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Offer for Electric Word plc

Released 07:00 27-Jun-2017

RNS Number : 2220J
Sport Business Acquisitions Limited
27 June 2017
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

27 June 2017

 

RECOMMENDED CASH ACQUISITION

 

of

 

Electric Word plc ("Electric Word")

 

by

 

Sport Business Acquisitions Limited ("Bidco")

 

a newly incorporated company, owned and controlled by Riccardo Silva and Marco Auletta

 

intended to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act

 

Summary

 

·          The Boards of Electric Word and Bidco are pleased to announce that they have reached agreement regarding the terms of a recommended cash offer pursuant to which Bidco intends to acquire the entire issued and to be issued share capital of Electric Word, (the "Acquisition").  The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme") (or if Bidco elects, with the consent of the Panel, by way of a Takeover Offer).

 

·          Under the terms of the Acquisition, Electric Word Shareholders will be entitled to receive:

 

for each Electric Word Share    3.93 pence in cash (the "Offer Price").

 

·          The Offer Price values the entire issued and to be issued ordinary share capital of Electric Word at approximately £16.58 million.

 

·          The Offer Price represents a premium of approximately:

 

·          16.3 per cent. to the Closing Price of an Electric Word Share of 3.38 pence on the 26 June 2017 (being the Last Practicable Date); and

 

·          21.7 per cent. to the average Closing Price per Electric Word Share of 3.23 pence, being the average Closing Price per Electric Word Share on each of the Business Days in the 12 month period to 26 June 2017 (being the Last Practicable Date)

 

·          If any dividend or other distribution or return of value is authorised, proposed, declared, made, paid or becomes payable by Electric Word in respect of Electric Word Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Offer Price by up to the amount of any such dividend, distribution or return of value.

 

·          Bidco is a newly incorporated company owned and controlled by Riccardo Silva and Marco Auletta, who have considerable experience of building and operating businesses involved in sports media including MP & Silva, a leading global media rights group and, also, Silva International which will act as an ongoing advisor to Bidco.

 

·          Bidco intends to finance the Acquisition exclusively by means of a loan provided by Riccardo Silva and Marco Auletta.

 

·          The Acquisition will be conditional on, amongst other things, the following matters:  

 

·          the approval by a majority in number of Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted;

 

·          the approval by Electric Word Shareholders of a special resolution (the "Special Resolution") in connection with the implementation of the Scheme, by the requisite majority at the Electric Word General Meeting;

 

·          the sanction of the Scheme by the Court; and

 

·          the Scheme becoming Effective by no later than the Long Stop Date.

 

Recommendation

 

·          The Electric Word Directors, who have been so advised by Panmure Gordon as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable.  In providing its advice to the Electric Word Directors, Panmure Gordon has taken into account the commercial assessments of the Electric Word Directors. Panmure Gordon is providing independent financial advice to the Electric Word Directors for the purpose of Rule 3 of the Code. In addition, the Electric Word Directors consider the terms of the Acquisition to be in the best interest of Electric Word Shareholders as a whole. 

 

·          Accordingly, the Electric Word Directors intend unanimously to recommend that Electric Word Shareholders (i) vote in favour of the Scheme at the Court Meeting (as those Electric Word Directors who are interested in Electric Word Shares and are entitled to vote those Electric Word Shares at the Court Meeting (i.e. not including Julian Turner) have irrevocably undertaken to do so in respect of their own holdings of, in aggregate, 7,200,000 Electric Word Shares representing approximately 1.8 per cent. of the Electric Word Shares in issue on the Last Practicable Date) and (ii) vote in favour of the Special Resolution to be proposed at the Electric Word General Meeting (as those Electric Word Directors who are interested in Electric Word Shares (i.e. including Julian Turner) have irrevocably undertaken to do so in respect of their own holdings of, in aggregate, 19,850,275 Electric Word Shares representing approximately 4.9 per cent. of the Electric Word Shares in issue on the Last Practicable Date).

 

Irrevocable Undertakings and support for the Acquisition

 

·          Bidco has received irrevocable undertakings from each of the Electric Word Directors who are interested in Electric Word Shares and are entitled to vote those Electric Word Shares at the Court Meeting (i.e. not including Julian Turner), to vote (or to procure the voting) in favour of the Scheme at the Court Meeting in respect of a total of 7,200,000 Electric Word Shares, representing, in aggregate, approximately 1.8 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

·          Bidco has received irrevocable undertakings from each of the Electric Word Directors who are interested in Electric Word Shares (i.e. including Julian Turner) to vote (or to procure the voting) in favour of the Special Resolution at the Electric Word General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 19,850,275 Electric Word Shares, representing, in aggregate, approximately 4.9 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

·          Bidco has also received irrevocable undertakings from certain other Electric Word Shareholders to vote (or to procure the voting) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Electric Word General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 310,672,786 Electric Word Shares, representing, in aggregate, approximately 76 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

·          In aggregate, therefore, Bidco has received (a) irrevocable undertakings to vote in favour of the Scheme at the Court Meeting in respect of a total of 317,872,786 Electric Word Shares representing approximately 77.8 per cent. of the share capital of Electric Word in issue on the Last Practicable Date (and approximately 80.3 per cent. of the share capital entitled to vote on the Scheme at the Court Meeting) and (b) irrevocable undertakings to vote in favour of the Special Resolution at the Electric Word General Meeting (or in, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 330,523,061 Electric Word Shares, representing, in aggregate, approximately 80.9 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

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

 

Scheme Document

 

The Scheme Document will include further information about the Acquisition, together with notices of the Court Meeting and the Electric Word General Meeting and the expected timetable of the Scheme, and will specify the actions to be taken by Electric Word Shareholders.  The Scheme Document will be sent to Electric Word Shareholders as soon as reasonably practicable and, in any event (save with the consent of the Panel), within 28 days of this Announcement and will be made available by Electric Word and Bidco at www.electricwordplc.com and www.silvainternational.com (subject to certain restrictions in relation to persons in Restricted Jurisdictions).

 

Comments on the Acquisition

 

Commenting on the Acquisition, Marco Auletta said:

 

"The Acquisition of SportBusiness Group through its parent company, Electric Word, is fantastic news, both for SportBusiness Group and Silva International.  SportBusiness Group is a great addition to Silva International's portfolio of assets under management across sport, media, entertainment and technology and we are confident that, through our networks and many years of experience across sports and media, we will be able to support SportBusiness Group as it seeks to grow more quickly. 

 

SportBusiness Group has established a reputation for the quality of its market-intelligence, consultancy expertise and journalistic content and this is testament to the capability of its staff, at all levels.  Silva International is looking forward to working with and helping to support the team at SportBusiness Group as it expands the business in the years ahead." 

 

Commenting on the Acquisition, Andrew Brode, Non-Executive Chairman of Electric Word said:

 

"Following Electric Word's recent disposals, the Group's operations now consist solely of those of SportBusiness Group. SportBusiness Group has performed well increasing its revenue and profit in the year to November 2016 with increased market penetration and a growing subscription base of loyal customers. Whilst the board of Electric Word remains confident of the future prospects for SportBusiness Group we firmly believe that this transaction is in the best interests of all Electric Word stakeholders, including shareholders, employees and customers. The Acquisition will provide SportBusiness Group with a broader platform and additional experience which should assist it to achieve long term growth and success. The board of Electric Word believes that the Acquisition is attractive and provides Electric Word Shareholders with an opportunity of a full cash exit at a premium to the current share price."

 

General

 

This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its Appendices).

 

The Acquisition will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculation of certain information contained in this Announcement. Appendix III to this Announcement contains a summary of the irrevocable undertakings received in relation to the Acquisition. Appendix IV to this Announcement contains definitions of certain expressions used in this summary and in this Announcement.

 

Enquiries:

 

 

Silva International / Bidco

+44 (0) 20 3866 9880

Roland Oakshett

Tony Pilch

 

 

BDO LLP (Financial Adviser to Bidco)

+44 (0) 20 7486 5888

John Stephan

Susan Jarram

 

 

Electric Word plc

+44 (0) 20 7265 4170

Julian Turner, Chief Executive

 

 

Panmure Gordon (Financial Adviser, Nominated Adviser
& Broker to Electric Word)

Karri Vuori

Andrew Potts

James Greenwood

Ryan McCarthy

 

+44 (0) 20 7886 2500

 

 

 

Important notices

 

BDO LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Bidco and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of BDO LLP nor for providing advice in relation to the matters referred to in this Announcement.

 

Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority is acting exclusively as financial adviser to Electric Word and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Electric Word for providing the protections afforded to clients of Panmure Gordon (UK) Limited nor for providing advice in relation to the matters referred to in this Announcement.

 

This Announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities, or the solicitation of any vote or approval of an offer to buy securities in any jurisdiction, pursuant to the Acquisition or otherwise nor shall there be any sale, issuance or transfer of any securities pursuant to the Acquisition in any jurisdiction in contravention of any applicable laws.

 

The Acquisition is intended to be implemented by way of a Scheme pursuant to the terms of the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Scheme. Any decision, vote or other response in respect of the Acquisition should be made only on the basis of information contained in the Scheme Document. Electric Word Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been dispatched.

 

This Announcement does not constitute a prospectus or prospectus-equivalent document.

 

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

 

Overseas jurisdictions

 

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom and the ability of Electric Word Shareholders who are not resident in the United Kingdom to participate in the Acquisition may be restricted by laws and/or regulations of those jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Scheme Shares with respect to the Scheme at the Court Meeting or with respect to the Special Resolution at the Electric Word General Meeting, or to execute and deliver Forms of Proxy appointing another to vote at the Court Meeting and/or Electric Word General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Therefore, any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom or Electric Word Shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any Electric Word Shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay.  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 involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. 

 

The Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws of that jurisdiction and no person may vote in favour of the Acquisition by any use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted 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.

 

Further details in relation to Electric Word Shareholders in overseas jurisdictions will be contained in the Scheme Document.

 

Notice to US investors

 

Electric Word Shareholders in the United States should note that the Acquisition relates to the securities of a company organised under the laws of England and Wales and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. This Announcement, the Scheme Document and certain other documents relating to the Acquisition have been or will be prepared in accordance with English law, the Code and UK disclosure requirements, format and style, all of which differ from those in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements of and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure requirements of the United States tender offer and proxy solicitation rules.

 

Electric Word's financial statements, and all financial information that is included in this Announcement or that may be included in the Scheme Document, or any other documents relating to the Acquisition, have been or will be prepared in accordance with International Financial Reporting Standards and may not be comparable to financial statements of companies in the United States or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles.

 

Cautionary Note regarding Forward Looking Statements

 

This Announcement contains certain statements about Bidco and Electric Word that are, or may be deemed to be, "forward-looking statements" which are prospective in nature. All statements other than statements of historical fact, are or may be deemed to be, forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are therefore subject to known and unknown risks and uncertainties which could cause actual results, performance or events to differ materially from the future results, performance or events expressed or implied by the forward-looking statements.  Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects", "goal", "objective", "outlook", "risks", "seeks" or words or terms of similar substance or the negative thereof, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might", "probably"  or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

 

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement. Any forward-looking statements made in this Announcement on behalf of Bidco or Electric Word are made as of the date of this Announcement based on the opinions and estimates of directors of Bidco and Electric Word, respectively. Each of Bidco and Electric Word and their respective members, directors, officers, employees, advisers and any person acting on behalf of one or more of them, expressly disclaims any intention or obligation to update or revise any forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except as required by applicable law. Neither Bidco, Electric Word nor their respective members, directors, officers or employees, advisers or any person acting on their behalf, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.

