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Verint WS Holdings Ltd  -     

Recommended cash offer for eg solutions plc

Released 07:00 05-Sep-2017

RNS Number : 7948P
Verint WS Holdings Ltd
05 September 2017
 


THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

5 September 2017

 

RECOMMENDED CASH OFFER

for

eg solutions plc

by

Verint WS Holdings Limited

 

intended to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

 

Summary

 

The boards of Verint and EG are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition pursuant to which Verint intends to acquire all of the issued and to be issued share capital of EG.

 

·        Under the terms of the Offer, each EG Shareholder will be entitled to receive:

for each EG Share held                                       112.5 pence in cash

The Offer values the entire issued and to be issued share capital of EG at approximately £26.30 million and represents:

 

·     a premium of 53.0 per cent. to the volume weighted average EG Share price of 73.5 pence for the six month period to 4 September 2017, the latest practicable date before this Announcement;

 

·     a premium of 4.1 per cent. to the volume weighted average EG Share price of 108.1 for the three month period to 4 September 2017, the latest practicable date before this Announcement; and

 

·     a discount of 11.1 per cent. to the closing EG Share price of 126.5 pence on 4 September 2017, the latest practicable date before this Announcement.

 

·        The Offer is conditional, amongst other things, on the Scheme becoming unconditional and Effective including its approval by a majority of the Scheme Shareholders present and voting (in person or by proxy) representing 75 per cent. of more in the value of the Scheme Shares held by such Scheme Shareholders. The Offer is subject to the terms and conditions set out in Appendix 1 to this Announcement and to be set out in the Scheme Document.

·        The EG Directors, who have been so advised by Nplus1 Singer Advisory LLP as to the financial terms of the Offer, unanimously consider the terms of the Offer to be fair and reasonable. In providing advice to the EG Directors, N+1 Singer has taken into account the commercial assessments of the EG Directors. N+1 Singer is providing independent financial advice to the EG Directors for the purpose of Rule 3 of the Code.

·        In addition, the EG Directors consider the terms of the Offer to be in the best interests of the EG Shareholders as a whole. Accordingly, the EG Directors unanimously intend to recommend that EG Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution at the General Meeting. Verint has received irrevocable undertakings to vote, or procure the vote in favour, of all Resolutions from the EG Directors in respect of their own beneficial holdings of 4,153,330 EG Shares representing, in aggregate, approximately 18.31 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer).

 

·        Irrevocable undertakings have also been received from the EBT to vote, or procure the vote in favour, of all Resolutions in respect of its entire holding of EG Shares amounting, in aggregate, to 1,514,285 EG Shares, representing approximately 6.68 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer).

 

·        Irrevocable undertakings have also been received from certain EG Shareholders to vote, or procure the vote, in favour of all of the Resolutions in respect of their entire beneficial holdings of EG Shares amounting, in aggregate, to 9,755,434 EG Shares, representing approximately 43.01 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer). These irrevocable undertakings will cease to be binding if, amongst other things, an announcement is made in accordance with Rule 2.7 of the Code of a competing offer (whether made by way of an offer or scheme of arrangement) wholly in cash or with a full cash alternative in respect of the entire issued and to be issued share capital of EG and the cash value of such competing offer, or as the case may be, full cash alternative represents a value per EG Share at the date and time in London of such announcement of not less than 110 per cent. of the value of the Offer.

 

·        In total therefore, irrevocable undertakings in favour of the Resolutions have been received from EG Shareholders controlling, in aggregate, 15,423,049 EG Shares, which represents approximately 67.99 per cent. of the existing issued share capital of EG.

 

·        The Offer is intended to be implemented by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (referred to in this Announcement as the Scheme). Verint reserves the right to elect to implement the Offer by way of a Contractual Offer, subject to the Panel's consent, if required.

 

·        The Scheme Document, containing further information about the Offer and notices convening the Court Meeting and the General Meeting, will be published in due course and, in any event, within 28 days of the date of this Announcement (unless otherwise agreed with the Panel), and will be made available by Verint on its website at www.verint.com/about/investor-relations and by EG on its website at www.egsplc.com/regulatory-news.

 

Commenting on the Offer, Nigel Payne, the Non-Executive Chairman of EG, said:

"I am pleased to recommend this offer to our shareholders. The Offer Price of 112.5 pence per share represents a premium of 85 per cent. over the share price of the business just one year ago, a premium of 53.0 per cent. over the last six month's volume weighted average share price and is an attractive exit price when viewed against the fundamentals of the business, against the way comparable small technology companies are currently valued by the market and importantly against what we believe was the last institutional price at which EG's shares traded, which was on 23 May 2017 at a price of 71.7 pence, some 40.8 pence (35.0 per cent.) below the Offer Price. Since 23 May 2017, we believe there have not been any institutional trades and the median trade is only 2,000 shares with all purchases and sales since that date being driven by small volume trades. Other than in the period since late July 2017, we also believe that there have been no trades in EG Shares at a level at or above the Offer Price in the last decade."

Commenting on the Offer, Nick Nonini, Managing Director, Customer Engagement Solutions of the EMEA region for Verint, said:

 

"The acquisition of Elektra will further strengthen the capabilities of Verint's customer engagement portfolio, extending our leadership with an even more comprehensive offering in the back-office market. The acquisition will add more capabilities, personnel and reach to our workforce optimisation suite that spans the entire enterprise; from back-office departments that help shape the customer experience, to front-office contact centres."

This summary should be read in conjunction with, and is subject to, the following full Announcement and the Appendices. The Conditions and certain further terms of the Offer are set out in Appendix 1 to this Announcement. Appendix 2 contains details of the irrevocable undertakings given to Verint. Appendix 3 contains bases and sources of certain information contained within this Announcement. Appendix 4 contains details of the EG Profit Forecast. Appendix 5 contains the definitions of certain terms used in this Announcement.


Enquiries

 



Verint WS Holdings Limited

Tel: +44 (0)1932 509336

Alex Shipley




eg solutions plc

Tel: +44 (0)1785 715772

Nigel Payne


Elizabeth Gooch




Nplus1 Singer Advisory LLP (financial adviser to EG)

Tel: +44 (0)207 496 3000

Shaun Dobson


Alex Price




KPMG LLP (financial adviser to Verint)

Tel: +44 (0)207 311 1000

Helen Roxburgh


Michael Nicholson




Yellow Jersey PR Limited (PR adviser to EG)


Felicity Winkles

Tel: +44 (0)7748 843871

Joe Burgess

Tel: +44 (0)7769 325254



N+1 Singer, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for EG and for no-one else in connection with the matters referred to in this Announcement and will not be responsible to any person other than EG for providing the protections afforded to clients of N+1 Singer, nor for providing advice in relation to the matters referred to herein. Neither N+1 Singer nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of N+1 Singer in connection with the matters referred to in this Announcement, or otherwise.

 

KPMG, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Verint and for no-one else in connection with the matters referred to in this Announcement and will not be responsible to any person other than Verint for providing the protections afforded to clients of KPMG, nor for providing advice in relation to the matters referred to herein. Neither KPMG nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of KPMG in connection with the matters referred to in this Announcement, or otherwise.

 

Jones Day are retained as legal advisers to Verint.

Freeths LLP are retained as legal advisers to EG.

 

IMPORTANT NOTES

 

This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, any offer or invitation to sell or purchase any securities, or the solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise nor shall there be any sale, issuance or transfer of securities of EG in any jurisdiction in contravention of applicable law. The Offer will be effected solely through the Scheme Document (or, if the Offer is implemented by way of a Contractual Offer, the offer document) which will contain the full terms and conditions of the Offer. Any vote, decision in respect of, or other response to, the Scheme (or the Contractual Offer, if applicable) should be made only on the basis of the information contained in the Scheme Document (or, if applicable, the offer document). Each EG Shareholder is urged to consult its independent professional advisers immediately regarding the tax consequences of the Offer applicable to them.

 

Overseas jurisdictions

 

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by law and/or regulation and therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their EG Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer, disclaim any responsibility or liability for the violation of such restrictions by any person.

 

The availability of the Offer to persons who are not resident in the United Kingdom may be restricted by the laws and/or regulations of the relevant jurisdictions in which they are located. The Offer will not be made available, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction. Any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. Further details in relation to overseas shareholders will be contained in the Scheme Document.

 

This Announcement has been prepared pursuant to and for the purpose of complying with English law, the Code, the AIM Rules and the Rules of the London Stock Exchange and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England.

 

Copies of this Announcement and formal documentation relating to the Offer will not be, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Offer. If the Offer is implemented by way of a Contractual Offer (unless otherwise permitted by applicable law or regulation), the Contractual Offer may not be made, directly or indirectly, in or into or from any Restricted Jurisdiction

 

United States Shareholders

 

Shareholders in the United States should note that the Offer relates to the shares of an English company and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended, will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included in or referred to in this document has been or will be prepared in accordance with accounting standards applicable in the UK and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

EG is incorporated under the laws of England. All of the officers and directors of EG are residents of countries other than the United States. It may not be possible to sue EG in a non-US court for violations of US securities laws. It may be difficult to compel EG and its respective affiliates to subject themselves to the jurisdiction and judgment of a US court.

 

The statements contained in this document are not to be construed as legal, business, financial or tax advice.

 

Please be aware that addresses, electronic addresses and certain other information provided by EG Shareholders, persons with information rights and other relevant persons for the receipt of communications from EG may be provided to Verint during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

 

Publication on website

 

Pursuant to Rule 26.1 of the Code, a copy of this Announcement and other documents in connection with the Scheme will, subject to certain restrictions, be available for inspection on Verint's website at www.verint.com/about/investor-relations and on EG's website at www.egsplc.com/regulatory-news no later than 12 noon (London time) on the day following this Announcement. The contents of the websites referred to in this Announcement are not incorporated into, and do not form part of, this Announcement.

 

Requesting hard copy documents

 

Pursuant to Rule 30.3 of the Code, a person so entitled may request a copy of this Announcement and any information incorporated into it by reference to another source in hard copy form. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Offer should be in hard copy form. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested from either Verint by contacting Alex Shipley at Verint (telephone number +44 (0)1932 509336) or EG by contacting  Michael Woolley at EG (telephone number +44 (0)1785 715772).

 

Rule 2.9 Disclosures

 

In accordance with Rule 2.9 of the Code, as at close of business on 4 September 2017 (being the last Business Day before the date of this Announcement, there are 22,682,937 EG Shares in issue and admitted to trading on AIM). The ISIN Number for the EG Shares is EGS.

