RNS Number:0274K
NSB Retail Systems PLC
17 December 2007
EMBARGOED UNTIL 7.00 A.M.
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.
17 December 2007
RECOMMENDED PROPOSALS FOR THE CASH ACQUISITION
OF
NSB RETAIL SYSTEMS PLC
BY
EPICOR SOFTWARE CORPORATION
(acting through its wholly owned subsidiary, Epicor Retail Solutions, Inc.)
(TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT)
Summary and highlights
- The boards of Epicor and NSB announce that they have reached
agreement on the terms of the recommended acquisition of NSB by Epicor (through
its wholly-owned subsidiary Epicor Retail) whereby shareholders of NSB will
receive 38.0 pence in cash per Ordinary Share. The Transaction will be effected
by means of a scheme of arrangement under section 425 of the Companies Act.
- The terms of the Proposals value the entire issued ordinary share
capital of NSB (fully diluted for the exchange of all Exchangeable Shares and
the exercise of all in the money options under the NSB Share Incentive Schemes)
at approximately �160.1 million.
- The terms of the Transaction represent a premium of approximately:
- 61.7 per cent. to the Closing Price of 23.50 pence per Ordinary
Share on 12 December 2007, being the last Business Day prior to the commencement
of the Offer Period;
- 55.7 per cent. to the average Closing Price of 24.40 pence per
Ordinary Share for the three months ended 12 December 2007, being the last
Business Day prior to the commencement of the Offer Period;
- 36.3 per cent. to the average Closing Price of 27.88 pence per
Ordinary Share for the 12 months ended 12 December 2007, being the last Business
Day prior to the commencement of the Offer Period; and
- 11.8 per cent. to the Closing Price of 34.00 pence per Ordinary
Share on 14 December, being the last Business Day prior to this announcement.
- Epicor is a global leader in the development and delivery of
integrated enterprise resource planning ("ERP"), customer relationship
management, supply chain management, retail point-of-sale and professional
services automation software solutions to mid-market companies and divisions of
the Global 1000.
- The Epicor Directors believe that a combination of NSB and Epicor
will create a leading provider of software applications to the specialty retail
market and will establish the company as a leader in point of sale ("POS")
solutions. The Epicor Directors further believe that the increased breadth of
products, additional market focus and opportunity and new cross-selling
opportunities resulting from the transaction should provide significant benefits
for customers and employees of both companies.
- The NSB Directors, who have been so advised by Close Brothers,
consider the terms of the Proposals to be fair and reasonable. In providing
advice on the Proposals to the NSB Directors, Close Brothers has taken account
of the commercial assessments of the NSB Directors. Accordingly, the NSB
Directors unanimously recommend that NSB Shareholders vote in favour of the
Scheme at the Court Meeting and in favour of the Special Resolution to be
proposed at the NSB General Meeting.
- Epicor has received irrevocable undertakings to vote (or to procure
the vote) in favour of the Scheme at the Court Meeting in respect of 31.21 per
cent. of the existing issued ordinary share capital of NSB entitled to vote at
the Court Meeting, and 36.93 per cent. of the existing issued share capital
entitled to vote at the NSB General Meeting, as follows:
(i) each of the NSB Directors who holds Ordinary Shares has irrevocably
undertaken to vote or to procure that the relevant registered shareholder vote
in favour of the Proposals in respect of the Ordinary Shares beneficially owned
by such NSB Directors or their connected persons, which amount, in aggregate, to
2,401,957 Ordinary Shares representing approximately 0.63 per cent. of the
existing issued ordinary share capital of NSB entitled to vote at the Court
Meeting and approximately 0.58 per cent. of the existing issued share capital of
NSB entitled to vote at the NSB General Meeting. These undertakings will
continue to be binding if any higher competing offer is made for NSB.
(ii) certain other NSB Shareholders have irrevocably undertaken to vote
in favour of the Proposals at the Court Meeting and to approve the Scheme in
respect of, in aggregate 116,486,132 Ordinary Shares, representing approximately
30.58 per cent. of the existing issued ordinary share capital of NSB entitled to
vote at the Court Meeting and in respect of, in aggregate, 116,486,132 Ordinary
Shares and 34,508,249 Voting Shares together representing approximately 36.35
per cent of the existing issued share capital of NSB entitled to vote at the NSB
General Meeting. These undertakings will cease to be binding if a higher
competing offer is made representing an improvement of at least 10 per cent.
above 38.0 pence per Ordinary Share or if the Scheme is withdrawn or lapses.
- The Proposals will be put to NSB Shareholders at the
Court Meeting and at the NSB General Meeting, which are both expected to be held
on or around 16 January 2008. In order to become effective, the Scheme must be
approved by a majority in number of the holders of Ordinary Shares present and
voting (and entitled to vote) at the Court Meeting, either in person or by
proxy, and representing not less than 75 per cent. in value of all Ordinary
Shares that are cast at the Court Meeting (or at any adjournment thereof). In
addition, the Special Resolution implementing the Scheme and sanctioning the
related Capital Reduction must be passed by NSB Shareholders representing not
less than 75 per cent. of the votes cast at the NSB General Meeting (or at any
adjournment thereof).
- The Scheme Document setting out the full details of the
Proposals, an indicative timetable and the procedure to be followed to approve
the Scheme and the Forms of Proxy will be posted to NSB Shareholders and, for
information only, to participants in the NSB Share Incentive Schemes and holders
of Exchangeable Shares as soon as practicable and in any event within 28 days of
this Announcement unless otherwise agreed with the Panel.
Commenting on the Proposals, Angus Monro, Non-Executive Chairman of NSB, said:
"I am very pleased that we have been able to reach agreement on the terms of
this transaction, which I believe is the right strategic outcome for NSB,
offering certainty and value to our shareholders and great opportunities for our
management and employees as part of the enlarged Epicor group. NSB's product
set and customer base should greatly strengthen Epicor's existing position in
retail software, and enable this to be leveraged internationally across Epicor's
broader geographic footprint. I am confident that NSB will make a significant
contribution to the future of the combined business."
Commenting on the Proposals, George Klaus, Chief Executive Officer of Epicor
said:
"NSB's current retail market focus is well aligned with Epicor's, and NSB brings
an attractive, loyal customer base, which complements Epicor's growing presence
in the highly fragmented retail market. We believe this combination will create
substantial synergies, excellent cross-selling opportunities and significant
economies of scale across the combined company."
This summary should be read in conjunction with the full text of the following
Announcement and Appendices.
Appendix I sets out the conditions to the implementation of the Scheme and the
Proposals.
Appendix II contains source notes relating to certain information contained in
this Announcement.
Certain terms used in this Announcement (including in this summary) are defined
in Appendix III.
Enquiries:
Epicor Software Corporation Tel: +1 949 585 4000
George Klaus
Michael Piraino
Mark Duffell
Damon Wright
UBS Investment Bank (financial adviser to Epicor) Tel: +1 310 556 6700
John Joliet
Scott Jacobsen
Craig Calvert (UK) Tel: +44 (0) 20 7567 8000
NSB Retail Systems PLC Tel: +1 514 426 0822
Angus Monro
David Henning
Stuart Mitchell
Close Brothers (financial adviser to NSB) Tel: +44 (0) 20 7655 3100
Simon Willis
James Craven
Dresdner Kleinwort (broker to NSB) Tel: +44 (0) 20 7623 8000
James Rudd
RedLeaf Communications (PR adviser to NSB) Tel: +44 (0) 20 7822 0200
Emma Kane
Samantha Robbins
UBS Investment Bank is acting exclusively as financial adviser to Epicor and no
one else in connection with the Proposals and will not be responsible to anyone
other than Epicor for providing the protections afforded to clients of UBS
Investment Bank or for providing advice in relation to the Proposals or any
other matters referred to in this Announcement.
Close Brothers, which is authorised and regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for NSB and no one else in
connection with the Proposals and will not be responsible to anyone other than
NSB for providing the protections afforded to clients of Close Brothers or for
providing advice in relation to the Proposals or any other matters referred to
in this Announcement.
This Announcement is not intended to and does not constitute or form any part
of, an offer to sell or an invitation to purchase or the solicitation of an
offer to subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Proposals or otherwise.
The distribution of this Announcement in jurisdictions other than the United
Kingdom may be restricted by law and therefore any persons who are subject to
the laws of any jurisdiction other than the United Kingdom should inform
themselves about, and observe, any applicable requirements. This Announcement
has been prepared for the purpose of complying with English law and the Takeover
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 the United Kingdom.
The availability of the Proposals to persons not resident in the UK may be
affected by the laws of the relevant jurisdiction in which they are located.
Persons who are not resident in the United Kingdom should inform themselves of
and observe any applicable requirements.
The Proposals will be carried out by way of scheme of arrangement under UK law
and are subject to UK disclosure requirements, which are different from those of
the United States or Canada. The Proposals will be subject to disclosure and
other procedural requirements, including with respect to withdrawal rights,
timetable, settlement procedures and timing of payments that are different from
those applicable under US or Canadian procedures and law.
Each holder of NSB Shares is urged to consult his independent professional
advisers immediately regarding the tax consequences of the Proposals.
Forward-Looking Statements
This Announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of the NSB Group and
the Epicor Group and certain plans and objectives of the boards of directors of
NSB and Epicor. These forward-looking statements can be identified by the fact
that they do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", "will", "may", "should", "would", "could"
or other words of similar meaning. These statements are based on assumptions
and assessments made by the boards of directors of NSB and Epicor in light of
their experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe appropriate. By
their nature, forward-looking statements involve risk and uncertainty, and the
factors described in the context of such forward-looking statements in this
Announcement could cause actual results and developments to differ materially
from those expressed in or implied by such forward-looking statements.
Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this Announcement. NSB and Epicor assume no obligation to
update or correct the information contained in this Announcement, whether as a
result of new information, future events or otherwise, except to the extent
legally required.
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set out in this Announcement since such
date. Nothing contained in this Announcement shall be deemed to be a forecast,
projection or estimate of the future financial performance of NSB or Epicor
except where expressly stated.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, "interested" (directly or indirectly) in 1% or more of any class of
"relevant securities" of NSB, all "dealings" in any "relevant securities" of NSB
(including by means of an option in respect of, or a derivative referenced to,
any such "relevant securities") must be publicly disclosed by no later than 3.30
p.m. (London time) on the Business Day following the date of the relevant
transaction. This requirement will continue until the Effective Date of the
Scheme (or such later date(s) as the Panel may specify). If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of NSB, they will be
deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in
"relevant securities" of NSB, by Epicor or NSB, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at http://
www.thetakeoverpanel.org.uk/.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the Panel
on telephone number +44 (0)20 7638 0129; fax number +44 (0)20 7236 7013.