 

No forward-looking or other statements have been reviewed by the auditors of Bidco or Electric Word. All subsequent oral or written forward-looking statements attributable to Bidco, Electric Word or to any of their respective members, directors, officers, advisers or employees or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

 

Rounding

 

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

 

No profit forecasts or estimates

 

Nothing in this Announcement is intended or shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco or Electric Word for any period and no statement in this Announcement should be interpreted to mean that cash flow from operations, earnings, or earnings per share or income of those persons (where relevant) for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, earnings, earnings per share or income of those persons (as appropriate).

 

Disclosure requirements of the Code

 

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 any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code 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 a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 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 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3:30 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 normally be deemed to be a single person for the purpose of Rule 8.3 of the Code.

 

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

Publication on website and availability of hard copies

 

A copy of this Announcement and the display documents required to be published pursuant to Rule 26 of the Code will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on Electric Word's website at www.electricwordplc.com and on Silva International's website (on behalf of Bidco) at www.silvainternational.com by no later than 12 noon (London time) on the Business Day following the date of this Announcement. For the avoidance of doubt, the contents of such website is not incorporated into, and do not form part of, this Announcement.

 

Any person who is required to be sent a copy of this Announcement under the Code, and who has not received a hard copy of it, may request a hard copy of this Announcement (and any information incorporated by reference in this Announcement) by submitting a request in writing to Computershare to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or by calling Computershare on +44 (0)370 889 4061. Calls are charged at the standard geographic rate and will vary by provider. The helpline is open between 9:00 am and 5:30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Computershare cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

 

Save as otherwise referred to above, a hard copy of this Announcement will not be sent unless requested. Any such person may also request that all future documents, announcements and information in relation to the Acquisition should be sent to them in hard copy form.

 

Relevant securities in issue

 

In accordance with Rule 2.9 of the Code, Electric Word confirms that, as at the close of business on the Last Practicable Date, it has 408,725,787 ordinary shares of 1 pence each in issue. The International Securities Identification Number for Electric Word Shares is GB0003083622.

 

Electronic communications

 

Please note that under Rule 2.11(c) of the Code, all addresses, electronic addresses (if any) and certain other information provided by the Electric Word Shareholders, persons with information rights and other relevant persons for the receipt of communications from Electric Word will upon request be provided to offerors (including Bidco) during the Offer Period as required under Section 4 of Appendix 4 of the Code.

 

General

 

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriate authorised independent financial adviser.

 

 

 

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

 

THE ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

27 June 2017

 

RECOMMENDED CASH ACQUISITION

 

of

 

Electric Word plc

 

by

 

Bidco, a newly incorporated company, owned and controlled by Riccardo Silva and Marco Auletta

 

intended to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act

1          Introduction

 

The Boards of Electric Word and Bidco are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Bidco intends to acquire the entire issued and to be issued share capital of Electric Word, (the "Acquisition"). The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme") (or if Bidco elects, with the consent of the Panel, by way of a Takeover Offer).

 

2          The Acquisition

 

Under the terms of the Acquisition, which shall be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, Electric Word Shareholders shall be entitled to receive

 

                   for each Electric Word Share                          3.93 pence in cash

 

The Offer Price values the entire issued and to be issued ordinary share capital of Electric Word at approximately £16.58 million which represents a premium of approximately:

 

·          16.3 per cent. to the Closing Price of an Electric Word Share of 3.38 pence on the 26 June 2017 (being the Last Practicable Date); and

 

·          21.7 per cent. to the average Closing Price per Electric Word Share of 3.23 pence, being the average Closing Price per Electric Word Share on each of the Business Days in the 12 month period to 26 June 2017 (being the Last Practicable Date)

 

The Electric Word Shares to be acquired under the Acquisition shall be acquired fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this Announcement.

 

If any dividend or other distribution or return of value is authorised, proposed, declared, made, paid or becomes payable by Electric Word in respect of Electric Word Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Offer Price by the amount of any such dividend, distribution or return of value.

 

If any such dividend, distribution or return of value is paid or made after the date of this Announcement and Bidco exercises its rights described above, 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. Any exercise by Bidco of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Scheme.

 

If the Scheme becomes Effective, Electric Word Shareholders will not be entitled to receive payments for any amounts less than 1 pence and any such amounts will be disregarded. Any amounts payable to Electric Word Shareholders which include fractions of 1 pence will be rounded down to the nearest whole penny and such fractional entitlements will be disregarded.

 

3          Conditions to the Acquisition

 

The Acquisition will be subject to the Conditions and further terms set out in Appendix I to this Announcement and which will be set out in the Scheme Document, including:

 

·          the approval by a majority in number of eligible Scheme Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Scheme Shares voted, such meeting to be held on or before 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 Electric Word and Bidco may agree and the Court may allow);

 

·          the approval by Electric Word Shareholders of the Special Resolution in connection with the implementation of the Scheme, by the requisite majority at the Electric Word General Meeting, such meeting to be held on or before the 22nd day after the expected date of the Electric Word General Meeting to be set out in the Scheme Document in due course (or such later date, if any, as Electric Word and Bidco may agree);

 

·          the sanction of the Scheme by the Court at the Scheme Court Hearing, such hearing to be held on or before the 22nd day after the expected date of the Scheme Court Hearing to be set out in the Scheme Document in due course (or such later date, if any, as Electric Word and Bidco may agree and the Court may allow);

 

·          the Scheme becoming Effective by no later than the Long Stop Date;

 

·          the satisfaction (or waiver by Bidco) of Condition 2.(a) of Appendix I to this Announcement (the "Expenses Condition"), which condition is further described below; and

 

·          the satisfaction (or where permissible, waiver) of the other Conditions listed in Appendix I to this Announcement.

 

In connection with the Expenses Condition, the Boards of Bidco and Electric Word have discussed the significant cash reserves currently credited to the accounts of the Electric Word Group. The Offer Price has been agreed between the Boards of Bidco and Electric Word partly by reference to the amount of those cash reserves (or estimated cash reserves as at, or shortly before, the time of completion of the Acquisition). The cash reserves position of the Electric Word Group at completion of the Acquisition is, therefore, deemed material by Bidco in making the Acquisition at the Offer Price.

 

The Expenses Condition has been included to protect against increases in the amounts of certain specified incurred, or predicted to be incurred, items of expenditure of the Electric Word Group (referred to in this Announcement as "Relevant Liabilities"), which might have a material adverse effect on the cash reserves position of the Electric Word Group at, or shortly before, the time of completion of the Acquisition.

 

The Board of Electric Word will provide certain information to Bidco, evidencing the Relevant Liabilities (and their amounts), shortly in advance of the Scheme Court Hearing, in order to provide comfort to Bidco that it can treat the Expenses Condition as satisfied, before the Court considers the sanctioning of the Scheme. Increases in such Relevant Liabilities above those amounts disclosed to Bidco immediately prior to this Announcement, which increases are material to Bidco in the context of the Acquisition, may, however, give Bidco the right to lapse the Acquisition.

 

4          Background to and reasons for the Electric Word Directors' recommendation

 

Electric Word has been listed on AIM since 2000 acting as a holding company for media businesses focused on the provision of market intelligence, critical information and consultancy through a combination of digital, print and live formats including subscription websites, magazines, events, special reports and consultancy. Over the last few years, the Directors of Electric Word have been engaged in simplifying the Group in order to maximise value for Electric Word Shareholders and following the disposals of the Group's interests in iGaming, Optimus and Speechmark the Group became solely focused on the continued growth of SportBusiness Group.

 

The year ended November 2016 represented a successful year for SportBusiness Group achieving revenue growth of 16 per cent. and adjusted EBITA growth of 124 per cent. as margins improved from 6 per cent. to 12 per cent.. This was driven in particular by continued success of TV Sports Markets and consultancy revenue in SportBusiness Intelligence. These successes also enabled the business to continue to build the newer Sport Sponsorship Insider product, where revenue grew 31 per cent. albeit from a relatively low base. Since November, Electric Word has also aligned the scale of its infrastructure and central costs to an appropriate level to support SportBusiness Group.

 

At the time that Electric Word announced the disposal of its interest in iGaming, the Directors of Electric Word also announced that they were considering making a capital return to shareholders subject to further analysis of the Group's cash requirements and growth opportunities.  Although the Electric Word Directors believe that SportBusiness Group has a strong future, they consider that an Offer Price of 3.93 pence per Electric Word Share represents full and fair value for Electric Word Shares and provides the opportunity for a full cash exit to Electric Word Shareholders today.

 

In Bidco, with its support from Silva International, the Electric Word Directors also believe that the business would have a partner which shares in the long-term vision for the continuation of SportBusiness Group's growth and has both the industry experience and investment capability to drive its future development.

 

5          Background to and reasons for the Acquisition

 

Bidco is a newly incorporated company, owned and controlled by Riccardo Silva and Marco Auletta who have considerable experience of building and operating businesses involved in sports media including MP & Silva, a leading global media rights group and, also, Silva International which will act as an ongoing advisor to Bidco.  Bidco believes that Electric Word and its SportBusiness Group is a unique and attractive business within the sector.

 

Bidco intends to support the development of the SportBusiness Group of Electric Word, recognising the importance of the continued independence of the SportBusiness Group.  Bidco intends to maintain such independence and integrity and will operate it separately from MP & Silva in which Riccardo Silva and Marco Auletta have ongoing interests.  Bidco intends to seek to add to the knowledge, experience and service capability of SportBusiness Group. As part of demonstrating a practical commitment to this, Bidco would seek to appoint an appropriate Independent Advisory Board to oversee the ongoing development of the SportBusiness Group.

 

Bidco believes that its or Silva International's proven knowledge and experience of and insight into the markets in which SportBusiness Group operates will be of considerable assistance to the strategic and operational development of the business.  In addition, Bidco will allocate sufficient funds to underpin the future development of the SportBusiness Group.  Bidco believes it is essential to secure the ongoing commitment of the existing management team and employees of SportBusiness Group and intends to provide opportunities and support for them to develop. 

 

6          Recommendation and undertakings by Electric Word Directors

 

The Electric Word Directors, who have been so advised by Panmure Gordon, as the independent financial adviser for the purposes of Rule 3 of the Code, as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Electric Word Directors, Panmure Gordon has taken into account the commercial assessments of the Electric Word Directors. In addition, the Electric Word Directors consider the terms of the Acquisition to be in the best interest of Electric Word Shareholders as a whole.

 

Accordingly, the Electric Word Directors intend unanimously to recommend that Electric Word Shareholders vote in favour of the Scheme at the Court Meeting and approve the Special Resolution to be proposed at the Electric Word General Meeting (as they have irrevocably undertaken to do so, to the extent described in paragraph 7 below and in Appendix III of this Announcement).

