Recommended Cash Acquisition of DWF Group plc
21/07/2023 11:15
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RNS Number : 8251G Inflexion Private Equity Partners 21 July 2023
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 THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EXEMPT DOCUMENT AND DWF
SHAREHOLDERS SHOULD NOT MAKE ANY DECISION IN RELATION TO THE CASH OFFER OR THE
PARTIAL SECURITIES ALTERNATIVE EXCEPT ON THE BASIS OF THE INFORMATION TO BE
CONTAINED IN THE SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE
COURSE
FOR IMMEDIATE RELEASE
21 July 2023
RECOMMENDED CASH ACQUISITION
OF
DWF group PLC
BY
AQUILA BIDCO LIMITED
a newly incorporated wholly-owned subsidiary of funds advised by
INFLEXION PRIVATE EQUITY PARTNERS LLP
to be implemented by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of Aquila Bidco Limited ("Bidco"), a newly
incorporated wholly-owned subsidiary of funds advised by Inflexion Private
Equity Partners LLP ("Inflexion") and DWF Group plc ("DWF") are pleased to
announce that they have reached agreement on the terms and conditions of a
recommended all cash offer by Bidco for the entire issued and to be issued
ordinary share capital of DWF (the "Acquisition"). The Acquisition is
intended to be implemented by means of a scheme of arrangement under Part 26
of the Companies Act.
· Under the terms of the Acquisition, each DWF Shareholder
will be entitled to receive:
100 pence for each DWF Share (the "Transaction Value")
valuing the entire issued, and to be issued, ordinary share capital of DWF at
approximately £342 million.
· The Transaction Value will comprise for each DWF Share
held at the Scheme Record Time:
- cash consideration of 97 pence per DWF Share (the
"Cash Offer"); and
- a special dividend of 3 pence per DWF Share, which
is conditional on the Acquisition becoming Effective (the "Special Dividend").
· The Transaction Value represents a premium of
approximately:
- 52.7 per cent. to the Closing Price of 65.5 pence
per DWF Share on 7 July 2023 (being the last Business Day before the date of
the commencement of the Offer Period);
- 81.8 per cent. to the daily volume weighted average
share price of 55.0 pence per DWF Share for the one month period ended on 7
July 2023 (being the last Business Day before the date of the commencement of
the Offer Period); and
- 71.7 per cent. to the daily volume weighted average
share price of 58.3 pence per DWF Share for the three month period ended on 7
July 2023 (being the last Business Day before the date of the commencement of
the Offer Period).
· Under the terms of the Acquisition, a Partial Securities
Alternative will be available to DWF Shareholders (other than DWF Shareholders
resident or located in a Restricted Jurisdiction) which will enable eligible
DWF Shareholders to elect to receive Loan Notes or Preference Shares in lieu
of part of the Transaction Value which they would otherwise be entitled to
receive in cash under the terms of the Acquisition. If an eligible DWF
Shareholder elects to receive the Partial Securities Alternative, they will
receive (at their discretion) either:
- 65 pence (being 65 per cent. of the Transaction Value)
as Loan Notes or Preference Shares (as applicable) and the remaining 35 pence
(being 35 per cent. of the Transaction Value) as cash (which shall include the
Special Dividend) (the "Rollover Alternative"); or
- 100 pence in cash (which shall include the
Special Dividend), of which 40 pence (being 40 per cent. of the Transaction
Value) shall be reinvested by subscribing for Loan Notes or Preference Shares
(as applicable) on a cashless basis pursuant to a subscription and payment
direction letter (the "Reinvestment Alternative").
· If the Acquisition becomes Effective, Scheme Shareholders
who do not validly elect to receive the Partial Securities Alternative will
automatically receive the full amount of the Transaction Value in cash for
their entire holding of Scheme Shares. In respect of the cash component
received by any Scheme Shareholder pursuant to the Cash Offer or the Partial
Securities Alternative, 3 pence per share shall be paid as a dividend by DWF
by way of the Special Dividend and the remainder shall be paid as
consideration for the sale of the Scheme Shares. Each DWF Shareholder shall
only be entitled to elect to receive the Partial Securities Alternative in
respect of all (and not some) of the DWF Shares held by them (excluding for
these purposes any DWF Shares of which they may become the legal or beneficial
holder as a result of the vesting of awards granted under the DWF Share Plans,
for which participants will be able to make a separate election to receive the
Partial Securities Alternative, as discussed further in paragraph 11 below).
· The DWF Directors intend to declare and pay the Special
Dividend of 3 pence per DWF Share to DWF Shareholders on the register of
members of DWF at the Scheme Record Time. The Special Dividend, payment of
which will be funded by Bidco, is conditional upon, and only payable if, the
Acquisition becomes Effective. The Special Dividend will not reduce the Cash
Offer.
· If any dividend, distribution and/or other return of value
is proposed, authorised, declared, made or paid or becomes payable in respect
of DWF Shares on or after the date of this Announcement and before the
Effective Date (other than the Special Dividend), Bidco reserves the right to
reduce the Cash Offer by the amount of any such dividend, distribution and/or
other return of value.
Information on Bidco and Inflexion
· Bidco is a private company limited by shares registered
in England and Wales and incorporated on 30 June 2023 with company number
14972770. Bidco is indirectly owned by funds advised by Inflexion. It was
formed for the purposes of the Acquisition and has not traded since its date
of incorporation, nor has it entered into any obligations other than in
connection with the Acquisition.
· Inflexion is a leading independent mid-market private
equity firm. Backing over 100+ investments and 430+ bolt ons for portfolio
companies since inception in 1999, Inflexion currently has £4.5bn of
investing funds and £7.2bn of assets under management. With a team of 140+
employees and offices located in the UK, Amsterdam, China, India, Singapore
and Brazil (with a London based European hub), Inflexion is a highly
experienced and committed investment partner which looks to guide companies on
their journey to future growth and expansion, enabling an average 21 per cent.
year-on-year EBITDA increase, 2x average full time employee increase and 3.6x
average return across realised investments. Inflexion has a European remit
with sector-led expertise and has been a client of DWF for over 10 years.
Inflexion has a value acceleration team that supports it's portfolio companies
to accelerate growth. This team includes capabilities in areas of M&A,
digital enhancement, commercial strategy, talent, ESG and international
expansion.
Background to and reasons for the Acquisition
· Inflexion has tracked the legal and alternative legal
service provider sectors for a number of years and recognises the genuinely
differentiated proposition that DWF offers through its integrated legal
management approach, which provides integrated legal and business services to
its clients globally.
· Inflexion believes private ownership is preferable for
DWF given the growth opportunities available to it. Inflexion fosters a close
working relationship with management for quick and efficient decision making,
partnering with management teams to accelerate growth in the best interests of
all stakeholders, including employees. With access to a significant amount of
capital, the Inflexion Funds are well-capitalised and able to support DWF in
continuing its strategy of acquiring bolt-on businesses, which is core to the
investment thesis.
· Inflexion intends to support DWF management to accelerate
DWF's organic and inorganic growth story.
Recommendation
· The DWF Directors, who have been so advised by Fenchurch
and Stifel as to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing their advice to the
DWF Directors, Fenchurch and Stifel have taken into account the commercial
assessments of the DWF Directors. Fenchurch and Stifel are providing
independent financial advice to the DWF Directors for the purposes of Rule 3
of the Takeover Code.
· Accordingly, the DWF Directors intend to recommend
unanimously that DWF Shareholders vote in favour (or procure votes in favour)
of the Scheme at the Court Meetings and vote in favour (or procure votes in
favour) of the Resolution(s) at the General Meeting as the DWF Directors who
hold DWF Shares as at the date of this Announcement have irrevocably
undertaken to do (or procure to be done) in respect of their own beneficial
holdings, amounting to 9,655,772 DWF Shares in aggregate, representing
approximately 5.3 per cent. of Scheme Shares entitled to vote at the Employee
Shareholder Court Meeting and 2.8 per cent. of the ordinary share capital of
DWF as at the Latest Practicable Date.
· The DWF Directors (other than the Independent
Non-Executive Directors) have each given irrevocable undertakings to accept
the Partial Securities Alternative in respect of their own DWF Shares. The
DWF Directors (other than the Independent Non-Executive Directors) have
undertaken to elect to receive the Partial Securities Alternative because it
allows them both to realise some cash on completion and to receive Loan Notes
or Preference Shares which will accrue a coupon. It also enables them to
retain a continuing indirect investment in the Wider DWF Group on terms which
most closely resemble their current direct investment, reflecting their
ongoing commitment to DWF's business.
· However, the DWF Directors are not able to and do not
give any advice to DWF Shareholders as to whether they should elect to receive
the Partial Securities Alternative as its benefits will depend on each DWF
Shareholder's individual tax and financial situation. DWF Shareholders should
consider whether receiving a significant part of the consideration in Loan
Notes or Preference Shares is a suitable payment alternative in light of their
own personal circumstances and investment objectives and are, therefore,
strongly recommended to seek their own independent financial, tax and legal
advice before deciding whether to elect to receive the Partial Securities
Alternative. DWF Shareholders should also ascertain whether acquiring or
holding Loan Notes or Preference Shares is affected by the laws of the
relevant jurisdiction in which they are resident.
· When considering whether to elect to receive the Partial
Securities Alternative, the attention of DWF Shareholders is drawn to
paragraph 11 below including, amongst other things, to the fact that whilst
the Loan Notes and Preference Shares will accrue a coupon, they are
non-transferable (save in very limited circumstances), unsecured, rank behind
the Senior Debt Facilities in relation to rights to returns and liquidation
preference and do not carry any voting or information rights. DWF
Shareholders are strongly recommended to consider these details carefully in
light of their own personal circumstances. In particular, DWF Shareholders who
are also employees or partners of DWF should consider the provisions
summarising the effect on their Loan Notes and Preference Shares if they
subsequently cease to be a partner or employee of DWF (summarised in paragraph
11 of the Announcement below).
· Accordingly, any decision to elect to receive the Partial
Securities Alternative should be based on each DWF Shareholder's personal
circumstances, independent financial, tax and legal advice and full
consideration of this Announcement and the Scheme Document.
Irrevocable undertakings
· In addition to the irrevocable undertakings given by the DWF
Directors, Bidco has also received irrevocable undertakings from 107 DWF
Partners and Senior Employees to vote or procure votes to approve the Scheme
at the Court Meetings and to vote or procure votes in favour of the
Resolutions to be proposed at the General Meeting.
· On 19 July 2023 (being the Latest Practicable Date) these
irrevocable undertakings together represented, in aggregate, 132,370,677 DWF
Shares, representing approximately: (i) 73.3 per cent. of Scheme Shares
entitled to vote at the Employee Shareholder Court Meeting; and (ii) 38.7 per
cent. of the ordinary share capital of DWF in issue as at the Latest
Practicable Date.
· Bidco has, therefore, received irrevocable undertakings in
respect of a total of 142,026,449 DWF Shares representing, in aggregate,
approximately 78.6 per cent. of Scheme Shares entitled to vote at the Employee
Shareholder Court Meeting and 41.5 per cent. of the ordinary share capital of
DWF as at the Latest Practicable Date.
· In addition, each of the irrevocable undertakings
received from the DWF Directors (other than the Independent Non-Executive
Directors) and from 90 DWF Partners and Senior Employees in respect of
114,222,044 DWF Shares, representing approximately 33.4 per cent. of the
ordinary share capital of DWF in issue as at the Latest Practicable Date
include an undertaking to accept the Partial Securities Alternative in respect
of the DWF Shares held by them as at the Latest Practicable Date. The
undertaking to elect to receive the Partial Securities Alternative was not
given by any person in respect of any DWF Shares of which they may become the
legal or beneficial holder as a result of the vesting of awards granted under
the DWF Share Plans.
· Full details of the irrevocable undertakings are set out
in Appendix 3 to this Announcement.