 

Cautionary note regarding forward-looking statements

 

This Announcement, oral statements made regarding the Offer and other information published by Verint and/or EG may contain certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to EG or Verint or their respective industry, products or activities. Forward-looking statements speak only as to the date of this document and may be identified by the use of forward-looking terms such as "may," "will," "expects," "believes," "hopes," "anticipates," "aims," "plans," "estimates," "projects," "targets," "intends," "forecasts," "outlook," "impact," "potential," "confidence," "improve," "continue," "optimistic," "deliver," "comfortable," "trend", and "seeks," or the negative of such terms or other variations on such terms or comparable terminology. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These statements are based on assumptions and assessments made by EG and/or Verint, as the case may be, in light of their experience and their perception of historical trends, current conditions, future developments and other factors that they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors that could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements are unknown. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, future exchange and interest rates and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof. Other risk factors are described herein and in Verint and EG's other respective filings, including in Verint and EG's respective annual reports and accounts for the year ended 31 January 2017. Many of these important factors are outside of Verint's or, as the case may be, EG's control. No assurances can be provided as to any result or the timing of any outcome regarding matters described herein or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation: (a) the receipt of approval of EG's shareholders; (b) any regulatory approvals required for the transaction not being obtained on the terms expected or on the anticipated schedule; (c) the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; (d) the possibility that the parties may be unable to any achieve expected synergies and operating efficiencies in connection with the transaction within the expected time-frames or at all and to successfully integrate EG's operations into those of Verint; (e) the integration of EG's operations into those of Verint being more difficult, time-consuming or costly than expected; (f) operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, being greater than expected following the transaction; (g) the retention of certain key employees of EG being difficult; (h) changes in tax laws or interpretations that could increase tax liabilities, including, if the transaction is consummated; (i) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated; (j) the possibility that application of or compliance with laws, court rulings, certifications, regulations, regulatory actions, or other requirements or standards may delay, limit or prevent new product introductions, affect the production and marketing of existing products or services or otherwise affect performance, results, prospects or value; (k) the potential of international unrest, economic downturn or effects of currencies, tax assessments, adjustments or anticipated rates, benefit or retirement plan costs, or other regulatory compliance costs; (l) the possibility of reduced demand, or reductions in the rate of growth in demand, for products and services; (m) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with Verint and EG's respective businesses, industry or initiatives may adversely impact performance, results, prospects or value; (n) the possibility that anticipated financial results or benefits of recent acquisitions will not be realised or will be other than anticipated; and (o) the effects of contractions in credit availability, as well as the ability of Verint and EG's respective customers and suppliers to adequately access the credit markets when needed.

 

Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and investors are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of the relevant document. Neither EG nor Verint assume any obligation to update or correct the information contained in the relevant document (whether as a result of new information, future events or otherwise), except as required by applicable law.

 

Given the risks and uncertainties, undue reliance should not be placed on forward-looking statements as a prediction of actual results. Should one or more of the risks or uncertainties mentioned materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant documents. EG, Verint and their affiliated companies assume no obligation to update or correct the information contained in the documents in this part of the website, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this Announcement and any documents referred to or incorporated herein are made as at the date of such documents, unless some other time is specified in relation to them, and service of the relevant documents shall not give rise to any implication that there has been no change in the facts set out in such documents since such date(s).

 

Dealing disclosure requirements

 

Under Rule 8.3(a) of the Code, any person who is interested in one per cent. or more of any class of relevant securities of an offeree company or of a securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.

 

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in one per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

 

Opening Position Disclosures must also be made by the offeree company and by an offeror and Dealing Disclosures must also be made by the offeree company, by an 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.

 

In accordance with normal UK practice, Verint or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, EG shares, other than pursuant to the Offer, until the date on which the Scheme (or Contractual Offer, if applicable) becomes Effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

 



 

 

 

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

5 September 2017

 

RECOMMENDED CASH OFFER

for

eg solutions plc

by

Verint WS Holdings Limited

 

intended to be effected by means of a Scheme of Arrangement under Part 26 of the Companies Act 2006

 

1. Introduction

 

The boards of Verint and EG are pleased to announce that they have reached agreement on the terms of a recommended cash acquisition pursuant to which Verint intends to acquire all of the issued and to be issued share capital of EG.

 

The Offer is intended to be implemented by means of a Court-sanctioned scheme of arrangement between EG and EG Shareholders under Part 26 of the Companies Act. Verint reserves the right to elect to implement the Offer by way of a Contractual Offer, subject to the Panel's consent, if required.

 

The Scheme will be subject to the Conditions and further terms set out below and in Appendix 1 to this Announcement and the full terms and conditions to be set out in the Scheme Document.

 

Subject to the satisfaction or, where appropriate, waiver of the Conditions, it is expected that the Offer will become Effective in November 2017. Further details in respect of the expected timetable of key events in relation to the Offer will be set out in the Scheme Document to be sent to EG Shareholders in due course.

 

2. Terms of the Offer

 

The Offer, which will be subject to the conditions and principal further terms referred to in Appendix 1 to this Announcement, will be made on the following basis:

 

for each EG Share held                                     112.5 pence in cash

 

The Offer values the entire issued and to be issued ordinary share capital of EG at approximately £26.30 million and represents:

 

·     a premium of 53.0 per cent. to the volume weighted average EG Share price of 73.5 pence for the six month period to 4 September 2017, the latest practicable date before this Announcement;

 

·     a premium of 4.1 per cent. to the volume weighted average EG Share price of 108.1 for the three month period to 4 September 2017, the latest practicable date before this Announcement; and

 

·     a discount of 11.1 per cent. to the closing EG Share price of 126.5 pence on 4 September 2017, the latest practicable date before this Announcement.

Fractional entitlements of pence payable EG Shareholders under the Offer will be rounded down to the nearest whole number of pence.

If, after the date of this Announcement, any dividend and/or other distribution and/or other return of capital is announced, declared, made or paid or becomes payable in respect of the EG Shares, Verint reserves the right to reduce the Cash Consideration by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared, made or paid or payable.

The EG Directors have irrevocably undertaken to vote or procure the vote in favour of all of the Resolutions in respect of their own beneficial holdings of 4,153,330 EG Shares representing, in aggregate, approximately 18.31 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer). Irrevocable undertakings have also been received from the EBT to vote, or procure the vote in favour, of all Resolutions in respect of its entire holding of EG Shares amounting, in aggregate, to 1,514,285 EG Shares, representing approximately 6.68 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer).

Irrevocable undertakings have also been received from certain EG Shareholders to vote, or procure the vote, in favour of all of the Resolutions in respect of their entire beneficial holdings of EG Shares amounting, in aggregate, to 9,755,434 EG Shares, which represent approximately 43.01 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer). These irrevocable undertakings will cease to be binding if, amongst other things, an announcement is made in accordance with Rule 2.7 of the Code of a competing offer (whether made by way of an offer or scheme of arrangement) wholly in cash or with a full cash alternative in respect of the entire issued and to be issued share capital of EG and the cash value of such competing offer or, as the case may be, full cash alternative, represents a value per EG Share at the date and time in London of such announcement of not less than 110 per cent. of the value of the Offer.

In total therefore, irrevocable undertakings in favour of all of the Resolutions have been received from EG Shareholders controlling, in aggregate, 15,423,049 EG Shares, which represents approximately 67.99 per cent. of the existing issued share capital of EG.

Further details of the irrevocable undertakings are set out in paragraph 15 below and Appendix 2 to this Announcement.

 

3. EG Share Option Plans

Verint will make appropriate proposals to participants in the EG Share Option Plans as soon as is practicable. Participants in the EG Share Option Plans will be contacted separately regarding the effect of the Offer on their rights under the EG Share Option Plans and with the details of Verint's proposals.

 

It is currently intended that the proposals to be made to participants in the EG Share Option Plans will consist, in summary, of an arrangement whereby participants will be offered a cashless exercise facility which will allow the exercise of options without participants having to pay the exercise price in advance out of their own funds and whereby participants will be given the opportunity to exercise their options in full conditionally on the Court sanctioning the Scheme.  The terms of the Scheme will then apply to the EG Shares acquired by the relevant participants on exercise of their options.  This means that such EG Shares will be transferred to Verint subject to the terms of the Scheme and, in return, the relevant participants will be entitled to receive the Cash Consideration for each EG Share as part of the Scheme.  Under the terms of such cashless exercise facility, participants who accept the proposals would authorise EG to receive on their behalf the Cash Consideration due under the Scheme in respect of the EG Shares acquired on the exercise of their options and to use such Cash Consideration to satisfy the exercise price and any applicable income tax and employer and employee national insurance contributions which will be due from them on that exercise but for which EG is liable to make payment to HM Revenue & Customs.

The exercise of options under the proposals would be conditional on the Court sanctioning the Scheme at the Scheme Court Hearing.  If the Court did not sanction the Scheme, any exercise would not be effective and the options would remain exercisable in accordance with the usual exercise provisions which apply to them.

The full details of the final proposals to be made to participants in the EG Share Option Plans will be contained in the proposals to be sent to them following the publication of the Scheme Document.

The Scheme will extend to any EG Shares which are unconditionally allotted or issued before the Scheme Record Time, including those allotted or issued as a result of the exercise of options or awards under the EG Share Option Plans.

The Scheme will not extend to EG Shares issued after the Scheme Record Time. However, it is proposed to approve amendments to EG's Articles at the General Meeting to provide that, if the Scheme becomes Effective pursuant to its terms, any EG Shares issued to any person after the Scheme Record Time (including in satisfaction of an option exercised under one of the EG Share Option Plans if the option proposal referred to below is not opted for) will be automatically transferred to Verint in consideration for the payment by Verint to such persons of 112.5 pence in cash for each EG Share so transferred.

4. Information on EG

EG was incorporated on 15 January 1988 and has been trading for over 28 years. It was admitted to AIM on 6 June 2005. As at 4 September 2017, being the Business Day immediately prior to the date of this announcement, the market capitalisation of EG was approximately £28.35 million.

EG provides back-office optimisation software solutions to companies across a range of sectors including financial services, utilities and government. Its software packages are designed to improve customer service, operational efficiency and compliance while reducing costs by creating additional capacity from existing resources.

EG operates principally in the UK but also has operations in Netherlands, Singapore, the United States, South Africa, Switzerland, Italy, India and Norway.

EG had revenues of £7.5 million and adjusted EBITDA of £0.8 million in the 12 months ending 31 January 2016. EG reported revenues of £8.2 million and adjusted EBITDA of £1.2 million in the 12 months ending 31 January 2017.  In the announcement titled "Pre-close Trading Statement" dated 20 July 2017 EG announced that it expected "…Adjusted EBITDA to be not less than £1.9 million (2017: £1.2 million")" (the "Profit Forecast"). This constituted an ordinary course profit forecast within the meaning of note 2 to Rule 28.1 of the Code. Further information on the Profit Forecast is contained in Appendix 4.

5. Information on Verint and Verint Systems

 

Headquartered in Melville, New York, Verint Systems, the ultimate parent entity of Verint, is publicly traded on the NASDAQ Stock Market under the symbol VRNT. It is a global leader in Actionable Intelligence® solutions. Over 10,000 organisations (as of 2014) in approximately 180 countries and over 80 per cent. of the US Fortune 100 (as of 2015) use Verint Systems' solutions.