 

7          Irrevocable undertakings

 

Bidco has received irrevocable undertakings from those Electric Word Directors who are interested in Electric Word Shares and are entitled to vote those Electric Word Shares at the Court Meeting (i.e. not including Julian Turner), to vote (or to procure the voting) in favour of the Scheme at the Court Meeting in respect of a total of 7,200,000 Electric Word Shares, representing, in aggregate, approximately 1.8 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

Bidco has received irrevocable undertakings from each of the Electric Word Directors who are interested in Electric Word Shares (i.e. including Julian Turner) to vote (or to procure the voting) in favour of the Special Resolution at the Electric Word General Meeting in respect of a total of 19,850,275 Electric Word Shares, representing, in aggregate, approximately 4.9 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

In addition to the irrevocable undertakings received from Electric Word Directors, Bidco has also received irrevocable undertakings from certain other Electric Word Shareholders to vote (or to procure the voting) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Electric Word General Meeting (or, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 310,672,786 Electric Word Shares, representing, in aggregate, approximately 76.0 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

In aggregate, therefore, Bidco has received (a) irrevocable undertakings to vote in favour of the Scheme at the Court Meeting in respect of a total of 317,872,786 Electric Word Shares representing approximately 77.8 per cent. of the share capital of Electric Word in issue on the Last Practicable Date (and approximately 80.3 per cent. of the share capital entitled to vote on the Scheme at the Court Meeting) and (b) irrevocable undertakings to vote in favour of the Special Resolution at the Electric Word General Meeting (or in, in the event that the Acquisition is implemented by way of a Takeover Offer, to accept or procure acceptance of the Takeover Offer) in respect of a total of 330,523,061 Electric Word Shares, representing, in aggregate, approximately 80.9 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

For the purposes of the Court Meeting, Julian Turner, being an Electric Word Director, will (because of the payments due to him under the JT Settlement Agreement, as further detailed in paragraph 10 of this Announcement) be treated as a separate class of Electric Word Shareholder and will not vote his Electric Word Shares at the Court Meeting but will instead consent to be bound by the Scheme. Notwithstanding that Julian Turner is unable to vote the Electric Word Shares, in which he is interested, in respect of the Scheme at the Court Meeting, he is fully supportive of the Acquisition and has undertaken not to vote the Electric Word Shares, in which he is interested, in favour of, or accept such shares to, any rival transaction in respect of Electric Word, were such rival transaction to be made. This undertaking will cease to bind Julian Turner in the same circumstances as the irrevocable undertakings cease to be binding, as set out in Appendix III to this Announcement.

 

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

 

8          Information on Bidco, Riccardo Silva, Marco Auletta and Silva International

 

Bidco is a newly incorporated company, owned and controlled by Riccardo Silva and Marco Auletta.  Bidco is advised by Silva International.

 

Riccardo Silva is a businessman, entrepreneur and the owner of Silva International. He has previously owned and founded successful businesses within the media sector. In 1998 Riccardo Silva launched MP Web, an early internet start-up with the Milan-based Media Partners Group (now Infront Media). MP Web managed sports rights and content for mobile and internet platforms.  In 2001 Riccardo Silva became CEO of Milan Channel, the official TV channel of AC Milan football club, and guided the international development of the channel. He also worked with Arsenal FC as their International Media Advisor.

 

Riccardo founded MP & Silva in 2004, a global international media rights company with offices in London, Singapore, Monaco and Dubai. MP & Silva became the world's leading distributor of TV rights, generating an annual turnover in excess of $750 million. These included rights to the English Premier League, La Liga of Spain, Bundesliga of Germany, Serie A of Italy, NFL, NBA Roland Garros and Formula One. Their main clients include FOX, ESPN, Canal Plus, Al Jazeera, CCTV, Globo, British Telecom, DirecTV, Eurosport, Viasat, NHK, Fuji TV, CNN, Sky and many others. In May 2016, Chinese brokerage Everbright Securities and internet entertainment company Beijing Baofeng Technology bought a 65 per cent. stake in MP & Silva.

 

Riccardo is President and co-owner of Miami FC, the soccer club that competes in the USA's North American Soccer League.

 

Marco Auletta joined Silva International as Chief Executive Officer in 2016 having spent eight years at MP & Silva. Marco was Vice President, Acquisitions before becoming Chief Executive Officer in 2009 where he consolidated MP & Silva's group corporate structure.  His previous experience includes six years at the International Association of Athletics Federation (IAAF) and three years at a leading private bank in Monaco. 

 

Silva International is an investment company based in London which manages investments in a range of companies across media, sports, entertainment, art and real estate.  The investment portfolio includes Miami FC, MP & Silva, MP Management, QP LDN, Mast Capital and The Riccardo Silva Collection. Senior executives of Silva International have extensive understanding of the sport, media and sports media sectors.

 

9          Information on Electric Word

 

Electric Word is a specialist information business providing market intelligence, decision-critical information and consultancy through a combination of digital, print and in-person formats.

 

Following the disposal of Optimus Education, Speechmark Publishing and the Group's stake in iGaming Business, the Group is now focused on one market-facing business, SportBusiness Group. SportBusiness Group provides business insight, information and consultancy to executives who work in sport, in rights-owning bodies, the media, sports marketing, sponsorship and club and event management.

 

Electric Word published its audited results for the twelve months ended 30 November 2016 on 14 February 2017.  The audited results can be found on Electric Word's website at www.electricwordplc.com.  

 

10        Management, employees and locations of business

 

Bidco recognises the quality of the SportBusiness Group management team and its employees generally and their importance to the future success of SportBusiness Group.  Bidco believes that following completion of the Acquisition, in a private company setting and with access to the support and other resources of Bidco and Silva International, management will be better able to fully focus on growing and developing the business.

 

Bidco intends to support and strengthen the SportBusiness Group management team within Electric Word and to help develop and execute management's current long term strategy, including with regards to its plans for the continued employment of its employees. Following completion of the Acquisition, Bidco intends to put in place an "independent advisory committee", which will not be a statutory board of directors of Bidco or Electric Word (and will have no statutory or legal status) but, instead, will be an advisory committee making recommendations in relation to the strategy for, and management of, the Electric Word Group.

 

Bidco's current plans for Electric Word do not include any material change in the conditions of employment of its employees and, following completion of the Acquisition, Bidco intends to ensure that the existing employment rights, including any pension rights, of the management and employees of Electric Word will be fully safeguarded.

 

Following completion of the Acquisition, Bidco expects to put in place appropriate incentives for the benefit of the SportBusiness Group management team. Only limited discussions have, however, taken place at this time (without any understandings having been reached with the management team), and it is not intended that any further discussions will take place until following the completion of the Acquisition.

 

Further information regarding the Electric Word Share Schemes and the proposed treatment of interests under those schemes is set out in paragraph 16 of this Announcement.

 

Bidco has no intention to change the locations of Electric Word's place of business or to redeploy any material fixed assets of Electric Word as a consequence of the Acquisition.

 

It is intended that each of the directors of Electric Word will resign from the Electric Word Board, conditional upon and with effect from the Effective Date (or, in the event that the Acquisition is implemented by way of a Takeover Offer, upon or shortly following the Takeover Offer becoming or being declared wholly unconditional). Notwithstanding Julian Turner's and William Fawbert's proposed resignations from the Electric Word Board on the Effective Date, it is expected that both will remain with the business for a period of 2 months following completion of the Acquisition. 

 

Julian Turner and William Fawbert have entered into the Settlement Agreements, details of which (including all payments due) are set out in Appendix IV to this Announcement. Appendix IV also sets out the amounts payable to the other Electric Word Directors on resignation. One of the payments due to Julian Turner under the JT Settlement Agreement is a bonus of £61,014.50, which is subject to approval by the Electric Word Shareholders.

 

It is proposed to put a shareholders resolution (the Bonus Resolution) to Electric Word Shareholders at the Electric Word General Meeting to approve this bonus.  The Acquisition is not conditional on such approval being granted.  

 

Electric Word has received irrevocable undertakings from certain Electric Word Shareholders to vote (or to procure the voting) in favour of the Bonus Resolution at the Electric Word General Meeting, representing, in aggregate, approximately 71.4 per cent. of the share capital of Electric Word in issue on the Last Practicable Date.

 

As a result of the payments to Julian Turner under the JT Settlement Agreement, Julian Turner will, for the purposes of the Court Meeting, be treated as a separate class of Electric Word Shareholder and will not vote his Electric Word Shares at the Court Meeting but will instead consent to be bound by the Scheme. Notwithstanding that Julian Turner is unable to vote the Electric Word Shares, in which he is interested, in respect of the Scheme at the Court Meeting, he is fully supportive of the Acquisition and has undertaken not to vote the Electric Word Shares, in which he is interested, in favour of, or accept such shares to, any rival transaction in respect of Electric Word, were such rival transaction to be made. This undertaking will cease to bind Julian Turner in the same circumstances as the irrevocable undertakings cease to be binding, as set out in Appendix III to this Announcement.

 

11        Financing arrangements

 

BDO LLP, in its capacity as financial adviser to Bidco, is satisfied that sufficient resources are available to Bidco to satisfy, in full, the Cash Consideration payable under the terms of the Acquisition.

 

The Offer is being financed by loans to be provided by each of Riccardo Silva and Marco Auletta to Bidco, pursuant to loan agreements entered into between each of them on 26 June 2017.

 

12        Structure of the Acquisition and the Scheme Document

 

Scheme

 

It is intended that the Acquisition will be effected by a Court-sanctioned scheme of arrangement between Electric Word and the Electric Word Shareholders under Part 26 of the Companies Act. The purpose of the Scheme is to enable Bidco to become the owner of the whole of the issued and to be issued share capital of Electric Word.

 

Under the Scheme, the Scheme Shares will be transferred to Bidco and in consideration the Scheme Shareholders will receive the Cash Consideration on the basis set out in paragraph 2 of this Announcement. The Scheme will be subject to the Conditions and further terms and conditions referred to in Appendix I to this Announcement and to be set out in the Scheme Document. The Acquisition will lapse if the Scheme does not become Effective by the Long Stop Date.

 

Approval by the Court Meeting and the Electric Word General Meeting

 

In order to become Effective, the Scheme requires:

 

(a)        the approval of a majority in number of the Scheme Shareholders who vote, representing not less than 75 per cent. in value of the Scheme Shares voted, either in person or by proxy, at the Court Meeting.  At the Court Meeting, voting will be by poll and not on a show of hands and all Electric Word Shareholders, appearing on Electric Word's register of members at the Voting Record Time, will be entitled to vote at the Court Meeting and to cast one vote for each Electric Word Share held (save for Julian Turner, who will not vote at the Court Meeting);

(b)        the approval of not less than 75 per cent. of the votes cast, either in person or by proxy, of the Special Resolution to be proposed at the Electric Word General Meeting (to be held directly after the Court Meeting) necessary in order to implement the Scheme, including to approve amendments to Electric Word's articles of association to ensure that any Electric Word Shares issued after the approval of the Scheme at the Court Meeting and the Scheme Record Time will be (i) subject to the Scheme and (ii) automatically acquired by Bidco (or its nominee(s)) on the same terms as under the Scheme. This will avoid any person (other than Bidco or its nominee(s)) being left with Electric Word Shares after the Effective Date. At the Electric Word General Meeting, all Electric Word Shareholders, appearing on Electric Word's register of members at the Voting Record Time, will be entitled to vote at the Electric Word General Meeting and to cast one vote for each Electric Word Share held; and

(c)        all of the other Conditions to the Acquisition, as set out in Appendix I to this Announcement, to be satisfied or (where applicable) waived.