Timetable and Conditions
· It is intended that the Acquisition will be implemented
by means of a court-sanctioned scheme of arrangement under Part 26 of the
Companies Act (although Bidco reserves the right to effect the Acquisition by
way of a Takeover Offer, subject to the consent of the Panel and the terms of
the Co-operation Agreement).
· The terms of the Acquisition will be put to DWF
Shareholders at two separate Court Meetings and the General Meeting. The
Court Meetings and the General Meeting are required to enable DWF Shareholders
to consider, and if thought fit, vote in favour of the Scheme and the
Resolutions to implement the Scheme. Employees and/or partners that hold DWF
Shares (including close relatives of any such persons) and the EBT and RST are
being treated as a separate class of shareholders from all other DWF
Shareholders for the purposes of the meetings convened by the Court because
the terms of the Partial Securities Alternative include "leaver" provisions
which, although they apply to all DWF Shareholders that accept the Partial
Securities Alternative, are only relevant to DWF Shareholders that are current
employees and/or partners of DWF. In order to become Effective, the Scheme
must be approved by a majority in number of Scheme Shareholders, present and
voting at each separate Court Meeting (and entitled to vote), whether in
person or by proxy, representing at least 75 per cent. in value of the Scheme
Shares held by those Scheme Shareholders who have voted at each separate Court
Meeting. In addition, at the General Meeting the Resolutions must each be
passed by DWF Shareholders representing at least 75 per cent. of the votes
validly cast on such Resolutions, whether in person or by proxy. The General
Meeting is expected to be held immediately after the Court Meetings.
· The Scheme will also need to be sanctioned by the Court.
Finally, a copy of the Court Order must be delivered to the Registrar of
Companies for registration, upon which the Scheme will become Effective.
· The Acquisition will be made in accordance with the
Takeover Code and on the terms and subject to the Conditions set out in
Appendix 1 to this Announcement. Full details of the Acquisition will be set
out in the Scheme Document.
· It is expected that the Scheme Document, containing
further information about the Acquisition and notices of the Court Meetings
and the General Meeting, together with the associated Forms of Proxy and Forms
of Election, will be sent to DWF Shareholders within 28 days of this
Announcement (or such later time as DWF, Bidco and the Panel agree) and the
Meetings are expected to be held shortly thereafter.
· The Acquisition is currently expected to become Effective
around Q4 2023, subject to the satisfaction (or, where applicable, waiver) of
the Conditions and further terms set out in Appendix 1 to this Announcement.
An expected timetable of key events relating to the Acquisition will be
provided in the Scheme Document.
Comments on the Acquisition
· Commenting on the Acquisition, Jonathan Bloomer, Chairman
of DWF, said:
"The DWF board of directors is pleased to announce its unanimous
recommendation of this Acquisition, which is highly attractive not only for
our internal and external shareholders, but also for our clients, employees
and other stakeholders. DWF is a leading global provider of integrated legal
and business services, with its success driven by the quality of its people,
the strength of its client relationships and its truly integrated business
model. The DWF board of directors recognises the opportunities that could be
delivered under private ownership with Inflexion, which includes access to
significant capital to invest in staff and technology, accelerated lateral
hiring and transformative acquisitions across jurisdictions. Inflexion has a
clear ambition to support the management team to execute its strategy to
create a global professional services business emanating from the legal sector
and this will enhance the already exceptional and differentiated services that
we deliver for our clients."
· Commenting on the Acquisition, Flor Kassai, Head of
Inflexion's Buyout Fund, said:
"We have followed DWF's progress since IPO with interest and have been very
impressed with the development of the business and expansion of its offering
to date. We are excited to partner with DWF as we look to support the business
in delivering on its vision to become the leading provider of integrated legal
and business professional services, through continued strong organic growth
and targeted acquisitions in the UK and international markets."
This summary should be read in conjunction with, and is subject to, the full
text of the following announcement (including its Appendices). The
Acquisition will be subject to the Conditions and certain further terms set
out in Appendix 1 to this Announcement and to the full terms and conditions
which will be set out in the Scheme Document. Appendix 2 to this
Announcement contains the sources of information and bases of calculations of
certain information contained in this Announcement. Appendix 3 to this
Announcement contains a summary of the irrevocable undertakings and letters of
intent received by Bidco in relation to this Acquisition. Appendix 4 to this
Announcement contains definitions of certain terms and expressions used in
this summary and in the following announcement (including its Appendices).
Enquiries:
Bidco and Inflexion +44 7767 481163
Sarah Gestetner
Rothschild & Co +44 20 7280 5000
(Financial Adviser to Bidco and Inflexion)
Ravi Gupta
Martin Tomaszewski
Harry Thompson
DWF Group plc +44 7971 983533
James Igoe, Head of Communications and IR
Fenchurch +44 20 7382 2222
(Joint Financial Adviser to DWF)
Kunal Gandhi
Philip Evans
Richard Locke
Ben Spalton
Stifel +44 20 7710 7600
(Joint Financial Adviser to DWF)
Robin Mann
Gareth Hunt
Fred Walsh
H/Advisors Maitland (Public Relations Adviser to DWF)
DWF-maitland@h-advisors.global
Sam Turvey +44 7827 836246
Sam Cartwright +44 7827 254561
Travers Smith LLP is acting as legal adviser to Bidco and Inflexion.
Dorsey & Whitney (Europe) LLP is acting as legal adviser to DWF and
Skadden, Arps, Slate, Meagher & Flom (UK) LLP is acting as equity
compensation legal adviser to DWF.
This Announcement contains certain inside information for the purposes of
Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK
domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"),
and is disclosed in accordance with DWF's obligations under Article 17 of MAR.
For the purposes of MAR, this announcement is being made on behalf of DWF by
Darren Drabble, Company Secretary.
Disclaimers
N.M. Rothschild & Sons Limited ("Rothschild & Co"), which is
authorised and regulated by the FCA in the United Kingdom, is acting
exclusively as financial adviser to Bidco and Inflexion and for no one else in
connection with the matters referred to in this Announcement and will not be
responsible to anyone other than Bidco and Inflexion for providing the
protections afforded to clients of Rothschild & Co, nor for providing
advice in relation to the Acquisition or any other matters referred to in this
Announcement. Neither Rothschild & Co nor any of its affiliates (nor their
respective directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Rothschild & Co in connection with this Announcement, any
statement contained in this Announcement, the Acquisition or otherwise. No
representation or warranty, express or implied, is made by Rothschild & Co
as to the contents of this Announcement.
Fenchurch Advisory Partners LLP ("Fenchurch"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively as joint financial adviser for DWF and no-one else in connection
with the Acquisition described in this Announcement and accordingly will not
be responsible to anyone other than DWF for providing the protections afforded
to its clients nor for providing advice in relation to the matters described
in this Announcement.
Stifel Nicolaus Europe Limited ("Stifel"), which is authorised and regulated
by the FCA in the United Kingdom, is acting exclusively as joint financial
adviser, alongside Fenchurch, to DWF and for no one else in connection with
the matters referred to in this Announcement and will not be responsible to
anyone other than DWF for providing the protections afforded to clients of
Stifel, nor for providing advice in relation to the Acquisition or any other
matters referred to in this Announcement.
Further information
This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer or inducement to sell or an
invitation to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of, any securities or the solicitation of an offer to buy any
securities, any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise, nor shall there be any purchase, sale, issuance or
exchange of securities or such solicitation in any jurisdiction in which such
offer, solicitation, sale issuance or exchange is unlawful. The Acquisition
will be made solely by means of the Scheme Document (or, if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document), which will
contain the full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any vote or other decision in
respect of, or other response to, the Acquisition should be made only on the
basis of the information in the Scheme Document (or, if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document).
This Announcement has been prepared in connection with proposals in relation
to a scheme of arrangement pursuant to and for the purpose of complying with
English law, the Listing Rules and the Takeover Code and information disclosed
may not be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of jurisdictions
outside England. Nothing in this Announcement should be relied on for any
other purpose.
DWF and Bidco will prepare the Scheme Document (or, if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document) to be distributed
to DWF Shareholders at no cost to them. DWF and Bidco urge DWF Shareholders
to read the Scheme Document when it becomes available because it will contain
important information relating to the Acquisition.
This Announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document.
Overseas jurisdictions
This Announcement has been prepared in accordance with and for the purpose of
complying with the laws of England and Wales, the Takeover Code, the Listing
Rules, and the Market Abuse Regulation (EU 596/2014) (which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018) and the Disclosure
Guidance and Transparency Rules and information disclosed may not be the same
as that which would have been disclosed if this Announcement had been prepared
in accordance with the laws of jurisdictions outside England and Wales.
The release, publication or distribution of this Announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by the
laws of those jurisdictions and therefore any persons into whose possession
this Announcement comes should inform themselves of, and observe, such
restrictions. In particular, the ability of persons who are not resident in
the United Kingdom to vote their DWF Shares with respect to the Scheme and the
Court Meetings, or to execute and deliver forms of proxy appointing another to
vote at the applicable Court Meeting on their behalf may be affected by the
laws of the relevant jurisdiction in which they are located. Further details
in relation to the Overseas Shareholders will be contained in the Scheme
Document. Any failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such means from within a Restricted
Jurisdiction or any other jurisdiction if to do so would constitute a
violation of the laws of that jurisdiction. Accordingly, copies of this
Announcement and all documents relating to the Acquisition are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
Announcement and all documents relating to the Acquisition (including
custodians, nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would violate the
laws in that jurisdiction.
The availability of the Acquisition to DWF Shareholders who are not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in
the United Kingdom should inform themselves of, and observe, any applicable
requirements. To the fullest extent permitted by applicable law, the companies
and persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
The Acquisition shall be subject to English law and the jurisdiction of the
Court and to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the FCA, the Listing Rules and the Registrar of
Companies.
Additional information for US investors in DWF
DWF Shareholders in the United States should note that the Acquisition relates
to the shares of an English company with a listing on the Main Market and is
proposed to be effected by means of a scheme of arrangement under English law.
This Announcement, the Scheme Document and certain other documents relating
to the Acquisition have been or will be prepared in accordance with English
law, the Takeover Code and UK disclosure requirements, format and style, all
of which differ from those in the United States. A transaction effected by
means of a scheme of arrangement is not subject to the tender offer rules or
the proxy solicitation rules under the US Exchange Act. Accordingly, the
Acquisition is subject to the disclosure requirements of and practices
applicable in the United Kingdom to schemes of arrangement, which differ from
the disclosure requirements of the United States tender offer and proxy
solicitation rules. If, in the future, Bidco exercises the right to
implement the Acquisition by way of a Takeover Offer and determines to extend
the offer into the United States, the Acquisition will be made in compliance
with applicable United States laws and regulations, including any applicable
exemptions under the US Exchange Act.
The Loan Notes, the Preference Shares, the Bidco Rollover Loan Notes, the
Midco 2 Rollover Loan Notes and the Bidco Rollover Preference Shares have not
been, and will not be, registered under the US Securities Act or with any
securities regulatory authority of any state or other jurisdiction of the
United States and may not be offered, sold, exercised, resold, transferred or
delivered, directly or indirectly, in or into the United States except
pursuant to an exemption from the registration requirements of the US
Securities Act. There will be no public offer of Loan Notes or Preference
Shares in the United States. Accordingly, the Partial Securities Alternative
is not being offered, and will not be offered, directly or indirectly in or
into, or by use of the mails of, or by any means or instrumentality of
interstate or foreign commerce of or of any facilities of a national
securities exchange of, the United States. This includes, but is not limited
to, facsimile transmission, electronic mail, telex, telephone, the internet
and other forms of electronic communication. The Partial Securities
Alternative may not be applied to by any such use, means, instrumentality or
facility from or within the United States or by persons located or resident in
the United States. Accordingly, materials allowing for the Partial Securities
Alternative are not being, and must not be, directly or indirectly mailed or
otherwise published, transmitted, distributed or forwarded (including, without
limitation, by custodians, nominees or trustees) in or into the United States
or to any US persons or any persons located or resident in the United States.
