
any onerous obligation or liability arising thereunder that is
material in the context of the Offer;
(iii) any mortgage, charge or other security interest being
created over the whole or any part of the business, property or
assets of any member of the Charteris Group or any such security
(whenever arising) becoming enforceable;
(iv) the value of any member of the Charteris Group or its
financial or trading position being prejudiced or adversely
affected to an extent which is material in the context of the
Offer;
(v) any assets or interests of any member of the Charteris Group
being or falling to be charged or disposed of or any right arising
under which any such asset or interest could be required to be
disposed of or charged;
(vi) the rights, liabilities, obligations or interests of any
member of the Charteris Group in or with any other person, firm or
company (or any arrangement relating to such interest or business)
being terminated or adversely modified or affected;
(vii) any member of the Charteris Group ceasing to be able to
carry on business under any name under which it currently does so;
or
(viii) the creation of any material liability, actual or
contingent, by any member of the Charteris Group other than to
trade creditors or other liabilities incurred in the ordinary
course of business;
e) since 31 July 2012, being the date of Charteris' last audited
financial statements, save as Disclosed, no member of the Charteris
Group having:
(i) (save for Charteris Shares issued pursuant to the exercise
of options granted under the Charteris Share Option Scheme or as
between Charteris and wholly-owned subsidiaries of Charteris
("Intra-Charteris Group Transactions")) issued or agreed to issue
or authorised the issue of additional shares of any class or
securities convertible into or rights, warrants or options to
subscribe for or acquire any such shares or convertible
securities;
(ii) other than to another member of the Charteris Group,
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any dividend, bonus or other distribution
(whether payable in cash or otherwise) other than dividends
lawfully paid to Charteris or wholly-owned subsidiaries of
Charteris;
(iii) save for Intra-Charteris Group Transactions, merged or
demerged with or acquired any body corporate, partnership or
business;
(iv) save for Intra-Charteris Group Transactions, (other than in
the ordinary course of business) acquired, or disposed of,
transferred, mortgaged or charged or created any security interest
over any asset or any right, title or interest in any asset
(including shares and trade investments) or authorised or announced
any intention to do so which, in any such case, is material in the
context of the Charteris Group taken as a whole;
(v) save for Intra-Charteris Group Transactions, issued or
authorised the issue of any debentures or incurred or increased any
indebtedness (other than in the ordinary course of business and
which is material in the context of the Charteris Group) or made,
authorised or announced an intention to propose any change in its
share or loan capital;
(vi) entered into or varied or announced its intention to enter
into or vary any contract, transaction, commitment or arrangement
(whether in respect of capital expenditure or otherwise) which is
of a long term (that is of 12 months or more) or which involves
expenditure other than in the ordinary course of business of
GBP100,000 or more or which involves or could involve an obligation
of a nature or magnitude which, in any such case, is material in
the context of the Charteris Group taken as a whole;
(vii) save for transactions in the ordinary course of business
entered into, implemented or authorised any reconstruction,
amalgamation, scheme of arrangement or other transaction or
arrangement or announced any intention to do so to an extent in
each case which is material in the context of the Charteris Group
taken as a whole;
(viii) entered into, or varied in any material respect the terms
of, any contract or agreement with any of the directors of
Charteris or any of its subsidiaries;
(ix) taken any corporate action or had any legal proceedings
started or threatened in writing against it or had any 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/or revenues or any
analogous proceedings in any jurisdiction;
(x) other than in respect of claims between Charteris and its
wholly owned subsidiaries, waived or compromised any claim other
than in the ordinary course of business;
(xi) made any material amendment to its memorandum or articles of association;
(xii) in relation to pension schemes established for its
directors and/or other employees and/or their dependants, made or
agreed or consented to any change to: (a) the terms of the trust
deeds constituting such pension schemes or to the benefits which
accrue; (b) the pensions which are payable under them; (c) the
basis on which qualifications for or accrual of or entitlement to
such benefits or pensions are calculated or determined; (d) the
basis upon which the liabilities (including pensions) of such
pension schemes are funded or made; or (e) the trustees of such
pension schemes;
(xiii) purchased, redeemed or repaid any of its own shares or
other securities or reduced or made any other change to any part of
its share capital;
(xiv) been unable or admitted in writing that it is unable to
pay its debts or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business;
and
(xv) entered into any contract, commitment or agreement with
respect to any of the transactions, matters or events referred to
in this condition (h) or announced an intention to do so in each