For the purposes of the Court Meeting, Julian Turner, being an Electric Word Director, will (because of the payments due to him under the JT Settlement Agreement, as further detailed in paragraph 10 and Appendix IV of this Announcement) be treated as a separate class of Electric Word Shareholder and will not vote his Electric Word Shares at the Court Meeting but will instead consent to be bound by the Scheme.

 

Application to the Court to sanction the Scheme

 

Once the necessary approvals have been obtained at the Electric Word Meetings, and the other Conditions have been satisfied or (where applicable) waived, in order for the Scheme to be capable of becoming Effective, it must be sanctioned by the Court at the Scheme Court Hearing.

 

The Scheme will only become Effective, however, in accordance with its terms, on delivery of the Scheme Court Order to the Registrar of Companies. 

 

Lapsing of the Acquisition

 

The Acquisition will lapse if, amongst other things:

 

(a)     the approval of the requisite majorities of eligible Scheme Shareholders at the Court Meeting is not obtained on or before 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 Electric Word and Bidco may agree and the Court may allow);

 

(b)     the approval of the requisite majority of Electric Word Shareholders to pass the Special Resolution to be proposed at the Electric Word General Meeting is not obtained on or before the 22nd day after the expected date of the Electric Word General Meeting to be set out in the Scheme Document in due course (or such later date, if any, as Electric Word and Bidco may agree);

 

(c)      the sanction of the Scheme by the Court (without modification or with modification on terms acceptable to Bidco and Electric Word) is not procured on or before the 22nd day after the expected date of the Scheme Court Hearing to be set out in the Scheme Document in due course (or such later date, if any, as Electric Word and Bidco may agree and the Court may allow) and the delivery of a copy of the Scheme Court Order to the Registrar of Companies; or

 

(d)     the Scheme does not become Effective by the Long Stop Date.

 

Scheme becoming Effective

 

Subject to the satisfaction or (where applicable) waiver of the Conditions, the Scheme is expected to become Effective by early August 2017.

 

Upon the Scheme becoming Effective, it will be binding on all Electric Word Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or Electric Word General Meeting, or whether they voted in favour of or against the Scheme.

 

The Cash Consideration will be despatched by Bidco to Electric Word Shareholders no later than 14 days after the Effective Date. Share certificates in respect of Electric Word Shares will cease to be valid and entitlements to Electric Word Shares held within the CREST system will be cancelled.

 

Scheme Document and Forms of Proxy

 

The Scheme Document will include full details of the Scheme, together with notices of the Court Meeting and the Electric Word General Meeting and the expected timetable for the Scheme, and will specify the action to be taken by Electric Word Shareholders.

 

It is expected that the Scheme Document, together with the Forms of Proxy, will be despatched to Electric Word Shareholders and, for information only, to participants in the Electric Word Share Schemes as soon as possible and, in any event, (save with the consent of the Panel) within 28 days of the date of this Announcement, unless Bidco and Electric Word otherwise agree, and the Panel consents, to a later date.

 

CREST proxy voting will be enabled in relation to Electric Word Shareholders voting in connection with the Scheme and shareholders who hold Electric Word Shares in uncertificated form are encouraged to avail themselves of this facility.

 

General

 

The Scheme will be governed by the laws of England and Wales. The Scheme will be also subject to the applicable requirements of the Code, the Panel, and the London Stock Exchange.

 

13        Interests of Bidco and Silva International in Electric Word Shares

 

As at the Last Practicable Date, save in respect of the irrevocable undertakings referred to at paragraph 7 above, neither Bidco, nor Silva International, nor any of their respective directors, nor, so far as Bidco is aware, any person acting in concert (within the meaning of the Code) with Bidco or Silva International had (i) any interest or right to subscribe for Electric Word Shares; nor (ii) any short positions in respect of relevant Electric Word Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell, any delivery obligation or right to require another person to purchase or take delivery; nor (iii) borrowed or lent any Electric Word Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Code).

 

Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.

 

14        Electric Word Share Schemes

 

Participants in the Electric Word Share Schemes will be contacted regarding the effect of the Acquisition on their rights under the Electric Word Share Schemes and appropriate proposals will be made to such participants in due course.  Participants in the Electric Word Share Schemes who exercise their options will be entitled to participate in the Cash Consideration.  Further details of the terms of such proposals shall be included in the Scheme Document and separate proposal documentation.

 

15        Acquisition related arrangements

 

Confidentiality agreement

 

On 14 October 2016, Silva International and Electric Word entered into a confidentiality agreement in relation to the Acquisition, pursuant to which they each undertook, subject to certain exceptions, to keep information relating to one another confidential and to not disclose it to third parties. Unless terminated earlier, the confidentiality obligations will remain in force for 18 months from the date of the agreement.

 

16        Cancellation of admission to trading on AIM and re-registration

 

Prior to the Scheme becoming Effective, and subject to any applicable requirements of the AIM Rules. Bidco intends for application be made to the London Stock Exchange for the admission of the Electric Word Shares to trading on AIM to be cancelled on the first Business Day following the Effective Date. The last day of dealings in, and for registration of transfers of, Electric Word Shares is expected to be the close of business on the Business Day before the Effective Date. No transfers of Electric Word Shares will be registered after this date, other than registration of the Electric Word Shares released, transferred or issued under the Electric Word Share Schemes.

 

In addition, entitlements to Electric Word Shares held within the CREST system will be cancelled and share certificates in respect of the Electric Word Shares will cease to be valid and should, if so requested by Electric Word, be sent to Electric Word for cancellation. It is also intended that, shortly after the Effective Date, Electric Word will be re-registered as a private limited company under the relevant provisions of the Companies Act.

 

17        Documents on display

 

The following documents will, in accordance with Rule 26.2 of the Code, be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Electric Word's website at www.electricwordplc.com and on Silva International's website (on behalf of Bidco) at www.silvainternational.com by no later than 12 noon on the Business Day following the date of this Announcement until the end of the Offer Period:

 

·          this Announcement;

·          the irrevocable undertakings described in paragraph 7 above;

·          certain financing documents referred to in paragraph 11 above (to be displayed on Silva International's website only); and

·          the confidentiality agreement described in paragraph 15 above.

 

Neither the contents of Electric Word's website, nor Silva International's website (on behalf of Bidco), nor the content of any other website accessible from hyperlinks on such website, is incorporated into or forms part of, this Announcement.

 

18        General

 

This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

 

The Scheme will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix II to this Announcement contains the sources and bases of certain information contained in this Announcement. Appendix III to this Announcement contains a summary of the irrevocable undertakings received in relation to the Acquisition. Appendix IV to this Announcement contains the definitions of certain expressions used in this Announcement.

 

Right to switch to Takeover Offer

 

Bidco reserves the right, subject to the prior consent of the Panel, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued share capital of Electric Word as an alternative to the Scheme. In such an event, a Takeover Offer will be implemented on the same terms (subject to appropriate amendments, including, if the Panel so agrees, an acceptance condition set at up to 90 per cent. of the shares to which such offer relates or such lesser percentage, being more than 50 per cent., as Bidco may decide), so far as applicable, as those which would apply to the Scheme.

 

If the Acquisition is effected by way of a Takeover Offer, there can be no certainty as to the level of the acceptance condition, or of Bidco's willingness to waive or lower such acceptance condition. If such Takeover Offer becomes or is declared unconditional in all respects, where:

 

·          acceptances are received from Electric Word Shareholders such that, together with any other Electric Word Shares unconditionally acquired, owned or controlled by Bidco, Bidco will hold at least 75 per cent. of the voting rights attaching to the Electric Word Shares, Bidco intends to request that the then appointed Electric Word Board (subject to its fiduciary duties) will apply to the London Stock Exchange for the admission of the Electric Word Shares to trading on AIM to be cancelled which would eliminate the liquidity of Electric Word Shares for any remaining Electric Word Shareholders; and

 

·          Bidco receives acceptances under the Takeover Offer in respect of, or otherwise acquires, 90 per cent. or more of the Electric Word Shares to which the Takeover Offer relates by nominal value and voting rights attaching to such shares, Bidco intends to exercise its rights pursuant to sections 974 to 991 of the Companies Act to acquire compulsorily the remaining Electric Word Shares in respect of which the Takeover Offer has not been accepted on the same terms as the Takeover Offer.

 

The availability of any such Takeover Offer to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements.

 

19        Consents

 

BDO LLP has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion therein of the references to its name in the form and context in which it appears.

 

Panmure Gordon (UK) Limited has given and has not withdrawn its written consent to the issue of this Announcement with the inclusion therein of the references to its name in the form and context in which it appears.

 

20        Inside information

 

The information contained within this Announcement is deemed by Electric Word to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this Announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain. The person responsible for arranging the release of this Announcement on behalf of Electric Word is Julian Turner, Chief Executive.

 

 

Enquiries:

 

 

Silva International / Bidco

+44 (0) 20 3866 9880

Roland Oakshett

Tony Pilch

 

 

BDO LLP (Financial Adviser to Bidco)

+44 (0) 20 7486 5888

John Stephan

Susan Jarram

 

 

Electric Word plc

+44 (0) 20 7265 4170

Julian Turner, Chief Executive

 

 

Panmure Gordon (Financial Adviser, Nominated Adviser
& Broker to Electric Word)

Karri Vuori

Andrew Potts

James Greenwood

Ryan McCarthy

 

+44 (0) 20 7886 2500

 

 

Further Information

 

BDO LLP, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Bidco and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Bidco for providing the protections afforded to clients of BDO LLP nor for providing advice in relation to the matters referred to in this Announcement.

 

Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Electric Word and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than Electric Word for providing the protections afforded to clients of Panmure Gordon (UK) Limited nor for providing advice in relation to the matters referred to in this Announcement.

 

This Announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities, or the solicitation of any vote or approval of an offer to buy securities in any jurisdiction, pursuant to the Acquisition or otherwise nor shall there be any sale, issuance or transfer of any securities pursuant to the Acquisition in any jurisdiction in contravention of any applicable laws.

 

The Acquisition is intended to be implemented by way of a Scheme pursuant to the terms of the Scheme Document, which will contain the full terms and conditions of the Acquisition, including details of how to vote in respect of the Scheme. Any decision, vote or other response in respect of the Acquisition should be made only on the basis of information contained in the Scheme Document. Electric Word Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been dispatched.

 

This Announcement does not constitute a prospectus or prospectus-equivalent document.