Any purported applicability of the Partial Securities Alternative resulting
directly or indirectly from a violation of these restrictions will be invalid
and any purported applicability of the Partial Securities Alternative made by
a person located in the United States or any agent, fiduciary or other
intermediary acting on a non-discretionary basis for a principal giving
instructions from within the United States will be invalid and will not be
accepted.
Each person electing to receive the Partial Securities Alternative will
represent that it is not a US person, it is not located in the United States
and it is not participating in the Acquisition from the United States or
acting on a non-discretionary basis for a principal that is not a US person,
it is located outside the United States and that it is not giving an order to
participate in the Partial Securities Alternative from the United States. For
the purposes of this and the above paragraph, "United States" means United
States of America, its territories and possessions (including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern
Mariana Islands), any state of the United States of America and the District
of Columbia.
DWF's financial statements, and all financial information that is included in
this Announcement, the Scheme Document or any other documents relating to the
Acquisition, have been or will be prepared in accordance with UK-adopted
international accounting standards and may not be comparable to financial
statements of companies in the United States or other companies whose
financial statements are prepared in accordance with US generally accepted
accounting principles.
The receipt of cash pursuant to the Acquisition by a US holder as
consideration for the transfer of its DWF Shares pursuant to the Scheme will
likely be a taxable transaction for United States federal income tax purposes
and under applicable United States state and local, as well as foreign and
other, tax laws. Each DWF Shareholder is urged to consult their independent
professional adviser immediately regarding the tax consequences of the
Acquisition applicable to them.
It may be difficult for US holders to enforce their rights and claims arising
out of the US federal securities laws, since Bidco and DWF are located in
countries other than the US, and some or all of their officers and directors
may be residents of countries other than the US. US holders may not be able
to sue a non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to compel a
non-US company and its affiliates to subject themselves to a US court's
judgement.
In accordance with normal UK practice and consistent with Rule 14e-5(b) of the
US Exchange Act, (to the extent applicable) Bidco, certain affiliated
companies and their nominees or brokers (acting as agents) may make certain
purchases of, or arrangements to purchase, shares in DWF outside of the US,
other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn.
If such purchases or arrangements to purchase were to be made they would
occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Exchange Act. Any information about such purchases or arrangements to
purchase will be disclosed as required in the United Kingdom, will be reported
to a Regulatory Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com
(http://www.londonstockexchange.com) .
Neither the United States Securities and Exchange Commission nor any US state
securities commission has approved or disapproved the Acquisition, passed upon
the merits or fairness of the Acquisition or passed any opinion upon the
accuracy, adequacy or completeness of this Announcement (nor will it do so in
respect of the Scheme Document). Any representation to the contrary is a
criminal offence in the United States.
Forward looking statements
This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco, Inflexion, DWF, any member of the Wider Bidco
Group or any member of the Wider DWF Group may contain statements which are,
or may be deemed to be, "forward looking statements". Forward looking
statements are prospective in nature and are not based on historical facts,
but rather on current expectations and projections about future events, and
are therefore subject to risks and uncertainties which could cause actual
results to differ materially from the future results expressed or implied by
the forward looking statements.
The forward looking statements contained in this Announcement include
statements relating to the expected effects of the Acquisition on Bidco,
Inflexion, DWF, any member of the Wider Bidco Group or any member of the Wider
DWF Group (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts. Often, but not always, forward looking statements can be
identified by the use of forward looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "intends", "cost-saving", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Forward looking
statements may include statements relating to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Bidco's, Inflexion's, DWF's, any member of the Wider Bidco
Group's or any member of the Wider DWF Group's operations and potential
synergies resulting from the Acquisition; and (iii) the effects of global
economic conditions and governmental regulation on Bidco's, Inflexion's,
DWF's, any member of the Wider Bidco Group's or any member of the Wider DWF
Group's business.
Although Bidco and DWF believe that the expectations reflected in such forward
looking statements are reasonable, Bidco, Inflexion, DWF, these forward
looking statements are not guarantees of future performance and the Wider
Bidco Group and the Wider DWF Group can give no assurance that such
expectations will prove to be correct. By their nature, forward looking
statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ materially
from those expressed or implied by such forward looking statements.
These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions; changes in the global
political, economic, business and competitive environments and in market and
regulatory forces; changes in future exchange and interest rates; changes in
tax rates; future business combinations or disposals; changes in general
economic and business conditions; changes in the behaviour of other market
participants; the anticipated benefits from the proposed transaction not being
realised as a result of changes in general economic and market conditions in
the countries in which Bidco, Inflexion, DWF, the Wider Bidco Group and/or the
Wider DWF Group operate; weak, volatile or illiquid capital and/or credit
markets; changes in the degree of competition in the geographic and business
areas in which Bidco, Inflexion, DWF, the Wider Bidco Group and/or the Wider
DWF Group operate; and changes in laws or in supervisory expectations or
requirements. Other unknown or unpredictable factors could cause actual
results to differ materially from those expected, estimated or projected in
the forward looking statements. If any one or more of these risks or
uncertainties materialises or if any one or more of the assumptions proves
incorrect, actual results may differ materially from those expected, estimated
or projected. Such forward looking statements should therefore be construed in
the light of such factors.
Neither Bidco, Inflexion, DWF, the Wider Bidco Group nor the Wider DWF Group,
nor any of their respective associates or directors, officers or advisers,
provide any representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward looking statements in this
Announcement will actually occur. Given these risks and uncertainties,
potential investors are cautioned not to place any reliance on these forward
looking statements.
Specifically, statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated.
Other than in accordance with their legal or regulatory obligations, neither
Bidco, Inflexion, DWF, the Wider Bidco Group nor the Wider DWF Group is under
any obligation, and each such person expressly disclaims any intention or
obligation to update or revise any forward looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts, estimates or qualified benefits statements
No statement in this Announcement, or incorporated by reference in this
Announcement, is intended as a profit forecast, profit estimate or quantified
benefits statement for any period and no statement in this Announcement should
be interpreted to mean that earnings or earnings per share for DWF for the
current or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for DWF.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Publication on website
A copy of this Announcement and the documents required to be published
pursuant to Rule 26.1 of the Takeover Code will be available, free of charge,
subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, on DWF's website at
https://dwfgroup.com/en/investors/possible-offer-for-dwf-group-plc and Bidco's
website at www.dwfoffer.com by no later than 12.00 p.m. on the Business Day
following this Announcement. For the avoidance of doubt, neither the content
of DWF's website and Bidco's website is incorporated into, or forms part of,
this Announcement.
Information relating to DWF Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by DWF Shareholders, persons with information rights and other
relevant persons for the receipt of communications from DWF may be provided to
Bidco and Inflexion during the Offer Period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Right to receive documents in hard copy form
Any person entitled to receive a copy of documents, announcements and
information relating to the Acquisition is entitled to receive such documents
in hard copy form free of charge. For persons who receive a copy of this
Announcement in electronic form or via a website notification, a hard copy of
this Announcement will not be sent unless so requested. A person may request
that all future documents, announcements and information in relation to the
Acquisition are sent to them in hard copy form.
In accordance with Rule 30.3 of the Takeover Code, DWF Shareholders, persons
with information rights and participants in DWF Share Plans may request a hard
copy of this announcement by contacting DWF's registrars, Equiniti Limited, on
+44 (0)371 384 2050 or by submitting a request in writing at Equiniti Limited,
Aspect House, Spencer Road, Lancing West Sussex BN99 6DA. Lines are open from
8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except English and
Welsh public holidays). Calls are charged at the standard geographical rate
and will vary by provider. Calls from outside the United Kingdom will be
charged at the applicable international rate.
Please note the Shareholder Helpline cannot provide advice on the merits of
the Acquisition or the Scheme nor give any financial, investment, legal or tax
advice.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 p.m. (London time) on the 10th business day
following the commencement of the offer period and, if appropriate, by no
later than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
General
Bidco reserves the right to elect, with the consent of the Panel, and subject
to the terms of the Co-operation Agreement, to implement the Acquisition by
way of a Takeover Offer as an alternative to the Scheme. In such an event,
the Takeover Offer will be implemented on the same terms or, if Bidco so
decides, on such other terms being no less favourable (subject to appropriate
amendments), so far as applicable, as those which would apply to the Scheme
and subject to the amendment referred to in Appendix 1 to this Announcement.
Upon sufficient acceptances being received in respect of such Takeover
Offer, Bidco intends to exercise its rights to apply the provisions of Chapter
3 of Part 28 of the Companies Act so as to acquire compulsorily the remaining
DWF Shares in respect of which the Takeover Offer has not been accepted.
Investors should be aware that Bidco may purchase DWF Shares otherwise than
under any Takeover Offer or the Scheme, including pursuant to privately
negotiated purchases.
If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriate authorised
independent financial adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR PROSPECTUS EXEMPT DOCUMENT AND DWF
SHAREHOLDERS SHOULD NOT MAKE ANY DECISION IN RELATION TO THE CASH OFFER OR THE
PARTIAL SECURITIES ALTERNATIVE EXCEPT ON THE BASIS OF THE INFORMATION TO BE
CONTAINED IN THE SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE
COURSE
FOR IMMEDIATE RELEASE
21 July 2023
RECOMMENDED CASH ACQUISITION
OF
DWF group PLC
BY
AQUILA BIDCO LIMITED
a newly incorporated wholly-owned subsidiary of funds advised by
INFLEXION PRIVATE EQUITY PARTNERS LLP
to be implemented by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The boards of Aquila Bidco Limited ("Bidco"), a newly incorporated
wholly-owned subsidiary of funds advised by Inflexion Private Equity Partners
LLP ("Inflexion") and DWF Group plc ("DWF") are pleased to announce that they
have reached agreement on the terms and conditions of a recommended all cash
offer by Bidco for the entire issued and to be issued ordinary share capital
of DWF (the "Acquisition"). The Acquisition is intended to be implemented by
means of a scheme of arrangement under Part 26 of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and further terms set out in Appendix 1 to this Announcement and the full
terms and conditions to be set out in the Scheme Document, each DWF
Shareholder will be entitled to receive:
100 pence for each DWF Share (the "Transaction Value")
valuing the entire issued, and to be issued, ordinary share capital of DWF at
approximately £342 million.
The Transaction Value will comprise for each DWF Share held at the Scheme
Record Time:
· cash consideration of 97 pence per DWF Share (the "Cash
Offer"); and
· a special dividend of 3 pence per DWF Share, which is
conditional on the Acquisition becoming Effective (the "Special Dividend").
The Transaction Value represents a premium of approximately:
· 52.7 per cent. to the Closing Price of 65.5 pence per DWF
Share on 7 July 2023 (being the last Business Day before the date of the
commencement of the Offer Period);
· 81.8 per cent. to the daily volume weighted average share
price of 55.0 pence per DWF Share for the one month period ended on 7 July
2023 (being the last Business Day before the date of the commencement of the
Offer Period); and
· 71.7 per cent. to the daily volume weighted average share
price of 58.3 pence per DWF Share for the three month period ended on 7 July
2023 (being the last Business Day before the date of the commencement of the
Offer Period).
Under the terms of the Acquisition, a Partial Securities Alternative will be
available to DWF Shareholders (other than DWF Shareholders resident or located
in a Restricted Jurisdiction) which will enable eligible DWF Shareholders to
elect to receive Loan Notes or Preference Shares in lieu of part of the
Transaction Value which they would otherwise be entitled to receive in cash
under the terms of the Acquisition. If an eligible DWF Shareholder elects to
receive the Partial Securities Alternative, they will receive (at their
discretion) either:
· 65 pence (being 65 per cent. of the Transaction Value) as
Loan Notes or Preference Shares (as applicable) and the remaining 35 pence
(being 35 per cent. of the Transaction Value) as cash (which shall include the
Special Dividend) (the "Rollover Alternative"); or
· 100 pence in cash (which shall include the Special
Dividend), 40 pence of which (being 40 per cent. of the Transaction Value)
shall be reinvested by subscribing for Loan Notes or Preference Shares (as
applicable) on a cashless basis pursuant to a subscription and payment
direction letter (the "Reinvestment Alternative").