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.
17 December 2007
RECOMMENDED PROPOSALS FOR THE CASH ACQUISITION
OF
NSB RETAIL SYSTEMS PLC
BY
EPICOR SOFTWARE CORPORATION
(acting through its wholly-owned subsidiary, Epicor Retail Solutions, Inc.)
(TO BE EFFECTED BY MEANS OF A SCHEME OF ARRANGEMENT)
1. Introduction
The boards of Epicor and NSB announce that they have reached agreement on the
terms of the recommended cash acquisition of NSB by Epicor (through its
wholly-owned subsidiary Epicor Retail), to be implemented by means of a scheme
of arrangement.
The terms of the Proposals are that shareholders of NSB will receive 38.0 pence
in cash per Scheme Share held at the Scheme Record Time, which values the entire
issued ordinary share capital of NSB (fully diluted for the exchange of all
Exchangeable Shares and the exercise of all in the money options under the NSB
Share Incentive Schemes) at approximately �160.1 million.
2. Recommendation
The NSB Directors, who have been so advised by Close Brothers, consider the
terms of the Proposals to be fair and reasonable. In providing its advice to
the NSB Directors, Close Brothers has taken into account the commercial
assessment of the NSB Directors.
Accordingly, the NSB Directors unanimously recommend that NSB Shareholders vote
in favour of the resolutions to be proposed at the Court Meeting and the NSB
General Meeting as they have irrevocably undertaken to do in respect of their
entire beneficial holdings of issued Ordinary Shares, which in aggregate amount
to 2,401,957 Ordinary Shares, representing approximately 0.63 per cent. of the
existing issued ordinary share capital of NSB entitled to vote at the Court
Meeting and approximately 0.58 per cent. of the existing issued share capital of
NSB entitled to vote at the NSB General Meeting.
3. The Proposals
Under the terms of the Proposals, which are subject to the Conditions and
further terms set out below and in Appendix I and the full terms and conditions
which will be set out in the Scheme Document, the Scheme Shares will be
cancelled and Scheme Shareholders will receive:
for each Ordinary Share
38.0 pence in cash
The terms of the Transaction value the entire issued ordinary share capital of
NSB (fully diluted for the exchange of all Exchangeable Shares and the exercise
of all in the money options under the NSB Share Incentive Schemes) at
approximately �160.1 million.
The price per Ordinary Share which Scheme Shareholders would receive under the
Proposals represents a premium of approximately:
- 61.7 per cent. to the Closing Price of 23.50 pence per Ordinary
Share on 12 December 2007, being the last Business Day prior to the commencement
of the Offer Period;
- 55.7 per cent. to the average Closing Price of 24.40 pence per
Ordinary Share for the three months ended 12 December 2007, being the last
Business Day prior to the commencement of the Offer Period;
- 36.3 per cent. to the average Closing Price of 27.88 pence per
Ordinary Share for the 12 months ended 12 December 2007, being the last Business
Day prior to the commencement of the Offer Period; and
- 11.8 per cent. to the Closing Price of 34.00 pence per Ordinary
Share on 14 December, being the last Business Day prior to this announcement.
4. Background to and reasons for recommending the Proposals
NSB was formed in 1995, was admitted to trading on AIM in 1997, and expanded
both organically and by acquisition from that point. In 1999 NSB moved to the
Official List and in late 2000 it completed the acquisition of STS Systems.
Following this acquisition, NSB's management team and operations were
increasingly weighted towards North America and this was further emphasised by
the sale of NSB's UK operations to BT in early 2004. Since then, NSB's focus
has been to build on its track record of expertise, innovation and delivery in
its chosen sub-sectors of fashion, apparel and speciality retail. This strategy
has yielded good results, with NSB reporting four consecutive years of growth in
adjusted operating profit (operating profit before impact of capitalising
development costs, share based payments, surplus property costs, employee
redundancy and separation costs) in the period 2003 to 2006 and a 23 per cent.
year-on-year increase in adjusted operating profit in the first six months of
2007. Also in 2007, NSB has resumed payment of dividends, and effected a smooth
handover of management responsibility from NSB's founder, Nikki Beckett, to the
current Chief Executive Officer, David Henning.
Whilst the NSB Directors are confident that the prospects of the business as an
independent company remain strong, they have also been mindful that NSB's share
price performance has been impaired, in their view, by a number of factors,
including especially the sustained devaluation of the US Dollar (NSB's principal
operational currency) against the Pound Sterling and Canadian Dollar. As NSB
has evolved over the years into an almost exclusively North American business,
the NSB Board has had cause to weigh both the costs and benefits of maintaining
an independent London listing, against the increased scale and reach achieved by
combining NSB with a larger, but still focused, software and solutions provider
such as Epicor. The board of NSB sees the Retail Division of Epicor and the
business of NSB as being in many respects complementary, both in terms of their
current geographic footprint and product offerings, whilst at the same time
offering scope for synergies from streamlining overlapping support functions,
and in the medium-term, from developing the combined business internationally in
line with both companies' stated strategy.
Accordingly, following an approach by Epicor, the NSB Board has held detailed
discussions regarding the terms of a potential acquisition of NSB by Epicor.
The NSB Board believes that the terms of the Proposals fairly reflect the
potential benefits that can be derived from combining the two businesses. The
Proposals represent a significant premium of 61.7 per cent. to the average
Closing Price of 23.50 pence per Ordinary Share on 12 December 2007 (being the
last Business Day prior to the commencement of the Offer Period) and a premium
of 55.7 per cent. to the average Closing Price of an Ordinary Share of 24.40
pence for the three months prior to 12 December 2007. Accordingly, the NSB
Board believes that the Proposals are in the best interests of NSB Shareholders.
5. Reasons for the Proposals
The Epicor Directors believe that a combination of NSB and Epicor will create a
leading provider of software applications to the specialty retail market and
will establish the company as a leader in POS solutions. The Epicor Directors
further believe that the increased breadth of products, additional market focus
and opportunity and new cross-selling opportunities resulting from the
transaction should provide significant benefits for customers and employees of
both companies.
Growth and integration opportunities
Epicor has historically supplemented its organic growth through the efficient
integration of strategic acquisitions of companies with complementary
technology, customers and geographies. Epicor has a proven track record in
leveraging the strengths of its acquisitions and realising operating synergies.
Epicor's acquisitions of CRS Retail Systems, Scala Business Solutions, ROI
Systems and DataWorks over the past nine years demonstrate its success in
integrating acquired businesses and products to realise synergies, enhance
product offerings, and roll out solutions and services into new markets,
customers, and geographies.
The Epicor Directors believe that the integration of NSB with Epicor should
produce similar benefits.
Creation of a leading retail industry solution
Epicor's CRS product line targets the retail industry and provides software and
services to over 130 leading specialty retailers. These solutions include POS,
Customer Relationship Management ("CRM"), Merchandising, Loss Prevention, Sales
Audit, Returns Management, Cross-Channel Order Management, Learning Solutions,
and Retail Services. The Epicor Directors believe that the combination of this
proven product suite with NSB's Connected Retailer suite offering planning,
sourcing and product development, merchandising, POS, sales analytics, Store,
CRM, EnterpriseExpress, and StoreExpress will create a leading specialty retail
sector ERP solution.
Expansion of blue chip customer base
The Transaction will more than double Epicor's existing retail customer base
with the combined group expected to have approximately 300 retail customers.
Recent high profile customer implementations for NSB include Harrah's,
Dillard's, and Mervyns. The combined customer base has limited overlap and will
provide an opportunity to cross-sell products, services, and technologies as
well as the opportunity to sell enterprise ERP solutions into NSB's customer
base.
The Transaction will also result in an enhanced product offering and
capabilities for Tier 2, Tier 3 and Tier 4 customers, augmenting Epicor's and
NSB's respective strengths with Tier 1 retailers such as Coach and Ann Taylor.
Significant synergies
The combination of Epicor and NSB is expected to generate material synergies
from areas such as sales, marketing, support, R&D, and public company cost
savings. Epicor also expects to gain ongoing cost benefits through the
advantages of scale in areas such as IT, consultancy costs and third party
software licences.
Financial impact on Epicor
The acquisition of NSB is expected to be materially accretive to Epicor's
non-GAAP earnings per share, cash earnings per share and free cash flow per
share for Epicor for the year ending 31 December 2008 before transaction costs.
This statement should not be interpreted to mean that earnings per share will
necessarily match or be greater than those for the relevant preceding financial
period.
6. Irrevocable undertakings and letters of intent
Scheme
Epicor has received irrevocable undertakings to vote (or procure the vote) in
favour of the Scheme at the Court Meeting or, (other than in respect of the
undertaking given by Aberforth Partners LLP, in the event that the Transaction
is implemented by way of a takeover offer, to accept such offer) in respect of
118,888,089 Ordinary Shares in aggregate, representing approximately 31.21 per
cent. of the existing issued ordinary share capital of NSB entitled to vote at
the Court Meeting.
Special Resolution
Epicor has also received irrevocable undertakings to vote in favour of the
Special Resolution to be proposed at the NSB General Meeting in respect of a
total of 118,888,089 Ordinary Shares, and 34,508,249 Voting Shares representing
in aggregate approximately 36.93 per cent. of the existing issued share capital
of NSB entitled to vote at the NSB General Meeting.
The irrevocable undertakings referred to above comprise the following:
(a) each of the NSB Directors who hold Ordinary Shares, being
Angus Monro, Stuart Mitchell, David Ferguson, Martin Chatwin and Richard Abraham
has irrevocably undertaken to vote or to take all reasonable steps to procure
that the relevant registered shareholder vote in favour of the Scheme at the
Court Meeting and the Special Resolution to be proposed at the NSB General
Meeting in respect of the Ordinary Shares beneficially owned by such NSB
Director or their connected persons, as noted below, representing, in aggregate,
approximately 0.63 per cent. of the existing issued ordinary share capital of
NSB entitled to vote at the Court Meeting and approximately 0.58 per cent. of
the existing issued voting share capital of NSB entitled to vote at the NSB
General Meeting:
Angus Monro 368,558
Stuart Mitchell 304,652
David Ferguson 50,000
Martin Chatwin 1,045,530
Richard Abraham 633,217
These undertakings will continue to be binding if any higher competing offer is
made for NSB.
