TIDMKWL
RNS Number : 6974F
Kinetic Bidco Limited
19 June 2012
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
19 June 2012
RECOMMENDED PROPOSALS FOR THE CASH ACQUISITION
of
KEWILL PLC by
KINETIC BIDCO LIMITED ("KINETIC BIDCO") an investment vehicle
indirectly owned by the Francisco Partners Funds
to be effected by means of a Scheme of Arrangement under Part 26
of the Companies Act 2006
REVISED FINAL OFFER and withdrawal of recommendation of Kestrel
Bidco Limited Offer
1. Summary
The Kewill Directors and the directors of Kinetic Bidco (the
"Kinetic Bidco Directors") are pleased to announce an increase in
the cash offer price of Kinetic Bidco's acquisition of Kewill (the
"Revised Offer") to:
110 pence per Kewill Share
The terms of the Revised Offer value the entire issued and to be
issued share capital of Kewill at approximately GBP102.7 million
and represent a premium of approximately:
-- 44.7 per cent. to the Closing Price of 76.0 pence per Kewill
Share on 1 May 2012 (being the last Business Day prior to Bidco's
announcement on 2 May 2012, the "Announcement Date");
-- 55.6 per cent. over the Volume Weighted Average Price of 70.7
pence per Kewill Share in the month prior to the Announcement
Date;
-- 52.1 per cent. over the Volume Weighted Average Price of 72.3
pence per Kewill Share in the three months prior to the
Announcement Date; and
-- 3.8 per cent. to the price of 106 pence per Kewill Share
under the offer announced by Kestrel Bidco Limited on 12 June 2012
(the "Competing Offer").
The Volume Weighted Average Price is calculated as the volume
weighted average of the daily volume weighted price.
Bidco's Revised Offer of 110 pence per Kewill Share is full and
final and will not be increased.
Details of the original offer by Kinetic Bidco for Kewill, also
recommended by the Kewill Directors, were set out in the scheme
document (the "Scheme Document") published on 3 May 2012 (the
"Original Offer"). The Original Offer received the support of in
excess of 99% of Kewill Shareholders who voted (whether in person
or by proxy) at the Court Meeting and the General Meeting which
took place on 25 May 2012 (an announcement in respect of which was
made by Kewill on 25 May 2012).
2. Background to the Revised Offer
On 12 June 2012, Kestrel Bidco Limited announced the Competing
Offer to acquire the entire issued and to be issued share capital
of Kewill at a price of 106 pence in cash per Kewill Share.
Kinetic Bidco has since received irrevocable undertakings from
each of Centaurus Capital Limited, Pendragon Capital LLP, RGM
Capital, LLC and SVG Investment Managers Limited (together, the
"Institutional Shareholders") to vote against or procure the vote
against and/or not accept or procure non-acceptance of, the
Competing Offer and any other competing offer in respect of
22,671,581 Kewill Shares (either held by such shareholders, over
which such shareholders hold discretionary voting control or in
respect of which such shareholders hold long positions under
contracts for difference), representing approximately 24.9 per
cent. of the ordinary share capital of Kewill in issue on 18 June
2012.
The irrevocable undertakings given by the Kewill Directors
(representing 1.1 per cent. of the existing issued share capital of
Kewill) in respect of the Original Offer and as described in the
Scheme Document remain in full force and effect in respect of the
Revised Offer.
Further details of such irrevocable undertakings are set out in
the Appendix to this announcement.
The effect of the irrevocable undertakings received from the
Institutional Shareholders when taken together with the 'hard'
irrevocable undertakings given by the Kewill Directors in
connection with the Original Offer is to ensure that:
-- for the 10 day period commencing on the date of this
announcement, no competing offer for Kewill at a price per Kewill
Share less than 118.25 pence (whether structured as a scheme of
arrangement or a Takeover Offer with an acceptance threshold in
excess of 73.95 per cent.) is capable of succeeding; and
-- following the elapse of the 10 day period commencing on the
date of this announcement, no competing offer for Kewill at any
price (whether structured as a scheme of arrangement or a Takeover
Offer with an acceptance threshold in excess of 73.95 per cent.) is
capable of succeeding.
3. Recommendation of Revised Offer and withdrawal of recommendation of Competing Offer
The Kewill Directors, who have been so advised by Investec,
consider the terms of the Revised Offer to be fair and reasonable
and materially better than those offered pursuant to the Competing
Offer. Accordingly, the Kewill Directors have agreed unanimously to
recommend the Revised Offer. In providing advice to the Kewill
Directors, Investec has taken into account the commercial
assessments of the Kewill Directors. Investec is providing
independent financial advice to the Kewill Directors for the
purposes of Rule 3 of the Code.
The Kewill Directors' recommendation of the Competing Offer has
accordingly been withdrawn with immediate effect in favour of the
Revised Offer.