If the Acquisition becomes Effective, Scheme Shareholders who do not validly
elect to receive the Partial Securities Alternative will automatically receive
the full amount of the Transaction Value in cash for their entire holding of
Scheme Shares. In respect of the cash component received by any Scheme
Shareholder pursuant to the Cash Offer or the Partial Securities Alternative,
3 pence per share shall be paid as a dividend by DWF by way of the Special
Dividend and the remainder shall be paid as consideration for the sale of the
Scheme Shares. Each DWF Shareholder shall only be entitled to elect to receive
the Partial Securities Alternative in respect of all (and not some) of the DWF
Shares held by them (excluding for these purposes any DWF Shares of which they
may become the legal or beneficial holder as a result of the vesting of awards
granted under the DWF Share Plans, for which participants will be able to make
a separate election to receive the Partial Securities Alternative, as
discussed further in paragraph 11 below).
For CREST nominees that operate pooled accounts, partial elections for the
Partial Securities Alternative will be permitted as long as the election
represents the total number of Scheme Shares held by the party giving the
instruction and not only part of that person's holding of Scheme Shares.
Further detail in relation to the Partial Securities Alternative is set out in
paragraph 11 below.
The DWF Directors intend to declare and pay the Special Dividend of 3 pence
per DWF Share to DWF Shareholders on the register of member of DWF at the
Scheme Record Time. The Special Dividend, payment of which will be funded by
Bidco, is conditional upon, and only payable if, the Acquisition becomes
Effective. The Special Dividend will not reduce the Cash Offer.
If any dividend, distribution and/or other return of value is proposed,
authorised, declared, made or paid or becomes payable in respect of DWF Shares
on or after the date of this Announcement and before the Effective Date (other
than the Special Dividend), Bidco reserves the right to reduce the Cash Offer
by the amount of any such dividend, distribution and/or other return of value.
If Bidco exercises its right to reduce the Cash Offer by all or part of the
amount of any dividend, distribution and/or other return of value, the
relevant eligible DWF Shareholders will be entitled to receive and retain such
dividend, distribution and/or other return of value, and any reference in this
Announcement to the Cash Offer will be deemed to be a reference to the Cash
Offer as so reduced.
Any exercise by Bidco of its rights referred to in the above paragraph shall
be the subject of an announcement and, for the avoidance of doubt, shall not
be regarded as constituting any revision or variation of the terms of the
Scheme. If and to the extent that any such dividend, distribution and/or other
return of value has been declared or announced but not paid or made or is not
payable in respect of the DWF Shares prior to the Effective Date or by
reference to a record date prior to the Effective Date or such dividend,
distribution and/or other return of value is: (i) transferred pursuant to the
Acquisition on a basis which entitles Bidco to receive the dividend, other
distribution and/or other return of value and to retain it or (ii) cancelled
before payment, the Transaction Value shall not be subject to change in
accordance with the above paragraph.
It is intended that the Acquisition will be implemented by means of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act
(although Bidco reserves the right to effect the Acquisition by way of a
Takeover Offer, subject to the consent of the Panel and the terms of the
Co-operation Agreement).
It is expected that the Scheme Document, containing further information about
the Acquisition and notices of the Court Meetings and the General Meeting,
together with the associated Forms of Proxy and Forms of Election, will be
sent to DWF Shareholders within 28 days of this Announcement (or such later
time as DWF, Bidco and the Panel agree) and the Meetings are expected to be
held shortly thereafter.
The Scheme will also need to be sanctioned by the Court. Finally, a copy of
the Court Order must be delivered to the Registrar of Companies for
registration, upon which the Scheme will become Effective.
The Acquisition is currently expected to become Effective around Q4 2023,
subject to the satisfaction (or, where applicable, waiver) of the Conditions
and further terms set out in Appendix 1 to this Announcement and the full
terms and conditions to be set out in the Scheme Document. An expected
timetable of key events relating to the Acquisition will be provided in the
Scheme Document.
The DWF Shares will be acquired fully paid and free from all liens, charges,
equitable interests, encumbrances and rights of pre-emption and any other
interests of any nature whatsoever and together with all rights attaching
thereto.
3. Information on Bidco and Inflexion
Bidco
Bidco is a private company limited by shares registered in England and Wales
and incorporated on 30 June 2023 with company number 14972770. Bidco is
indirectly owned by funds advised by Inflexion. It was formed for the
purposes of the Acquisition and has not traded since its date of
incorporation, nor has it entered into any obligations other than in
connection with the Acquisition.
Inflexion
Inflexion is a leading independent mid-market private equity firm. Backing
over 100+ investments and 430+ bolt ons for portfolio companies since
inception in 1999, Inflexion currently has £4.5bn of investing funds and
£7.2bn of assets under management. With a team of 140+ employees and offices
located in the UK, Amsterdam, China, India, Singapore and Brazil (with a
London based European hub), Inflexion is a highly experienced and committed
investment partner which looks to guide companies on their journey to future
growth and expansion, enabling an average 21 per cent. year-on-year EBITDA
increase, 2x average full time employee increase and 3.6x average return
across realised investments. Inflexion has a European remit with sector-led
expertise and has been a client of DWF for over 10 years. Inflexion has a
value acceleration team that supports it's portfolio companies to accelerate
growth. This team includes capabilities in areas of M&A, digital
enhancement, commercial strategy, talent, ESG and international expansion.
4. Information on DWF
DWF is a leading global provider of integrated legal and business services. It
is the United Kingdom's largest listed legal business, with over 4,400
employees located in 35 locations across the globe. The company became the
first Main Market Premium Listed legal business on the London Stock Exchange
in March 2019.
DWF differentiates itself from peers through its level of integration across
services, including premium legal advice and related alternative legal and
business services. DWF's legal advisory work is underpinned by excellence in
client service and a focus on quality and innovation, and the Wider DWF
Group's innovative products and business services enhance and complement the
legal offering, helping clients manage business challenges including risk,
reputation, cost and time. The proposition leads to exceptional client
relationships and DWF has won a number of significant long-term supplier and
panel appointments for globally recognised businesses in recent months.
Following a reorganisation on 1 May 2023, the Wider DWF Group operates through
three divisions:
· Commercial Services: Combines DWF's commercial Legal
Advisory teams with business services including Global Entity Management,
Forensic Accountants, ESG Consulting and Regulatory Consulting. The division
leverages commercial intelligence and industry experience across sectors
including Real Estate, Financial Services, Technology Media &
Communications, Retail, Food & Hospitality, Transport, Government &
Public Sector and Energy.
· Insurance Services: Brings together more than c.1,700
specialists and combines insurance-focused legal expertise with business
services, such as claims management, loss adjusting and costs advice, under a
single leadership team.
· Legal Operations: An alternative legal services provider
delivering services including eDiscovery, contract management, compliance,
legal technology, consulting and operations, and knowledge management. DWF
provides outsourced and process-led alternative legal services designed to
standardise, systematise, scale and optimise legal workflows, ensuring that
customers' regulatory obligations are met. DWF's global teams include lawyers,
paralegals and project management specialists and DWF works for a range of
Fortune 500 and FTSE 100 clients through this division.
5. Trading Update
The Wider DWF Group restates, for completeness, the key points from the
trading update issued on 30 May 2023 in relation to results for the year to 30
April 2023:
· The Wider DWF Group expects to report:
- revenue of c.£452m (unaudited) and net revenue of
c.£380m (unaudited) reflecting growth of more than 8%.
- lock-up days at c.190 days on a like-for-like basis
(FY22: 179 days) in line with the half year position reflecting the expected
stabilisation after the H1 increase.
· Confident in medium term guidance provided in July 2021,
underpinned by the cost programme which is now expected to remove in excess of
£15m cost by end of FY24 (versus £10-12m reported in December 2022), helping
to protect the business from broader inflationary cost pressures.
The Wider DWF Group continued to enjoy strong activity levels in the year,
delivering revenue growth of more than 8%. The transaction with Whitelaw
Twining in December 2022 boosted growth in a first-of-its-kind transaction for
North America, with the launch of a legal services offering in Toronto
following within two months of completion. Like for like growth ("LfL") for
the Wider DWF Group, which excludes the impact of any M&A, disposals or
closures, is expected to be 5%.
Whilst FY23 has enjoyed a greater degree of stability and normality compared
to the Covid-impacted prior periods, H2 performance is notable due to
acceleration in growth with 12% year-on-year net revenue growth in Q3 (LfL
growth of 7%) and c.14% year-on-year net revenue growth in Q4 (LfL growth of
6%). This reflects the impact of the Wider DWF Group's Integrated Legal
Management strategy and ongoing key client focus, delivering integrated
solutions to more Wider DWF Group clients.
Whilst inflationary pressures have impacted direct costs and driven some
margin dilution, H2 saw some of the benefit from the impact of cost programmes
tackling both direct and indirect costs.
The further detail below contains numbers which are unaudited. All figures are
for the financial year ended 30 April 2023 ("FY23").
Legal Advisory
Legal Advisory delivered net revenue growth of 8% (LfL growth of 5%) despite
facing a number of challenges throughout FY23, including the impact of the
Russia and Ukraine conflict and significant political uncertainty in the
United Kingdom during Q2 and Q3. High single digit percentage growth in a
number of our global teams such as Dispute Resolution, with double digit
percentage growth in Tax & Private Capital and Finance &
Restructuring, has been partly offset by transactional teams which have been
impacted by the broader economic uncertainty and delays in the regulatory
pipeline. Insurance grew by 5% and is generally less affected by macro factors
due to its defensive nature. As the first financial year following the easing
of Covid-19 restrictions, FY23 chargeable activity was also adversely impacted
by increased absence as many colleagues took their first substantial holidays
since 2019.
Given these various top line headwinds, fee earner, team and location
performance levels have been closely monitored to identify potential strategic
cost savings and protect margins. Along with tight controls over recruitment,
these activities helped mitigate the impact of cost pressures that intensified
from the FY23 sector 'war on talent' and market demands including cost of
living pay increases for non-qualified grades upwards. Such actions needed to
be balanced sensibly with the longer-term needs of the division.
Recruitment has been enhanced where the future pipeline warrants investment,
for example in insurance and our new sustainable business offering and global
arbitration teams. There has been a drive to build presence in London and to
recruit high quality lateral hires into France and other overseas locations,
whilst supporting wider growth in lower cost jurisdictions to facilitate
efficient best-shoring of work.
Consequently direct costs have increased ahead of net revenue growth,
resulting in a degree of gross margin degradation. There has also been an
impact from lengthening matter lifecycles which have led to slower payments
from clients, placing pressure on working capital and increasing lock-up days.
This is consistent with trends reported across the sector and a broad range of
measures have been introduced to mitigate risks in this regard. This working
capital stretch is considered to be a timing issue which will ultimately
unwind.
The end of the year saw the launch of a number of initiatives, such as the
planned introduction of pricing technology solutions to help counteract
ongoing inflationary cost pressures.
In addition, expansion into new locations (including Saudi Arabia and Canada)
will support the drive for profitable future growth.
Connected Services
Connected Services delivered net revenue growth of 20% compared to FY23 (LfL
growth of 14%). This growth was supported by the acquisition of Acumension in
September, a team of 47 legal costs management specialists in the UK, which
has expanded DWF's costs management capability and enhanced the service for
clients in the insurance and public sectors.