case which is not in the ordinary course of business and is
material in the context of the wider Charteris Group;
f) since 31 July 2012, being the date of Charteris' last audited
financial statements, save as Disclosed:
(i) no litigation, arbitration, prosecution or other legal
proceedings having been instituted, announced or threatened in
writing or remaining outstanding by or against any member of the
Charteris Group or to which any member of the Charteris Group is or
may become a party (whether as claimant, respondent or otherwise)
which, in any such case, would or might reasonably be expected
adversely to affect any member of the wider Charteris Group to an
extent which is material in the context of the Charteris Group
taken as a whole;
(ii) no adverse change having occurred in the business, assets,
financial or trading position or profits of the Charteris Group in
each case which is material in the context of the Charteris Group
taken as a whole;
(iii) no contingent or other liability of any member of the
Charteris Group having arisen which might reasonably be expected to
materially and adversely affect the Charteris Group taken as a
whole;
(iv) other than as a result of the Offer no investigation by any
Relevant Authority having been threatened in writing, announced,
implemented or instituted or remaining outstanding which in any
case would be likely to have a material adverse effect on the
financial position of the Charteris Group taken as a whole;
g) save as Disclosed, Sword Soft not having discovered that:
(i) any business, financial or other information concerning any
member of the Charteris Group publicly disclosed at any time by or
on behalf of any member of the Charteris Group is misleading,
contains a misrepresentation of fact or omits to state a fact
necessary to make the information contained therein not misleading
which, in any such case, is material in the context of the
Charteris Group taken as a whole; or
(ii) any member of the Charteris Group is other than in its
ordinary course of business subject to any liability, actual or
contingent, which is not Disclosed and which is material in the
context of the Charteris Group taken as a whole.
Sword Soft reserves the right to waive all or any of conditions
(b) to (g) (inclusive) above, in whole or in part. Conditions (b)
to (g) (inclusive) must be fulfilled or waived by midnight on the
21(st) day after the later of the First Closing Date and the date
on which condition (a) is fulfilled (or such later date as the
Panel may agree). Sword Soft shall be under no obligation to waive
or treat as fulfilled any of conditions (b) to (g) (inclusive) by a
date earlier than the latest date specified above for the
fulfilment thereof notwithstanding that the other conditions of the
Offer 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.
If Sword Soft is required by the Panel to make an offer for
Charteris Shares under the provisions of Rule 9 of the Code, Sword
Soft may make such alterations to the conditions as are necessary
to comply with the provisions of that Rule of the Code.
The Offer will lapse and will not proceed if the OFT refers the
Offer or any part of it to the Competition Commission and/or if the
European Commission either indicates to Sword Soft that it has
decided to initiate proceedings under Article 6(1)(c) of Council
Regulation (EC) 139/2004 or to make a referral to a competent
authority of the United Kingdom under Article ((1) of that
Regulation in each case before 3 p.m. on the First Closing Date or
on the 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 accepting Charteris Shareholders and Sword Soft will
cease to be bound by acceptances submitted on or before the time
when the Offer lapses.
APPENDIX II
SOURCES OF INFORMATION AND BASES FOR CALCULATIONS
In this Announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used:
a) Unless otherwise stated, financial information relating to
Charteris has been extracted or derived (without material
adjustment) from the audited financial statements of Charteris for
the years ended 31 July 2011 and 31 July 2012and the unaudited
interim results for the six months ended 31 January 2013.
b) On 14 November 2013 (being the last Business Day prior to
making this Announcement), Charteris had in issue 50,254,411
ordinary shares of 1 penny each.
c) On 14 November 2013 (being the last Business Day prior to
making this Announcement), there were 1,340,000 outstanding options
granted under the Charteris Share Options Scheme and likely to be
exercised, excluding any options which are covered by the Charteris
EBT.
d) The value of the entire issued share capital of the Company
of approximately GBP2.26million is calculated on the basis of the
existing issued share capital of Charteris as set out in (b) above
multiplied by the Offer Price.
e) The value of the total cash payment of GBP2.31 million
payable by Sword Soft assumes full acceptance of the Offer of the
existing issued share capital of Charteris as set out in (b) above
multiplied by the Offer Price and the exercise of all vested and
outstanding Charteris Share Options with an exercise price of less
than 4.5 pence per Charteris Share (being 1,340,000 Charteris
Shares) under the Charteris Share Option Scheme before the Offer
closes multiplied by the Offer Price.
f) Unless otherwise stated, financial information relating to
Sword Soft has been extracted or derived (without material
adjustment) from the audited consolidated accounts of Sword Soft
for the period ended 31 December 2012.
g) The prices of Charteris Shares on a particular date are
derived from the Closing Price for that date.