4. Factors for consideration in connection with the Revised Offer
Shareholders should note the following factors in connection
with the Revised Offer:
-- the Original Offer has already been approved by the requisite
majority of Scheme Shareholders at the Court Meeting as a result of
which the Revised Offer would be capable of delivering cash to
Kewill Shareholders in a shorter timeframe than under the Competing
Offer;
-- the only conditions of the acquisition of Kewill by Kinetic
Bidco yet to be satisfied are the sanction of the Scheme by the
Court on or before 24 July 2012 (being the date which is 21 days
following the date on which the Scheme Court Hearing is expected to
take place) and the Scheme becoming effective in accordance with
its terms. In contrast, the Competing Offer remains subject to the
satisfaction of a number of conditions including (without
limitation), all necessary merger control approvals or clearances
required under section 35 et seq. of the German Act against
restraints on competition having been obtained and the absence of
any material adverse change having occurred in the business,
assets, financial or trading, position or profits of any member of
the Wider Kewill Group as well as being subject to Kewill
Shareholder approval; and
-- the irrevocable undertakings given by the Institutional
Shareholders mean that (save as set out above) any competing offer
for Kewill has a high chance of failure.
5. Implementation of the Scheme
It is proposed to implement the Revised Offer by way of amending
the Scheme. The Scheme Court Hearing (at which the Court's sanction
of the Scheme will be sought) is expected to take place on or after
3 July 2012 and the Scheme is expected to become effective on or
after 5 July 2012.
6. Financing of the Revised Offer
HSBC Bank plc has confirmed that it is satisfied that sufficient
resources are available to Kinetic Bidco to enable it to satisfy,
in full, the cash consideration payable under the terms of the
Revised Offer.
7. Disclosure of interests and irrevocable undertakings
The irrevocable undertakings given by the Kewill Directors
(which represent 1.1 per cent. of the issued ordinary share capital
of Kewill) in respect of the Original Offer, as described in the
Scheme Document, remain in effect in respect of the Revised
Offer.
Kinetic Bidco has received irrevocable undertakings from the
Institutional Shareholders to vote against or procure the vote
against and/or not accept or procure non-acceptance of, the
Competing Offer and any other competing offer for Kewill, in
respect of a total of 22,671,581 Kewill Shares (either held by such
shareholders, over which such shareholders hold discretionary
voting control or in respect of which such shareholders hold long
positions under contracts for difference), representing
approximately 24.9 per cent. of the issued ordinary share capital
of Kewill. Further details of the irrevocable undertakings obtained
by Kinetic Bidco are set out in the Appendix to this announcement
and copies have been put on display on Kewill's website
(www.kewill.com/uk).
As at the date of this announcement, Kinetic Bidco holds one
Kewill Share which it subscribed for in accordance with paragraph
12.8 of part 2 of the Scheme Document.
Save as disclosed in the Scheme Document and this announcement,
Kinetic Bidco has not obtained any irrevocable undertakings or
letters of support from other Kewill Shareholders in relation to
the Revised Offer and none of Kinetic Bidco or any of its directors
or Francisco Partners or any of its partners or, so far as
Francisco Partners and the Kinetic Bidco Directors are aware, any
person acting, or deemed to be acting, in concert with Bidco hold
any interests in Kewill Shares.
8. Other
Save for the increased offer price, in all other respects the
Revised Offer will be subject to the Conditions (to the extent not
already satisfied) and the Certain Further Terms set out in the
Scheme Document. Copies of the Scheme Document are available at
Kewill's website (www.kewill.com/uk).
Unless otherwise stated, capitalised terms used in this
announcement have the same meaning as those in the 2 May
Announcement and the Scheme Document.
Enquiries:
Kinetic Bidco and Francisco Partners Tel: +44 (0) 20 7907
8600
Deep Shah
HSBC (financial adviser and corporate Tel: +44 (0) 20 7991
broker to Kinetic Bidco and Francisco 8888
Partners)
Abbas Merali
Gloria Leung
Stuart Dickson
Tulchan Communications LLP (public relations Tel: +44 (0)20 7353
adviser to Kinetic Bidco and Francisco 4200
Partners)
James Macey White
Kewill Tel: +44 (0) 1483
406080
Paul Nichols
David Gibbon
Investec (financial adviser and corporate Tel: +44 (0) 20 7597
broker to Kewill) 5000
Andrew Pinder / Patrick Robb
Dominic Emery / Junya Iwamoto
FTI Consulting (public relations adviser Tel: +44 (0) 20 7269
to Kewill) 7147
Edward Bridges
Marc Cohen
HSBC Bank plc, which is authorised and regulated in the United
Kingdom by the FSA, is acting for Bidco and Francisco Partners and
no one else in connection with the Revised Offer and will not be
responsible to anyone other than Bidco and Francisco Partners for
providing the protections afforded to clients of HSBC Bank plc, or
for giving advice in connection with the Revised Offer or any
matter referred to herein.