(b) Aberforth Partners LLP ("Aberforth") has irrevocably
undertaken to vote in favour of the Scheme at the Court Meeting and in favour of
the Special Resolution to be proposed at the NSB General Meeting in respect of
61,209,900 Ordinary Shares, representing approximately 16.07 per cent. of the
existing issued ordinary share capital of NSB entitled to vote at the Court
Meeting and approximately 14.73 per cent. of the existing issued share capital
of NSB entitled to vote at the NSB General Meeting;
(c) Hermes Focus Asset Management Limited ("Hermes") has
irrevocably undertaken to vote in favour of the Scheme at the Court Meeting and
in favour of the Special Resolution to be proposed at the NSB General Meeting in
respect of 43,798,297 Ordinary Shares, representing approximately 11.50 per
cent. of the existing issued ordinary share capital of NSB entitled to vote at
the Court Meeting and approximately 10.54 per cent. of the existing issued share
capital of NSB entitled to vote at the NSB General Meeting;
(d) Gartmore Investment Limited ("Gartmore") has irrevocably
undertaken to vote in favour of the Scheme at the Court Meeting and in favour of
the Special Resolution to be proposed at the NSB General Meeting in respect of
11,477,935 Ordinary Shares, representing approximately 3.01 per cent. of the
existing issued ordinary share capital of NSB entitled to vote at the Court
Meeting and approximately 2.76 per cent. of the existing issued share capital of
NSB entitled to vote at the NSB General Meeting;
(e) 3068358 Canada Inc. (i) has given its written consent to the
Scheme (ii) in its capacity as holder of 34,508,249 Voting Shares (being all of
the issued Voting Shares) representing approximately 8.31 per cent. of the
existing issued voting share capital of NSB entitled to vote at the NSB General
Meeting, has irrevocably undertaken to vote in favour of the Special Resolution
to be proposed at the NSB General Meeting, and (iii) in its capacity as holder
of 34,508,249 Exchangeable Shares has irrevocably undertaken to cause the
retraction or exchange of its 34,508,249 Exchangeable Shares into 34,508,249
Ordinary Shares immediately following the sanction of the Scheme by the Court,
subject to all other conditions to the Scheme having been met or waived.
The undertakings from Aberforth, Hermes, Gartmore and 3068358 Canada Inc. will
cease to be binding if a higher competing offer is made representing an
improvement of at least 10 per cent. above 38.0 pence per Ordinary Share or if
the Scheme is withdrawn or lapses.
7. Structure of the Proposals
(a) Introduction
The Transaction is to be effected by means of a scheme of arrangement between
NSB and the Scheme Shareholders under section 425 of the Companies Act, the
provisions of which will be set out in full in the Scheme Document. The purpose
of the Scheme, together with the proposed changes to the NSB Articles, is to
provide for Epicor Retail to become the owner of the whole of the issued
ordinary share capital of NSB. The Scheme will provide for the cancellation of
the Scheme Shares and the application of the reserve arising from such
cancellation in paying up in full a number of New Ordinary Shares which is equal
to the number of and which have a nominal value equal to the nominal value of
the Scheme Shares cancelled and issuing the same to Epicor Retail and/or its
nominee(s).
Scheme Shareholders will then receive cash on the basis set out in paragraph 3
above.
It is intended that Epicor Retail or its nominee will acquire one Ordinary Share
prior to the Court Meeting. This share will not be subject to the Scheme.
To become effective, the Scheme requires the approval of Scheme Shareholders at
the Court Meeting. The Scheme also requires the sanction of the Court and the
passing of the Special Resolution to be proposed at the NSB General Meeting, as
well as satisfaction or waiver of the other Conditions set out in Appendix I.
Upon the Scheme becoming effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the NSB General Meeting.
(b) The Meetings
Notices of the Court Meeting and the NSB General Meeting will be set out in the
Scheme Document. Entitlements to attend and vote at the Meetings and the number
of votes which may be cast at them will be determined by reference to, in the
case of the Court Meeting, holdings of Scheme Shares and, in the case of the NSB
General Meeting, holdings of Ordinary Shares and Voting Shares, in each case as
shown in the register of members of NSB at the time specified in the notice of
the relevant meeting.
The Court Meeting
The Court Meeting will be held at the direction of the Court to seek the
approval of the Scheme Shareholders to the Scheme. At the Court Meeting, voting
will be by way of poll and each Scheme Shareholder present in person or by proxy
will be entitled to one vote for each Scheme Share held. The approval required
at the Court Meeting is a majority in number of those Scheme Shareholders who
are present and vote, either in person or by proxy, and who represent 75 per
cent. or more in value of all Scheme Shares held by such Scheme Shareholders.
Scheme Shareholders have the right to raise any objections they may have to the
Scheme at the Court Meeting.
It is important that as many votes as possible are cast at the Court Meeting
(whether in person or by proxy) so that the Court may be satisfied that there is
a fair and reasonable representation of NSB Shareholder opinion.
Notice of the Court Meeting and a form of proxy for the Court Meeting will be
sent to the Scheme Shareholders together with the Scheme Document.
The NSB General Meeting
The NSB General Meeting will be convened to consider and, if thought fit, pass
the Special Resolution (which requires votes in favour representing at least 75
per cent. of the votes cast) to approve:
(i) the Capital Reduction (in connection with the Scheme);
(ii) the giving of authority to the NSB Directors to allot shares in NSB
to Epicor Retail as provided for in the Scheme; and
(iii) certain amendments to the NSB Articles as described below.
Notice of the NSB General Meeting and a form of proxy for the NSB General
Meeting will be sent to the NSB Shareholders together with the Scheme Document.
Voting on the Special Resolution will be on a show of hands unless a poll is
demanded. The Chairman reserves the right to demand a poll and, in such event,
each holder of NSB Shares present in person or by proxy will be entitled to one
vote for each NSB Share held. All NSB Shareholders will be entitled to vote on
the Special Resolution.
It is proposed that the NSB Articles will be amended to ensure that any Ordinary
Shares which are issued after the NSB General Meeting but before the Scheme
Record Time will be subject to and bound by the Scheme. Any Ordinary Shares
issued on the exercise of options under the NSB Share Incentive Schemes, on the
conversion of the Exchangeable Shares into Ordinary Shares or otherwise after
the Scheme Record Time will not be subject to the Scheme. Accordingly, it is
also proposed that the NSB Articles will be amended so that any Ordinary Shares
issued to any person other than Epicor Retail (or its nominee(s)) on or after
the Scheme Record Time will automatically be acquired by Epicor Retail in
consideration for the payment by Epicor Retail to such person of such cash
consideration as would have been payable under the Scheme had such Ordinary
Shares been Scheme Shares. The proposed amendments to the NSB Articles will be
set out in full in the notice of the NSB General Meeting.
(c) Modifications to the Scheme
The Scheme will contain a provision for NSB and Epicor Retail jointly to consent
on behalf of all concerned to any modifications, additions or conditions to the
Scheme which the Court may think fit to approve or impose. The Court would be
unlikely to approve of or impose any modifications, additions or conditions to
the Scheme which might be material to the interests of Scheme Shareholders
unless Scheme Shareholders were informed of any such modification, addition or
condition. It would be a matter for the Court to decide, at its discretion,
whether or not a further meeting of Scheme Shareholders should be held.
(d) Conditions to the Scheme
The Conditions to the Scheme are set out in full in Appendix I. The Scheme is
conditional, amongst other things, upon:
(i) the Scheme becoming effective by not later than 31 March 2008 or
such later date as NSB and Epicor Retail may agree and (if required) the Court
may allow;
(ii) approval of the Scheme by a majority in number of the Scheme
Shareholders who are present and vote either in person or by proxy at the Court
Meeting, or any adjournment of that Meeting, and who represent 75 per cent. or
more in value of all Scheme Shares held by such Scheme Shareholders;
(iii) the Special Resolution to be set out in the notice of the NSB
General Meeting being duly passed by the requisite majority at the NSB General
Meeting or any adjournment of that Meeting; and
(iv) the sanction (with or without modification agreed by NSB and Epicor
Retail) of the Scheme and confirmation of the Capital Reduction by the Court,
office copies of the Court Orders and the minute of such reduction attached
thereto being delivered for registration to the Registrar of Companies and, in
the case of the Court Order confirming the Capital Reduction, registration of
such Court Order by him.
(e) Sanction of the Scheme by the Court
Under the Companies Act, the Scheme and the Capital Reduction require the
sanction of the Court at the First Court Hearing and Second Court Hearing
respectively. Epicor Retail has confirmed that it will be represented by
Counsel at such hearings so as to consent to the Scheme and to undertake to the
Court to be bound thereby.
The Scheme will become effective in accordance with its terms on delivery of
office copies of the Court Orders to the Registrar of Companies, and (in
relation to the Court Order to confirm the Capital Reduction comprised in the
Scheme) the registration of such Court Order by him.
If the Scheme becomes effective, it will be binding on all Scheme Shareholders
irrespective of whether or not they attended or voted in favour of the Scheme at
the Court Meeting or in favour of the resolutions proposed at the NSB General
Meeting. If the Scheme does not become effective by 31 March 2008 (or such
later date (if any) as Epicor Retail and NSB may agree and (if required) the
Court may allow) the Scheme will not become effective.
(f) Exchangeable Shares and Voting Shares
3068358 Canada Inc., in its capacity as holder of 34,508,249 Exchangeable Shares
(being all of the issued Exchangeable Shares), has agreed to exercise its
retraction right and will receive 34,508,249 Ordinary Shares immediately
following the sanction of the Scheme by the Court and prior to the Scheme Record
Time, subject to all other conditions to the Scheme having been met or waived at
such time. Once this happens, the newly issued Ordinary Shares will be subject
to and bound by the Scheme and 3068358 Canada Inc. will be entitled to receive
the consideration payable under the Scheme to holders of Scheme Shares.
If 3068358 Canada Inc. does not exercise its retraction rights, all of the
34,508,249 issued Exchangeable Shares will, in accordance with the rights
attaching to them, automatically be redeemed for Ordinary Shares. This will
occur upon the Court Orders confirming the Scheme and the Capital Reduction
being delivered for registration to the Registrar of Companies and, in the case
of the Court Order confirming the Capital Reduction, upon registration of such
Court Order.