 

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

 

Overseas jurisdictions

 

The release, publication or distribution of this Announcement in jurisdictions other than the United Kingdom and the ability of Electric Word Shareholders who are not resident in the United Kingdom to participate in the Acquisition may be restricted by laws and/or regulations of those jurisdictions. In particular, the ability of persons who are not resident in the United Kingdom to vote their Electric Word Shares with respect to the Scheme at the Court Meeting or with respect to the Special Resolution at the Electric Word General Meeting, or to execute and deliver Forms of Proxy appointing another to vote at the Court Meeting and/or Electric Word General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Therefore, any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom or Electric Word Shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any Electric Word Shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay.  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 involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. 

 

The Acquisition will not be made, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws of that jurisdiction and no person may vote in favour of the Acquisition by any use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and any formal documentation relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted 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.

 

Further details in relation to Electric Word Shareholders in overseas jurisdictions will be contained in the Scheme Document.

 

Notice to US investors

 

Electric Word Shareholders in the United States should note that the Acquisition relates to the securities of a company organised under the laws of England and Wales and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. This Announcement, the Scheme Document and certain other documents relating to the Acquisition have been or will be prepared in accordance with English law, the Code and UK disclosure requirements, format and style, all of which differ from those in the United States. A transaction effected by means of a scheme of arrangement is not subject to the tender offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the Acquisition is subject to the disclosure requirements of and practices applicable in the United Kingdom to schemes of arrangement, which differ from the disclosure requirements of the United States tender offer and proxy solicitation rules.

 

Electric Word's financial statements, and all financial information that is included in this Announcement or that may be included in the Scheme Document, or any other documents relating to the Acquisition, have been or will be prepared in accordance with International Financial Reporting Standards and may not be comparable to financial statements of companies in the United States or other companies whose financial statements are prepared in accordance with US generally accepted accounting principles.

 

Cautionary Note regarding Forward Looking Statements

 

This Announcement contains certain statements in relation to Bidco and Electric Word that are, or may be deemed to be, "forward-looking statements" which are prospective in nature.  All statements other than statements of historical fact, are or may be deemed to be, forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are therefore subject to known and unknown risks and uncertainties which could cause actual results, performance or events to differ materially from the future results, performance or events expressed or implied by the forward-looking statements.  Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects", "goal", "objective", "outlook", "risks", "seeks" or words or terms of similar substance or the negative thereof, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might", "probably"  or "will" be taken, occur or be achieved.  Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations.

 

Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements.  Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this Announcement.  Any forward-looking statements made in this Announcement on behalf of Bidco or Electric Word are made as of the date of this Announcement based on the opinions and estimates of directors of Bidco and Electric Word, respectively.  Each of the Bidco and Electric Word and their respective members, directors, officers, employees, advisers and any person acting on behalf of one or more of them, expressly disclaims any intention or obligation to update or revise any forward-looking or other statements contained in this Announcement, whether as a result of new information, future events or otherwise, except as required by applicable law. Neither Bidco and Electric Word nor their respective members, directors, officers or employees, advisers or any person acting on their behalf, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur.

 

No forward-looking or other statements have been reviewed by the auditors of Bidco or Electric Word. All subsequent oral or written forward-looking statements attributable to Bidco, Electric Word or their respective members, directors, officers, advisers or employees or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above.

 

Rounding

 

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

 

 

No profit forecasts or estimates

 

Nothing in this Announcement is intended or shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco or Electric Word for any period and no statement in this Announcement should be interpreted to mean that cash flow from operations, earnings, or earnings per share or income of those persons (where relevant) for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, earnings, earnings per share or income of those persons (as appropriate).

 

Disclosure requirements of the Code

 

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 any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code 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 a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

 

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 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 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3:30 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 normally be deemed to be a single person for the purpose of Rule 8.3 of the Code.

 

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

 

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

 

Publication on website and availability of hard copies

 

A copy of this Announcement and the display documents required to be published pursuant to Rule 26 of the Code will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on Electric Word's website at www.electricwordplc.com and on Silva International's website (on behalf of Bidco) at www.silvainternational.com by no later than 12 noon (London time) on the Business Day following the date of this Announcement. For the avoidance of doubt, the contents of such website is not incorporated into, and do not form part of, this Announcement.

 

Any person who is required to be sent a copy of this Announcement under the Code, and who has not received a hard copy of it, may request a hard copy of this Announcement (and any information incorporated by reference in this Announcement) by submitting a request in writing to Computershare to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ or by calling Computershare on +44 (0)370 889 4061. The helpline is open between 9:00 am and 5:30 pm, Monday to Friday excluding public holidays in England and Wales. Please note that Computershare cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes.

 

Save as otherwise referred to above, a hard copy of this Announcement will not be sent unless requested. Any such person may also request that all future documents, announcements and information in relation to the Acquisition should be sent to them in hard copy form.

 

Relevant securities in issue

 

In accordance with Rule 2.9 of the Code, Electric Word confirms that, as at the close of business on the Last Practicable Date, it has 408,725,787 ordinary shares of 1 pence each in issue. The International Securities Identification Number for Electric Word Shares is GB0003083622.

 

Electronic communications

 

Please note that under Rule 2.11(c) of the Code, all addresses, electronic addresses (if any) and certain other information provided by the Electric Word Shareholders, persons with information rights and other relevant persons for the receipt of communications from Electric Word will upon request be provided to offerors (including Bidco) during the Offer Period as required under Section 4 of Appendix 4 of the Code.

 

General

 

If you are in any doubt about the contents of this Announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriate authorised independent financial adviser.

 

 

 

Appendix I

 

Conditions and Further Terms of the Acquisition and the Scheme

 

Part A: Conditions of the Acquisition

 

The Acquisition is conditional upon the Scheme becoming unconditional and becoming Effective by no later than the Long Stop Date or such later date (if any) as Bidco and Electric Word may agree and (if required) the Panel and the Court may allow.

 

1.       The Scheme shall be conditional on the following Conditions:

 

Scheme Approval

 

(a)     the approval of the Scheme by a majority in number representing 75 per cent. or more in value of the Scheme Shareholders (or the relevant class or classes thereof, if applicable) present and voting, either in person or by proxy at the Court Meeting (or at any adjournment of any such meeting) to be held on or before 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 Electric Word and Bidco may agree and the Court may allow); 

 

(b)     the Special Resolution required to approve and implement the Scheme as set out in the notice of the Electric Word General Meeting (including, without limitation, to amend Electric Word's articles of association) being duly passed by the requisite majority required to pass such resolution at the Electric Word General Meeting (or at any adjournment of that meeting) to be held on or before the 22nd day after the expected date of the Electric Word General Meeting to be set out in the Scheme Document in due course (or such later date, if any, as Electric Word and Bidco may agree); and

 

(c)      the sanction of the Scheme by the Court (without modification or with modification on terms acceptable to Bidco and Electric Word) on or before the 22nd day after the expected date of the Scheme Court Hearing to be set out in the Scheme Document in due course (or such later date, if any, as Electric Word and Bidco may agree and the Court may allow) and the delivery of a copy of the Scheme Court Order to the Registrar of Companies.  

 

2.       In addition, subject as stated in Part B below and to the requirements of the Code, the Acquisition will be conditional upon the following Conditions and, accordingly, the Court Order will not be delivered to the Registrar of Companies unless such Conditions have been satisfied or, where relevant, waived:

 

Cash Expenses

 

(a)     by reference to, and as evidenced by the Pre-Completion Confirmation to be provided to Bidco between 9:00 a.m. and 12:00 p.m. on the Pre-Completion Date, the Electric Word Payments (excluding applicable VAT) not exceeding £1,006,000 or such higher amount as Bidco shall agree to in writing from time to time; 

 

Other third party clearances

 

(b)     no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court tribunal in any jurisdiction (each a "Relevant Authority") having taken or instituted or given written notice of any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same) or enacted, made or proposed any statute, regulation, order or decision or taken any other steps and there not continuing to be outstanding any statute, regulation, order or decision that would or would reasonably be expected to:

 

(i)      make the Acquisition or other acquisition of Electric Word Shares, or control or management of Electric Word by Bidco or any member of Wider Bidco Group void, unenforceable or illegal in any jurisdiction or directly or indirectly prohibit or otherwise materially restrict, materially delay or materially interfere with the implementation of, or impose material additional conditions or obligations with respect to, or otherwise materially challenge or require amendment to the terms of, the Scheme or the Acquisition or other acquisition of any Electric Word Shares, or control or management of Electric Word by Bidco or any member of the Wider Bidco Group in any such case in a manner which is material in the context of the Acquisition;

 

(ii)     require, prevent or materially delay the divestiture (or alter the terms of any proposed divestiture) by the Wider Bidco Group or the Wider Electric Word Group of all or any material part of their respective businesses, assets or properties or impose any material limitation on their ability to conduct all or any part of their respective businesses and to own, control or manage any of their respective assets or properties in any such case in a manner which is material in the context of the Acquisition;

 

(iii)    impose any limitation on, or result in any material delay in, the ability of any member of the Wider Bidco Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Electric Word Group or on the ability of any member of the Wider Electric Word Group to hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider Electric Word Group to an extent which is material in the context of the Wider Electric Word Group taken as a whole or the Wider Bidco Group taken as a whole or material in the context of the Acquisition (as the case may be);

 

(iv)    except pursuant to Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Bidco Group or of the Wider Electric Word Group to acquire or offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Electric Word Group or any member of the Wider Bidco Group owned by a third party (other than in the implementation of the Acquisition) where such acquisition would be material in the context of the Acquisition;

 

(v)     other than in the implementation of the Acquisition, require the divestiture by any member of the Wider Bidco Group of any shares, securities or other interests in any member of the Wider Electric Word Group to an extent that is material in the context of the Wider Bidco Group or Wider Electric Word Group each taken as a whole;

 

(vi)    impose any material limitation on, or result in any material delay in, the ability of any member of the Wider Bidco Group or the Wider Electric Word Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Bidco Group and/or the Wider Electric Word Group in any such case in a manner which is material in the context of the Acquisition;

 

(vii)   result in any member of the Wider Electric Word Group ceasing to be able to carry on business under any name under which it presently does so, to an extent which is material in the context of the Wider Electric Word Group taken as a whole or the Wider Bidco Group taken as a whole or material in the context of the Acquisition (as the case may be);

 

(viii)  otherwise materially and adversely affect the business, assets, financial or trading position or profits of any member of the Wider Electric Word Group in a manner which is material in the context of the Acquisition,

 

and all applicable waiting and other time periods (including extensions thereof) during which any such Relevant Authority could decide to take, institute or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated; provided that, for the avoidance of doubt, this paragraph 2.(b) shall not apply to any action taken by a Relevant Authority in relation to a contract or arrangement with a member of the Wider Electric Word Group entered into in the ordinary course of its business;

 