Verint Systems' innovative solutions are developed by a large research and development team comprised of approximately 1,400 professionals and backed by more than 800 patents and patent applications worldwide. Verint Systems employs a global workforce of approximately 5,000 personnel.

As at 1 September 2017, being the last Business Day in the United States prior to the date of this Announcement, the market capitalisation of Verint Systems was approximately $2.5 billion.

Verint is a company incorporated under the laws of England and Wales and is owned indirectly by Verint Systems. It serves as a holding company for a significant portion of Verint Systems' UK and European trading assets, and it manages certain intellectual property and software development activities of specific software products, which are then sold globally through Verint Systems' worldwide network. Verint is also the main conduit for ongoing investments by the Wider Verint Group in the UK.

Verint recently filed its latest company accounts at Companies House, in which its subsidiaries are shown as investments rather than consolidated. Total assets at the 31 January 2017 year end stood at £72.8 million and, subsequent to 31 January 2017, a further £149 million of assets have been contributed from the Wider Verint Group as part of a UK entity consolidation programme. Operating profits for the year ended 31 January 2017 were £19.6 million, including £19.1 million net finance income, from revenues of £6.1 million.  

6. Background to and reasons for the Offer

EG is a leading provider in the UK of workforce optimisation solutions that are designed to enable enterprise operational managers to control, optimise and enhance back-office processes in real time. Organisations in the UK and internationally across multiple industry sectors including financial services, healthcare and utilities, use EG's cloud-based and on-premises software to assist them in managing work, people, and end-to-end processes in the back-office. Using its forecasting, scheduling, real-time work management and operational analytics capabilities, EG strives to deliver measurable improvements in service, quality, productivity and regulatory compliance for its customers.

The Verint Directors believe that the acquisition of EG will strengthen the capabilities of Verint's customer engagement platform and provide organisations with workforce optimisation across the entire enterprise, from the back-office operations centre to the front office contact centre and branch location. Furthermore, the combined group will extend and deepen a number of existing customer and partner relationships and enhance Verint's strategy and holistic approach to customer engagement. As a result, Verint believes that customers, partners and other stakeholders will benefit from a differentiated combination of solutions for the enterprise, while also offering Verint and EG a clear opportunity for growth globally.

7. Background to and reasons for the Recommendation

The EG Board notes that, in the period since 11 August 2017, EG's mid-market closing share price has been in excess of the price per share offered by Verint under the Offer. The EG Board believes, however, that the recent increase in the share price has been entirely driven by small volumes of retail purchases, causing the share price to rise as a result of the limited liquidity of EG's shares. In particular, the EG Board believes that the current mid-market price of EG is not reflective of a price at which any significant volume of EG Shares could be bought or sold in the market. The EG Board considers that EG has long suffered from an illiquid shareholder register which can give rise to volatility in its share price. Moreover, the EG Board understands that, so far as it is aware, the last institutional price at which EG's shares have traded, was on 23 May 2017 at a price of 71.7 pence, some 40.8 pence (35 per cent.) below the Offer Price. Since 23 May 2017, the EG Board does not believe that there have been any institutional trades and the median trade size is only 2,000 shares, with all purchases and sales since that date being driven by small volume trades. Other than in the period since late July 2017, so far as the EG Board is aware, there have been no trades in EG Shares at a level at or above the Offer Price in the last decade.

Importantly, the EG Board believes that the level of the Offer represents an attractive exit price when viewed against the fundamentals of the business, against the way comparable small technology companies are currently valued by the market and against the most recent higher-volume share trades. It also represents an attractive premium of 53.0 per cent. and 4.1 per cent. against the VWAP of the EG Shares over the six and three month periods respectively prior to the date of this Announcement.

In evaluating the Offer, in considering its recommendation and in analysing the recent movements in the EG share price, the EG Board has consulted extensively with its advisers. The EG Board has carefully considered such advice, in particular as to the price at which any significant volume of EG Shares could be bought or sold in the market. The EG Board has also considered additional factors such as balancing the realisation of a sustained and liquid share price at the Offer level against the costs of realising the same, together with future investment requirements of EG, the short and medium-term management succession requirements and the overall fit of EG with Verint.

8. Verint's intentions regarding EG and Management, Employees and Location

Upon completion of the Offer, EG will be rebranded as 'eg solutions, a Verint Company'. In due course, Verint will phase out the EG brand.

Verint's guiding principle is to develop customers for life. Verint believes that EG's success has been attributable, in no small part, to understanding and meeting the needs of its customers. This shared customer-centric approach will support the transition of EG's customers to the Verint family. As noted above, Verint believes the combination of the two companies will extend and deepen a number of existing customer and partner relationships and allow Verint and EG to better serve customers across all parts of the enterprise. Verint intends to leverage its global footprint and extensive partner network to expand EG's international reach and accelerate its growth plan, including by offering partners access to a wider portfolio of products and services.

Verint believes that EG's product portfolio will benefit from being part of a company with innovation as a core value and which has more than 800 patents and patent applications as a result of its continued investment in research and development. Verint intends to utilise both companies' products to create a comprehensive, best-of-breed solution for customers.

The existing board of directors of EG have confirmed that they will resign as directors upon completion of the Offer. Elizabeth Gooch, EG's founder and CEO, will also resign as an employee upon completion of the Offer, but has agreed to remain involved in the business in a consultative role for an interim period to assist with the integration of the two organisations. Nick Nonini, Managing Director of EMEA of Verint, will take up the operational leadership of EG. Accordingly, Elizabeth Gooch has today entered into a contract for services with EG and Verint which will become Effective so long as the following conditions have been satisfied by the Long Stop Date: (i) the Offer becoming Effective; (ii) the Service Agreement being terminated in accordance with its terms and any severance payments due to Elizabeth Gooch under the Service Agreement having been made; and (iii) prior to the Offer becoming Effective, no circumstance having arisen which would give EG the right to terminate the Service Agreement pursuant to clause 13.1 thereof (the "Consultancy Agreement").

Under the terms of the Consultancy Agreement, Elizabeth Gooch will receive a monthly fee of £22,500. The Consultancy Agreement shall be terminable by Elizabeth Gooch by giving one months' written notice. Following the initial period of three months, the Consultancy Agreement will be terminable by EG and Verint by giving three months' written notice.

For the purpose of Rule 16.2 of the Code N+1 Singer has confirmed that, in its opinion, the terms of the Consultancy Agreement are fair and reasonable so far as the Independent EG Shareholders are concerned.

Verint values EG's workforce as they will play an important role in the future of the business, which will be integrated into Verint's Customer Engagement Solutions global business line. Its technology will become part of the Verint Customer Engagement portfolio. The acquisition will be focused on driving growth, rather than cost reductions, and as such, Verint believes there will be opportunities for internal promotions and hiring of new positions. Headcount reductions will occur only when there is a clear redundancy in positions. Verint expects that any such headcount reductions will be less than 2.5 per cent. of the existing combined UK workforce of the Wider Verint Group and EG.

Verint has informed the EG Directors that it intends to put in place appropriate incentivisation arrangements for EG employees following completion of the Offer. Beyond this statement, no discussions have taken place to date between Verint and EG in relation to such arrangements, no agreements or arrangements have been entered into at the current time and there will be no discussions in relation to any such arrangements during the Offer Period.

Verint intends to retain the existing EG UK office location for the foreseeable future. Verint has no intention to redeploy any of EG's fixed assets.

Verint confirms that, following the implementation of the Offer, the existing contractual and statutory employment rights, including in relation to pensions, of all EG employees, will be fully safeguarded. Verint has no current intention to make any changes in relation to such matters that will negatively impact the employees of EG.

9. Delisting

 

It is intended that an application will be made for the cancellation of the admission to trading of EG Shares on AIM, to take effect shortly after the Effective Date. It is intended that dealing in EG Shares will be suspended at 5.00pm London time on the Business Day immediately preceding the Effective Date.

 

On the Effective Date, the Company will become a wholly-owned subsidiary of Verint. As soon as possible after the Effective Date, it is intended that the Company will be re-registered as a private limited company under the relevant provisions of the Companies Act.

 

10. Financing the Offer

 

The Cash Consideration payable pursuant to the Offer will be funded using Verint's existing cash resources.

 

KPMG, financial adviser to Verint, is satisfied that sufficient resources are available to Verint to satisfy in full the Cash Consideration payable under the terms of the Offer.

 

11. Opening Position Disclosures and interests

 

Save in respect of the irrevocable undertakings referred to in paragraph 15, as at the close of business on 4 September 2017 (being the last Business Day before this Announcement) neither Verint, nor any of its directors, nor, so far as Verint is aware, any person acting in concert (within the meaning of the Code) with it has:

 

(i)         any interest in or right to subscribe for any relevant securities of EG;

(ii)        any short positions in respect of relevant EG Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery;

(iii)       borrowed or lent any relevant EG Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Code);

(iv)       procured an irrevocable commitment or letter of intent to accept the Offer or vote in favour of a scheme of arrangement in respect of any relevant EG securities; or

(v)        any Dealing Arrangement in relation to any relevant EG securities.

 

12. The Scheme

 

It is proposed that the Offer will be implemented by way of a Court sanctioned scheme of arrangement between EG and EG Shareholders under Part 26 of the Companies Act, although Verint reserves the right, at its sole discretion and subject (if required) to the consent of the Panel, to seek to implement the Offer by way of a Contractual Offer for the entire issued and to be issued share capital of the Company, and to make appropriate amendments to the terms of the Offer arising from the change from the Scheme to a Contractual Offer. The purpose of the Scheme is for Verint to become the owner of the entire issued and to be issued share capital of EG.

 

The Offer is subject to the Conditions and certain further terms set out in Appendix 1 to this Announcement and to the full terms and conditions to be set out in the Scheme Document, and will only become Effective if, among other things, the following events occur on or before the Long Stop Date:

 

·        a resolution to approve the Scheme is passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares held by those Scheme Shareholders;

 

·        the Special Resolution is passed at the General Meeting, which will require the approval of EG Shareholders representing at least 75 per cent. of the votes cast at the General Meeting, which is expected to be held immediately after the Court Meeting;

 

·        following the Meetings, the Scheme is sanctioned by the Court (without modification, or with modification on terms agreed by EG and Verint); and

 

·        an office copy of the Scheme Court Order is delivered to the Registrar of Companies, whereupon the Scheme will become Effective.

 

Upon the Scheme becoming Effective, it will be binding upon all EG Shareholders irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting. Any EG Shares issued before the Scheme Record Time will be subject to the terms of the Scheme.

 

If the Scheme does not become Effective on or before the Long Stop Date, it will lapse and the Offer will not proceed unless Verint and EG agree otherwise and the Panel consents.

 

Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document.

 

13. The Court Meeting and the General Meeting

 

The Offer (including the Scheme) will be put to EG Shareholders at the Court Meeting and at the General Meeting, which are expected to be held during October 2017. Notices to convene the Court Meeting (subject to the consent of the Court) and the General Meeting will be included in the Scheme Document.