Following such exchange, the newly issued Ordinary Shares will automatically be
acquired by Epicor Retail in consideration for the payment by Epicor Retail to
the holder of such shares of such cash consideration as would have been payable
under the Scheme had such Ordinary Shares been Scheme Shares, in accordance with
the amended provisions of the NSB Articles to be approved at the NSB General
Meeting, as set out in paragraph (b) above.
Upon the retraction or redemption of the Exchangeable Shares whether such
exchange is voluntary or automatic, NSB will redeem all of the 34,508,249 issued
Voting Shares at par.
8. Information relating to the Epicor Group
Epicor is a global leader in the development and delivery of
integrated enterprise resource planning ("ERP"), customer relationship
management, supply chain management, retail point-of-sale and professional
services automation software solutions to mid-market companies and divisions of
the Global 1000. Epicor is listed on NASDAQ with a market capitalisation of
approximately US$687 million. Founded in 1984, Epicor serves over 20,000
customers in more than 140 countries, providing solutions in over 30 languages.
Epicor has ten active operating subsidiaries worldwide and its corporate
headquarters are located at 18200 Von Karman Ave, Suite 1000, Irvine,
California.
For the year ended 31 December 2006, Epicor reported U.S. GAAP
revenues of US$384 million and for the quarter ended 30 September 2007, Epicor
reported U.S. GAAP revenues of US$103 million. Through organic growth and
acquisitions, Epicor has achieved year-on-year revenue growth of 28.7 per cent.
and 32.7 per cent. in 2005 and 2006 respectively.
Epicor Retail is a New Brunswick corporation incorporated specifically for the
purpose of the Transaction. It is a wholly owned subsidiary of Epicor and prior
to the date of this Announcement has not traded or carried out any business
other than in connection with the Transaction.
9. Information relating to the NSB Group
NSB was formed in 1995, was admitted to trading on AIM in 1997 and has been
listed on the Official List since 1999. NSB is a predominantly North American
supplier of software solutions and services that help the retail market create,
manage and fulfil consumer demand. Its customers include GameStop, JC Penney,
and Ross Stores. NSB has approximately 610 employees based primarily at NSB's
headquarters in Montreal, Canada and in Columbus, Ohio, USA. BT acts as NSB's
exclusive distributor in the UK. The NSB Group's focus remains on the fashion,
apparel and specialty retail markets.
For the year ended 31 December 2006, NSB had revenues of US$87.6 million and
operating profit before exceptional items of US$18.9 million. As at 30 June
2007, the total assets of NSB were US$149.7 million (2006: US$129.5 million),
net assets were US$106.1 million (2006: US$90.0 million) and net cash was
US$34.6 million (2006: US$21.6 million).
10. Current trading of NSB
The following extracts have been taken from the Chief Executive Officer's
statement accompanying the announcement of the unaudited consolidated financial
statements of the NSB Group for the six month period ended 30 June 2007 on 11
September 2007.
"I am delighted to report a strong set of results in my first period as Chief
Executive. We achieved good growth in all our key operating metrics; order
intake, revenues and operating profit. Our past actions to control our cost
base along with our continuing investment in product development leave NSB well
positioned for future growth.
Results:
Total revenues were up 8% to US$46.0 million (2006: $42.5 million) with North
American revenues up 9% to US$44.3 million (2006: US$40.6 million).
Operating profit increased 46% to $10.1 million (2006: $6.9 million) on a
statutory basis. However, we believe a better measure of the Group's progress
is adjusted operating profit which eliminates the impact of redundancy costs
(2007: nil; 2006: $2.2 million), the impact of capitalising and amortising
development costs (2007: $0.1 million expense; 2006: $0.8 million credit) and
the impact of share based payment expense (2007: $0.3 million; 2006: $0.1
million). On this basis, adjusted operating profit increased 23% to $10.5
million (2006: $8.5 million) reflecting the strong performance of the North
American business, particularly services and support.
Our costs remained under tight control increasing just 1% to $31.6 million,
before hardware purchase and redundancy costs (2006: $31.2 million). Our cost
base is impacted by currency. Most of our revenues are in US Dollars and this
is the Group's reporting currency whereas a substantial proportion of the
Group's costs are in Canadian Dollars. Currency movements did not have a
material impact on comparative first half results although the strengthening of
the Canadian Dollar against the US Dollar since May 2007 will have a negative
impact on full year results.
Adjusted basic earnings per share has been reported because, in the Board's
view, it is the most relevant measure of EPS. Adjusted basic EPS is profit
before the impact of currency movements on Canadian Dollar deferred tax assets
(both years) and redundancy and separation costs in 2006 divided by the weighted
average number of shares in issue. EPS calculated on this basis was up 11% to
2.45 cents (equivalent to 1.24p) (2006: 2.20 cents or 1.19p). Basic EPS
increased 53% to 2.73 cents (1.38p) (2006: 1.79 cents (0.97p)).
Operating cash flow continues to be good. Cash balances at the period end are
up $1.3 million to $34.6 million (31 December 2006: $33.2 million) after paying
dividends of $4.1 million and funding provisions previously accrued for surplus
facilities, redundancies and separation costs totalling $2.4 million.
Outlook:
The first half of 2007 was a period of good progress. We have a clear growth
strategy and are already starting to realise the benefit of its increasingly
international focus. Our pipelines and order books remain strong and,
notwithstanding adverse currency movements, we look forward with confidence to
reporting further progress in the second half."
Since the announcement of the interim results on 11 September 2007 NSB has
continued to trade materially in line with the NSB Board's expectations.
For the full text of the NSB interim results announced on 11 September 2007
please refer to NSB's website (www.nsbgroup.com) or the Scheme Document expected
to be posted as soon as practicable.
11. Financing the Transaction
The consideration payable under the Transaction is being funded from Epicor's
existing cash resources and from a new senior secured credit facility arranged
by Banc of America Securities LLC as Sole Lead Arranger and Book Manager and
with Bank of America, N.A. as Administrative Agent, and KeyBank National
Association as Syndication Agent. The new credit facility provides Epicor with
a secured revolving loan facility in an amount up to US$100 million and a
secured term loan facility in an amount up to US$100 million. Further details
of the financing arrangements for the Transaction will be set out in the Scheme
Document.
UBS, financial adviser to Epicor, is satisfied that sufficient resources are
available to Epicor to satisfy in full the cash consideration payable to NSB
Shareholders under the terms of the Transaction.
12. Management, Directors and employees
Epicor attaches great importance to the skills and experience of the current
management team and employees of NSB. The Epicor Board has given assurances to
the NSB Directors that, upon the Scheme becoming effective, the existing
employment rights of NSB Group employees will continue to be safeguarded and
pension obligations complied with. Epicor's plans do not involve any material
change to the conditions of employment of NSB's employees (other than the
intended transition of certain employees to the Epicor Group's standard terms
and conditions of employment, but there is no intention to reduce overall
employee remuneration and other contractual benefits will remain broadly
comparable) and there are no current plans to change the principal locations of
NSB's existing businesses.
Following the Scheme becoming effective, a joint team from Epicor and NSB will
be set up to assess how best to take advantage of the combined businesses'
strong strategic position and growth opportunities and to realise the synergies
in each case referred to above. This review will include an analysis of the
Epicor Group's continuing operating locations and associated staffing levels.
The Epicor Board has also indicated that it intends that David Henning, NSB's
current Chief Executive Officer, will assume overall management responsibility
for the enlarged retail sector business of Epicor.
The non-executive NSB Directors have agreed to resign from the NSB Board upon
the Scheme becoming effective and will be paid in full in respect of their
notice periods.
13. Implementation and inducement fee arrangements
NSB and Epicor have entered into the Implementation Agreement which governs
their relationship during the period until the Scheme becomes effective, lapses
or is withdrawn. Among other things, the parties have agreed to cooperate to
implement the Scheme and NSB has entered into certain undertakings concerning
the conduct of its business and the provision of certain further information
during that period.
As an inducement for Epicor carrying out its due diligence in respect of the
Proposals and devoting management time and resources in connection with the
Proposals, NSB has agreed in the Implementation Agreement to pay to Epicor an
inducement fee of �1,600,000 in aggregate (equal to approximately one per cent.
of the value of NSB by reference to the price offered under the Proposals)
(inclusive of value added tax, if any, except to the extent any such value added
tax is recoverable by NSB) in the following circumstances:
(i) the Scheme lapses or is withdrawn and a competing proposal that is
announced (under rule 2.5 of the Takeover Code) prior to the date which is 3
months after the date in which the Scheme lapses or is withdrawn becomes
unconditional or otherwise completes;
(ii) the NSB Directors withdraw or adversely modify their recommendation
of the Proposals and the Scheme lapses or is withdrawn.
In the Implementation Agreement, NSB has also agreed with Epicor that if it
receives an approach which the NSB Board determines in good faith constitutes a
superior proposal, it will notify Epicor of the terms of the competing proposal
and shall not withdraw or adversely modify its recommendation of the Proposals
unless either (i) Epicor informs NSB that it is not willing to revise the
Proposals such that they are no less in value than the competing proposal; (ii)
Epicor does not, within 48 hours of being notified of the competing proposal,
confirm that it is willing to revise the Proposals such that they are no less in
value than the competing proposal; or (iii) Epicor, having confirmed within 48
hours of being notified of the competing proposal that it is willing to revise
the Proposals such that they are no less in value than the competing proposal,
fails within 96 hours of receipt of such notice to announce the revised
Proposals. Epicor Retail has a right to enforce the provisions under the
Implementation Agreement.
Further details of the implementation and inducement fee arrangements will be
set out in the Scheme Document.
14. NSB Share Incentive Schemes
NSB 1998 Share Option Scheme and Long Term Incentive Stock Option Plan for
Former Employees of STS Systems ("Discretionary Option Schemes")
All options under the Discretionary Option Schemes are currently exercisable,
having been held for more than 3 years and having met relevant vesting and/or
performance conditions (as the case may be). A proposal will shortly be made to
optionholders under the Discretionary Option Schemes to exercise all outstanding
options, and receive Ordinary Shares immediately after the Court sanction of the
Scheme but prior to the Scheme Record Time, so that such Ordinary Shares will be
subject to and benefit from the terms of the Scheme. Although the proposal
extends to all options under the Discretionary Option Schemes, it is unlikely
that an option with an exercise price per Ordinary Share above 38 pence will be
exercised.