(c)      other than in relation to the approvals referred to in paragraph 2.(b) above, all material filings, applications and/or notifications which are necessary under applicable legislation or regulation of any relevant jurisdiction having been made and all relevant waiting periods and other time periods (including any extensions thereof) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated and all applicable statutory or regulatory obligations in any jurisdiction having been complied with in each case in respect of the Scheme and the Acquisition or, except pursuant to Chapter 3 of Part 28 of the Companies Act, other acquisition of any shares or other securities in, or control or management of, Electric Word or any member of the Wider Electric Word Group by any member of the Wider Bidco Group or (except as Disclosed) the carrying on by any member of the Wider Electric Word Group of its business;

(d)     other than in relation to the approvals referred to in paragraph 2.(b) above, all Authorisations which are necessary in any jurisdiction for or in respect of the Acquisition and other acquisition of any Electric Word Shares, or control of Electric Word, by Bidco or any member of the Wider Bidco Group being obtained on terms and in a form reasonably satisfactory to Bidco from appropriate Relevant Authorities, or (except as Disclosed) from any persons or bodies with whom any member of the Wider Bidco Group or the Wider Electric Word Group has entered into contractual arrangements or material business relationships, and such Authorisations, together with all other Authorisations necessary for any member of the Wider Electric Word Group to carry on its business (except as Disclosed) (where the absence of any such Authorisations would be material and adverse in the context of the Acquisition) remaining in full force and effect and no written notice of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been given;

Confirmation of absence of adverse circumstances

 

(e)     except as Disclosed, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Electric Word Group is a party or by or to which any such member or any of its assets is or may be bound or subject which, as a result of the implementation of the Acquisition or other acquisition by Bidco or any member of the Wider Bidco Group of any Electric Word Shares, or change in the control or management of Electric Word or otherwise, would or would reasonably be expected to result in (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole):

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

 

(ii)     the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any such member of the Wider Electric Word Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

 

(iii)    any rights, assets or interests of any such member of the Wider Electric Word Group being or falling to be disposed of or ceasing to be available to any member of the Wider Electric Word Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Electric Word Group;

 

(iv)    the interest or business of any such member of the Wider Electric Word Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or adversely modified or affected;

 

(v)     any such member of the Wider Electric Word Group ceasing to be able to carry on business under any name under which it presently does so;

 

(vi)    the value of any such member of the Wider Electric Word Group or its financial or trading position or prospects being prejudiced or adversely affected;

 

(vii)   any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation arising or any adverse action being taken or arising thereunder;

 

(viii)  the creation of any liability (actual or contingent) by any such member of the Wider Electric Word Group, other than trade creditors or other liabilities incurred in the ordinary course of business; or

 

(ix)    any requirement on any member of the Wider Electric Word Group to acquire, subscribe, pay up or repay any shares or other securities (or the equivalent);

 

and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Electric Word Group is a party or by or to which any such member or any of its assets is or may be bound or subject, would or would reasonably be expected to result in any events or circumstances as are referred to in this paragraph 2.(e) (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

No material transactions, claims or changes in the conduct of the business of the Electric Word Group

 

(f)      except as Disclosed, no member of the Wider Electric Word Group having since 30 November 2016:

(i)      issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities or transferred or sold (or agreed to transfer or sell) any shares out of treasury (except, in each case, (a) as between Electric Word and its wholly owned subsidiaries or between its wholly owned subsidiaries, or (b) upon, pursuant to or in respect of the exercise of any options or vesting of any awards granted under the Electric Word Share Plans);

 

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

 

(iii)    (except for transactions between Electric Word and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) implemented or authorised any merger or demerger acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any asset or any right, title or interest in any asset (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(iv)    entered into, or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of businesses or corporate entities (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(v)     other than pursuant to the Acquisition and except for transactions between Electric Word and its wholly owned subsidiaries or between wholly owned subsidiaries of Electric Word, implemented or authorised any reconstruction, amalgamation, scheme or other transaction or arrangement with a substantially equivalent effect (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(vi)    purchased, redeemed or repaid any of its own shares or other securities or reduced or made or authorised any other change in its share capital (except, in each case, where relevant, (a) as between Electric Word and wholly owned subsidiaries of Electric Word or between the wholly owned subsidiaries of Electric Word, or (b) upon, pursuant to or in respect of the exercise of any options or vesting of any awards granted under the Electric Word Share Plans);

 

(vii)   made or authorised any change in its loan capital or issued or authorised the issue of any debentures or incurred or increased any indebtedness or contingent liability (except, in each case, where relevant, as between Electric Word and wholly owned subsidiaries of Electric Word or between the wholly owned subsidiaries of Electric Word) (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(viii)  entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure, real estate or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves, or would reasonably be expected to involve, an obligation of a nature or magnitude which is materially restrictive on the business of any member of the Wider Electric Word Group (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(ix)    been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due 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 (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(x)     commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(xi)    (other than in respect of a member of the Wider Electric Word Group which is dormant and solvent at the relevant time) taken any corporate action or had any legal proceedings started, served or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had written notice given of the intention to appoint any of the foregoing to it (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(xii)   except in the ordinary course of business, waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Wider Electric Word Group (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(xiii)  made any material alteration to its constitutional documents (other than the amendments to Electric Word's articles of association as required in connection with the Acquisition);

 

(xiv)  entered into, or varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of any member of the Wider Electric Word Group;

 

(xv)   proposed, agreed to provide, or agreed to modify 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 any member of the Wider Electric Word Group;

 

(xvi)  having taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Electric Word Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; or

 

(xvii) entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) to effect, or proposed or announced any intention to effect, any of the transactions, matters or events referred to in this paragraph 2.(f) (otherwise than where permitted or referred to in this paragraph 2.(f));

 

(g)     except as Disclosed, since 30 November 2016:

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

 

(ii)     no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Electric Word Group or to which any member of the Wider Electric Word Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Electric Word Group having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Electric Word Group (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(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 Electric Word Group having been threatened in writing, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider Electric Word Group, in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole;

 

(iv)    no steps having been taken and no omissions having been made which would result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Electric Word Group which is necessary for the proper carrying on of its business, and the withdrawal, cancellation, termination or modification of which would have a material adverse effect on the Wider Electric Word Group taken as a whole; and

 

(v)     no contingent or other liability having arisen outside the ordinary course of business which would or would reasonably be expected to adversely affect any member of the Wider Electric Word Group (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(h)     except as Disclosed, Bidco not having discovered that:

(i)      any financial, business or other information concerning the Wider Electric Word Group publicly announced prior to the date of this Announcement at any time by any member of the Wider Electric Word Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

(ii)     there is any information which affects the import of any information publicly announced prior to the date of this Announcement by or on behalf of any member of the Wider Electric Word Group (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole);

 

(iii)    any member of the Wider Electric Word Group is subject to any liability, contingent or otherwise, other than in the ordinary course of business (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole); or

 

(iv)    there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, re-instate or clean up any property now or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Electric Word Group under any environmental legislation, regulation, notice, circular or order of any Relevant Authority in any jurisdiction (in each case to an extent which is material in the context of the Wider Electric Word Group taken as a whole); and

 

Anti-corruption, sanctions and criminal property

 

(i)      except as Disclosed, Bidco having not discovered that:

(i)      (a) any past or present member, director, officer or employee of the Wider Electric Word Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation; or (b) any person that performs or has performed services for or on behalf of the Wider Electric Word Group  is or has any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation; or

(ii)     any asset of any member of the Wider Electric Word 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

(iii)    any past or present member, director, officer or employee of the Wider Electric Word Group, or any other person for whom any such person may be liable or responsible, has engaged in any business with, made any investments in, made any funds or assets available to or received any funds or assets from: (a) 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 (b) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states; or

(iv)    a member of the Wider Electric Word Group has engaged in any transaction which would cause Bidco to be in breach of any law or regulation upon its acquisition of Electric Word, including the economic sanctions administered by the United States Office of Foreign Assets Control, or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states.

 

Part B:        Certain further terms of the Acquisition

 

1.       Bidco reserves the right (subject to the requirements of the Code and the Panel) to waive, in whole or in part, the above Conditions in paragraph 2 of Part A.

 

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

 

3.       The Acquisition shall lapse unless all the above Conditions in paragraphs 1.(a), 1.(b) and 2 have been fulfilled or, where permitted, waived by 11:59 p.m. on the date immediately preceding the date of the Scheme Court Hearing. Such date may not be further extended, other than with the agreement of Bidco, Electric Word and the Panel. 

 

4.       Bidco shall be under no obligation to waive (if capable of waiver), to determine to be or remain satisfied or to treat as fulfilled any of the Conditions in paragraph 2 by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Acquisition 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. 

 

5.       Under Rule 13.5 of the Code, Bidco may not invoke a Condition so as to cause the Acquisition 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 Bidco in the context of the Acquisition. The Conditions contained in paragraph 1 are not subject to this provision of the Code.

 

6.       The Electric Word Shares to be acquired under the Acquisition shall be acquired fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this Announcement. Accordingly, without prejudice to paragraph 2 of this Announcement, insofar as any dividend or other distribution or return of value is authorised, declared, made or paid in respect of Scheme Shares on or after the date of this Announcement and prior to the Effective Date, Bidco reserves the right to reduce the Offer Price payable by the amount of any such dividend, except where the Scheme Shares are or will be acquired pursuant to the Scheme on a basis which entitles Bidco to receive the dividend, distribution or return of value and to retain it.

 

7.       If the Scheme becomes Effective, Electric Word Shareholders will not be entitled to receive payments for any amounts less than 1 pence and any such amounts will be disregarded. Any amounts payable to Electric Word Shareholders which include fractions of 1 pence will be rounded down to the nearest whole penny and such fractional entitlements will be disregarded.

 

8.       The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the Restricted Jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

 

9.       Bidco reserves the right, subject to the prior consent of the Panel, to implement the Acquisition by way of a Takeover Offer.  In such event, the Takeover Offer will be implemented on the same terms, so far as applicable, as those which would apply to the Scheme, subject to appropriate amendments to reflect the change in acquisition method.

 

10.     The Acquisition is governed by English law and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I to this Announcement and those terms which will be set out in the Scheme Document. The Acquisition shall be subject to the applicable requirements of the Code, the Panel, the London Stock Exchange (including the AIM Rules) and the Financial Conduct Authority.

 

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

 

12.     The Acquisition shall lapse, and shall no longer bind Electric Word Shareholders or Bidco if:

 

(a)      in so far as the Acquisition or any matter arising from or relating to the Acquisition constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference; or

 

(b)      in so far as the Acquisition or any matter arising from the Acquisition does not constitute a concentration with a Community dimension within the scope of the Regulation, the Acquisition or any matter arising from or relating to the Acquisition becomes subject to a CMA Phase 2 Reference,

 

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

Appendix II

Sources of information and bases of calculation

 

In this Announcement, unless otherwise stated, or the context otherwise requires, the bases and sources used are set out below.

 

1.       Unless otherwise stated, financial information relating to the Electric Word Group has been extracted or derived (without any adjustment) from the Electric Word Group's audited consolidated financial statements for the financial year ended on 30 November 2016, as applicable.

 

2.       As at the Last Practicable Date, there were 408,725,787 Electric Word Shares in issue.

 

3.       The Scheme Shares eligible to be voted on the Scheme at the Court Meeting are 396,075,512 Electric Word Shares (i.e. excluding 12,650,275 Electric Word Shares in which Julian Turner is interested).