Whilst net revenue has grown by £6.8m, gross profit did not increase by the
same proportion, resulting in gross margin decline for the division. This was
due to cost pressures driven primarily by cost of living linked pay increases
across a number of territories, particularly the UK, US and Canada. This
margin dilution began to ease in Q4 as a result of cost measures and pricing
interventions and is expected to improve along with the rest of the Group over
time, particularly as efficiencies are secured through the new divisional
structure.
The Claims Management and Adjusting business has grown by 12%. This was driven
by both the US and Canadian geographies where the strength of the North
American insurance market led to new client wins, teams in Chicago and
Vancouver were expanded and as the business benefitted from the pound
weakening against the dollar. The United Kingdom and Ireland business remained
flat as new business replaced Covid-19 Business Interruption claims work.
Combining the Claims Management and Adjusting business with Insurance Legal
Services in FY24 will promote greater client sharing and collaboration.
The Regulatory business, which largely aligns to the new Commercial Services
Division, has grown by 23% and saw an improving gross margin. With the
exception of Audit, which underwent a restructure during the year, all
businesses showed double-digit net revenue growth, reflecting a strong
pipeline of work due to our clients increasing demand for regulatory advice.
The Wider DWF Group restructure produces synergies with what was the Legal
Advisory division and presents the opportunity to reduce cost within the
division. The full impact of the cost efficiency programme began to show
through in the final quarter and, with the majority of the identified savings
being support roles, should have limited impact on revenue.
Mindcrest
Mindcrest had a transitionary year as structural changes were implemented,
including a change in leadership and the recruitment of new sales resource.
The focus for H2 has been on building pipeline and embedding the new dual
go-to-market strategy, focussing both on sales to the top 450 Wider DWF Group
clients as well as internal work transfer to secure Wider DWF Group margin
benefit. As with other divisions, the cost efficiency programme has driven
some cost removal but has also facilitated investment into sales resource in
the US (the largest alternative legal services provider market globally).
Divisional net revenue contracted by 6% in the year, owing to the conclusion
of one of the division's flagship engagements which began winding down in H2
of FY22. Despite net revenue having contracted year-on-year, H2 of FY23 saw
top line growth of 9% as compared to H2 of FY22 as the division starts to
generate momentum. Certain services within the division have enjoyed
particular success, reflecting improved demand from financial services
clients. This includes eDiscovery services, which grew revenue by 15%, and
lender/recovery services, which grew by 10%.
In addition to the restructuring and refocussing activities, the division saw
similar inflationary cost of living pressure across all geographies (more so
in United Kingdom following announcement of Living Wage increases). The margin
pressures began to ease in Q4 due to cost savings and the positive pipeline
development.
Group
In addition to top-line growth rates, the Wider DWF Group is gradually seeing
the stabilisation and reversal of gross margin dilution from salary inflation
over the last 18 months. The gross margin gap to prior year at FY23 has
reduced compared to HY23, reflecting some improvements in pricing combined
with the cost programme announced in December 2022. Overheads and the
cost-to-income ratio are trending favourably with £9m of the previously
announced cost savings secured by the end of FY23. These dynamics help to
underscore confidence in market guidance as management has taken action to
offset some of the adverse economic circumstances not envisaged when guidance
was last issued.
Working capital performance continues to be an area of challenge in an
environment where clients are generally looking to manage their own working
capital cycle by often seeking longer billing or payment cycles. The Wider DWF
Group reported lock-up days of 190 at HY23 which reflected an 11 day increase
on FY22. As expected, this position stabilised in H2 with the previous
trading statement signposting c.190 days for FY23 on a like-for-like basis.
Net debt performance follows lock-up days with FY23 net debt of £101.8m. The
Wider DWF Group remains within all required covenants and has liquidity
headroom to trade through the current period of lock-up stretch.
The Wider DWF Group has continued to trade well in FY24 despite the
challenging environment. The FY23 additions from M&A are performing
well, and the Wider DWF Group is confident in its prospects for the future. A
separate update regarding the timing of release of the Wider DWF Group's
annual report and accounts for the financial year ended 30 April 2023 will be
provided in due course.
6. Background to and reasons for the Acquisition
Inflexion has tracked the legal and alternative legal service provider sectors
for a number of years and recognises the genuinely differentiated proposition
that DWF offers through its integrated legal management approach, which
provides integrated legal and business services to clients globally.
Inflexion believes private ownership is preferable for DWF given the growth
opportunities available to it and to realign focus on long-term value
creation. Inflexion fosters a close working relationship with management for
quick and efficient decision making in a transparent environment, partnering
with management teams to accelerate growth in the best interests of all
stakeholders, including employees. With access to a significant amount of
capital, the Inflexion Funds are well-capitalised and able to support DWF in
continuing its strategy of acquiring bolt-on businesses, which is core to the
investment thesis. Inflexion also has the ability to introduce more innovative
ways to reward colleagues, details of which will be discussed with the
management following the Effective Date.
7. Recommendation
The DWF Directors, who have been so advised by Fenchurch and Stifel as to the
financial terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing their advice to the DWF Directors,
Fenchurch and Stifel have taken into account the commercial assessments of the
DWF Directors. Fenchurch and Stifel are providing independent financial
advice to the DWF Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, the DWF Directors intend to recommend unanimously that DWF
Shareholders vote in favour (or procure votes in favour) of the Scheme at the
Court Meetings and vote in favour (or procure votes in favour) of the
Resolution(s) at the General Meeting as the DWF Directors who hold DWF Shares
as at the date of this Announcement have irrevocably undertaken to do (or
procure to be done) in respect of their own beneficial holdings, amounting to
9,655,772 DWF Shares in aggregate, representing approximately 5.3 per cent.
of Scheme Shares entitled to vote at the Employee Shareholder Court Meeting
and 2.8 per cent. of the ordinary share capital of DWF as at the Latest
Practicable Date.
The DWF Directors (other than the Independent Non-Executive Directors) have
each given irrevocable undertakings to accept the Partial Securities
Alternative in respect of their own DWF Shares. The DWF Directors (other than
the Independent Non-Executive Directors) have undertaken to elect to receive
the Partial Securities Alternative because it allows them both to realise some
cash on completion and to receive Loan Notes or Preference Shares which will
accrue a coupon. It also enables them to retain a continuing indirect
investment in the Wider DWF Group on terms which most closely resemble their
current direct investment, reflecting their ongoing commitment to DWF's
business.
However, the DWF Directors are not able to and do not give any advice to DWF
Shareholders as to whether they should elect to receive the Partial Securities
Alternative as its benefits will depend on each DWF Shareholder's individual
tax and financial situation. DWF Shareholders should consider whether
receiving a significant part of the consideration in Loan Notes or Preference
Shares is a suitable payment alternative in light of their own personal
circumstances and investment objectives and are, therefore, strongly
recommended to seek their own independent financial, tax and legal advice
before deciding whether to elect to receive the Partial Securities
Alternative. DWF Shareholders should also ascertain whether acquiring or
holding Loan Notes or Preference Shares is affected by the laws of the
relevant jurisdiction in which they are resident.
When considering whether to elect to receive the Partial Securities
Alternative, the attention of DWF Shareholders is drawn to paragraph 11 below
including, amongst other things, to the fact that whilst the Loan Notes and
Preference Shares will accrue a coupon, they are non-transferable (save in
very limited circumstances), unsecured, rank behind the Senior Debt Facilities
in relation to rights to returns and liquidation preference and do not carry
any voting or information rights. DWF Shareholders are strongly recommended
to consider these details carefully in light of their own personal
circumstances. In particular, DWF Shareholders who are also employees or
partners of DWF should consider the provisions summarising the effect on their
Loan Notes and Preference Shares if they subsequently cease to be a partner or
employee of DWF (summarised in paragraph 11 below).
Accordingly, any decision to elect to receive the Partial Securities
Alternative should be based on each DWF Shareholder's personal circumstances,
independent financial, tax and legal advice and full consideration of this
Announcement and the Scheme Document.
8. Background to and reasons for the recommendation
Over the past three years DWF's committed management team has delivered an
effective restructuring plan and significantly improved DWF's financial
performance. The business has demonstrated a successful track record for
M&A over a number of years, having delivered on its inorganic strategy
through accretive acquisitions, including RCD in 2019, Mindcrest in 2020 and
more recently its transaction with Whitelaw Twining in December 2022. The DWF
Directors remain confident that the ongoing execution of the existing strategy
would continue to deliver growth and further diversification of the business
across complementary services and geographies. However, the Acquisition
provides an extremely compelling offer for all categories of shareholders,
whilst also presenting an opportunity to rapidly accelerate management's
vision to become the leading global provider of integrated legal and business
services.
At the Transaction Value of 100 pence for each DWF Share, Shareholders who
vote in favour of the Acquisition and elect to receive cash will receive a
highly attractive premium on their shareholding, at 52.7 per cent. to the
Closing Price of 65.5 pence per DWF Share on 7 July 2023 (being the last
Business Day before the date of the commencement of the Offer Period). DWF
Shareholders who vote in favour of the Acquisition and elect to receive the
Partial Securities Alternative will receive Loan Notes or Preference Shares
(as applicable) with a 12 per cent. coupon and long-term economic exposure to
a business that will have the support and backing of an award-winning
financial sponsor.
The DWF Directors strongly believe that the new ownership structure and choice
of partner will facilitate clear strategic benefits to DWF's internal and
external stakeholders, including DWF's colleagues, clients and communities.
Inflexion has a highly successful track record in the business services sector
and shares the vision to build a global professional services business.
Furthermore, Inflexion is respectful of DWF's culture and DWF will be able to
continue its ESG commitments supported by the new investor.
As a result of the financial backing from a patient long-term investor, the
Acquisition will provide access to capital to pursue our current strategy more
vigorously by:
· enhancing organic growth through increased investment in
staff and technology, improving the efficiency of DWF's systems and processes
and developing the ability to focus on core clients in key locations. The
Acquisition will also accelerate the already strong lateral hire programme.
· supporting selective bolt-on and transformative
acquisitions from DWF's identified M&A pipeline, consistent with DWF's
ambition to strengthen its position as a truly global and diversified
business. This includes possible acquisitions of legal advisory businesses in
key markets, as well as increasing DWF's scale in business services such as
legal operations and claims management and adjusting businesses in the US and
other new and attractive locations. The DWF Directors believe that there would
be challenges in securing funding for these transactions through the public
markets.
All of this will enable DWF to continue to deliver, and enhance, its excellent
integrated legal and business services to clients on a global basis.
The DWF Directors also recognise benefits from private ownership, including
greater transparency on financial performance for the leadership group as DWF
will no longer by subject to restrictions on internal disclosures of results.
Having taken into account all of the above and the interests of all other
relevant stakeholders, the DWF Directors intend unanimously to recommend that
DWF Shareholders vote in favour of the Scheme at the Court Meetings (or in the
event that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of such Takeover Offer).
9. Irrevocable undertakings
As described in paragraph 7 above, Bidco has received irrevocable undertakings
to vote (or, where applicable, procure voting) in favour of the Scheme at the
Employee Shareholder Court Meeting and the Resolutions to be proposed at the
General Meeting (or, in the event that the Acquisition is implemented by a
Takeover Offer, to accept or procure acceptance of such Takeover Offer) from
all of the DWF Directors who hold DWF Shares as at the date of this
Announcement, in respect of their own legal and/or beneficial holdings which
are under their control (and those held by close relatives and related
trusts), totalling 9,655,772 DWF Shares (representing approximately 5.3 per
cent. of Scheme Shares entitled to vote at the Employee Shareholder Court
Meeting and 2.8 per cent. of the issued ordinary share capital of DWF as at
the Latest Practicable Date), as well as any further DWF Shares of which they
may become the legal or beneficial holder (whether as a result of the vesting
of awards granted under the DWF Share Plans or otherwise). All of the DWF
Directors support the Acquisition, as set out in paragraph 7 above.