APPENDIX III
IRREVOCABLE UNDERTAKINGS
Charteris Directors
The Charteris Directors have given Irrevocable Undertakings
accept the Offer as follows:
% of
Number of Charteris
Charteris Shares
Name Shares in issue
Allan Barr 166,667 0.33
David Mann 7,864,431 15.65
Chris Rees 6,622,211 13.18
Total 14,653,309 29.16
Steve Vaughan does not hold any Charteris Shares.
These Irrevocable Undertakings anticipate that any offer will be
made at the Offer Price.
Each of the above Irrevocable Undertakings has been entered into
by the relevant director only as a shareholder of Charteris and not
in their capacity as a director; nothing contained in the
undertakings requires any of the Charteris Directors to take or not
to take any decision or action in their capacity as a Charteris
Director.
These Irrevocable Undertakings include undertakings from the
Charteris Directors in respect of their entire holdings of
Charteris Shares to accept or procure the acceptance of the
Offer.
These Irrevocable Undertakings will cease to be binding if:
(i) this Announcement is not published by 6.00 p.m. on 15 November 2013;
(ii) the Offer Document is not published and the Form of
Acceptance is not posted within 28 days of the date of the
publication of this Announcement or such later time as may be
agreed by the Panel;
(iii) the Offer does not become or is not declared wholly
unconditional on or before the date being 185 days following the
date of this Announcement; or
(iv) the Offer lapses or is withdrawn.
Other Irrevocable Undertakings
Sword Soft has received Irrevocable Undertakings to accept the
Offer as follows from the following holders or controllers of
Charteris Shares:
% of
Number of Charteris
Charteris Shares
Name Shares in issue
Cliff Preddy 11,222,211 22.33
Richard Mann 1,848,000 3.68
Edward Mann 1,848,000 3.68
Total 14,918,211 29.69
These Irrevocable Undertakings include undertakings from the
holders or controllers in respect of their entire holdings of
Charteris Shares:
(i) to accept or procure the acceptance of the Offer.
These Irrevocable Undertakings will cease to be binding if:
(i) this Announcement is not published by 6.00 p.m. on 15 November 2013; and
(ii) the Offer Document is not published and the Form of
Acceptance is not posted within 28 days of the date of the
publication of this Announcement or such later time as may be
agreed by the Panel with the consent of Charteris; and
(iii) the Offer does not become or is not declared wholly
unconditional on or before the date being 185 days following the
date of this Announcement;
(iv) the Offer lapses or is withdrawn; or
(iv) a person other than Sword Soft or any person acting in
concert with Sword Soft makes or announces (in accordance with Rule
2.7 of the Code) an offer (within the meaning of the Code) to
acquire issued and to be issued share capital of Charteris, other
than that already owned by the person making such offer (or persons
acting in concert with it), on terms which represent, in the
reasonable opinion of the relevant holder or controller of
Charteris Shares, an improvement of 15 per cent. on the value of
represented by the Offer.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout
this Announcement, unless the context requires
otherwise:
"Acquisition" the proposed acquisition of
Charteris by Sword Soft pursuant
to the Offer
"Act" the Companies Act 2006, as
amended from time to time;
"acting in concert" has the same meaning given
by the Code
"AIM Cancellation" the proposed cancellation of
the Charteris Shares to trading
on AIM
"AIM Rules" the rules governing the admission
to, and operation of, AIM as
set out in the AIM Rules for
Companies published by the
London Stock Exchange from
time to time
"Announcement" this announcement
"Australia" the commonwealth of Australia,
its, states, territories or
possessions
"Beaumont Cornish" Beaumont Cornish Limited, which
is authorised and regulated
in the UK by the Financial
Conduct Authority to carry
on investment business, the
independent financial adviser
under the Code to Charteris
"Business Day" a day on which banks are open
for business in London (excluding
Saturdays, Sundays and public
holidays)
"Canada" Canada, its possessions, provinces
and territories and all areas
subject to its jurisdiction
or any political sub-division
thereof
"Charteris" or Charteris plc
"Target"
"Charteris Directors" the directors of Charteris
or "Charteris at the date of this Announcement
Board" being Steve Vaughan, Allan
Barr, David Mann and Christopher
Rees
"Charteris EBT" the Charteris Ltd General Employee
Benefit Trust created under
a trust deed dated 21 March
2000
"Charteris Group" Charteris and its subsidiary
undertakings at the date of
this Announcement
"Charteris Optionholders" holders of options in the Charteris
Share Option Scheme
"Charteris Shareholders" the holders of Charteris Shares
"Charteris Shares" the existing unconditionally
allotted or issued and fully
paid (or credited as fully
paid) ordinary shares of 1
penny each in the capital of
Charteris and any further shares
which are unconditionally allotted
or issued fully paid or credited