 

4.       The International Securities Identification Number for the Electric Word Shares is GB0003083622.

 

5.       The aggregate transaction value of £16.58 million has been calculated on the basis of:

 

(a)     408,725,787 Electric Word Shares in issue multiplied by the Offer Price of 3.93 pence per Electric Word Share; plus

 

(b)     a further 692,267 Electric Word Shares being Electric Word Shares that may be issued following the exercise of in-the-money share options granted on 5 November 2011 under Electric Word plc EMI Share Option Scheme, multiplied by the Offer Price of 3.93 pence per Electric Word Share, less the exercise price of such share options; plus

 

(c)      a further 20,443,057 Electric Word Shares being Electric Word Shares that may be issued following the exercise of in-the-money options granted in 2013 under Electric Word plc 2010 EMI Share Option Scheme multiplied by the Offer Price of 3.93 pence per Electric Word Share, less the exercise price of such share options.

 

6.       Unless otherwise stated, all prices and closing prices for Electric Word Shares are closing middle market quotations derived from the Electric Word summary page of the London Stock Exchange website.

 

 

 

 

 

 

Appendix III

Irrevocable Undertakings

 

Electric Word Directors' Irrevocable Undertakings

 

Bidco has received irrevocable undertaking from the Electric Word Directors in respect of their beneficial holdings in Electric Word Shares, relating to a total of 7,200,000 Electric Word Shares (representing approximately 1.8 per cent. of the Scheme Shares entitled to vote  at the Court Meeting) to vote (or procure the voting) in favour of the Scheme at the Court Meeting and relating to a relating to a total of 19,850,275 Electric Word Shares (representing approximately 4.9 per cent. of the Scheme Shares entitled to vote  at the Electric Word General Meeting)  to vote in favour of the Special Resolution to be proposed at the Electric Word General Meeting (or in the event that the Acquisition is implemented by way of a Takeover Offer, to accept, or procure the acceptance of, the Takeover Offer) as follows:

 

Name of Electric Word Director/ Shareholder

Number of Electric Word Shares to which the irrevocable undertaking relates

Percentage of Electric Word Shares in issue at the Last Practicable Date

 

Julian Turner*

12,650,275

3.1

William Fawbert

Nil

Nil

Andrew Brode

7,200,000

1.8

Henrietta Marsh

Nil

Nil

Total

19,850,275

4.9

 

*For the reasons given at paragraph 10 of the Announcement, Julian Turner will not vote at the Court Meeting in respect of the Scheme Shares held by him and the irrevocable undertaking given by him relates only to the voting in respect of the Special Resolution to be proposed at the General Meeting.

 

These irrevocable undertakings will cease to be binding if:

 

(a)     Bidco announces, with the consent of the Takeover Panel, that it does not intend to make or proceed with the Acquisition;

(b)     the Scheme Document or the Offer Document (as the case may be) has not been posted within 28 days of the date of this Announcement (or within such longer period as Bidco and Electric Word, with the consent of the Panel, determine);

(c)      the Acquisition lapses or is withdrawn in accordance with its terms, save, in such circumstances, in situations where Bidco elects (and is permitted to elect) to implement the Acquisition by Takeover Offer instead of by way of scheme of arrangement; or

(d)     the Scheme not becoming effective by the Long Stop Date.

 

These irrevocable undertakings will remain binding if a higher competing offer for Electric Word is made. 

 

Electric Word Shareholders' Irrevocable Undertakings

 

Further, certain other Electric Word Shareholders have given irrevocable undertakings to vote (or procure the voting) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the Electric Word General Meeting (or in the event that the Acquisition is implemented by way of a Takeover Offer, to accept, or procure the acceptance of, the Takeover Offer) in relation to the following Electric Word Shares:

 

Name of Electric Word Shareholder

Number of Electric Word Shares to which the irrevocable undertaking relates

 

Percentage of Electric Word Shares in issue at the Last Practicable Date

Baronsmead Venture Trust plc(1)

       41,847,119

        10.2

Baronsmead Second Venture Trust plc (2)

       70,810,421

        17.3

Stewart Worth Newton

       26,020,000

         6.4

Sussex Research Limited (3)

        6,603,773

         1.6

Sussex Trading Company Limited (4)

       71,249,751

        17.4

Nigel Wray

       17,517,739

         4.3

Brendon Retirements Benefit Scheme (5)

       31,761,000

         7.8

Edna Wray Grandchildren's Accumulation and Maintenance Trust (6)

       18,423,530

         4.5

Euroblue Investments Limited (7)

        6,350,000

         1.6

Lucy P Wray Mercey(8)

        1,506,120

         0.4

Henderson Opportunities Trust plc(9)

       18,583,333

 

         4.5

Total

   310,672,786

        76.0

 

(1)     Baronsmead Venture Trust plc is managed by Livingbridge VC LLP.

(2)     Baronsmead Second Venture Trust plc is managed by Livingbridge VC LLP.

(3)     Sussex Research Limited is owned by Stewart Newton in his own name, Roger Butler and Stewart Newton as trustees of the Newton 1992 Family Trust and Linda Garnier and Stephen Whale as the trustees of the Stuart Newton Family Settlement Trust. Stewart Newton is the beneficiary of the Newton 1992 Family Trust and the Newton Family Settlement Trust.

(4)     Sussex Trading Company Limited is a wholly owned subsidiary of Sussex Research Limited. As set out above, Stewart Newton is the ultimate beneficial owner of Sussex Research Limited.

(5)     Nigel Wray and his wife, Linda Wray, are the beneficiaries of the Brendon Retirements Benefit Scheme.

(6)     Nigel Wray's children and grandchildren are the beneficiaries of the Edna Wray Grandchildren's Accumulation and Maintenance Trust.

(7)     Euroblue Investments Limited is a wholly owned subsidiary of Eurobeck Limited. Eurobeck Limited is wholly owned by Nigel Wray.

(8)     Nigel Wray is the father of Lucy P Wray Mercey.

(9)     Henderson Opportunities Trust plc is managed by Henderson Global Investors Limited.

 

These irrevocable undertakings will cease to be binding in the same circumstances as described above in respect of the Electric Word Directors' irrevocable undertakings, save for the irrevocable given by Livingbridge VC LLP and Henderson Global Investors Limited which will cease to have effect if any third party makes an offer to acquire the entire issued and to be issued share capital of Electric Word (not already owned by such party) which values each Electric Word Share at a price which is 15 per cent. (or more) higher than the Offer Price (provided that, if by or on the seventh business day after the day on which the third party's offer is made, the Offer Price is increased such that its value is equal to or exceeds the third party's offer, the irrevocable undertaking given by Livingbridge VC LLP and Henderson Global Investors Limited shall not lapse).

 

 

 

 

 

Appendix IV

 

Payments to be made to each Electric Word Director in connection with their resignations

 

Julian Turner

 

On 26 June 2017, Electric Word entered into an agreement with Julian Turner (the "JT Settlement Agreement") in connection with the termination of Julian Turner's employment with Electric Word, pursuant to which Electric Word has agreed to pay to Julian Turner, in full and final settlement of all present and future claims or rights of actions that he has or may have against the Electric Word Group and its officers:

 

(a)  any unpaid salary and untaken holiday accrued up to and including the date of termination of his employment with Electric Word (the "JT Termination Date");

(b)  payment in lieu of basic salary for the notice period remaining under his service agreement with Electric Word as at the JT Termination Date;

(c)  subject to the Scheme becoming Effective:

a.   a statutory redundancy payment of £12,469.50;

b.   £80,102.41 as an enhanced redundancy payment; and

c.   subject to approval of the requisite majority of Electric Word Shareholders at the Electric Word General Meeting, a bonus of £61,014.50;

(d)  his legal fees in connection with the terms of the JT Settlement Agreement up to £5,000 (plus VAT); and

(e)  a reimbursement of any expenses properly incurred by him in the performance of his duties during his employment with Electric Word,

 

less any applicable deductions for income and tax and national insurance contributions, or other deductions required at law, at appropriate rates. Julian Turner has agreed to waive any other claims or entitlements to bonus, commission, share option or other scheme benefit, payment or award. Julian has also agreed to repay a loan of £170,737.82 made to him by the Electric Word Employment Benefit Trust from the proceeds of the sale of his Electric Word Shares.

 

William Fawbert

 

On 26 June 2017, Electric Word entered into an agreement with William Fawbert (the "WF Settlement Agreement") in connection with the termination of William Fawbert's employment with Electric Word, pursuant to which Electric Word has agreed to pay to William Fawbert, in full and final settlement of all present and future claims or rights of actions that he has or may have against the Electric Word Group and its officers:

 

(a)  any unpaid salary accrued up to and including the date of termination of his employment with Electric Word (the "WF Termination Date");

(b)  payment in lieu of basic salary for the notice period remaining under his service agreement with Electric Word as at the WF Termination Date;

(c)  subject to the Scheme becoming Effective:

a.   a statutory redundancy payment of £2,934.00; and

b.   £75,912.15 as an enhanced redundancy payment and compensation for loss of employment;

(d)  his legal fees in connection with the terms of the WF Settlement Agreement up to £5,000 (plus VAT); and

(e)  a reimbursement of any expenses properly incurred by him in the performance of his duties during his employment with Electric Word,

 

less any applicable deductions for income and tax and national insurance contributions, or other deductions required at law, at appropriate rates. William Fawbert has agreed to waive any other claims or entitlements to bonus, commission, share option or other scheme benefit, payment or award.

 

Andrew Brode

 

By a letter dated 26 June 2017, Julian Turner wrote to Andrew Brode to set out the terms on which Andrew's appointment to the Electric Word Board will end by mutual agreement on the Effective Date ("AB Resignation Letter"). Pursuant to the AB Resignation Letter on the Effective Date, Andrew Brode will receive a payment of £15,000 less the normal deductions for tax and national insurance contributions in lieu of fees for the 6 month notice period in accordance with Andrew's letter of appointment dated 20 May 2013.

 

Henrietta Marsh

 

By a letter date 26 June 2017, Julian Turner wrote to Henrietta Marsh to set out the terms on which Henrietta's appointment to the Electric Word Board will end by mutual agreement on the Effective Date ("HM Resignation Letter"). Pursuant to the HM Resignation Letter on the Effective Date, Henrietta Marsh will receive a payment of £10,000 less the normal deductions for tax and national insurance contributions in lieu of fees for the 6 month notice period in accordance with Henrietta's letter of appointment dated 12 December 2013.