Bidco has also received irrevocable undertakings to vote (or, where
applicable, procure voting) in favour of the Scheme at the Employee
Shareholder Court Meeting and the Resolutions to be proposed at the General
Meeting (or, in the event that the Acquisition is implemented by a Takeover
Offer, to accept or procure acceptance of such Takeover Offer) from 107 DWF
Partners and Senior Employees who hold DWF Shares, in respect of their own
legal and/or beneficial holdings which are under their control (and those held
by close relatives and related trusts), totalling 132,370,677 DWF Shares
(representing approximately 73.3 per cent. of Scheme Shares entitled to vote
at the Employee Shareholder Court Meeting and 38.7 per cent. of the existing
issued ordinary share capital of DWF as at the Latest Practicable Date), as
well as any further DWF Shares of which they may become the legal or
beneficial holder (whether as a result of the vesting of awards granted under
the DWF Share Plans or otherwise).
Bidco has therefore received irrevocable undertakings in respect of a total of
142,026,449 DWF Shares representing, in aggregate, approximately 78.6 per
cent. of Scheme Shares entitled to vote at the Employee Shareholder Court
Meeting and 41.5 per cent. of the ordinary share capital of DWF as at the
Latest Practicable Date.
In addition, each of the irrevocable undertakings received from the DWF
Directors (other than the Independent Non-Executive Directors) and from 90 DWF
Partners and Senior Employees in respect of 114,222,044 DWF Shares,
representing approximately 33.4 per cent. of the ordinary share capital of DWF
in issue as at the Latest Practicable Date, includes an undertaking to accept
the Partial Securities Alternative in respect of the DWF Shares held by them
as at the Latest Practicable Date. The undertaking to accept the Partial
Securities Alternative was not given by any person in respect of any DWF
Shares of which they may become the legal or beneficial holder as a result of
the vesting of awards granted under the DWF Share Plans.
The irrevocable undertakings given by the DWF Directors and DWF Partners and
Senior Employees will remain binding in the event that a higher competing
offer for DWF is made.
Further details of these irrevocable undertakings and letters of intent,
including the circumstances in which they cease to be binding, are set out in
Appendix 3 to this Announcement.
The majority of DWF Partners and Senior Employees each hold minority interests
of less than 1 per cent. of DWF's issued share capital as at the Latest
Practicable Date. The Panel has therefore consented to the information
relating to the irrevocable undertakings signed by the DWF Partners and Senior
Employees being aggregated and to the publication on a website by DWF and
Bidco of a template of the form of irrevocable undertaking that they have
signed (save in respect of any DWF Partners and Senior Employees that have
made an Opening Position Disclosure pursuant to Rule 8 of the Takeover Code,
whose respective irrevocable undertaking will be published on a website by DWF
and Bidco). The information in Appendix 3 relating to the DWF Partners and
Senior Employees is therefore aggregated and is set out in relevant bands of
shareholding, rather than disclosing each individual DWF Partner and Senior
Employee's individual shareholding. A copy of the form of irrevocable
undertaking that was signed by the DWF Partners and Senior Employees has been
published on DWF's website and Bidco's website, as described in paragraph 21
below.
10. Directors, management, employees, pensions, research and
development and locations
Strategic plans for the Wider DWF Group
Bidco fully recognises the contribution made by the DWF management team and
the wider leadership of the business in developing the DWF business and
attaches great importance to their skills and experience. As set out in
paragraph 5 above, Bidco also highly values DWF's integrated legal management
approach, through which it provides integrated legal and business services to
its clients globally.
Bidco intends to support DWF's management team in the pursuit of its existing
strategy following the completion of the Acquisition with a particular focus
on investment in existing colleagues, enhancing retention, continuing its
strong lateral hire programme, scaling and investing in legal and business
services, investing in technology to create more efficient systems and
processes and improving DWF's overall client experience. Bidco will also
support DWF to pursue meaningful near-term acquisitions in DWF's core target
markets.
Intentions for employees and management
Bidco attaches great importance to the skills, knowledge and expertise of
DWF's employees and expects they will continue to be key to the future success
of DWF. Bidco does not intend for the Acquisition to have any material impact
on the continued employment of DWF's employees and management and Bidco has no
intention of making any material change to the balance of skills and functions
of DWF's employees and management. Bidco has confirmed that it has no
intention of making any changes to the current executive leadership team of
DWF.
Bidco has not entered into, and has not discussed, any form of incentivisation
arrangements with members of DWF's management team or other employees. At an
appropriate future date following completion of the Acquisition Bidco intends
to discuss and agree with DWF leaders and employees the provision of an
alternative future incentive structure to give DWF leaders and employees the
possibility of significant returns on future exit.
It is expected that each of the Independent Non-executive Directors will
resign from their office as a director of DWF on or shortly after the
Effective Date.
Existing rights and pension schemes
Bidco intends to fully safeguard the existing employment rights of the
management and employees of DWF, including in relation to pensions, in
accordance with applicable law and does not intend to make any material change
in the conditions of employment of the management and employees of the Wider
DWF Group, unless otherwise agreed with the relevant employees. Bidco does not
intend to make any changes to the agreed employer contributions into DWF's
existing defined contribution pension schemes or the admission of new members
into such pension schemes following the Effective Date. DWF does not operate
or contribute to any defined benefit pension schemes.
Intentions for headquarters, locations, fixed assets and research &
development
Bidco does not intend to make any changes to DWF's fixed assets or asset base.
Following completion, Bidco may identify business divisions within DWF where
investment can be increased, or specific business units prioritised from an
investment and management perspective. However, based on preliminary due
diligence to date, Bidco does not expect any material change to the corporate
or operating structure, headquarters of DWF or, other than supporting
management in continuing its strategy (including of acquiring bolt-on
businesses), the locations of business. DWF does not have a material research
and development function and accordingly Bidco has no plans in this regard.
De-listing and corporate governance
Prior to the Effective Date, as noted in paragraph 17 below, it is intended
that applications will be made to the London Stock Exchange to cancel the
trading in DWF Shares on the London Stock Exchange's Main Market for listed
securities and to the FCA to cancel the listing of DWF Shares from the
Official List, in each case to take effect on or shortly after the Effective
Date.
It is intended that DWF be re-registered as a private limited company on, or
as soon as practicable following, the Effective Date.
A separate update regarding the timing of release of DWF's annual report and
accounts for the financial year ended 30 April 2023 will be provided by DWF in
due course.
Statements
None of the statements in this paragraph 10 is a "post-offer undertaking" for
the purposes of Rule 19.5 of the Takeover Code.
11. Partial Securities Alternative
As an alternative to part of the Transaction Value to which they would
otherwise be entitled under the terms of the Acquisition, a Partial Securities
Alternative will be available to DWF Shareholders (other than DWF Shareholders
resident or located in a Restricted Jurisdiction) which will enable eligible
DWF Shareholders to elect to receive, in respect of each DWF Share held (at
their discretion) either:
· 35 pence (being 35 per cent. of the Transaction Value) in
cash (which shall include the Special Dividend) and 65 pence (being 65 per
cent. of the Transaction Value) in Loan Notes or Preference Shares (as
applicable) (the "Rollover Alternative"); or
· 100 pence in cash (which shall include the Special
Dividend), 40 pence of which (being 40 per cent. of the Transaction Value)
shall be reinvested by subscribing for Loan Notes or Preference Shares (as
applicable) on a cashless basis pursuant to a subscription and payment
direction letter (the "Reinvestment Alternative").
Whether or not the Rollover Alternative or the Reinvestment Alternative is
more beneficial to a DWF Shareholder will depend on that DWF Shareholder's
individual tax and financial situation (including the jurisdiction in which
they are tax resident). DWF Shareholders are, therefore, strongly
recommended to seek their own independent financial, tax and legal advice
before deciding whether to elect to receive the Partial Securities Alternative
and if so, whether to receive the Rollover Alternative or the Reinvestment
Alternative. DWF Shareholders should also ascertain whether acquiring or
holding Loan Notes or Preference Shares by reason of the Rollover Alternative
or the Reinvestment Alternative (as applicable) is affected by the laws of the
relevant jurisdiction in which they are resident. Further detail on the
reason why an eligible DWF Shareholder might elect to receive the Rollover
Alternative or the Reinvestment Alternative will be set out in the Scheme
Document.
If the Acquisition becomes Effective, Scheme Shareholders who do not validly
elect to receive the Partial Securities Alternative will automatically receive
the full amount of the Transaction Value in cash (including by payment of the
Special Dividend) for their entire holding of Scheme Shares. Each DWF
Shareholder shall only be entitled to elect to receive the Partial Securities
Alternative in respect of all (and not some) of the DWF Shares held by them
(excluding for these purposes any DWF Shares of which they may become the
legal or beneficial holder as a result of the vesting of awards granted under
the DWF Share Plans in respect of which participants will be able to make a
separate election).
For CREST nominees that operate pooled accounts, partial elections for the
Partial Securities Alternative will be permitted as long as the election
represents the total number of Scheme Shares held by the party giving the
instruction and not only part of that person's holding of Scheme Shares.
Any DWF Shareholder who is also a participant in any of the DWF Share Plans
shall be entitled to submit a separate Form of Election to elect to receive
the Partial Securities Alternative in respect of all (and not some) of their
DWF Shares subject to awards granted under the DWF Share Plans that will vest
on the Court sanction date, save that DWF may, in its sole discretion, reject
any Form of Election received from a participant if, by making such an
election, the cash element of the Partial Securities Alternative is not
sufficient to meet any employee income tax and/or social security liability or
equivalent amounts in any jurisdiction arising from the vesting of the share
awards and for which DWF is required to account to the relevant tax authority.
Each eligible DWF Shareholder who elects to receive the Partial Securities
Alternative will be given an option in their Form(s) of Election as to whether
they wish to receive Loan Notes or Preference Shares, and whether they wish to
receive them under the Rollover Alternative or the Reinvestment Alternative.
It is expected that holders of Loan Notes and Preference Shares will enjoy
the same economic rights and will rank equally with each other as if they were
the same class of security. Further detail on the reason why an eligible DWF
Shareholder might elect to receive Loan Notes or Preference Shares will be set
out in the Scheme Document.
Summary of terms of Loan Notes and Preference Shares
A summary of the key rights and restrictions attaching to the Loan Notes and
Preference Shares will be set out in the Scheme Document. As an overview, the
Loan Notes and Preference Shares will be subject to the following terms and
conditions:
· The Loan Notes and Preference Shares will be issued on
the basis of £0.01 nominal value for each £0.01 of cash to which an eligible
DWF Shareholder would otherwise be entitled to in respect of their DWF Shares
under the Cash Offer.
· The Loan Notes will be governed by English law and will
be issued by Midco 1, credited as fully paid, in amounts and integral
multiples of £0.01. The Loan Notes will constitute direct, unsecured and
subordinated obligations of Midco 1.
· The Preference Shares will be governed by the Topco
Articles (Topco being a company limited by shares incorporated in England and
Wales) and will be issued by Topco, credited as fully paid up to £0.01.
· The Loan Notes will bear interest at a rate of 12 per
cent. per annum (compounding quarterly). Half of the annual coupon accrued
in any 12 month period may be paid in cash at the discretion of Topco's board
of directors (with Inflexion consent and subject to the terms of the Senior
Debt Facilities). The Preference Shares will accrue a fixed cumulative
preferential dividend at a rate of 12 per cent. per annum (compounding
quarterly). Half of the annual dividend accrued in any 12 month period may be
paid in cash at the discretion of Topco's board of directors (with Inflexion
consent) and subject to (i) the terms of the Senior Debt Facilities; and (ii)
Topco having sufficient available profits for distribution within the meaning
of the Companies Act.
· The cash payments in respect of the annual coupon on the
Loan Notes and the annual dividend on the Preference Shares referred to above
will only be permitted payments under the terms of the Senior Debt Facilities
if, inter alia, the adjusted net leverage of the DWF Group is below a certain
threshold as set out in the Senior Debt Facilities.