NSB Savings-Related Share Option Scheme, NSB Canadian Sharesave Plan, and NSB US
Sharesave Plan ("Sharesave Schemes")
Options under the Sharesave Schemes are not currently exercisable. Under the
rules of the Sharesave Schemes as agreed by NSB Shareholders, outstanding
options would not become exercisable until immediately after the Scheme becomes
effective. The Ordinary Shares issued to optionholders would, however, not be
subject to the Scheme as they would be issued after the Scheme Record Time. To
enable optionholders to participate in the Scheme, the rules of the Sharesave
Schemes have therefore been amended by the Board (using the powers reserved to
them) so that the options can be exercised to the full extent possible
immediately after the Court sanction of the Scheme, as is the case with options
under the Discretionary Option Schemes. A proposal will shortly be made to
optionholders on those terms so that the Ordinary Shares issued to them pursuant
to the Sharesave Schemes will be subject to and benefit from the terms of the
Scheme.
Optionholders under the Sharesave Schemes are, under the rules of the schemes,
only able to exercise their options to the extent that they have saved their
exercise price at the date of exercise of the option. Optionholders under the
Sharesave Schemes who exercise their options and receive Ordinary Shares
immediately after the Court sanction of the Scheme will not be able to receive
the full number of Ordinary Shares under option as they will not by then have
saved the full amount required to exercise the options in full. As they would
have saved the full amount by 1 June 2008, Epicor has decided that it will make
a compensatory cash payment to optionholders who accept the proposal to exercise
their options immediately after the Court sanction of the Scheme. The cash
payment will be equal to the additional profit the optionholders would have made
had they exercised their options using savings they could have made in the six
months following the Court sanction of the Scheme.
The Scheme will not extend to Ordinary Shares issued, including on the exercise
of options under the Discretionary Option Schemes and the Sharesave Schemes, on
or after the Scheme Record Time. However, an amendment to the NSB Articles is
to be proposed at the NSB General Meeting to the effect that Ordinary Shares
issued pursuant to the exercise of options on or after the Scheme Record Time
would be automatically transferred to Epicor Retail in consideration for the
payment of the same cash consideration as would have been payable under the
Scheme had those Ordinary Shares been Scheme Shares.
NSB Long-Term Incentive Plan (the "Long-Term Incentive Plan")
The Long-Term Incentive Plan was approved by NSB Shareholders in May 2006.
Awards were made on 23 March 2007. The Long-Term Incentive Plan provides free
Ordinary Shares to participants if, broadly, they remain in employment with the
NSB Group until the awards vest and to the extent that performance conditions
are met. On a takeover of NSB, the Remuneration Committee of the NSB Board has
discretion as to how many Ordinary Shares should be received by participants.
The Remuneration Committee has decided, taking into account the recent
performance of the Company, the 38.0 pence in cash per Scheme Share payable
under the Scheme and the fact that the awards made in 2007 have been the only
long-term incentive awards made to senior executives since 2004, that the awards
should vest in full.
The NSB employee trust currently holds 862,897 Ordinary Shares in excess of
those needed to satisfy awards already granted under the Long-Term Incentive
Plan. The Remuneration Committee has resolved in principle that the trustee of
the Company's employee trust be requested to transfer those Ordinary Shares to
key executives immediately after the Court sanction of the Scheme, including
recommending the transfer of 242,897 Ordinary Shares to David Henning and
160,000 Ordinary Shares to Stuart Mitchell.
Beneficial interests in the relevant number of Ordinary Shares receivable will
be transferred immediately after the Court sanction of the Scheme by the
Company's employee trust using Ordinary Shares which it already holds.
Participants will therefore hold Ordinary Shares at the Scheme Record Time so
that their Ordinary Shares will automatically be subject to and benefit from the
terms of the Scheme.
Participants in NSB Share Incentive Schemes will be contacted separately
regarding the effect of the Transaction on their rights and the proposals
referred to above will be made to them in due course.
15. Disclosure of interests in NSB
Save for the irrevocable undertakings referred to in paragraph 6 above, as at
the date of this Announcement, neither Epicor, nor, so far as the Directors of
Epicor are aware, any person acting in concert with it, has any interest in or
right to subscribe for any relevant securities of NSB nor are they party to any
short positions (whether conditional or absolute and whether in the money or
otherwise) relating to relevant securities of NSB, including any short positions
under derivatives, agreements to sell or any delivery obligations or rights to
require another person to take delivery. Neither Epicor, nor, so far as the
Directors of Epicor are aware, any person acting in concert with it, has
borrowed or lent any relevant securities of NSB.
16. Delisting of Ordinary Shares and re-registration
If the Scheme becomes effective, it is intended that applications be made to the
UK Listing Authority for the listing of Ordinary Shares on the Official List to
be cancelled and to the London Stock Exchange for the cancellation of trading of
Ordinary Shares on its market for listed securities, in each case to take effect
on the day that is two Business Days after the Effective Date.
On the Effective Date, share certificates in respect of Scheme will cease to be
valid and should be destroyed. In addition, entitlement to Ordinary Shares held
in the CREST system will be cancelled. It is proposed that, following the
Effective Date, and after the NSB Shares have been delisted, NSB will be
re-registered as a private company.
17. Anticipated timetable
NSB anticipates that it will despatch the Scheme Document to NSB Shareholders
and, for information only, to holders of options granted under the NSB Share
Incentive Schemes and to holders of Exchangeable Shares, within the next 28 days
(or such later date as may be agreed with the Panel), that the Court Meeting and
NSB General Meeting will take place in January 2008, and subject to the Scheme
becoming unconditional and effective in accordance with its terms, the Effective
Date will occur in February 2008. A full anticipated timetable will be set out
in the Scheme Document.
18 Other
The Transaction will be subject to the requirements of the Takeover Code and
will be on the terms and subject to the Conditions set out in this Announcement
and in Appendix I, and to be set out in the Scheme Document which will include
full details of the Scheme, together with notices of the Court Meeting and the
NSB General Meeting and the expected timetable. The Scheme Document, together
with forms of proxy for the Meetings, will be despatched to NSB Shareholders
and, for information only, to holders of options granted under the NSB Share
Incentive Schemes, as soon as practicable and, in any event, within 28 days of
the date of this Announcement unless agreed otherwise with the Panel. In
deciding whether or not to vote in favour of the Scheme and the related matters
in respect of their NSB Shares, NSB Shareholders should rely on the information
contained in, and follow the procedures described in, the Scheme Document and
forms of proxy.
The availability of the Proposals and the distribution of this Announcement to
persons who are not resident in the UK may be affected by the laws of the
relevant jurisdictions in which they are located. Persons who are not resident
in the UK should inform themselves of, and observe, any applicable requirements.
Certain terms used in this Announcement are defined in Appendix III.
This Announcement does not constitute an offer to sell, or an invitation to
purchase, any securities or the solicitation of any vote or approval in any
jurisdiction. The full terms and conditions of the Scheme will be set out in the
Scheme Document. NSB Shareholders are advised to read carefully the formal
documentation in relation to the Proposals once it has been despatched.
19. Responsibility
(a) The Epicor Directors accept responsibility for all information in
this Announcement, other than the information for which responsibility is taken
pursuant to paragraph (b) below. To the best of the knowledge and belief of the
Epicor Directors (who have taken all reasonable care to ensure that such is the
case), the information contained in this Announcement for which they are
responsible is in accordance with the facts and does not omit anything likely to
affect the import of such information.
(b) The NSB Directors accept responsibility for all the information
contained in this Announcement relating to NSB, the NSB Group, the opinions of
NSB and the NSB Group, the NSB Directors and members of their immediate
families, related trusts and their connected persons. To the best of the
knowledge and belief of the NSB Directors (who have taken all reasonable care to
ensure that such is the case), the information contained in this Announcement
for which they are responsible is in accordance with the facts and does not omit
anything likely to affect the import of such information.
Enquiries:
Epicor Software Corporation Tel: +1 949 585 4000
George Klaus
Michael Piraino
Mark Duffell
Damon Wright
UBS Investment Bank (financial adviser to Epicor) Tel: +1 310 556 6700
John Joliet
Scott Jacobsen
Craig Calvert (UK) Tel: +44 (0) 20 7567 8000
NSB Retail Systems PLC Tel: +1 514 426 0822
Angus Monro
David Henning
Stuart Mitchell
Close Brothers (financial adviser to NSB) Tel: +44 (0) 20 7655 3100
Simon Willis
James Craven
Dresdner Kleinwort (broker to NSB) Tel: +44 (0) 20 7623 8000
James Rudd
RedLeaf Communications Tel: +44 (0) 20 7822 0200
Emma Kane
Samantha Robbins
UBS Investment Bank is acting exclusively as financial adviser to Epicor and no
one else in connection with the Proposals and will not be responsible to anyone
other than Epicor for providing the protections afforded to clients of UBS
Investment Bank or for providing advice in relation to the Proposals or any
other matters referred to in this Announcement.
Close Brothers, which is authorised and regulated in the United Kingdom by the
Financial Services Authority is acting exclusively for NSB and no one else in
connection with the Proposals and will not be responsible to anyone other than
NSB for providing the protections afforded to clients of Close Brothers or for
providing advice in relation to the Proposals or any other matters referred to
in this Announcement.
This Announcement is not intended to and does not constitute or form any part
of, an offer to sell or an invitation to purchase or the solicitation of an
offer to subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Proposals or otherwise.
The distribution of this Announcement in jurisdictions other than the United
Kingdom may be restricted by law and therefore any persons who are subject to
the laws of any jurisdiction other than the United Kingdom should inform
themselves about, and observe, any applicable requirements. This Announcement
has been prepared for the purpose of complying with English law and the Takeover
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 the United Kingdom.
The availability of the Proposals to persons not resident in the UK may be
affected by the laws of the relevant jurisdiction in which they are located.
Persons who are not resident in the United Kingdom should inform themselves of
and observe any applicable requirements.
The Proposals will be carried out by way of scheme of arrangement under UK law
and are subject to UK disclosure requirements, which are different from those of
the United States or Canada. The Proposals will be subject to disclosure and
other procedural requirements, including with respect to withdrawal rights,
timetable, settlement procedures and timing of payments that are different from
those applicable under US or Canadian procedures and law.
Each holder of NSB Shares is urged to consult his independent professional
advisers immediately regarding the tax consequences of the Proposals.