 

 

Appendix V

 

Definitions

 

"Acquisition"

the proposed recommended all-cash acquisition by Bidco for the entire issued and to be issued share capital of Electric Word, by means of the Scheme, on the terms and subject to the conditions set out in this Announcement and to be set out in the Scheme Document (or the Takeover Offer, under certain circumstances as described in this Announcement)

 

 

"AIM"

the market of that name operated by the London Stock Exchange

 

 

"AIM Rules"

The AIM Rules for Companies published by the London Stock Exchange

 

 

"Announcement"

means this Announcement made pursuant to Rule 2.7 of the Code

 

 

"Authorisations"

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

 

 

"BDO"

BDO LLP, the financial adviser to Bidco in relation to the Acquisition

 

 

"Bidco"

Sport Business Acquisitions Limited, a company incorporated in England and Wales with registered number 10783177

 

 

"Board"

in relation to Bidco or Electric Word, the board of directors of the relevant company

 

 

"Bonus Resolution"

the resolution to be proposed as an ordinary resolution at the Electric Word General Meeting to approve the bonus payable to Julian Turner pursuant to the Settlement Agreement entered into by the Company and Julian Turner

 

 

"Business Day"

a day (other than Saturdays, Sundays and public or bank holidays in the UK) on which banks are generally open for business in the City of London

 

 

"Cash Consideration"

the consideration payable to Electric Word Shareholders in connection with the Acquisition comprising of 3.93 pence per Electric Word Share

 

 

 

"Closing Price"

the middle market price for an Electric Word Share at the close of business on the day to which the price relates, as derived from the Electric Word summary page of the London Stock Exchange website for that day

 

 

"CMA Phase 2 Reference"

a reference of the Acquisition to the chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013

 

 

"Code"

the City Code on Takeovers and Mergers issued from time to time by the Panel

 

 

"Companies Act"

the Companies Act 2006

 

 

"Computershare"

Computershare Investor Services plc, Electric Word's registrars

 

 

"Conditions"

the conditions of the Acquisition (including the Scheme) set out in Part A of Appendix I to this Announcement and to be set out in the Scheme Document

 

 

"Court"

the High Court of Justice, Chancery Division (Companies Court) in England and Wales

 

 

"Court Meeting"

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

 

 

"CREST"

the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in such Regulations) for the paperless settlement of trades in securities and the holding of uncertificated securities

 

 

"Disclosed"

information which has been: (i) fairly disclosed by, or on behalf of, Electric Word to Bidco (or its advisers) in the data room established by Electric Word for the purposes of the Acquisition, on or before 23 June 2017, (ii) disclosed in the annual report and accounts for Electric Word for the financial year ended 30 November 2016, (iii) disclosed in any announcement to a regulatory information service by, or on behalf of, Electric Word, prior to the publication of this Announcement, (iv) disclosed in this Announcement; or any other information that is fairly disclosed to Bidco or its advisers in writing on or before the Business Day prior to the date of this Announcement

 

 

 

 

"Effective"

the Scheme having become effective in accordance with its terms, upon delivery of the Scheme Court Order to the Registrar of Companies

 

 

"Effective Date"

the date upon which the Scheme becomes Effective

 

 

"Excluded Shares"

(a)        any Electric Word Shares held by Bidco; and

 

(b)        any Electric Word Shares held in treasury from time to time

 

 

"Electric Word"

Electric Word plc, a company incorporated in England and Wales with registered number 3934419

 

 

"Electric Word Directors"

 

the board of directors of Electric Word

 

 

"Electric Word General Meeting"

the general meeting of Electric Word Shareholders (including any adjournment thereof) to be convened in connection with the Scheme, notice of which will be set out in the Scheme Document

 

 

"Electric Word Group"

Electric Word and its subsidiaries and subsidiary undertakings

 

 

 

"Electric Word Meetings"

the Court Meeting and the Electric Word General Meeting

 

 

 

"Electric Word Payments"

all payments made by Electric Word and each member of the Electric Word Group in respect of the Relevant Liabilities between 6:00 p.m. on the day prior to the Pre‑Announcement Date and 6:00 p.m. on the day prior to the Pre‑Completion Date and all unpaid amounts due in respect of the Relevant Liabilities as at 6:00 p.m. on the day prior to the Pre‑Completion Date

 

 

"Electric Word Share"

an ordinary share of 1 pence in the capital of Electric Word

 

 

 

"Electric Word Shareholders"

 

the holders of Electric Word Shares from time to time 

 

 

"Electric Word Share Schemes"

the Electric Word plc EMI Share Option Scheme and the Electric Word plc 2010 EMI Share Option Scheme

 

 

"Forms of Proxy"

the forms of proxy for use at the Court Meeting and at the Electric Word General Meeting which will accompany the Scheme Document

 

 

"JT Settlement Agreement"

 

has the meaning given to it in Appendix IV to this Announcement

 

"Last Practicable Date"

26 June 2017, being the last practicable date prior to the publication of this Announcement

 

 

"London Stock Exchange"

 

London Stock Exchange Group plc

 

"Long Stop Date"

27 September 2017, or such later date (if any) as may be agreed by Bidco and Electric Word (with the consent of the Panel) and the approval of the Court (if such approval is required)

 

 

"Offer Period"

in relation to Electric Word, has the meaning given to it in the Code, which  period commenced on the date of this Announcement

 

 

"Offer Price"

3.93 pence per Electric Word Share

 

 

"Opening Position Disclosure"

 

has the meaning given to it in Rule 8 of the Code

 

"Panel"

the Panel on Takeovers and Mergers

 

 

"Panmure Gordon"

Panmure Gordon (UK) Limited, the financial adviser to Electric Word in relation to the Acquisition

 

 

"Pre-Announcement Date"

 

the Business Day prior to the date of the Announcement

 

 

"Pre-Completion Confirmation"

a schedule detailing the Electric Word Payments as to 6:00 p.m. on the day prior to the Pre‑Completion Date, to be provided by Electric Word to Bidco and which has been confirmed as having been reviewed and approved by the Electric Word Directors

 

 

"Pre-Completion Date"

 

the day prior to the date of the Scheme Court Hearing

 

 

"Registrar of Companies"

the Registrar of Companies in England and Wales

 

 

 

"Regulation"

Council Regulation (EC) No 139/2004

 

 

"Relevant Authority"

has the meaning given to it in paragraph 2.(b) of Appendix I to this Announcement

 

 

"Relevant Liabilities"

 

All payments specified in paragraphs (A) to (F) below for which each member of the Electric Word Group is or becomes liable prior to 6:00 p.m. on the date prior to the Pre-Completion Date, which has not been paid prior to 6:00 p.m. on the date prior to the Pre-Announcement Date:

 

(A).    to the Electric Word Directors (or their connected parties and associates), other than in accordance with the terms of their service agreements or non-executive letters of appointment;

(B).    to Ben Speight, other than in accordance with the terms of his employment agreement;

(C).    to the employees or past employees of the Electric Word Group, other than in accordance with their existing employment contracts or contracts for services; 

(D).    in respect of Employer's National Insurance payments due on any payments to the employees or past employees of the Electric Word Group other than in accordance with the terms of their service agreements or non‑executive letters of appointment and on the exercise of all options exercisable over Electric Word Shares;

(E).    to Memery Crystal LLP (including disbursements and expenses, as well as fees); and

(F).    to Panmure Gordon (UK) Limited (including, without limitation, disbursements, expenses and fees relating to their terms of engagement as nominated adviser and broker to Electric Word)

 

 

"Restricted Jurisdiction"

any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if the information concerning the Acquisition is sent or made available to Electric Word Shareholders in that jurisdiction

 

 

"Scheme"

the proposed scheme of arrangement under Part 26 of the Companies Act between Electric Word and the Electric Word Shareholders to implement the Acquisition with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by Electric Word and Bidco

 

 

"Scheme Court Hearing"

the hearing of the Court to sanction the Scheme under section 899 of the Companies Act

 

 

"Scheme Court Order"

the order of the Court sanctioning the Scheme under section 899 of the Companies Act

 

 

"Scheme Document"

the document to be despatched to (among others) Electric Word Shareholders including, among other things, details of the Scheme required by section 897 of the Companies Act, the full terms and conditions of the Scheme and the notices of the Electric Word Meetings

 

 

"Scheme Record Time"

the time and date to be specified as such in the Scheme Document or such later time and/or date as Bidco and Electric Word may agree

 

 

"Scheme Shareholder"

 

holders of Scheme Shares

 

"Scheme Shares"

(a)    the Electric Word Shares in issue at the date of the Scheme Document;

 

(b)    any Electric Word Shares issued after the date of the Scheme Document and before the Voting Record Time; and

 

(c)     any Electric Word Shares issued at or after the Voting Record Time and before the Scheme Record Time in respect of which the original or any subsequent holders thereof are, or shall have agreed in writing to be, bound by the Scheme,

 

in each case remaining in issue at the Scheme Record Time and excluding the Excluded Shares

 

 

"Settlement Agreements"

the JT Settlement Agreement and the WF Settlement Agreement

 

 

 

"Significant Interest"

 

 

 

 

in relation to an undertaking, a direct or indirect interest of 20 per cent. or more of (i) the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking or (ii) the relevant partnership interest

 

 

"Silva International"

Silva International Investments (UK) Ltd, a company incorporated in England and Wales with registered number 09570788

 

 

"Special Resolution"

a shareholder resolution in connection with the implementation of the Scheme to be proposed as a special resolution at the Electric Word General Meeting and voted on by Electric Word Shareholders

 

 

"SportBusiness Group"

the business activity carried out by SBG Companies Limited, a wholly owned subsidiary undertaking of Electric Word

 

 

"Takeover Offer"

should the Acquisition be implemented by way of a takeover offer as defined in Chapter 3 of Part 28 of the Companies Act, the recommended offer to be made by or on behalf of Bidco to acquire the entire issued and to be issued share capital of Electric Word and, where the context requires, any subsequent revision, variation, extension or renewal of such offer and includes any election available thereunder

 

 

"Third Party"

each of a central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or any other body or person whatsoever in any jurisdiction

 

 

"UK" or "United Kingdom"

 

the United Kingdom of Great Britain and Northern Ireland

 

 

 

"US" or "United States"

the United States of America, the territories and possessions, any state of the United States of America, the District of Columbia and all areas subject to its jurisdiction or any political subdivision thereof

 

 

"US Exchange Act"

the US Securities Exchange Act of 1934, as amended from time to time

 

 

"Voting Record Time"

the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting or the Electric Word General Meeting will be determined, expected to be 6:30 p.m. on the day which is two days before the date of the Court Meeting or, if the Court Meeting is adjourned, 6:30 p.m. on the day which is two days before the date of such adjourned meeting

 

 

"Wider Bidco Group"

Bidco and its subsidiaries, subsidiary undertakings, associated undertakings, holding companies, and their respective subsidiaries, subsidiary undertakings, associated undertakings, holding companies and any other body corporate, partnership, joint venture or person in which Bidco and all such undertakings (aggregating their interests) have a Significant Interest or which have a Significant Interest in Bidco or any other member of the Wider Bidco Group, in each case other than any member of the Wider Electric Word Group

 

 

"Wider Electric Word Group"

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

 

 

"WF Settlement Agreement"

has the meaning given to it in Appendix IV to this Announcement

 

 

 

 

 

 

 

         

 

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the respective meanings given thereto by the Companies Act.

 

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

 

All the times and/or dates referred to in this Announcement are to those times and/or dates as determined by Greenwich Mean Time, unless otherwise stated.

 

References to the singular include the plural and vice versa.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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