as fully paid before the date
on which the Offer ceases to
be open for acceptance (or
such earlier date as Sword
Soft may, subject to the Code,
decide) but excluding any such
shares held or which become
held in treasury
"Charteris Share Charteris Share Option Scheme
Option Scheme"
"certificated" not in uncertificated form
or "in certificated
form"
"Closing Price" the closing middle market quotation
of a Charteris Share on the
relevant date as derived from
the AIM Appendix to the Daily
Official List
"Code" the City Code on Takeovers
and Mergers (as amended or
interpreted from time to time
by the Panel)
"CREST" the relevant system (as defined
in the Regulations) in respect
of which Euroclear UK & Ireland
Limited is the operator
"Daily Official the Daily Official list of
List" the London Stock Exchange
"Disclosed" (i) as disclosed in Charteris'
report and accounts for the
year ended 31 July 2012; (ii)
as publicly announced by Charteris
(by the delivery of an announcement
to an authorised Regulatory
Information Service) prior
to 15 November 2013; (iii)
as disclosed in this Announcement;
or (iv) as otherwise disclosed
in writing, or in the documentation
or written information provided
(including in the electronic
data room established by Charteris
in connection with the Offer),
to Sword Soft or its advisers
by or on behalf of Charteris
prior to 15 November 2013 in
the context of the Offer
"Enlarged Group" the Sword Group and the Charteris
Group following completion
of the Acquisition
"First Closing the date which is 21 days after
Date" the day of posting of the Offer
Document
"Form of Acceptance" the form of acceptance and
authority for use by holders
of Charteris Shares in certificated
form in connection with the
Offer
"FCA" the Financial Conduct Authority
"FSMA" the Financial Services and
Markets Act 2000, as amended
from time to time
"Irrevocable Undertakings" the irrevocable undertakings
given by certain Charteris
Shareholders as described in
Appendix III of this Announcement
"Japan" Japan, its cities, prefectures,
territories and possessions
"London Stock London Stock Exchange PLC
Exchange"
"Offer" the recommended cash offer
of not less than 4.5 pence
per Charteris Share to be made
by Sword Soft to acquire the
entire issued and to be issued
ordinary share capital of Charteris
on the terms and subject to
the conditions to be set out
in the Offer Document and the
Form of Acceptance (including,
where the context so requires,
any subsequent waiver, revision,
variation, extension or renewal
thereof)
"Offer Document" the document to be sent to
Charteris Shareholders containing
the terms of the Offer
"Offer Period" the period commencing 1 October
2013, the date of announcement
by Charteris of its strategic
review, until whichever of
the following shall be the
later of (a) the First Closing
Date; (b) the date on which
the Offer lapses or is withdrawn;
and (c) the date on which the
Offer becomes unconditional
as to acceptances
"Offer Price" 4.5 pence per Charteris Share
"OFT" Office of Fair Trading
"Panel" the Panel on Takeovers and
Mergers
"Regulations" the Uncertificated Securities
Regulations 2011 (S.I. 2001
No. 3755) as amended from time
to time
"Relevant Authorities" government or governmental,
quasi-governmental, supranational,
statutory or regulatory body,
or any court, institution,
investigative body, association,
trade agency or professional
or environmental body or (without
prejudice to the generality
of the foregoing) any other
person or body in any jurisdiction
(each, a "Relevant Authority")
"Restricted Jurisdiction" the United States, Canada,
Australia, the Republic of
South Africa or Japan or any
other country or jurisdiction
if making the Offer in such
jurisdiction would constitute
a violation of the relevant
laws of, or require registration
of the Offer in, such jurisdiction
"Sword Group" Sword Group SE and its subsidiary
undertakings at the date of
this Announcement
"Sword Soft" Sword Soft Limited
"Sword Soft Board" the directors of Sword Soft
or "Sword Soft at the date of this Announcement,
Directors" being Jacques Mottard and Stuart
Anthony Allen
"uncertificated" recorded on the relevant register
or "in uncertificated of the share or security concerned
form" as being held in uncertificated
form in CREST, and title to
which, by virtue of the Regulations,
may be transferred by means
of CREST
"United Kingdom" the United Kingdom of Great
or "UK" Britain and Northern Ireland
"United States" the United States of America,
or "US" its territories and possessions,
any states of the United States
and the District of Columbia
"GBP", "p", "pence" the lawful currency for the
or "sterling" time being in the UK
For the purposes of this Announcement, "subsidiary", "subsidiary
undertaking", associated undertaking" and "undertaking" has the
meaning given by the Act.
In this Announcement, the singular includes the plural and vice
versa, unless the context otherwise requires.
All times referred to are London time, unless otherwise
stated.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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