Forward-Looking Statements
This Announcement contains certain forward-looking statements with respect to
the financial condition, results of operations and business of the NSB Group and
Epicor Group and certain plans and objectives of the boards of directors of NSB
and Epicor. These forward-looking statements can be identified by the fact that
they do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", "will", "may", "should", "would", "could"
or other words of similar meaning. These statements are based on assumptions
and assessments made by the boards of directors of NSB and Epicor in light of
their experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe appropriate. By
their nature, forward-looking statements involve risk and uncertainty, and the
factors described in the context of such forward-looking statements in this
Announcement could cause actual results and developments to differ materially
from those expressed in or implied by such forward-looking statements.
Should one or more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary materially from
those described in this Announcement. NSB and Epicor assume no obligation to
update or correct the information contained in this Announcement, whether as a
result of new information, future events or otherwise, except to the extent
legally required.
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set out in this Announcement since such
date. Nothing contained in this Announcement shall be deemed to be a forecast,
projection or estimate of the future financial performance of NSB Epicor except
where expressly stated.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code, if any person is, or
becomes, "interested" (directly or indirectly) in 1% or more of any class of
"relevant securities" of NSB, all "dealings" in any "relevant securities" of NSB
(including by means of an option in respect of, or a derivative referenced to,
any such "relevant securities") must be publicly disclosed by no later than
3.30pm (London time) on the Business Day following the date of the relevant
transaction. This requirement will continue until the Effective Date of the
Scheme (or such later date(s) as the Panel may specify). If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an "interest" in "relevant securities" of NSB, they will be
deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Takeover Code, all "dealings" in
"relevant securities" of NSB, by Epicor or NSB, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at http://
www.thetakeoverpanel.org.uk/.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Takeover Code, which can also be
found on the Panel's website. If you are in any doubt as to whether or not you
are required to disclose a "dealing" under Rule 8, you should consult the Panel
on telephone number +44 (0)20 7638 0129; fax number +44 (0)20 7236 7013.
APPENDIX I
CONDITIONS TO IMPLEMENTATION OF THE PROPOSALS
1. The Proposals will be conditional upon the Scheme becoming
unconditional and being implemented by no later than 31 March 2008 or such later
date as, subject to the Takeover Code, NSB and Epicor Retail may agree and (if
required) the Court may allow.
The Scheme will be conditional upon:
(a) approval of the Scheme by a majority in number representing 75 per
cent. or more in value of the Scheme Shareholders who are present and voting,
either in person or by proxy, at the Court Meeting or at any adjournment of that
Meeting;
(b) the resolution to be set out in the notice of the NSB General Meeting
(namely the Special Resolution) being duly passed by the requisite majority at
the NSB General Meeting or at any adjournment of that Meeting; and
(c) the sanction (with or without modification (but subject to such
modification being acceptable to NSB and Epicor Retail)) of the Scheme and the
confirmation of the Capital Reduction by the Court, office copies of the Court
Orders and of the minute confirming the Capital Reduction being delivered for
registration to the Registrar of Companies in England and Wales and, in the case
of the Court Order confirming the Capital Reduction, registration of such Court
Order by the Registrar of Companies in England and Wales.
2. All filings have been made and all or any appropriate waiting periods
under the United States Hart Scott Rodino Anti-trust Improvements Act of 1976
and the regulations made thereunder having expired, lapsed or been terminated as
appropriate in each case in respect of the Proposals and the proposed
acquisition of any shares in, or control of, NSB by Epicor Retail.
3. NSB and Epicor Retail have agreed that, subject as stated in
paragraph below, application to the Court to sanction the Scheme and to confirm
the Capital Reduction will not be made unless the Conditions in paragraphs 1(a),
1(b) and 2 above have been fulfilled or satisfied and, immediately prior to the
hearing of the petition to sanction the Scheme (or any adjournment of such
hearing), the following conditions are satisfied or waived:
(a) save as disclosed, no government or governmental, quasi-governmental,
supranational, statutory, regulatory or investigative body, authority, court,
trade agency, association or institution or professional or environmental body
or any other similar person or body whatsoever in any relevant jurisdiction
(each a "Third Party") having decided, without the consent or agreement of
Epicor Retail to take, institute, implement or threaten any action, proceedings,
suit, investigation, enquiry or reference or having required any action to be
taken or information to be provided or otherwise having done anything or having
made, proposed or enacted any statute, regulation, order or decision or having
done anything which would or might reasonably be expected to (in each case to an
extent which is material in the context of the wider NSB Group or wider Epicor
Group in each case taken as a whole):
(i) make the Proposals or their implementation, or the acquisition or
the proposed acquisition by Epicor Retail of any shares or other securities in,
or control of, NSB or any of its subsidiaries or subsidiary undertakings or
associated undertakings (as defined in the Companies Act) (including any joint
venture, partnership, firm or company in which any member of the NSB Group is
substantially interested (the "wider NSB Group" (and "member of the wider NSB
Group" shall be construed accordingly)) void, illegal or unenforceable in any
relevant jurisdiction, or otherwise directly or indirectly restrain, prohibit,
restrict, prevent or delay the same or impose additional conditions or financial
or other obligations with respect thereto, or otherwise challenge or interfere
therewith;
(ii) require, prevent or delay the divestiture or alter the
terms envisaged for any proposed divestiture by Epicor or any of its
subsidiaries or subsidiary undertakings or associated undertakings (including
any joint venture, partnership, firm or company in which any member of the
Epicor Group is substantially interested) (the "wider Epicor Group" (and "member
of the wider Epicor Group" shall be construed accordingly)) of any NSB Shares or
of any shares in a member of the wider NSB Group;
(iii) require, prevent or delay the divestiture or alter the
terms envisaged for any proposed divestiture by any member of the wider Epicor
Group or by any member of the wider NSB Group of all or any portion of their
respective businesses, assets or property, or (to an extent which is material in
the context of the Proposals or the wider NSB Group concerned taken as a whole)
impose any limit on the ability of any of them to conduct their respective
businesses (or any of them) or to own or control any of their respective assets
or properties or any part thereof;
(iv) impose any material limitation on, or result in any
material delay in, the ability of any member of the wider Epicor Group or any
member of the wider NSB Group to acquire, hold or exercise effectively, directly
or indirectly, all or any rights of ownership of NSB Shares or any shares or
securities convertible into NSB Shares or to exercise voting or management
control over any member of the wider NSB Group;
(v) require any member of the wider Epicor Group and/or of
the wider NSB Group to acquire or offer to acquire or repay any shares or other
securities in and/or indebtedness of any member of the wider NSB Group owned by
or owed to any third party; or
(vi) impose any material limitation on the ability of any
member of the wider Epicor Group or the wider NSB Group to integrate or
co-ordinate its business, or any material part of it, with the business of any
member of the wider NSB Group or wider Epicor Group respectively;
(vii) otherwise adversely affect any or all of the businesses,
assets, prospects, profits or financial or trading position of any member of the
wider NSB Group or any member of the wider Epicor Group,
and all applicable waiting and other time periods during which any
Third Party could institute, implement or threaten any such action, proceedings,
suit, investigation, enquiry or reference under the laws of any relevant
jurisdiction, having expired, lapsed or been terminated;
(b) all necessary filings and applications having been made and all
necessary waiting and other time periods (including any extensions thereof)
under any applicable legislation or regulations of any relevant jurisdiction
having expired, lapsed or been terminated and all statutory or regulatory
obligations in any relevant jurisdiction having been complied with in each case
as may be necessary in connection with the Proposals or their implementation or
the acquisition or proposed acquisition by Epicor Retail or any member of the
wider Epicor Group of any shares or other securities in, or control of, NSB or
any member of the wider NSB Group, in each case to the extent the absence
thereof would have a material adverse effect in the context of the wider NSB
Group or the wider Epicor Group in each case taken as a whole; and all
authorisations, orders, recognitions, grants, consents, clearances,
confirmations, licences, certificates, permissions and approvals
("Authorisations") necessary for or in respect of the Proposals or the
acquisition or proposed acquisition by Epicor Retail of any shares or other
securities in, or control of, NSB or the carrying on by any member of the wider
NSB Group of its business or in relation to the affairs of any member of the
wider NSB Group, in each case to the extent the absence thereof would have a
material adverse effect in the context of the wider NSB Group or the wider
Epicor Group in each case taken as a whole, having been obtained in terms and in
a form reasonably satisfactory to Epicor Retail from all appropriate Third
Parties or persons with whom any member of the wider NSB Group has entered into
contractual arrangements and all such Authorisations remaining in full force and
effect and all filings necessary for such purpose having been made and there
being no notice or intimation of any intention to revoke, suspend, restrict or
amend or not renew the same; and there being no indication that the renewal
costs of any such Authorisation might be higher than the renewal costs for the
current Authorisation to an extent material in the context of the wider NSB
Group or the wider Epicor Group in each case taken as a whole;
(c) except as disclosed, there being no provision of any arrangement,
agreement, licence or other instrument to which any member of the wider NSB
Group is a party or by or to which any such member or any of its respective
assets is or are or may be bound, entitled or subject or any circumstance which,
in consequence of the making or implementation of the Proposals or the
acquisition or proposed acquisition of any shares or other securities in, or
control of, NSB or because of a change in the control or management of NSB or
otherwise, could reasonably be expected to result in (to an extent which is
material in the context of the wider NSB Group taken as a whole):
(i) any amount of monies borrowed by or other indebtedness
or liabilities actual or contingent of, or any grant available to, any member of
the wider NSB Group being or becoming repayable or capable of being declared
repayable immediately or prior to its stated maturity date or the ability of any
such member to borrow monies or incur any indebtedness being withdrawn or
inhibited or capable of being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business, property,
assets or interests of any member of the wider NSB Group or any such security
(whenever created, arising or having arisen) being enforced or becoming
enforceable;
(iii) any such arrangement, agreement, license or instrument
or the rights, liabilities, obligations, or interests of any member of the wider
NSB Group under any such arrangement, agreement, licence or instrument (or any
arrangement, agreement, licence or instrument relating to any such right,
liability, obligation, interest or business) or the interests or business of any
such member in or with any other person, firm, company or body being or becoming
capable of being terminated or adversely modified or adversely affected or any
adverse action being taken or any onerous obligation or liability arising
thereunder;
(iv) any asset or interest of any member of the wider NSB
Group being or falling to be disposed of or charged (otherwise than in the
ordinary course of trading) or ceasing to be available to any member of the
wider NSB 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 NSB Group (otherwise than in the ordinary course of trading);
(v) any member of the wider NSB Group ceasing to be able to
carry on business under any name under which it presently does so;