Investec, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Kewill and no one
else in connection with the Revised Offer and will not be
responsible to anyone other than Kewill for providing the
protections afforded to clients of Investec or for providing advice
in connection with the Revised Offer or in relation to matters
described in this announcement or any transaction or arrangement
referred to herein.
This announcement is for information purposes only and is not
intended to and does not constitute or form part of an offer to
sell or invitation to purchase any securities or the solicitation
of any vote for approval in any jurisdiction, nor shall there be
any sale, issue or transfer of the securities referred to in this
announcement in any jurisdiction in contravention of applicable
law. The Revised Offer will be made solely through the amended
Scheme Document and the accompanying Forms of Proxy, which will
together contain the full terms and conditions of the Revised
Offer, including details of how to vote in respect of the Revised
Offer. Any response in relation to the Revised Offer should be made
only on the basis of the information contained in the amended
Scheme Document or any document by which the Revised Offer is
made.
Overseas Shareholders
This announcement has been prepared for the purpose of complying
with the laws of England and Wales and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside England and Wales. The release,
publication or distribution of this announcement in certain
jurisdictions may be restricted by law. Persons who are not
resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any
applicable requirements. Further details in relation to overseas
shareholders will be contained in the Scheme Document.
The Revised Offer relates to shares of a UK company and is
proposed to be effected by means of a scheme of arrangement under
the laws of England and Wales. A transaction effected by means of a
scheme of arrangement is not subject to the proxy solicitation or
tender offer rules under the US Securities Exchange Act of 1934.
Accordingly, the Scheme is subject to the disclosure requirements,
rules and practices applicable in the United Kingdom to schemes of
arrangement, which differ from the requirements of the US proxy
solicitation and tender offer rules. However, if Bidco were to
elect to implement the Revised Offer by means of a Takeover Offer,
such takeover offer will be made in compliance with all applicable
laws and regulations, including the US tender offer rules, to the
extent applicable.
Unless otherwise determined by Bidco or required by the Code,
and permitted by applicable law and regulation, the Revised Offer
will not be made available, directly or indirectly, in, into or
from a Restricted Jurisdiction where to do so would violate the
laws in that jurisdiction and no person may vote in favour of the
Revised Offer by any such use, means, instrumentality or form
within a Restricted Jurisdiction or any other jurisdiction if to do
so would constitute a violation of the laws of that jurisdiction.
Accordingly, copies of this announcement and all documents relating
to the Revised Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction, and persons receiving this
announcement and all documents relating to the Revised Offer
(including custodians, nominees and trustees) must not mail or
otherwise distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Revised Offer to Kewill Shareholders who
are not resident in the United Kingdom may be affected by the laws
of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.
Forward-Looking Statements
This announcement contains statements that are or may be
forward-looking statements. All statements other than statements of
historical facts included in this announcement may be
forward-looking statements. Without limitation, any statements
preceded or followed by or that include the words "targets",
"plans", "believes", "expects", "aims", "intends", "will",
"should", "could", "would", "may", "anticipates", "estimates",
"synergy", "cost-saving", "projects", "goal" or "strategy" or,
words or terms of similar substance or the negative thereof, are
forward-looking statements. Forward looking statements include
statements relating to the following: (i) future capital
expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy,
losses and future prospects; (ii) business and management
strategies and the expansion and growth of Bidco's or Kewill's
operations and potential synergies resulting from the Revised
Offer; and (iii) the effects of government regulation on Bidco's or
Kewill's business.
These forward-looking statements are not guarantees of future
financial performance. Except as expressly provided in this
document, they have not been reviewed by the auditors of Bidco or
Kewill. Such forward-looking statements involve known and unknown
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 hereof. All subsequent oral or written forward-looking
statements attributable to Bidco or Kewill or any of their
respective members, directors, officers or employees or any persons
acting on their behalf are expressly qualified in their entirety by
the cautionary statement above. Bidco and Kewill disclaim any
obligation to update any forward-looking or other statements
contained herein, except as required by applicable law.
Dealing Disclosure Requirements
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any paper offeror (being any offeror other
than an offeror in respect of which it has been announced that its
offer is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any paper
offeror is first identified. An Opening Position Disclosure must
contain details of the person's interests and short positions in,
and rights to subscribe for, any relevant securities of each of (i)
the offeree company and (ii) any paper offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) 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 paper offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a paper offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any paper offeror must make
a Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any paper offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any paper offeror, save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 pm (London time) on the business day following the date of the
relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a paper
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. If you are in any doubt as to whether you are required
to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20
7638 0129.