 

The purpose of the Court Meeting is to seek the approval of EG Shareholders for the Scheme and certain related matters.

 

The purpose of the General Meeting is to consider and, if thought fit, pass the Special Resolution which will, among other matters, provide that the Articles be amended to incorporate provisions requiring any EG shares issued after the Scheme Record Time (other than to Verint and/or its nominees) to be automatically transferred to Verint, or as it shall direct, on the same terms as the Offer (other than terms as to timings and formalities). The provisions of the Articles (as amended) will prevent any person other than Verint and its nominees holding shares in the capital of EG after the Effective Date.

 

14. Expected timetable for posting of the Scheme Document

 

It is expected that the Scheme Document will be posted to EG Shareholders during September 2017 (and, in any event, within 28 days of this Announcement, unless otherwise agreed with the Panel) and that the Scheme will become Effective in November 2017, subject to the satisfaction of the Conditions.

15. Irrevocable undertakings and interests in EG Shares

EG Directors

 

Irrevocable undertakings to vote, or procure the vote, in favour of all of the Resolutions to be proposed at the Meetings have been received from Elizabeth Gooch, Nigel Payne and George Rolls in respect of their entire beneficial holdings of EG Shares amounting, in aggregate, to 4,153,330 EG Shares, which represents approximately 18.31 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer). Michael Woolley and Robert Krakauer do not have any beneficial holdings in EG Shares.

 

Each of the above irrevocable undertakings will cease to be binding only if the Offer (or, if made, a Contractual Offer) lapses or is withdrawn at any time (but will continue to be binding if the Offer is changed from the Scheme to a Contractual Offer).

 

EBT

 

Irrevocable undertakings have been received from the EBT to vote, or procure the vote in favour, of all Resolutions in respect of its entire holding of EG Shares amounting, in aggregate, to 1,514,285 EG Shares, representing approximately 6.68 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer).

 

These irrevocable undertakings will cease to be binding only if the Offer (or, if made, a Contractual Offer) lapses or is withdrawn at any time (but will continue be binding if the Offer is changed from the Scheme to a Contractual Offer).

 

Other EG Shareholders

 

Irrevocable undertakings have also been received from Livingbridge VC LLP, Marlborough Fund Managers Limited, Unicorn Asset Management Limited, and Veritas Investment Management LLP, to vote, or procure the vote, in favour of all of the Resolutions in respect of their entire beneficial holdings of EG Shares amounting, in aggregate, to 9,755,434 EG Shares, which represent approximately 43.01 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer).

These irrevocable undertakings will cease to be binding if, amongst other things, an announcement is made in accordance with Rule 2.7 of the Code of a competing offer (whether made by way of an offer or scheme of arrangement) wholly in cash or with a full cash alternative in respect of the entire issued and to be issued share capital of EG and the cash value of such competing offer, or, as the case may be, full cash alternative, represents a value per EG Share at the date and time in London of such announcement of not less than 110 per cent. of the value of the Offer.

Further details of these irrevocable undertakings are set out in Appendix 2 to this Announcement.

 

As at the date of this Announcement, Verint does not own any EG Shares.

16. Recommendation

 

The EG Directors, who have been so advised by N+1 Singer as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing its advice to EG Directors, N+1 Singer has taken into account the commercial assessments of the EG Directors. N+1 Singer is providing independent financial advice to the EG Directors for the purposes of Rule 3 of the Code.

 

In addition, the EG Directors consider the terms of the Offer to be in the best interests of EG Shareholders as whole. Accordingly, the EG Directors unanimously intend to recommend that EG Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution at the General Meeting. Verint has received irrevocable undertakings to vote, or procure the vote in favour, of all Resolutions from the EG Directors in respect of their own beneficial holdings of 4,153,330 EG Shares representing, in aggregate, approximately 18.31 per cent. of the ordinary share capital of EG in issue on 4 September 2017 (being the latest practicable date prior to the date of this Announcement) (or, if the Offer is implemented by way of a Contractual Offer, to accept or procure acceptance of the Contractual Offer).

 

17. Offer-related arrangements and documents available on website

 

Confidentiality Agreement

Pursuant to the Confidentiality Agreement, Verint and EG have undertaken to each other, amongst other things, to: (a) keep confidential information relating to the Offer and the other party and not to disclose it to third parties unless permitted by the terms of the Confidentiality Agreement; and (b) use the confidential information for the sole purpose of the potential Offer. With certain exceptions, the confidentiality obligations will expire two years from the date of the Confidentiality Agreement.

 

The Confidentiality Agreement also contains undertakings from each party that it will not, and will procure that its employees, affiliates, agents, consultants and advisors will not, directly or indirectly, for a period of nine months from the date of the Confidentiality Agreement, solicit or entice away certain employees or contactors of the other party, subject to customary carve-outs.

 

Documents available on website

Copies of the following documents will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Verint's website at www.verint.com/about/investor-relations and EG's website at www.egsplc.com/regulatory-news by no later than 12.00 noon (London time) on the Business Day following the date of this Announcement, until the end of the Offer Period. For the avoidance of doubt, the contents of those websites are not incorporated into and do not form part of this Announcement:

 

·        this Announcement;

 

·        the irrevocable undertakings referred to in paragraph 15 above and in Appendix 2;

 

·        the consent letters referred to in paragraph 20 below;

 

·        the Confidentiality Agreement; and

 

·        the Consultancy Agreement.

 

18. Dividends

 

If, after the date of this Announcement, any dividend and/or other distribution and/or other return of capital is announced, declared or paid or becomes payable in respect of the EG Shares, Verint reserves the right to reduce the offer consideration by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid or payable.

19. Availability of hard copies

 

If this Announcement is sent to you in electronic form or you have been sent a website notification, you may request a hard copy of this Announcement by contacting Alex Shipley at Verint during business hours on +44 (0)1932 509336 or  Michael Woolley at EG during business hours on +44 (0)1785 715772. Hard copies of this Announcement will not be sent to any further persons unless so requested. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

 

20. General

 

This announcement does not constitute an offer or an invitation to purchase any securities.

The Offer will be made subject to the Conditions and on the terms contained in Appendix 1 to this announcement and on the further terms and Conditions to be set out in the Scheme Document. Verint reserves the right, at its sole discretion and subject (if required) to the consent of the Panel, to seek to implement the Offer by way of a Contractual Offer for the entire issued share capital of the Company, and to make appropriate amendments to the terms of the Offer arising from the change from the Scheme to a Contractual Offer.

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, the AIM Rules, and the Financial Conduct Authority.

KPMG has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion of the references to its name in the form and context in which they appear.

N+1 Singer has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion of the references to its name in the form and context in which they appear.

The Conditions and certain further terms of the Offer are set out in Appendix 1 to this Announcement. Appendix 2 contains details of the irrevocable undertakings given to Verint. Appendix 3 contains bases and sources of certain information contained within this Announcement. Appendix 4 contains details of EG's Profit Forecast. Appendix 5 contains the definitions of certain terms used in this Announcement.



 

Enquiries

Verint WS Holdings Limited

Tel: +44 (0)1932 509336

Alex Shipley




eg solutions plc

Tel: +44 (0)1785 715772

Nigel Payne


Elizabeth Gooch




Nplus1 Singer Advisory LLP (financial adviser to EG)

Tel: +44 (0)207 496 3000

Shaun Dobson


Alex Price




KPMG LLP (financial adviser to Verint)

Tel: +44 (0)207 311 1000

Helen Roxburgh


Michael Nicholson




Yellow Jersey PR Limited (PR adviser to EG)


Felicity Winkles

Tel: +44 (0)7748 843871

Joe Burgess

Tel: +44 (0)7769 325254



 

N+1 Singer, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for EG and for no-one else in connection with the matters referred to in this Announcement and will not be responsible to any person other than EG for providing the protections afforded to clients of N+1 Singer, nor for providing advice in relation to the matters referred to herein. Neither N+1 Singer nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of N+1 Singer in connection with the matters referred to in this Announcement, or otherwise.

KPMG, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for Verint and for no-one else in connection with the matters referred to in this announcement and will not be responsible to any person other than Verint for providing the protections afforded to clients of KPMG, nor for providing advice in relation to the matters referred to herein. Neither KPMG nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of KPMG in connection with the matters referred to in this Announcement, or otherwise.

Jones Day are retained as legal advisers to Verint.

Freeths LLP are retained as legal advisers to EG.



 

IMPORTANT NOTES

 

This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, any offer or invitation to sell or purchase any securities, or the solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer or otherwise nor shall there be any sale, issuance or transfer of securities of EG in any jurisdiction in contravention of applicable law. The Offer will be effected solely through the Scheme Document (or, if the Offer is implemented by way of a Contractual Offer, the offer document) which will contain the full terms and conditions of the Offer. Any vote, decision in respect of, or other response to, the Scheme (or the Contractual Offer, if applicable) should be made only on the basis of the information contained in the Scheme Document (or, if applicable, the offer document). Each EG Shareholder is urged to consult its independent professional advisers immediately regarding the tax consequences of the Offer applicable to them.

 

Overseas Jurisdictions

 

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom may be restricted by law and/or regulation and therefore any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their EG Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer, disclaim any responsibility or liability for the violation of such restrictions by any person.

 

The availability of the Offer to persons who are not resident in the United Kingdom may be restricted by the laws and/or regulations of the relevant jurisdictions in which they are located. The Offer will not be made available, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction. Any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction. Further details in relation to overseas shareholders will be contained in the Scheme Document.

 

This Announcement has been prepared for the purpose of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England.

 

Copies of this Announcement and formal documentation relating to the Offer will not be, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Offer. If the Offer is implemented by way of a Contractual Offer (unless otherwise permitted by applicable law or regulation), the Contractual Offer may not be made, directly or indirectly, in or into or from any Restricted Jurisdiction

 

United States Shareholders

 

Shareholders in the United States should note that the Offer relates to the shares of an English company and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended, will apply to the Scheme. Moreover, the Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included in or referred to in this document has been or will be prepared in accordance with accounting standards applicable in the UK and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

EG is incorporated under the laws of England. All of the officers and directors of EG are residents of countries other than the United States. It may not be possible to sue EG in a non-US court for violations of US securities laws. It may be difficult to compel EG and its respective affiliates to subject themselves to the jurisdiction and judgment of a US court.

In accordance with normal UK practice, Verint or is nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, EG shares, other than pursuant to the Offer, until the date on which the Scheme (or Contractual Offer, if applicable) becomes Effective, lapses or is otherwise withdrawn. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

 

Please be aware that addresses, electronic addresses and certain other information provided by EG Shareholders, persons with information rights and other relevant persons for the receipt of communications from EG may be provided to Verint during the Offer Period as required under Section 4 of Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.

 

Publication on Website

 

Pursuant to Rule 26.1 of the Code, a copy of this Announcement and other documents in connection with the Scheme will, subject to certain restrictions, be available for inspection on Verint's website at www.verint.com/about/investor-relations and EG's website at www.egsplc.com/regulatory-news by no later than 12 noon (London time) on the day following this Announcement. The contents of the websites referred to in this Announcement are not incorporated into, and do not form part of, this Announcement.