(vi) any member of the wider NSB Group and/or the wider NSB
Group being required to acquire or repay any shares in and/or indebtedness of
any member of the wider NSB Group owed by any third party;
(vii) any change in or effect on the ownership or use of any
intellectual property rights owned or used by any member of the wider Epicor
Group;
(viii) the value or financial or trading position of any member
of the wider NSB Group being prejudiced or adversely affected; or
(viii) the creation of any material liability, actual or
contingent, by any such member,
and no event having occurred which, under any provision of any such
arrangement, agreement, licence or other instrument, might reasonably be
expected to result in any of the events referred to in this Condition 3(c);
(d) since 31 December 2006 and except as disclosed, no member of the wider
NSB Group having:
(i) issued or agreed to issue or authorised or proposed the
issue of additional shares or securities of any class, or securities convertible
into or exchangeable for shares, or rights, warrants or options to subscribe for
or acquire any such shares, securities or convertible securities (save for
issues between NSB and any of its wholly-owned subsidiaries or between such
wholly-owned subsidiaries, save for the exchange of the Exchangeable Shares
issued by Exchangeco and save for options as disclosed to Epicor Retail granted
under the NSB Share Incentive Schemes before the date of this Announcement or
the issue of any NSB Shares allotted upon the exercise of options granted before
the date of this Announcement under the NSB Share Incentive Schemes) or
redeemed, purchased, repaid or reduced or proposed the redemption, purchase,
repayment or reduction of any part of its share capital or any other securities;
(ii) recommended, declared, made or paid or proposed to
recommend, declare, make or pay any bonus issue, dividend or other distribution
whether payable in cash or otherwise other than any distribution by any
wholly-owned subsidiary within the NSB Group;
(iii) save as between members of the NSB Group, effected,
authorised, proposed or announced or announced its intention to propose or made
any material change in its loan capital;
(iv) save as between members of the NSB Group, effected,
authorised, proposed or announced its intention to propose any merger, demerger,
reconstruction, arrangement, amalgamation, commitment or scheme or any
acquisition or disposal or transfer of assets or shares (other than in the
ordinary course of business) or any right, title or interest in any assets or
shares or other transaction or arrangement in respect of itself or another
member of the wider NSB Group which in each case would be material in the
context of the wider NSB Group taken as a whole;
(v) save as between members of the NSB Group, acquired or
disposed of or transferred (other than in the ordinary course of business) or
mortgaged, charged or encumbered any assets or shares or any right, title or
interest in any assets or shares (other than in the ordinary course of business)
or authorised the same or entered into, varied or terminated or authorised,
proposed or announced its intention to enter into, vary, terminate or authorise
any agreement, arrangement, contract, transaction or commitment (other than in
the ordinary course of business and whether in respect of capital expenditure or
otherwise) which is of a loss-making, long-term or unusual or onerous nature or
magnitude, or which involves or could involve an obligation of such a nature or
magnitude (other than in the ordinary course of trading), in each case which is
material in the context of the wider NSB Group taken as a whole;
(vi) entered into any agreement, contract, transaction,
arrangement or commitment which in any case is material in the context of the
wider NSB Group taken as a whole;
(vii) entered into any contract, transaction or arrangement
which would be restrictive on the business of any member of the wider NSB Group
or the wider Epicor Group or which is or could involve obligations which would
or might reasonably be expected to be so restrictive;
(viii) save for transactions between members of the NSB Group
or transactions carried out by members of the NSB Group in the ordinary course
of trading, issued, authorised or proposed the issue of or made any change in or
to any debentures, or (other than in the ordinary course of trading) incurred or
increased any indebtedness or liability, actual or contingent, which is material
in the context of the wider NSB Group taken as a whole;
(ix) been unable or admitted that it is unable to pay its
debts or having stopped or suspended (or threatened to stop or suspend) payment
of its debts generally or ceased or threatened to cease carrying on all or a
substantial part of its business or proposed or entered into any composition or
voluntary arrangement with its creditors (or any class of them) or the filing at
court of documentation in order to obtain a moratorium prior to a voluntary
arrangement or, by reason of actual or anticipated financial difficulties,
commenced negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness;
(x) made, or announced any proposal to make, any change or
addition to any retirement, death or disability benefit or any other
employment-related benefit of or in respect of any of its directors, employees,
former directors or former employees in a manner which is material in the
context of the wider NSB Group taken as a whole;
(xi) save as between NSB and its wholly-owned subsidiaries,
granted any lease or third party rights in respect of any of the leasehold or
freehold property owned or occupied by it or transferred or otherwise disposed
of any such property in any case which is material in the context of the wider
NSB Group taken as a whole;
(xii) entered into or materially varied or made any offer
(which remains open for acceptance) to enter into or materially vary the terms
of any service agreement with any director or senior executive of NSB or any
director or senior executive of the wider NSB Group;
(xiii) taken or proposed any corporate action or had any
proceedings started or threatened against it for its winding-up (voluntary or
otherwise), dissolution, striking-off or reorganisation or for the appointment
of a receiver, administrator (including the filing of any administration
application, notice of intention to appoint an administrator or notice of
appointment of an administrator), administrative receiver, trustee or similar
officer of all or any material part of its assets or revenues or for any
analogous proceedings or steps in any relevant jurisdiction or for the
appointment of any analogous person in any relevant jurisdiction which in any
case is material in the context of the NSB Group taken as a whole;
(xiv) made any amendment to its memorandum or articles of
association which is materially prejudicial to the Proposals;
(xv) waived or compromised any claim or authorised any such
waiver or compromise, save in the ordinary course of business, which is material
in the context of the wider NSB Group taken as a whole;
(xvi) taken, entered into or had started or threatened against
it in a relevant jurisdiction outside England and Wales any form of insolvency
proceeding or event similar or analogous to any of the events referred to in
Conditions 3(d)(ix) and (xiii) above; or
(xvii) agreed to enter into or entered into an agreement or
arrangement or commitment or passed any resolution or announced any intention
with respect to any of the transactions, matters or events referred to in this
Condition 3(d);
(e) except as disclosed:
(i) there having been no adverse change or deterioration in
the business, assets, financial or trading position or profits or prospects of
the wider NSB Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the wider NSB Group is or may
become a party (whether as claimant or defendant or otherwise), and no enquiry
or investigation by or complaint or reference to any Third Party, against or in
respect of any member of the wider NSB Group, having been threatened, announced
or instituted or remaining outstanding by, against or in respect of any member
of the wider NSB Group which is material in the context of the NSB Group taken
as a whole; and
(iii) no contingent or other liability having arisen or
become apparent or increased which might be likely in either case to have a
material adverse effect on the wider NSB Group taken as a whole;
(f) save as disclosed, Epicor Retail not having discovered:
(i) that any financial, business or other information
concerning NSB or the wider NSB Group which is contained in the information
publicly disclosed at any time by or on behalf of any member of the wider NSB
Group either publicly or in the context of the Proposals contains a material
misrepresentation of fact which has not, prior to the date of this Announcement,
been corrected by public announcement through an RIS or omits to state a fact
necessary to make the information contained therein not materially misleading in
the context of the wider NSB Group taken as a whole;
(ii) any information which materially affects the import of
any such information as is mentioned in Condition 3(f)(i) to an extent which is
material in the context of the wider NSB Group taken as a whole; or
(iii) that any member of the wider NSB Group is subject to
any liability, contingent or otherwise, which is not disclosed in the annual
report and accounts of NSB for the twelve months ended 31 December 2006 or which
has otherwise not been fairly disclosed to Epicor Retail by or on behalf of NSB
prior to the date of this Announcement and which is material in the context of
the wider NSB Group taken as a whole;
(g) save as disclosed, Epicor Retail not having discovered that:
(i) there has been a disposal, spillage or leakage of waste
or hazardous substance or any substance reasonably likely to impair the
environment or harm human health on, or there has been an emission or discharge
of any waste or hazardous substance or any substance reasonably likely to impair
the environment or harm human health from, any land or other asset now or
previously owned, occupied or made use of by any member of the wider NSB Group
which would be reasonably likely to give rise to any liability (whether actual
or contingent, civil or criminal) or cost on the part of any member of the wider
NSB Group which is material in the context of the wider NSB Group taken as a
whole;
(ii) any member of the wider NSB Group has failed to comply
with any and/or all applicable legislation or regulations of any relevant
jurisdiction with regard to the use, treatment, handling, storage, transport,
disposal, spillage, release, discharge, leak or emission of any waste or
hazardous substance or any substance reasonably likely to impair the environment
or harm human health or animal health or otherwise relating to environmental
matters, or that there has otherwise been any such use, treatment, handling,
storage, transport, disposal, spillage, release, discharge, leak or emission
(whether or not the same constituted a non-compliance by any member of the wider
NSB Group with any such legislation or regulations, and wherever the same may
have taken place) any of which use, treatment, handling, storage, transport,
disposal, spillage, release, discharge, leak or emission would be likely to give
rise to any liability (actual or contingent, civil or criminal) or cost on the
part of any member of the wider NSB Group which is material in the context of
the wider NSB Group taken as a whole;
(iii) there is, or is likely to be, for that or any other
reason whatsoever, any liability (actual or contingent) on any member of the
wider NSB Group to make good, alter, improve, repair, reinstate, clean up or
otherwise assume responsibility for any property or any controlled waters now or
previously owned, occupied or made use of or controlled by any such past or
present member of the wider NSB Group, under any environmental legislation,
regulation, notice, circular or order or any government, governmental,
quasi-governmental, state or local government, supranational, statutory or other
regulatory body, agency, court, association or any other person or body in any
relevant jurisdiction which is in any case material in the context of the NSB
Group taken as a whole;
(iv) circumstances exist whereby a person or class of persons
would be reasonably likely to have a claim or claims in respect of any product
or process of manufacture or materials used therein now or previously
manufactured, sold or carried out by any member of the wider NSB Group, which
claim or claims would be reasonably likely to have a material adverse effect on
any member of the wider NSB Group to an extent which is material in the context
of the wider NSB Group taken as a whole;
(v) circumstances exist (whether as a result of the making of
the Offer or otherwise) which would be reasonably likely to lead to any third
party instituting, or whereby any member of the wider NSB Group would be
reasonably likely to be required to institute, an environmental audit or take
any other steps which would, in any such case, be reasonably likely to result in
any actual or contingent liability to improve or install new plant or equipment
or make good, repair, reinstate or clean up any land or other asset now or
previously owned, occupied or made use of by any member of the wider NSB Group,
which, in any such case, would be material in the context of the wider NSB Group
taken as a whole,
4. Epicor Retail reserves the right to waive all or any of the
Conditions in paragraph 3 above.