· The Loan Notes will be redeemable: (i) immediately prior
to an exit (unless the holders of a majority by number of the Loan Notes
consent to them being sold as part of the exit transaction); (ii) at any time
at the option of Midco 1 after expiry of a six-month period from the Effective
Date (with the consent of the holders of a majority by number of the Loan
Notes); (iii) on certain customary events of default (including insolvency and
a breach or reasonably foreseeable breach of the Senior Debt Facilities) (with
the consent of the holders of a majority by number of the Loan Notes); and
(iv) on the eighth anniversary of completion of the Acquisition (unless such
final repayment date is extended by resolution of the holders of a majority by
number of the Loan Notes). The Preference Shares shall be redeemable in
materially the same circumstances as the Loan Notes save that the redemption
of the Preference Shares will also be subject to Topco having sufficient
profits available for distribution within the meaning of the Companies Act.
· The Loan Notes and the Preference Shares which are held
by or on behalf of any employee, director or partner of the Wider DWF Group
will be subject to market standard leaver provisions pursuant to which the
accrued coupon on the Loan Notes and the accrued dividend on the Preference
Shares may be reduced and/or written-off, either retrospectively and/or going
forward, depending on the circumstances in which the relevant holder of Loan
Notes and/or Preference Shares becomes a Leaver.
· Inflexion as the majority holder of the Loan Notes and
the Preference Shares will be entitled to amend the terms of the instruments
at any time provided that any such amendment treats all Loan Notes and all
Preference Shares on a pari passu basis. There are also other conditions which
limit changes that can be made.
· The Loan Notes and Preference Shares will be subject to
customary 'drag-along' provisions in favour of Inflexion as the majority
holder of the Loan Notes and Preference Shares.
· The Loan Notes and Preference Shares will be subordinated
to the Senior Debt Facilities and DWF partners' member contributions.
· The Loan Notes and Preference Shares will contractually
rank pari passu amongst themselves as if they constituted the same class of
security.
· Transfers of the Loan Notes and Preference Shares will
require Inflexion consent, provided that up to 50 per cent. of a holder's Loan
Notes or Preference Shares (as applicable) may, subject to meeting certain
requirements, be transferred for bona fide tax planning purposes to family
members or family trusts.
· As soon as practicable following the Effective Date, the
Loan Notes will be listed on a recognised investment exchange, recognised
overseas investment exchange, designated investment exchange or designated
overseas investment exchange, in each case for the purposes of the Financial
Services and Markets Act 2000 (which will likely be The International Stock
Exchange).
Elections made by DWF Directors and DWF Partners and Senior Employees
As described in paragraph 9 above, Bidco has received irrevocable undertakings
from: (i) all of the DWF Directors (other than those of the Independent
Non-Executive Directors) who hold DWF Shares and (ii) 107 DWF Partners and
Senior Employees who hold DWF Shares, each as at the date of this
Announcement. Each such irrevocable undertaking includes an undertaking to
elect to receive the Partial Securities Alternative, save in respect of any
DWF Shares of which the relevant DWF Partner or Senior Employee may become the
legal or beneficial holder as a result of the vesting of awards granted under
the DWF Share Plans.
Bidco has received irrevocable undertakings to accept the Partial Securities
Alternative from DWF Shareholders holding a total of 120,952,670 DWF Shares
representing, in aggregate, approximately 35.4 per cent. of DWF's share
capital in issue as at the Latest Practicable Date.
Rollover mechanics to give effect to the Partial Securities Alternative
Set out below is a summary of the rollover/reinvestment steps pursuant to
which eligible Scheme Shareholders will receive Loan Notes or Preference
Shares (as applicable) if they elect to receive the Partial Securities
Alternative. This summary should be read in conjunction with, and is subject
to, the full text of the documents referred to in this summary, once made
available on DWF's website.
Pursuant to the Power of Attorney, any eligible Scheme Shareholder who validly
elects to receive the Partial Securities Alternative will irrevocably appoint
Bidco, and any director of, or person authorised by, Bidco, as their attorney
and/or agent to execute on their behalf all documents necessary or desirable
to effect the rollover mechanics described in this summary.
If the Scheme becomes Effective, eligible Scheme Shareholders that validly
elect to receive consideration by means of the Partial Securities Alternative
will ultimately receive either:
· Loan Notes issued by Midco 1; or
· Preference Shares issued by Topco.
Rollover Alternative
If an eligible Scheme Shareholder elects for the Rollover Alternative and
elects to receive Loan Notes, they will receive Bidco Rollover Loan Notes in
the first instance, which will be issued to the relevant Scheme Shareholder in
consideration for the transfer of 65 per cent. of their Scheme Shares on the
Effective Date. On the Effective Date, those Bidco Rollover Loan Notes will
(by the operation of mutual put and/or call options) be exchanged for the
relevant amount of Midco 2 Rollover Loan Notes which will then (by the
operation of the same mechanism) be exchanged for the relevant amount of Loan
Notes.
If eligible Scheme Shareholders elect to receive Preference Shares by electing
for the Rollover Alternative, on the Effective Date the relevant amount of
Bidco Rollover Preference Shares will be issued to the relevant Scheme
Shareholders in consideration for the transfer of 65 per cent. of their Scheme
Shares. Those Bidco Rollover Preference Shares will (by operation of put
and/or call options) then be exchanged for the relevant amount of Preference
Shares.
Reinvestment Alternative
If an eligible Scheme Shareholder elects for the Reinvestment Alternative and
elects to reinvest in Loan Notes, 40 per cent. of the cash consideration
payable to that Scheme Shareholder (being 40 per cent. of the Transaction
Value) will be applied on a cashless basis, at that Scheme Shareholder's
direction in making payment to Midco 1 by way of a subscription for Loan Notes
and the balance shall be paid out to that Scheme Shareholder in cash
(including the Special Dividend).
If an eligible Scheme Shareholder elects for the Reinvestment Alternative and
elects to reinvest in Preference Shares, 40 per cent. of the cash
consideration payable to that Scheme Shareholder (being 40 per cent. of the
Transaction Value) will be applied on a cashless basis, at that Scheme
Shareholder's direction in making payment to Topco by way of a subscription
for Preference Shares and the balance shall be paid out to that Scheme
Shareholder in cash (including the Special Dividend).
Other information on the Partial Securities Alternative
Unless otherwise determined by Bidco and permitted by applicable law and
regulation, the Partial Securities Alternative will not be offered, sold or
delivered, directly or indirectly, in or into any Restricted Jurisdiction and
individual elections for the Partial Securities Alternative will only be valid
if all regulatory approvals (if any) required by a Scheme Shareholder to
acquire the Loan Notes or the Preference Share (as applicable) have been
obtained by the Scheme Shareholder.
Full details of the Partial Securities Alternative, the Rollover Alternative
and the Reinvestment Alternative, and an estimate of the value of the Loan
Notes and Preference Shares by Rothschild & Co for the purposes of Rule
24.11 of the Takeover Code will be contained in the Scheme Document.
The Partial Securities Alternative is not being offered to persons in, or to,
or for the account or benefit of any person located in any Restricted
Jurisdiction.
12. Financing of the Acquisition
The Acquisition will be funded through a combination of:
· equity investment into Bidco from the Inflexion Funds (by
way of shareholder loans and shares); and
· new debt financing to be provided under the Senior Debt
Facilities made available to Bidco by ICG funds with ICG Alternative
Investment Limited acting as mandated lead arranger.
Rothschild & Co, in its capacity as the financial adviser to Bidco and
Inflexion, is satisfied that sufficient resources are available to Bidco to
enable it to satisfy in full the cash consideration payable to Scheme
Shareholders under the terms of the Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
13. DWF Share Plans
Participants in the DWF Share Plans will be contacted regarding the effect of
the Acquisition on their rights under the DWF Share Plans and any action they
may need to take. An appropriate proposal will be made to such participants in
due course, and such proposal will reflect their rights under the DWF Share
Plans. The Partial Securities Alternative will be made available to
participants in the DWF Share Plans as part of these proposals and
participants will be entitled to make a separate election for the Partial
Securities Alternative in respect of any DWF Shares subject to awards granted
under the DWF Share Plans that will vest on the Court sanction date, save that
DWF may, in its sole discretion, reject any Form of Election received from a
participant if, by making such an election, the cash element of the Partial
Securities Alternative is not sufficient to meet any employee income tax
and/or social security liability or equivalent amounts in any jurisdiction
arising from the vesting of the share awards and for which DWF is required to
account to the relevant tax authority. Participants do not have to make the
same election in respect of the DWF Shares subject to awards granted under the
DWF Share Plans that will vest on the Court sanction date as they decide to
make in respect of their current DWF Shares.
Details of the impact of the Scheme on each of the DWF Share Plans and the
offer will be set out in the Scheme Document.
14. Offer-related arrangements
Confidentiality Agreement
On 9 January 2023, DWF and Inflexion entered into a confidentiality agreement
in relation to the Acquisition (the "Confidentiality Agreement"), pursuant to
which, amongst other things, Inflexion gave certain undertakings to keep, and
to procure that certain of its representatives keep, confidential information
relating to the Wider DWF Group and/or the Acquisition confidential, to use
such information solely for the agreed purpose in relation to the Acquisition
and not to disclose it to third parties (subject to certain exceptions). These
confidentiality obligations will remain in force until 9 January 2025.
The Confidentiality Agreement also contains undertakings from Inflexion that:
(i) for a period of 12 months from the date of the Confidentiality Agreement,
it shall not, and shall procure that its group members shall not, in
connection with the Acquisition, engage in or have contact of any kind with
any officers or employees of DWF or any member of the Wider DWF Group without
the prior written consent of DWF (except in the ordinary course of business)
and (ii) for a period of 12 months from the date of the Confidentiality
Agreement, it shall not, and shall procure that its group members shall not,
solicit or offer to employ or engage an employee of DWF holding an executive,
supervisory or managerial position with, or an officer of, any member of the
Wider DWF Group (subject to customary carve outs).
Inflexion has also agreed to customary standstill arrangements pursuant to
which Inflexion has agreed that, without the prior written consent of DWF,
Inflexion will not, and will procure that its group members will not, amongst
other things, acquire DWF Shares or any interest in DWF Shares for a period of
12 months from the date of the Confidentiality Agreement. These standstill
arrangements fall away immediately following the making of this Announcement.
Co-operation Agreement
On 21 July 2023, Bidco and DWF entered into a co-operation agreement in
relation to the Acquisition (the "Co-operation Agreement"), pursuant to which,
amongst other things: (i) Bidco has agreed to provide DWF with certain
information for the purposes of the Scheme Document and to otherwise assist
with the preparation of the Scheme Document; (ii) Bidco has agreed to certain
provisions if the Scheme should switch to a Takeover Offer; (iii) Bidco and
DWF have agreed to co-operate for the purposes of obtaining certain regulatory
clearances and satisfying the conditions; and (iv) each of DWF and Bidco has
agreed to take certain actions to implement certain proposals in relation to
the DWF Share Plans.
The Co-operation Agreement provides that DWF will, in accordance with the
trust deed of the EBT or the RST (as applicable), notify the trustee of the
EBT and the RST that its existing waiver of dividends payable on any DWF
shares held legally and beneficially by the trustee in the trust fund of
either the EBT or the RST in respect of which it holds both the legal and
beneficial title will not apply in respect of the DWF shares held legally and
beneficially by the trustee as at the Scheme Record Time (the "Surplus
Shares"), such that the Special Dividend will be paid to the trustee in
respect of the Surplus Shares in accordance with the terms of the Scheme.