 

Requesting Hard Copy Documents

 

Pursuant to Rule 30.3 of the Code, a person so entitled may request a copy of this announcement and any information incorporated into it by reference to another source in hard copy form. A person may also request that all future documents, announcements and information to be sent to that person in relation to the Offer should be in hard copy form. For persons who receive a copy of this Announcement in electronic form or via a website notification, a hard copy of this Announcement will not be sent unless so requested from either Verint by contacting Alex Shipley at Verint (telephone number +44 (0)1932 509336) or EG by contacting  Michael Woolley at EG (telephone number +44 (0)1785 715772).

 

Rule 2.9 Disclosures

 

In accordance with Rule 2.9 of the Code, as at close of business on 4 September 2017 (being the last Business Day before the date of this Announcement), there are 22,682,937 EG Shares in issue and admitted to trading on AIM. The ISIN Number for the EG Shares is EGS.

 

Cautionary note regarding forward-looking statements

 

This Announcement, oral statements made regarding the Offer and other information published by Verint and/or EG may contain certain trends, expectations, forecasts, estimates, or other forward-looking information affecting or relating to EG or Verint or their respective industry, products or activities. Forward-looking statements speak only as to the date of this document and may be identified by the use of forward-looking terms such as "may," "will," "expects," "believes," "hopes," "anticipates," "aims," "plans," "estimates," "projects," "targets," "intends," "forecasts," "outlook," "impact," "potential," "confidence," "improve," "continue," "optimistic," "deliver," "comfortable," "trend", and "seeks," or the negative of such terms or other variations on such terms or comparable terminology. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These statements are based on assumptions and assessments made by EG and/or Verint, as the case may be, in light of their experience and their perception of historical trends, current conditions, future developments and other factors that they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, because they relate to events and depend on circumstances that will occur in the future and the factors that could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements are unknown. Many important factors could cause actual results to differ materially from those in the forward-looking statements including, without limitation, disruption of production or supplies, changes in market conditions, political events, pending or future claims or litigation, competitive factors, technology advances, actions of regulatory agencies, future exchange and interest rates and changes in laws, government regulations, labeling or product approvals or the application or interpretation thereof. Other risk factors are described herein and in Verint and EG's other respective filings, including in Verint and EG's respective annual reports and accounts for the year ended 31 January 2017. Many of these important factors are outside of Verint's or, as the case may be, EG's control. No assurances can be provided as to any result or the timing of any outcome regarding matters described herein or otherwise with respect to any regulatory action, administrative proceedings, government investigations, litigation, warning letters, cost reductions, business strategies, earnings or revenue trends or future financial results. Other potential risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements include, without limitation: (a) the receipt of approval of EG's shareholders; (b) any regulatory approvals required for the transaction not being obtained on the terms expected or on the anticipated schedule; (c) the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; (d) the possibility that the parties may be unable to any achieve expected synergies and operating efficiencies in connection with the transaction within the expected time-frames or at all and to successfully integrate EG's operations into those of Verint; (e) the integration of EG's operations into those of Verint being more difficult, time-consuming or costly than expected; (f) operating costs, customer loss and business disruption, including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers, being greater than expected following the transaction; (g) the retention of certain key employees of EG being difficult; (h) changes in tax laws or interpretations that could increase tax liabilities, including, if the transaction is consummated; (i) the possibility that market demand will not develop for new technologies, products or applications or services, or business initiatives will take longer, cost more or produce lower benefits than anticipated; (j) the possibility that application of or compliance with laws, court rulings, certifications, regulations, regulatory actions, or other requirements or standards may delay, limit or prevent new product introductions, affect the production and marketing of existing products or services or otherwise affect performance, results, prospects or value; (k) the potential of international unrest, economic downturn or effects of currencies, tax assessments, adjustments or anticipated rates, benefit or retirement plan costs, or other regulatory compliance costs; (l) the possibility of reduced demand, or reductions in the rate of growth in demand, for products and services; (m) the possibility that anticipated growth, cost savings, new product acceptance, performance or approvals, or other results may not be achieved, or that transition, labor, competition, timing, execution, regulatory, governmental, or other issues or risks associated with Verint and EG's respective businesses, industry or initiatives may adversely impact performance, results, prospects or value; (n) the possibility that anticipated financial results or benefits of recent acquisitions will not be realised or will be other than anticipated; and (o) the effects of contractions in credit availability, as well as the ability of Verint and EG's respective customers and suppliers to adequately access the credit markets when needed.

 

Although it is believed that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct and investors are therefore cautioned not to place undue reliance on these forward-looking statements which speak only as at the date of the relevant document. Neither EG nor Verint assume any obligation to update or correct the information contained in the relevant document (whether as a result of new information, future events or otherwise), except as required by applicable law.

 

Given the risks and uncertainties, undue reliance should not be placed on forward-looking statements as a prediction of actual results. Should one or more of the risks or uncertainties mentioned materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant documents. EG, Verint and their affiliated companies assume no obligation to update or correct the information contained in the documents in this part of the website, whether as a result of new information, future events or otherwise, except to the extent legally required. The statements contained in this Announcement and any documents referred to or incorporated herein are made as at the date of such documents, unless some other time is specified in relation to them, and service of the relevant documents shall not give rise to any implication that there has been no change in the facts set out in such documents since such date(s).

 

Dealing Disclosure Requirements

 

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of a securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified.

 

An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

 

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

 

Opening Position Disclosures must also be made by the offeree company and by an offeror and Dealing Disclosures must also be made by the offeree company, by an 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.

 



 

Appendix 1

 

CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER

Part A: Conditions of the Scheme

 

1        The Offer is conditional upon the Scheme becoming unconditional and Effective, subject to the Code, by not later than the Long Stop Date.

2        The Scheme will be subject to the following conditions:

 

2.1       its approval by a majority in number of Scheme Shareholders who are on the register of members of EG at the Voting Record Time, present and voting (and entitled to vote), whether in person or by proxy, representing 75 per cent. or more in value of the Scheme Shares held by those Scheme Shareholders, at the Court Meeting, or any adjournment thereof, provided that the Court Meeting may not be adjourned beyond the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course, or such later date (if any) as Verint and EG may agree and the Court may allow;

2.2       all resolutions in connection with or required to approve and implement the Scheme as set out in the notice of the General Meeting, including without limitation the Special Resolution, being duly passed by the requisite majority at the General Meeting;

2.3       such General Meeting being held on or before the 22nd day after the expected date of the General Meeting as set out in the Scheme Document (or such later date as may be agreed by Verint and EG);

2.4       the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to EG and Verint) and the delivery of an office copy of the Scheme Court Order to the Registrar of Companies for registration; and

2.5       the Scheme Court Hearing being held on or before the 22nd day after the expected date of the Scheme Court Hearing as set out in the Scheme Document (or such later date as may be agreed by Verint and EG).

3        In addition, subject as stated in Part B below and to the requirements of the Panel, the Offer will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless such Conditions (as amended, if appropriate) have been satisfied or, where relevant, waived:

Notifications, waiting periods and Authorisations

(a)           the CMA issuing a decision, in terms satisfactory to Verint, that it is not making a CMA Phase 2 Reference in respect of the Offer or any matter arising from it;

(b)           if the European Commission decides to examine the Combination or any matter arising from it pursuant to Article 22(3) of the EU Merger Regulation, the European Commission having declared it compatible with the internal market pursuant to Article 6(1)(b) of the EU Merger Regulation on terms satisfactory to Verint;

(c)      all necessary notifications, filings or applications having been made in connection with the Offer and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and all Authorisations necessary in any jurisdiction for or in respect of the Offer and, except pursuant to Chapter 3 of Part 28 of the Companies Act, for the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, EG or any other member of the Wider EG Group by any member of the Wider Verint Group having been obtained in terms and in a form reasonably satisfactory to Verint from all relevant Third Parties or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any member of the Wider EG Group or the Wider Verint Group has entered into contractual arrangements and all such Authorisations necessary to carry on the business of any member of the Wider EG Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Offer becomes effective or otherwise wholly unconditional and there being no notice of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations and all such necessary statutory or regulatory obligations in any jurisdiction having been complied with;

(d)      except with the consent or the agreement of Verint, no resolution of EG Shareholders in relation to any acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings (or in relation to any merger, demerger, consolidation, reconstruction, amalgamation or scheme) being passed at a meeting of EG Shareholders other than in relation to and as necessary to implement the Offer or the Scheme and, other than with the consent or the agreement of Verint, no member of the Wider EG Group having taken (or agreed or proposed to take) any action that requires, or would require, the consent of the Takeover Panel or the approval of EG Shareholders in accordance with, or as contemplated by, Rule 21.1 of the Code;

 

General regulatory

 

(e)      no antitrust regulator or Third Party having given notice of a decision or proposal to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything or taken any steps, or having enacted or made or proposed to enact or make any statute, regulation, decision, order or change to published practice (and, in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:

(i)       require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider Verint Group or by any member of the Wider EG Group of all or any material part of its businesses, assets or property or impose any material limitation on the ability of all or any of them to conduct their businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof);

 

(ii)      except pursuant to Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Verint Group or the Wider EG Group to acquire or offer to acquire a material number of any shares, other securities (or the equivalent) or interest in any member of the Wider EG Group or any asset owned by any third party (other than in the implementation of the Offer);

 

(iii)     impose any limitation on, or result in a delay in, the ability of any member of the Wider Verint Group directly or indirectly to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in or loans to Verint or on the ability of any member of the Wider EG Group or any member of the Wider Verint Group directly or indirectly to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider EG Group;

 

(iv)     otherwise materially adversely affect any or all of the business, assets, prospects or profits of any member of the Wider EG Group or the Wider Verint Group;

 

(v)      result in any member of the Wider EG Group ceasing to be able to carry on business under any name under which it presently carries on business to an extent which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer (as the case may be);

 

(vi)     make the Offer, or any aspect of the Offer, its implementation or the acquisition of any shares or other securities in, or control or management of, EG by any member of the Wider Verint Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise directly or indirectly materially prevent or prohibit, restrict, restrain, or delay or otherwise materially interfere with the implementation of, or impose additional materially adverse conditions or obligations with respect to, or otherwise materially challenge, impede, interfere or require material amendment of the Offer or the acquisition of any shares or other securities in, or control or management of, EG by any member of the Wider Verint Group;

 

(vii)    require, prevent or materially delay a divestiture by any member of the Wider Verint Group of any shares or other securities (or the equivalent) in any member of the Wider EG Group or any member of the Wider Verint Group; or

 

(viii)    impose any material limitation on the ability of any member of the Wider Verint Group or any member of the Wider EG Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Verint Group and/or the Wider EG Group in a manner which is materially adverse to the Wider EG Group taken as a whole or the Wider Verint Group taken as a whole or in the context of the Offer (as the case may be),

 

and all applicable waiting and other time periods (including any extensions thereof) during which any such antitrust regulator or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any relevant jurisdiction in respect of the Offer or the acquisition of any EG Shares or of management or voting control of EG or any member of the Wider EG Group or otherwise intervene having expired, lapsed or been terminated;

 

Certain matters arising as a result of any arrangement, agreement, etc.