5. If Epicor Retail is required by the Panel to make an offer for the
NSB Shares under Rule 9 of the Takeover Code, Epicor Retail may make such
alteration to the terms and conditions of the Transaction as may be necessary to
comply with the provisions of the Takeover Code.
6. Epicor Retail reserves the right to elect to implement the
Transaction by way of a takeover offer. In such event, such offer will be
implemented on the same terms (subject to appropriate amendments, including
(without limitation) an acceptance condition set at 90 per cent. (or such lesser
percentage as Epicor Retail may, subject to compliance with the Takeover Code,
decide) of the NSB Shares to which such offer relates), so far as applicable, as
those which would apply to the Scheme.
7. Epicor Retail will not invoke any of the Conditions in paragraph 3
unless the circumstances that give rise to the right to invoke the relevant
Conditions are of material significance to Epicor Retail in the context of the
Transaction.
8. If the Scheme is effected, NSB Shareholders will be deemed to have
confirmed to NSB that the NSB Shares held by them are fully paid and free from
all liens, charges, equitable interests, encumbrances, rights of pre-emption and
any other rights and interest of any nature whatsoever.
9. For the purpose of these Conditions:
(a) "disclosed" means disclosed in:
(i) any of the documents made available as at 6.00 p.m. on
13 December 2007 in respect of the proposed Transaction in the electronic data
room;
(ii) any other information delivered to an Information
Recipient in respect of the Transaction by or on behalf of NSB on or before 6.00
p.m. on 13 December 2007;
(iii) any public announcement by NSB to a RIS on or before
6.00 p.m. on 13 December 2007;
(iv) the announcement released on 13 March 2007 by NSB of
its preliminary results for the financial year ended 31 December 2006 and on 11
September 2007 by NSB of the unaudited consolidated financial statements of the
NSB Group for the six month period ended 30 June 2007; or
(v) the report and accounts of NSB for the financial year
ended 31 December 2006.
(b) "Information Recipient" means each:
(i) any director or employee of any member of the Epicor
Group; and
(ii) any professional advisers engaged by any member of the
Epicor Group in connection with the Transaction.
10. The Transaction and the Scheme are governed by English Law and will be
subject to the exclusive jurisdiction of the English courts and the conditions
set out above.
APPENDIX II
BASES OF CALCULATION AND SOURCES OF INFORMATION
(a) The value attributed to the fully diluted ordinary share capital
of NSB is based upon 380,918,199 Ordinary Shares in issue as at the date of this
Announcement, 34,508,249 Exchangeable Shares in issue at the date of this
Announcement, (each of which are exchangeable at the option of the holder or on
certain events into Ordinary Shares on a one-for-one basis) and no more than
5,953,587 options outstanding over Ordinary Shares at the date of this
Announcement in respect of which the exercise price is less than 38 pence per
Ordinary Share to be issued.
(b) The issued ordinary share capital of NSB entitled to vote at the
Court Meeting is based upon 380,918,199 Ordinary Shares in issue as at the date
of this Announcement.
(c) The issued share capital of NSB is based upon 380,918,199
Ordinary Shares in issue as at the date of this Announcement and 34,508,249
Voting Shares in issue as at the date of this Announcement. Each Ordinary Share
and Voting Share holds one vote.
(d) Unless otherwise stated, all prices for NSB Shares have been
derived from the Daily Official List and represent the Closing Prices on the
relevant date.
(e) Unless otherwise stated, the market capitalisation of Epicor is
based upon 58,591,535 shares in issue and a closing price of US$11.73 per share
of Epicor common stock as at 13 December 2007.
(f) The closing price per common stock of Epicor as at 13 December
2007 is derived from the NASDAQ.
APPENDIX III
DEFINITIONS
AIM Alternative Investment Market, a market operated by
the London Stock Exchange
BT BT Group plc
Business Day any day (other than a public holiday, Saturday or
Sunday) on which clearing banks in London are open
for normal business
Canadian Dollar Canadian Dollar (and references to "cent" shall be
construed accordingly)
Capital Reduction the proposed reduction of the capital of the Company
in connection with the Scheme
Close Brothers Close Brothers Corporate Finance Limited, financial
adviser to NSB
Closing Price the closing middle market quotation of a NSB Share
on the Daily Official List
Companies Act the Companies Act 1985 as amended, modified,
consolidated, re-enacted or replaced from time to
time
Conditions the conditions to the Scheme set out in Appendix I
Court the High Court of Justice in England and Wales
Court Meeting the meeting of the Scheme Shareholders to be
convened pursuant to an order of the Court pursuant
to section 425 of the Companies Act for the purpose
of considering and, if thought fit, approving the
Scheme, and any adjustment thereof
Court Order(s) the order of the Court sanctioning the Scheme under
section 425 of the Companies Act and the order of
the Court confirming the Capital Reduction under
section 137 of the Companies Act, or where the
context may require, either of them
CRM customer relationship management
Effective Date the date on which an office copy of the order of the
Court confirming the Capital Reduction provided for
by the Scheme has been delivered to the Registrar of
Companies for registration and is registered
Epicor Epicor Software Corporation, a Delaware company,
with its principal offices at 18200 Von Karman
Avenue, Suite 1000, Irvine, California 92612
Epicor Directors or Directors of Epicor the directors of Epicor at the date of this
Announcement
Epicor Group Epicor and its subsidiaries and subsidiary
undertakings
Epicor Retail Epicor Retail Solutions, Inc.
Exchangeable Shares 34,508,249 shares issued by Exchangeco which are
exchangeable on a one for one basis for Ordinary
Shares
Exchangeco 513165 N.B. Inc, a New Brunswick corporation which
is a member of the NSB Group
Excluded Shares any Ordinary Shares of which Epicor Retail is the
holder or in which Epicor Retail is beneficially
interested
First Court Hearing the Court hearing of the petition to sanction the
Scheme
holder a registered holder
Implementation Agreement the implementation and inducement fee agreement
dated 17 December 2007 between NSB and Epicor
London Stock Exchange London Stock Exchange plc
Meetings the Court Meeting and the NSB General Meeting
New Ordinary Shares the new ordinary shares of 2 pence each in the
capital of NSB to be issued in accordance with the
Proposals
NSB or the Company NSB Retail Systems PLC
NSB Articles the articles of association of NSB from time to time
NSB Directors, Directors of NSB or NSB Board the directors of NSB at the date of this
Announcement
NSB General Meeting the general meeting of NSB Shareholders (and any
adjournment thereof) to be convened in connection
with the Proposals
NSB Group NSB and its subsidiaries and subsidiary undertakings
NSB Share Incentive Schemes the NSB Long Term Incentive Stock Option Plan for
former Employees of STS Systems, the NSB Long-Term
Incentive Plan, the NSB 1998 Share Option Scheme,
the NSB Savings-Related Share Option Scheme, the NSB
U.S. Sharesave Plan and the NSB Canadian Sharesave
Plan
NSB Shareholders holders of NSB Shares
NSB Shares the Ordinary Shares and the Voting Shares
Offer Period the period commencing on 13 December 2007, being the
date of the announcement by NSB that it was in
discussion that may or may not lead to an offer for
NSB, and ending on the date on the Effective Date
Official List the official list of the Financial Services
Authority
Ordinary Shares the ordinary shares of 2 pence each in the capital
of NSB
Panel the Panel on Takeovers and Mergers
Pound Sterling or � UK pound sterling (and references to "pence" shall
be construed accordingly)
POS point of sale
Proposals the Scheme and the other matters to be considered at
the Meetings
Regulatory Information Service any of the services set out in Appendix 3 to the
Listing Rules
Scheme Document the document to be posted to NSB Shareholders and
others containing, amongst other things, the Scheme
and the notices of the Meetings
Scheme or Scheme of Arrangement the scheme of arrangement proposed to be made under
section 425 of the Companies Act between NSB and the
holders of Scheme Shares, with or subject to any
modification, addition or condition approved or
imposed by the Court and agreed to by NSB and Epicor
Retail
Scheme Record Time 6:00 p.m. on the Business Day immediately preceding
the Second Court Hearing
Scheme Shareholders the holders of Scheme Shares
Scheme Shares (i) the Ordinary Shares in issue at the date of the
Scheme Document;
(ii) any Ordinary Shares issued after the date of
the Scheme Document and before the Voting Record
Time; and
(iii) any Ordinary 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,
other than the Excluded Shares
Second Court Hearing the Court hearing of the petition to confirm the
Capital Reduction
Special Resolution the special resolution to be proposed at the NSB
General Meeting in connection with, amongst other
things, the approval of the Scheme and the
sanctioning of the Capital Reduction
subsidiary and subsidiary undertaking the meaning given to these terms in the Companies
Act but for those purposes ignoring paragraph 20(1)
(b) of Schedule 4A to the Companies Act
substantial interest a direct or an indirect interest of 20 per cent. or
more of the voting rights exercisable in relation to
the undertaking or enterprise concerned or in the
equity capital or any class of equity capital of
such undertaking or enterprise
Takeover Code the City Code on Takeovers and Mergers
Transaction the proposed acquisition of the entire issued and to
be issued share capital of NSB by Epicor (acting
through its wholly-owned subsidiary, Epicor Retail)
to be effected by way of a scheme of arrangement
under section 425 of the Companies Act
UBS or UBS Investment Bank UBS Limited, financial adviser to Epicor
UK or United Kingdom the United Kingdom of Great Britain and Northern
Ireland (and its dependent territories)
US Dollar or US$ United States Dollar (and references to "cent" shall
be construed accordingly)
Voting Record Time 6:00 p.m. on the day which is two days before the
date of the Court Meeting or the NSB General Meeting
or, if the Court Meeting or the NSB General Meeting
is adjourned, 6:00 p.m. on the day prior to the day
immediately before the date fixed for the adjourned
meeting
Voting Shares special voting shares of 0.01p each in the capital
of NSB
All references to time in this document are to London time.
Words importing the singular shall include the plural and vice versa, and words
importing the masculine gender shall include the feminine or neutral gender.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFBFFASMWSWSEDE
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