APPENDIX IRREVOCABLE UNDERTAKINGS
The irrevocable undertakings given by the Kewill Directors in
respect of the Original Offer (representing 1.1 per cent. of the
issued ordinary share capital of Kewill), as described in the
Scheme Document, remain in full force and effect in respect of the
Revised Offer.
The following institutional holders or controllers of Kewill
Shares have given irrevocable undertakings to vote against or
procure the vote against and/or not accept or procure
non-acceptance of, the Competing Offer and any other competing
offer:
Name Number of Kewill Shares % of Kewill Shares in issue
Centaurus Capital Limited 8,559,630 9.4
Pendragon Capital LLP 6,134,213 6.7
RGM Capital, LLC 5,340,581 5.9
SVG Investment Managers Limited 2,637,157 2.9
TOTAL 22,671,581 24.9
Centaurus Capital Limited ("Centaurus")
Bidco has received an irrevocable undertaking to vote against,
or procure the vote against, and /or not accept or procure
non-acceptance of, the Competing Offer and any other competing
offer for Kewill from Centaurus in respect of 8,559,630 Kewill
Shares over which it holds long positions through contracts for
differences to the extent Centaurus is able to procure the
underlying holder so to act. To the extent Centaurus is unable to
so procure the underlying holder of Kewill Shares, Centaurus has
agreed, on a best efforts basis, to procure such underlying holder
(provided neither party to the relevant contract for differences is
prevented by its internal trading standards from doing so) to close
out the contracts for differences thereby acquiring the underlying
shares, in which event Centaurus will instead itself comply with
the terms of the undertaking in relation to the relevant Kewill
Shares.
The irrevocable undertaking received from Centaurus will cease
to be binding:
(a) in the event a competing or revised offer for Kewill is made
within 10 days of the date of this announcement by any person other
than Bidco, the value of which exceeds the value of the Revised
Offer by more than 7.5 per cent.; or
(b) if Kewill ceases to be in an Offer Period (as such term is defined in the City Code).
Pendragon Capital LLP ("Pendragon")
Bidco has received an irrevocable undertaking to vote against,
or procure the vote against, and /or not accept or procure
non-acceptance of, the Competing Offer and any other competing
offer for Kewill from Pendragon in respect of 6,134,213 Kewill
Shares over which it holds long positions through contracts for
differences to the extent Pendragon is able to procure the
underlying holder so to act. To the extent Pendragon is unable to
so procure the underlying holder of Kewill Shares, Pendragon has
agreed, on a reasonable best efforts basis, to procure such
underlying holder (provided neither party to the relevant contract
for differences is prevented by its internal trading standards from
doing so) to close out the contracts for differences thereby
acquiring the underlying shares, in which event Pendragon will
instead itself comply with the terms of the undertaking in relation
to the relevant Kewill Shares.
The irrevocable undertaking received from Pendragon will cease
to be binding:
(a) in the event a competing or revised offer for Kewill is made
within 10 days of the date of this announcement by any person other
than Bidco, the value of which exceeds the value of the Revised
Offer by more than 7.5 per cent.; or
(b) if Kewill ceases to be in an Offer Period (as such term is
defined in the City Code) or Bidco informs Pendragon in writing
that it has ceased to be interested in pursuing the Revised
Offer.
SVG Investment Managers Limited ("SVG")
Bidco has received an irrevocable undertaking to vote against
and /or not accept, the Competing Offer and any other competing
offer for Kewill from SVG in respect of 2,637,157 Kewill Shares
which it manages on behalf of clients and in respect of which it is
able to exercise discretionary and voting control. Such shares
represent approximately 2.9 per cent. of the existing issued
ordinary share capital of Kewill.
The irrevocable undertaking received from SVG will cease to be
binding:
(a) in the event a competing or revised offer for Kewill is made
within 10 days of the date of this announcement by any person other
than Bidco, the value of which (in the opinion of HSBC Bank plc)
exceeds the value of the Revised Offer by more than 7.5 per cent.;
or
(b) if Kewill ceases to be in an Offer Period (as such term is defined in the City Code).
RGM Capital, LLC ("RGM Capital")
Bidco has received an irrevocable undertaking to vote against
and /or not accept, the Competing Offer and any other competing
offer for Kewill from RGM Capital in respect of 5,340,581 Kewill
Shares over which it is able to exercise discretionary and voting
control. Such shares represent approximately 5.9 per cent. of the
existing issued ordinary share capital of Kewill.
The irrevocable undertaking received from RGM Capital will cease
to be binding:
(a) in the event a competing offer for Kewill is made within 10
days of the date of this announcement, the value of which exceeds
the value of the Revised Offer by more than 7.5 per cent.; or
(b) if Kewill ceases to be in an Offer Period (as such term is
defined in the City Code) or Bidco informs RGM Capital in writing
that it has ceased to be interested in pursuing the Revised
Offer.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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