(f)       except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider EG Group is a party or by or to which any such member or any of its assets is or may be bound, entitled or be subject or any event or circumstance which, as a consequence of the Offer or the acquisition or the proposed acquisition by any member of the Wider Verint Group of any shares or other securities in EG or because of a change in the control or management of any member of the Wider EG Group or otherwise, would or might reasonably be expected to result in, in each case to an extent which is material in the context of the Wider EG Group taken as a whole or material in the context of the Offer:

 

(i)       any monies borrowed by, or any other indebtedness, actual or contingent, of, or any grant available to, any member of the Wider EG Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;

 

(ii)      the creation or enforcement 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 EG Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) becoming enforceable or being enforced;

(iii)     any assets of any such member being disposed of or charged or ceasing to be available to any such member, or any right arising under which any asset could be required to be disposed of or charged or could cease to be available to any such member other than in the ordinary course of business;

(iv)     any obligation to obtain or acquire any licence, permission, approval, clearance, permit, notice, consent, authorisation, waiver, grant, concession, agreement, certificate, exemption order or registration from any Third Party;

 

(v)      any arrangement, agreement, lease, licence, permit, licence, permission, approval, clearance, notice, consent, authorisation, waiver, grant, concession, certificate, exemption order or registration or other instrument being terminated or becoming capable of being terminated or adversely modified or the rights, liabilities, obligations or interests of any member of the Wider EG Group being adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;

(vi)     any liability of any member of the Wider EG Group to make any severance, termination, bonus or other payment to any of its directors or other officers;

(vii)    the rights, liabilities, obligations, interests or business of any member of the Wider EG Group or any member of the Wider Verint Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider EG Group or any member of the Wider Verint Group in or with any other person or body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder;

 

(viii)    any member of the Wider EG Group ceasing to be able to carry on business under any name under which it presently carries on business;

 

(ix)     the creation or acceleration of any liability to taxation or an adverse effect on the tax position of any member of the Wider EG Group;

(x)      the value of, or the financial or trading position of, any member of the Wider EG Group being prejudiced or adversely affected; or

(xi)     the creation or acceleration of any liability (actual or contingent and including without limitation for taxation) by any member of the Wider EG Group or for which any such member may be responsible other than trade creditors or other liabilities incurred in the ordinary course of business,

 

and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider EG Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in Conditions 3(f)(i) to (xi) of this Part A;

(g)      except as Disclosed, no member of the Wider EG Group having:

(i)       entered into any agreement, contract, transaction, arrangement or commitment or terminated or varied the terms of any agreement or arrangement (other than in the ordinary course of business) which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer;

(ii)      entered into any contract, transaction or arrangement which would be restrictive on the business of any member of the Wider EG Group or the Wider Verint Group to a material extent or which is or could involve obligations which would or might reasonably be expected to be so restrictive; or

(iii)     entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing agreement, partnership or merger of business or corporate entities which is material in the context of the Wider EG Group;

Certain events occurring since 31 January 2017

 

(h)      except as Disclosed, no member of the Wider EG Group having since 31 January 2017:

(i)       issued, proposed or agreed to issue, or authorised or announced its intention to authorise or propose the issue, of, additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of EG Shares (except, where relevant, as between EG and wholly owned subsidiaries of EG or between the wholly owned subsidiaries of EG) or redeemed, purchased or reduced any part of its share capital;

(ii)      recommended, declared, paid or made, or proposed to declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions, whether payable in cash or otherwise) lawfully paid or made by any wholly owned subsidiary of EG to EG or any of its wholly owned subsidiaries;

(iii)     save as between EG and its wholly-owned subsidiaries, effected, authorised, proposed or announced its intention to propose any change in its share or loan capital (or equivalent thereof);

(iv)     purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or made any other change to any part of its share capital;

(v)      sold or transferred or agreed to sell or transfer any EG Shares held by EG as treasury shares except for the issue or transfer out of treasury of EG Shares on the exercise of employee share options or vesting of employee share awards;

(vi)     proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Wider EG Group;

(vii)    save as between EG and its wholly-owned subsidiaries and other than pursuant to the Offer, implemented, effected, authorised, proposed or announced its intention to propose any merger, demerger, reconstruction, arrangement, amalgamation, commitment or scheme or any acquisition or disposal or transfer of assets, shares (other than in the ordinary course of business) or loan capital (or the equivalent thereof) or any right, title or interest in any assets, shares or loan capital (or the equivalent thereof) or other transaction or arrangement in respect of itself or another member of the Wider EG Group which in each case would be material in the context of the Wider EG Group taken as a whole;

(viii)    acquired or disposed of or transferred (other than in the ordinary course of business) or mortgaged, charged or encumbered any assets or shares or any right, title or interest in any assets or shares (other than in the ordinary course of business) or authorised the same or entered into, varied or terminated or authorised, proposed or announced its intention to enter into, vary, terminate or authorise any agreement, arrangement, contract, transaction or commitment (other than in the ordinary course of business and whether in respect of capital expenditure or otherwise) which is of a loss-making, long-term or unusual or onerous nature or magnitude, or which involves or could involve an obligation of such a nature or magnitude, in each case which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer (whether in respect of capital expenditure or otherwise);

(ix)     exercised any pre-emption rights, or any similar rights that allow any member of the Wider EG Group to subscribe for, or acquire, shares in any other person;

(x)      issued, authorised or proposed the issue of or made any change in or to any debentures, or (other than in the ordinary course of business) incurred or increased any indebtedness or liability, actual or contingent, which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer;

(xi)     been unable or admitted 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 or proposed or entered into any composition or voluntary arrangement with its creditors (or any class of them) or the filing at court of documentation in order to obtain a moratorium prior to a voluntary arrangement or, by reason of actual or anticipated financial difficulties, commenced negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness;

(xii)    made, or announced any proposal to make, any change or addition to any retirement, death or disability benefit or any other employment-related benefit (including, but not limited to, bonuses, retention arrangements or share incentive schemes or other benefit relating to the employment or termination of employment of any employee of the Wider EG Group) of or in respect of any of its directors, employees, former directors or former employees;

(xiii)    save as between EG and its wholly-owned subsidiaries, granted any lease or third party rights in respect of any of the leasehold or freehold property owned or occupied by it or transferred or otherwise disposed of any such property;

(xiv)    entered into or varied or made any offer (which remains open for acceptance) to enter into or vary the terms of any service agreement, commitment or arrangement with any director or senior executive of EG or any director or senior executive of the Wider EG Group;

(xv)    taken any action which results in the creation or acceleration of any material tax liability or any member of the Wider EG Group or a material adverse effect on the tax position of any such member;

(xvi)    taken or proposed any corporate action or had any steps taken or had any legal proceedings started or threatened against it for its winding-up (voluntary or otherwise), dissolution, striking-off or reorganisation or for the appointment of a receiver, administrator (including the filing of any administration application, notice of intention to appoint an administrator or notice of appointment of an administrator), administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or for any analogous proceedings or steps in any jurisdiction or for the appointment of any analogous person in any jurisdiction;

(xvii)   made any amendment to its memorandum or articles of association;

(xviii)  waived, compromised or settled any claim or authorised any such waiver or compromise, save in the ordinary course of business, which is material in the context of the Wider EG Group taken as a whole or material in the context of the Offer;

(xix)    taken, entered into or had started or threatened against it in a jurisdiction outside England and Wales any form of insolvency proceeding or event similar or analogous to any of the events referred to in Conditions 3(h)(xi) and (xvi) of this Part A above; or

(xx)    agreed to enter into or entered into an agreement or arrangement or commitment or passed any resolution or announced any intention or made any offer (which remains open to acceptance) with respect to any of the transactions, matters or events referred to in this Condition (h);

No adverse change, litigation, regulatory enquiry or similar

 

(i)       since 31 January 2017 except as Disclosed, there having been:

 

(i)       no adverse change and no circumstance having arisen which would or would be reasonably expected to, result in any material adverse change, in the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider EG Group, in each case to an extent which is material in the context of the Wider EG Group taken as a whole or is material in the context of the Offer;

(ii)      no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against or in respect of any member of the Wider EG Group or to which any member of the Wider EG Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider EG Group, in each case which is or might reasonably be expected to be material in the context of the Wider EG Group, or the Wider Verint Group, taken as a whole or in the context of the Offer;

(iii)     no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider EG Group having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider EG Group, in each case which might reasonably be expected to have a material adverse effect on the Wider EG Group, or the Wider Verint Group, taken as a whole or is material in the context of the Offer;

(iv)     no contingent or other liability having arisen or increased which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider EG Group to an extent which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer;

(v)      no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider EG Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to have a material adverse effect on the Wider EG Group taken as a whole or is material in the context of the Offer;

No discovery of certain matters regarding information, liabilities and environmental issues

(j)       except as Disclosed, Verint not having discovered:

 

(i)       that any financial, business or other information concerning the Wider EG Group publicly announced prior to the date of this Announcement or disclosed at any time to any member of the Wider Verint Group by or on behalf of any member of the Wider EG Group prior to the date of this Announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading, in any such case to an extent which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer;

(ii)      any member of the Wider EG Group is subject to any material liability, contingent or otherwise, which is not disclosed in the annual reports and accounts of EG for the financial year ended 31 January 2017;

(iii)     that any member of the Wider EG Group or any partnership, company or other entity in which any member of the Wider EG Group has a significant economic interest and which is not a subsidiary undertaking of EG is subject to any liability, contingent or otherwise which is outside the ordinary course of business; or

(iv)     that there is or is reasonably likely to be any material obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property, asset or any controlled waters currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider EG Group, or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto, in each case to an extent which is material in the context of the Wider EG Group taken as a whole or in the context of the Offer;

Anti-corruption and criminal property

 

(k)      except as Disclosed, Verint not having discovered:

 

(i)       any past or present member, director, officer or employee of the Wider EG Group or any person that performs or has performed services for or on behalf of any such company is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, as amended or the US Foreign Corrupt Practices Act 1977, as amended or any other anticorruption legislation applicable to the Wider EG Group;

(ii)      any past or present member of the Wider EG Group has engaged in any activity or business with, or made any investments in, or made any payments to any government, entity or individual covered by any of the economic sanctions administered by the United Nations or the European Union (or any of their respective member states) or the United States Office of Foreign Assets Control or any other governments or supranational body or authority in any jurisdiction;

(iii)     any asset of any member of the Wider EG Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition); or

(iv)     that any past or present member, director, officer or employee of the of Wider EG Group has engaged in any business with or made any investments in, or made any payments, funds or assets available, to or received any funds or assets from: (i) any government, entity or individual in respect of which US or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs; or (ii) any government, entity or individual named by any of the economic sanctions of the United Nations or the European Union or any of their respective member states, in each case to an extent which is material in the context of the Wider EG Group as a whole.

Part B: Certain further terms of the Offer

 

1        Subject to the requirements of the Panel, Verint reserves the right in its sole discretion to waive:

(a)      any of the Conditions set out in the above Condition 2 of Part A for the timing of the Court Meeting, the General Meeting and the Scheme Court Hearing. If any such deadline is not met, Verint shall make an announcement by 8.00 a.m. on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with EG to extend the deadline in relation to the relevant Condition; and

(b)      in whole or in part all or any of the above Conditions 3(a) to (k) of Part A inclusive.

2        If Verint is required by the Panel to make an offer for EG Shares under the provisions of Rule 9 of the Code, Verint may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.

3        The Offer will lapse (unless otherwise agreed with the Panel) if:

(a)      it becomes the subject of a CMA Phase 2 Reference, or the European Commission either initiates proceedings under Article 6(1)(c) of the EU Merger Regulation in respect of the Offer or makes a referral of any part of the Offer to a competent authority of the United Kingdom under Article 9(1) of the EU Merger Regulation and there is subsequently a CMA Phase 2 Reference in respect of the Offer; or

(b)      in so far as the Offer or any matter arising from the Scheme or the Offer does not constitute a concentration with an EU dimension within the scope of the EU Merger Regulation, the European Commission decides to examine the Offer or any matter arising from it pursuant to Article 22(3) of the EU Merger Regulation and the European Commission initiates proceedings under Article 6(1)(c) of the EU Merger Regulation in respect of the Offer,

in each case, before the date of the Court Meeting or the General Meeting.

4        Under Rule 13.5 of the Code, Verint may not invoke a condition of the Scheme so as to cause the Scheme not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the condition are of material significance to Verint in the context of the Offer. Whether or not such condition can be invoked would be determined by the Panel. The conditions contained in Conditions 1 and 2 and 3(a) and (b) of Part A are not subject to this provision of the Code.

5        Verint shall not be under any obligation to waive (if capable of waiver), to determine, to be or remain satisfied or to treat as fulfilled any of the Conditions in 2 or 3 of Part A (to the extent capable of waiver), by a date earlier than the latest date for the fulfilment of that Condition 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.

6        The EG Shares to be acquired under the Offer will be acquired fully paid and free from all Encumbrances and together with all rights now or hereafter attaching or accruing to them, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made, paid or payable, or any other return of capital made on or after the date of this Announcement.

7        If, prior to the Scheme Court Hearing, any dividend and/or other distribution and/or other return of capital is authorised, declared, made or paid or becomes payable in respect of EG Shares, Verint reserves the right (without prejudice to any right of Verint, with the consent of the Panel, to invoke Conditions 3(h)(ii) or 3(h)(iv) in Part A above) to reduce the Cash Consideration payable under the Scheme in respect of an EG Share by the aggregate amount of such dividend or distribution (excluding associated tax credit).

8        If any such dividend or distribution is authorised, declared, made or paid or becomes payable before the Scheme Court Hearing, if Verint exercises its rights described in these paragraphs 7 to 10, any reference in this Announcement to the consideration payable under the Scheme shall be deemed to be a reference to the consideration as so reduced.

9        To the extent that such a dividend or distribution has been authorised or declared but has not been paid or made or become payable before the Scheme Court Hearing and such dividend or distribution is cancelled, then the consideration payable under the Scheme shall not be subject to change in accordance with these paragraphs 7 to 10.

10      Any exercise by Verint of its rights referred to in these paragraphs 7 to 10 shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Offer.

11      Fractional entitlements of pence payable EG Shareholders under the Offer will be rounded down to the nearest whole number of pence.

12      Verint reserves the right to elect (with the consent of the Panel, if required) to implement the Offer by way of a Contractual Offer, in its absolute discretion. In such event, the acquisition will be implemented on substantially the same terms subject to appropriate amendments, including (without limitation), with the consent of the Panel, if required, an acceptance condition set at 90 per cent. (or such lesser percentage, being more than 50 per cent. as Verint may decide) of the shares to which such offer relates, so far as applicable, as those which would apply to the Scheme.

 

13      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 requirements.

 

14      The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction and will not be capable of acceptance by any such use, means, instrumentality or facility or from within any such jurisdiction.

15      Verint reserves the right for any other member of the Wider Verint Group from time to time to implement the Offer.

 

16      The Offer is governed by the laws of England and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I and to be set out in the Scheme Document. The Offer will be subject to the applicable requirements of the City Code, the Panel, the London Stock Exchange, the AIM Rules and the Financial Conduct Authority.

 



 

17      Each of the Conditions will be regarded as a separate Condition and will not be limited by reference to any other Condition.

Appendix 2

 

IRREVOCABLE UNDERTAKINGS

Shareholder Irrevocable Undertakings

The following EG shareholders have, on the basis set out below, given irrevocable undertakings to Verint to vote in favour of the Resolutions or, as the case may be, accept a Contractual Offer made by Verint provided that such Contractual Offer does not represent a diminution in value of the Cash Consideration.

Name of Shareholder

Number of EG Shares in respect of which undertaking is given

Percentage of existing issued share capital of EG

Livingbridge VC LLP

4,340,161

19.13

Hargreave Hale (through Marlborough Fund Managers Limited)

3,360,000

14.81

Unicorn Asset Management Limited

1,050,273

4.63

Veritas Investment Management LLP

1,005,000

4.43

EBT

1,514,285

6.68

Total

11,269,719

49.68%

 

These irrevocable undertakings (other than that given by the EBT) will cease to be binding if:

(i)       an announcement is made in accordance with Rule 2.7 of the Code of a competing offer (whether made by way of an offer or scheme of arrangement) wholly in cash or with a full cash alternative in respect of the entire issued and to be issued share capital of EG and the cash value of such competing offer or, as the case may be, full cash alternative, represents a value per EG Share at the date and time in London of such announcement of not less than 110 per cent. of the value of the Offer; or

(ii)      the Scheme lapses or is withdrawn in accordance with its terms, and at or before the time of such lapse or withdrawal, Verint has not publicly confirmed that it intends to implement the Offer by way of a Contractual Offer or otherwise. However, subject to the foregoing, these irrevocable undertakings will continue be binding if the Offer is changed from the Scheme to a Contractual Offer.

The irrevocable undertaking from the EBT will cease to be binding if the Scheme lapses or is withdrawn in accordance with its terms, and at or before the time of such lapse or withdrawal, Verint has not publicly confirmed that it intends to implement the Offer by way of a Contractual Offer or otherwise. However, subject to the foregoing, this irrevocable undertaking will continue be binding if the Offer is changed from the Scheme to a Contractual Offer.

Director Irrevocable Undertakings

The following EG Directors have, on the basis set out below, given irrevocable undertakings to Verint to vote in favour of the Resolutions, or as the case may be, accept a Contractual Offer made by Verint provided that such offer does not represent a diminution in value of the Cash Consideration.

Name of Director or connected person

Number of EG Shares in respect of which undertaking is given

Percentage of existing issued share capital of EG

Elizabeth Gooch

4,025,430

17.75%

George Rolls

101,450

0.45%

Nigel Payne

26,450

0.12%

Total

4,153,330

18.31%


These irrevocable undertakings will cease to be binding if the Scheme lapses or is withdrawn in accordance with its terms, and at or before the time of such lapse or withdrawal, Verint has not publicly confirmed that it intends to implement the Offer by way of a Contractual Offer or otherwise. However, subject to the foregoing, these irrevocable undertakings will continue be binding if the Offer is changed from the Scheme to a Contractual Offer.

Michael Woolley and Robert Krakauer do not hold any EG Shares.

Irrevocable Undertakings - General

The irrevocable undertakings referred to above include undertakings:

(i)         to vote, or procure the vote, in favour (or to submit, or procure the submission of, Forms of Proxy voting in favour) of:

·        the Scheme at the Court Meeting; and

·        the Special Resolutions to be proposed at the General Meeting necessary to implement the Scheme; and

(ii)        if Verint exercises its right to structure the Offer as a Contractual Offer, to accept, or procure the acceptance of the Contractual Offer.



 

Appendix 3

 

BASES AND SOURCES OF INFORMATION

 

1.                     Unless otherwise stated:

·     financial information relating to EG has been extracted or derived (without any adjustment) from EG's Annual Report and Accounts for the years ended 31 January 2015, 31 January 2016 and 31 January 2017; and

·     financial information relating to Verint has been extracted or derived (without material adjustment) from Verint's Annual Report and Accounts for the year ended 31 January 2017.

2.                     References to percentages of EG Shares (before completion of the Offer) are based upon the current undiluted number of EG Shares in issue referred to in paragraph 3 below.

3.                     As at the close of business on 4 September 2017, being the latest practicable date prior to this Announcement, the Company had in issue 22,682,937 EG Shares, including 1,514,285 EG Shares held by an employee benefit trust in order to satisfy the exercise of share options.

4.                     The Company confirms that, as at the close of business on 4 September 2017, being the latest practicable date prior to this Announcement, the Company had in issue or outstanding:

(a)        22,682,937 EG Shares, 1,514,285 of which are held by the EBT in order to satisfy the exercise of options under the EG Share Option Plans referred to at paragraphs (b) and (c) below; plus

(b)        options under the Company's EMI Scheme over 1,333,285 EG Shares, comprising

a.    options over 829,658 EG Shares under the enterprise management incentive legislation with an average exercise price of 49 pence per share; plus

b.   non tax advantaged options over 503,627 EG Shares with an average exercise price of 55 pence per share; plus

(c)        options under the Company's 2014 Long Term Incentive Plan over 875,000 EG Shares with an average exercise price of 1 pence per share,

giving a total number of EG Shares in issue and to be issued of 23,376,937. The Company confirms that it holds no EG Shares in treasury.

5.                     The Company confirms that all warrants in respect of EG Shares previously granted to Aspect Software UK Limited have lapsed and are no longer capable of being exercised and that, save as set out in paragraph 4 above, there are not outstanding any warrants, options or other rights to subscribe for or call for the issue of EG Shares.

6.                     The total value of the Offer of £26.30 million has been calculated on the basis of the information contained in paragraph 4 above.

7.                     Volume weighted average EG Share prices are derived from Bloomberg.

8.                     Unless otherwise stated, all closing prices for EG Shares are closing middle market quotations derived from the AIM pages of the Official List.

9.         Verint Systems' market capitalisation is derived from Proquote.

10.        Certain figures included in this Announcement have been subject to rounding adjustments.


Appendix 4

 

EG PROFIT FORECAST

 

Profit forecast regarding the financial year to 31 January 2018

 

In the announcement titled "Pre-close Trading Statement" dated 20 July 2017, EG announced that it expected "…Adjusted EBITDA to be not less than £1.9m (2017: £1.2m)". This constituted an ordinary course profit forecast within the meaning of Note 2 to Rule 28.1 of the Code.

 

In accordance with Rule 28.1(c) of the Code the EG Directors confirm that the Profit Forecast remains valid and confirm that the Profit Forecast has been properly compiled on the basis of the assumptions stated below and that the basis of accounting used is consistent with EG's accounting policies.

 

The Profit Forecast does not take into account any impact of the Offer.

 

The EG Directors prepared the Profit Forecast on the basis of the following assumptions, any of which could turn out to be incorrect and therefore affect whether the Profit Forecast is achieved:

 

Factors outside the influence and control of the EG Directors

 

(a)        there will be no material change in the political and/or economic environment that would materially affect EG;

 

(b)        there will be no material change in market conditions in relation to customer demand or the competitive environment;

 

(c)        there will be no material change in legislation or regulatory requirements impacting on the EG Group's operations or its accounting policies;

 

(d)        there will be no material litigation or regulatory investigations, or material unexpected developments in any existing litigation or regulatory investigation, in relation to any of EG's operations, products or services;

 

(e)        there will be no business disruptions that materially affect EG, its customers, operations, supply chain or labour supply, including natural disasters, acts of terrorism, cyber-attack and/or technological issues; and

 

(f)        there will be no material change in the management or control of EG.

 

Factors within the influence and control of the EG Directors

 

(a)        There will be no material acquisitions or disposals;

 

(b)        there will be no material change in the existing operational strategy of EG; and

 

(c)        there are no material strategic investments or capital expenditure in addition to those already planned.


Appendix 5

 

DEFINITIONS

 

In this Announcement the following words and expressions have the following meanings unless the context requires otherwise:

 

The following definitions apply throughout this Announcement unless the context requires otherwise:

 

 

"AIM"

the AIM Market of the London Stock Exchange



"AIM Rules"

the AIM Rules for Companies for the London Stock Exchange

 

"Announcement"

 

this announcement made in accordance with Rule 2.7 of the Code



"Announcement Date"

the date of this announcement



"Articles"

the articles of association of EG from time to time



"Authorisations"

regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals



"Board"

board of directors of the relevant company



"Business Day"

 

a day, other than a Saturday, Sunday or public holiday in the UK, on which banks are open for non-automated business in the City of London

 

"Cash Consideration"

 

the entitlement for EG Shareholders under the terms of the Offer to receive 112.5 pence in cash for each EG Share

 

"City Code" or "Code"

City Code on Takeover and Mergers



"CMA"

the UK Competition and Markets Authority, a UK statutory body established under the Enterprise and Regulatory Reform Act 2013



"CMA Phase 2 Reference"

a reference, pursuant to sections 22 or 33 of the Enterprise Act 2002, of the Merger or any part of it to the Chair of the CMA for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013



"Companies Act"

 

the Companies Act 2006, as amended

"Conditions"

the terms and conditions to the implementation of the Offer, as set out in Appendix 1 to this Announcement and to be set out in the Scheme Document



"Confidentiality Agreement"

the confidentiality agreement entered into between EG and Verint, on 26 June 2017



"Consultancy Agreement"

has the meaning given to it in paragraph 8 of the Announcement



"Contractual Offer"

means a takeover offer within the meaning of Part 28 of the Companies Act



"Court"

the High Court of Justice in England and Wales

 

"Court Meeting"

the meeting of EG Shareholders to be convened by order of the Court under section 896 of the Companies Act for the purposes of considering and, if thought fit, approving the Scheme (with or without amendment), and any adjournment thereof

 

"CREST"

the system for the paperless settlement of trades in securities and the holding of uncertificated securities operated by Euroclear

 

"Daily Official List"

the daily official list published by London Stock Exchange



"Dealing Arrangement"

an arrangement of the kind referred to in Note 11(a) on the definition of acting in concert in the Code



"Dealing Disclosure"

has the same meaning as in Rule 8 of the Code

 

"Disclosed"

 

the information fairly disclosed by, or on behalf of EG: (i) in the annual report and accounts of EG for the financial year ended 31 January 2017; (ii) in any other announcement to a Regulatory Information Service by, or on behalf of EG before the publication of this Announcement; (iii) in filings made with the Registrar of Companies and appearing on EG's file at Companies House on or before the Business Day which is two Business Days before the date of this Announcement; (iv) in any of the documents, papers or written information made available in the electronic data room maintained by Freeths LLP in respect of the proposed Offer on before the Business Day which is which is two Business Days before the date of this Announcement; (v) in this Announcement

 

"EBT"

means the EG Employee Benefit Trust

 

"Effective"

in the context of the Offer (i) if the Offer is implemented by way of a Scheme, the Scheme having become effective in accordance with its terms; or (ii) if the Offer is implemented by way of a Contractual Offer, the Contractual Offer having been declared or become unconditional in all respects in accordance with the requirements of the Code



"Effective Date"

 

the date on which the Scheme becomes effective in accordance with its terms

 

"EG" or the "Company"

eg solutions plc, registered in England and Wales with number 02211062



"EG Directors"

 

the directors of EG

"EG Share Option Plans"

means collectively, the EG 2014 Long Term Incentive Plan and the EG EMI Scheme



"EG Shareholders"

the holders of EG Shares

 

"EG Share(s)"

 

ordinary shares of one pence each in the capital of EG



"Excluded Shares"

(i) any EG Shares beneficially owned by Verint or any parent or subsidiary undertaking (as defined in the Companies Act) of Verint; and (ii) any EG Shares held in treasury;

 

"Financial Conduct Authority"

the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000

 

"Form(s) of Proxy"

the forms of proxy for use by Shareholders in connection with the Court Meeting and the General Meeting

 

"General Meeting"

the meeting of EG Shareholders to be convened for the purposes of considering and, if thought fit, approving the Scheme and other resolutions ancillary to the Scheme, and any adjournment thereof

 

"Independent EG Shareholders"

the EG Shareholders excluding Elizabeth Gooch



"KPMG"

KPMG LLP, a limited liability partnership registered in England and Wales with registered number OC301540 and which has its registered office at 15 Canada Square, E14 5GL, United Kingdom

 

"London Stock Exchange"

London Stock Exchange plc

 



"Long Stop Date"

5.00pm London time on 15 December 2017, or such later date (if any) as Verint and EG may agree and (if required) the Panel and the Court may allow



"Meetings"

 

the General Meeting and the Court Meeting

 

"N+1 Singer"

Nplus1 Singer Advisory LLP



"Offer"

 

the proposed offer being made by Verint to acquire the entire issued and to be issued share capital of EG to be effected by means of the Scheme (or, if Verint so elects and with, if required, the consent of the Panel, a Contractual Offer) and, where the context admits, any subsequent revision, variation, extension or renewal thereof



"Offer Period"

the offer period (as defined by the Code) relating to EG, which commenced on 5 September 2017



"Offer Price"

112.5 pence per EG Share



"Opening Position Disclosure"

 

has the same meaning as in Rule 8 of the Code

 

"Overseas Shareholders"

EG Shareholders (or nominees, or custodians or trustees of EG Shareholders) who are resident in, or nationals or citizens of jurisdictions outside the UK or who are citizens or residents of countries other than the UK

 

"Panel"

 

the Panel on Takeovers and Mergers

"Profit Forecast"

has the meaning given to it at paragraph 4 of this Announcement



"Registrar of Companies"

registrar of companies in England and Wales



"Regulatory Information Service"

any of the services set out in Appendix III to the UK Listing Authority's Listing Rules



"Resolutions"

each of the resolutions (where applicable) as described in paragraph 12 of this Announcement

 

"Restricted Jurisdiction"

any jurisdiction where the relevant action would constitute a violation of the relevant laws and regulations of such jurisdiction or would result in a requirement to comply with any governmental or other consent or any registration, filing or other formality which Verint or EG regards as unduly onerous

 

"Scheme"

the proposed scheme of arrangement under Part 26 of the Companies Act between EG and EG Shareholders in connection with the Offer, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by EG and Verint

 

"Scheme Court Hearing"

the hearing of the Court to sanction the Scheme



"Scheme Court Order"

the order of the Court sanctioning the Scheme under Part 26 of the Companies Act

 

"Scheme Document"

the document to be sent to EG Shareholders, containing, among other things, the Scheme and the notices convening the Court Meeting and the General Meeting



"Scheme Record Time"

the date and time specified in the Scheme Document, expected to be 6.00 pm London time on the Business Day immediately following the Scheme Court Hearing



"Scheme Shareholder"

a holder of Scheme Shares as appearing in the register of EG at the Scheme Record Time



"Scheme Shares"

the EG Shares: (i) in issue at the date of the Scheme Document; (ii) (if any) issued after the date of the Scheme Document but before the Voting Record Time; and (iii) (if any) issued at or after the Voting Record Time and before the Scheme Record Time on terms that the original or any subsequent holders shall be, or shall have agreed in writing by such time to be, bound by the Scheme, in each case, excluding any Excluded Shares

 

"Service Agreement"

means the Service Agreement dated 19 May 2005 between (1) EG and (2) Elizabeth Gooch in respect of her employment with EG



"Significant Interest"

in relation to an undertaking, a direct or indirect interest of 10 per cent. or more of the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking



"Special Resolution"

the special resolution to be proposed by EG at the General Meeting in connection with, among other things, the approval of the Scheme, the alteration of the Articles, the reregistration of EG as a private company and such other matters as may be necessary to implement the Scheme and the delisting of the EG Shares



"Third Party"

any central bank, ministry, government or governmental, quasi-governmental (including the European Union), national, state, municipal or local government (including any subdivision, court, administrative agency or commission or other authority thereof), supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, authority, court, trade agency, association, institution, professional or environmental body, employee representative body or bodies responsible for the review and/or approval of mergers, acquisitions, concentrations, joint ventures or any other similar matter or any other similar body or person whatsoever (including any national or supranational anti-trust or merger control authority, any sectoral ministry or regulator and any foreign investment review body), in any jurisdiction



"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland

"United States", "US" or "USA"

the United States of America

"Verint"

Verint WS Holdings Limited, registered in England and Wales with number 04740402



"Verint Directors"

the directors of Verint



"Verint Systems"

 

Verint Systems Inc.

"Voting Record Time"

 

the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined

 

"VWAP"

volume weighted average price

 

"Wider EG Group"

EG and associated undertakings and any other body corporate, partnership, joint venture or person in which EG and such undertakings (aggregating their interests) have a Significant Interest

 

"Wider Verint Group"

Verint and associated undertakings and any other body corporate, partnership, joint venture or person in which Verint and all such undertakings (aggregating their interests) have a Significant Interest

 

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given to such terms in the Companies Act.

 

All references to "pounds", "pounds Sterling", "Sterling", "GBP", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

 

All references to "$" are to the lawful currency of the United States of America.

 

All the times referred to in this Announcement are London times unless otherwise stated.

 

All references to legislation in this document are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of legislation shall include any amendment, modification, re-enactment or extension thereof.


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Recommended cash offer for eg solutions plc - RNS