The parties acknowledge that the trustee will be subject to a UK tax
liability in respect of the Special Dividend, and that this liability will be
funded out of the Scheme proceeds held in the trust funds of the EBT and the
RST following the Effective Date. Any proceeds held in the trust funds of
the EBT and the RST following the Effective Date will (after any and all costs
have been paid including, but not limited to, the fees of the trustee and/or
tax liabilities or similar charges) thereafter be available to be used for the
benefit of the beneficiaries of the EBT or the RST (as applicable), in
accordance with the applicable trust deed. Bidco and DWF agree that, following
the Effective Date, only a committee of the board of directors of DWF
comprising solely of (and at least two) DWF Board Directors (as defined in the
Co-operation Agreement) (the "DWF Committee"), may in its sole discretion,
following consultation with the board of directors of Topco (or a duly
authorised committee thereof), make recommendations to the trustee of the EST
and the RST, and may enter into agreement with the trustee, as to the use of
trust assets for the benefit of the beneficiaries of the EBT and the RST (as
applicable), including but not limited to a recommendation to distribute cash
amounts to beneficiaries of the applicable trust to reflect (whether in whole
or in part) any portion of such beneficiary's award(s) granted under the DWF
Share Plans which may lapse if the Scheme is sanctioned by the Court at the
Sanction Hearing. The parties further agreed that before making any
recommendations to, or agreements with the Trustee as to the use of assets of
the applicable trust for the benefit of, including payments to, the following
four senior leaders Sir Nigel Knowles, Matthew Doughty, Paul Rimmer and Chris
Stefani, the DWF Committee must obtain prior consent from the IFX Investor
Director (as defined in the Co-operation Agreement), whose decision shall be
final and binding.
The Co-operation Agreement will terminate: (a) if agreed in writing between
the parties at any time prior to the Effective Date; (b) upon service of
written notice by Bidco to DWF, if, prior to the Long Stop Date: (i) a
Competing Proposal (as defined in the Co-operation Agreement) is announced by
any third party or member of the Wider DWF Group (or an announcement in
respect of it is made by the Panel), which is recommended or intended to be
recommended, in whole or in part, by the DWF Directors; (ii) an Adverse
Recommendation Change (as defined in the Co-operation Agreement, other than as
set out in limb (b) of that definition) occurs and Bidco does not otherwise
exercise its right to affect a Switch (as defined in the Co-Operation
Agreement); (iii) in respect of the Scheme, except following a Switch (as
defined in the Co-Operation Agreement), either Court Meeting, the General
Meeting and/or the Sanction Hearing are not held within the stipulated time
periods; or (iv) any Condition has been invoked by Bidco or any Condition
which is incapable of waiver is not satisfied or becomes incapable of
satisfaction (in each case, where the invocation of the relevant Condition or
confirmation that the Condition is incapable of satisfaction, as appropriate
has been permitted by the Panel); (c) upon service of written notice by either
party to the other party, if one or more of the following occurs: (i) a
Competing Proposal (as defined in the Co-operation Agreement) completes,
becomes effective or is declared or becomes unconditional; (ii) except
following a Switch (as defined in the Co-operation Agreement), the Scheme is
not approved by DWF Shareholders at either Court Meeting and/or any of the
Resolutions put to the General Meeting are not passed by the requisite
majority or the Court refuses to sanction the Scheme; (iii) the Acquisition is
withdrawn, terminated or lapses in accordance with its terms prior to the Long
Stop Date and, where required, with the consent of the Panel (other than
where: (A) such lapse, termination or withdrawal is as a result of the
exercise of Bidco's right to effect a Switch (as defined in the Co-operation
Agreement); or (B) it is otherwise to be followed within five Business Days
(or such other period as DWF and Bidco may agree) by an announcement under
Rule 2.7 of the Takeover Code made by Bidco or any person acting in concert
with Bidco (or deemed to be acting in concert with the Bidco) to implement the
Acquisition by a different offer or scheme on substantially the same or
improved terms); or (d) the Effective Date occurs.
The above summary of the Co-operation Agreement does not purport to be
complete and is subject to, and qualified in its entirety by, the text of the
Co-operation Agreement, which is available for inspection as described in
paragraph 21 below.
15. Structure of the Acquisition
It is intended that the Acquisition will be implemented by means of a
Court-sanctioned scheme of arrangement between DWF and the Scheme Shareholders
under Part 26 of the Companies Act (although Bidco reserves the right to
effect the Acquisition by way of a Takeover Offer, subject to the consent of
the Panel and the terms of the Co-operation Agreement).
The purpose of the Scheme is to provide for Bidco to become the holder of the
entire issued and to be issued ordinary share capital of DWF. This is to be
achieved by the transfer of the DWF Shares (other than any Excluded Shares) to
Bidco, in consideration for which the DWF Shareholders will receive the Cash
Offer (or, if a valid election is made, Loan Notes or Preference Shares
pursuant to the Partial Securities Alternative) on the basis set out in
paragraph 2 above.
The Acquisition is subject to the Conditions and certain further terms
referred to in Appendix 1 to this Announcement and to the full terms and
conditions to be set out in the Scheme Document, and will only become
Effective if, among other things, the following events occur on or before the
Long Stop Date:
· a resolution to approve the Scheme is passed by a
majority in number of the Scheme Shareholders present and voting (and entitled
to vote) at each separate Court Meeting, either in person or by proxy,
representing at least 75 per cent. in value of the Scheme Shares voted by
those Scheme Shareholders at each separate Court Meeting;
· the Resolutions required to implement the Scheme being
duly passed by DWF Shareholders at the General Meeting representing at least
75 per cent. of the votes validly cast on such Resolutions, either in person
or by proxy;
· each of the Regulatory Conditions have been satisfied or
waived;
· following the Court Meetings and the General Meeting, the
Scheme is sanctioned by the Court (without modification, or with modification
on terms agreed by Bidco and DWF); and
· following such sanction, a copy of the Court Order is
delivered to the Registrar of Companies.
The Scheme will lapse if, amongst other things:
· the Court Meetings and the General Meeting are not
held on or before the 22nd day after the expected date of the Meetings, which
will be set out in the Scheme Document (or such later date as may be agreed
between Bidco and DWF, with the consent of the Panel and, if required, the
Court);
· one or more of the Regulatory Conditions have not been
satisfied (or are incapable of being satisfied) prior to the Long Stop Date;
· the Sanction Hearing to approve the Scheme is not held on
or before the 22nd day after the expected date of such hearing, which will be
set out in the Scheme Document (or such later date as may be agreed between
Bidco and DWF, with the consent of the Panel and, if required, the Court); or
· the Scheme does not become Effective on or before the
Long Stop Date,
provided, however, that the deadlines for the Court Meetings, the General
Meeting and the Sanction Hearing as set out above may be waived by Bidco and
the deadline for the Scheme to become Effective may be extended by agreement
between DWF and Bidco, with the consent of the Panel and, if required, the
Court.
The Regulatory Conditions have been included following specific negotiation
between the parties and they could be invoked by Bidco with the consent of the
Panel if the necessary clearances are not obtained. DWF and Bidco do not
intend to implement the Acquisition without each of the Regulatory Conditions
having been satisfied and DWF Shareholders should note that Bidco intends to
seek the Panel's consent to invoke any of the Regulatory Conditions if they
have not been satisfied or become incapable of being satisfied prior to the
Long Stop Date. Bidco's intentions in this regard have been discussed with
DWF which shares Bidco's views of the material impact of such circumstances.
DWF intends to support any request by Bidco to seek the consent of the Panel
to invoke any of the Regulatory Conditions should these circumstances arise.
A decision by the Panel on whether to permit Bidco to invoke a Condition would
be judged by the Panel by reference to the facts at the time that the relevant
circumstances arise.
Once the necessary approvals from DWF Shareholders have been obtained and the
other Conditions have been satisfied or (where applicable) waived and the
Scheme has been approved by the Court, the Scheme will become Effective upon
delivery of the Court Order to the Registrar of Companies. Subject to the
satisfaction (or, where applicable, waiver) of the Conditions and the further
terms set out in Appendix 1 to this Announcement, the Scheme is expected to
become Effective around Q4 2023.
Upon the Scheme becoming Effective: (i) it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
applicable Court Meeting or the General Meeting (and if they attended and
voted, whether or not they voted in favour); and (ii) entitlements to DWF
Shares held within the CREST system will be cancelled and such entitlements
rematerialised; and (iii) share certificates in respect of DWF Shares will
cease to be valid. The cash consideration payable to Scheme Shareholders
(including all cash payable under the Partial Securities Alternative) will be
dispatched to DWF Shareholders no later than 14 days after the Effective Date.
Any DWF Shares issued before the Scheme Record Time will be subject to the
terms of the Scheme. The Resolutions to be proposed at the General Meeting
will, amongst other matters, provide that the DWF Articles be amended to
incorporate provisions requiring any DWF Shares issued after the Scheme Record
Time (other than to Bidco and/or its nominees) to be automatically transferred
to Bidco (and, where applicable, for the Cash Offer to be paid to the original
recipient of the DWF Shares so issued) on the same terms as the Acquisition
(other than terms as to timings and formalities) in exchange for the Cash
Offer (excluding the Special Dividend). The provisions of the DWF Articles (as
amended) will avoid any person (other than Bidco and its nominees) holding
shares in the capital of DWF after the Effective Date.
Bidco reserves the right to elect to implement the Acquisition by way of a
Takeover Offer as an alternative to the Scheme (subject to the Panel's consent
and the terms of the Co-operation Agreement). In such event, the Acquisition
will be implemented on the same terms (subject to appropriate amendments
including (without limitation) the inclusion of an acceptance condition which
will be set at 90 per cent. (or such lesser percentage as Bidco may decide
after, to the extent necessary, consultation with the Panel, being in any case
more than 50 per cent. of the voting rights attaching to the DWF Shares) of
the shares to which the Acquisition relates and those required by, or deemed
appropriate by, Bidco under applicable law, so far as applicable) as those
which would apply to the Scheme. Further, if sufficient acceptances of such
Takeover Offer are received and/or sufficient DWF Shares are otherwise
acquired, it is the intention of Bidco to apply the provisions of the
Companies Act to acquire compulsorily any outstanding DWF Shares to which such
Takeover Offer relates.
Further details of the Scheme, including expected times and dates for each of
the Court Meetings, the General Meeting and the Sanction Hearing, together
with notices of the Meetings will be set out in the Scheme Document, which,
together with the Forms of Proxy and Forms of Election in respect of the
Partial Securities Alternative, will be sent to DWF Shareholders no later than
within 28 days of this Announcement (or such later time as DWF, Bidco and the
Panel agree) and the Meetings are expected to be held shortly thereafter.
The General Meeting is expected to be held immediately after the Court
Meetings.
The Scheme will be governed by the laws of England and Wales and will be
subject to the jurisdiction of the courts of England and Wales. The Scheme
will be subject to the applicable requirements of the Takeover Code, the
Panel, the London Stock Exchange, the Listing Rules, the FCA and the Registrar
of Companies.
16. Conditions to the Acquisition
The Acquisition will be on the terms and subject to the Conditions set out in
Appendix 1 to this Announcement (including, but not limited to, the Conditions
summarised in paragraph 15 above), and the full terms and conditions will be
set out in the Scheme Document.
On 14 July 2023, the SRA confirmed in writing: (i) to each of the DWF SRA
Authorised Firms that each Bidco Restricted Interest Holder (as at 14 July
2023) has been approved by the SRA as an owner for the purposes of the
Condition set out in paragraph 3(a)(i) of Part A of Appendix 1 to this
Announcement and (ii) to DWF Law LLP that each Bidco Individual Role Holder
(as at 14 July 2023) has been approved by the SRA as a beneficial owner,
officer or manager for the purposes of the Condition set out in paragraph
3(a)(ii) of Part A of Appendix 1 to this Announcement.
17. Cancellation of listing of DWF Shares
Before the Scheme becoming Effective, it is intended that applications will be
made to the London Stock Exchange to cancel trading in DWF Shares on the Main
Market and to the FCA to cancel the listing of the DWF Shares from the premium
segment of the Official List, in each case, with effect from or shortly
following the Effective Date. The last day of dealings in, and registration
of transfers of, DWF Shares on the London Stock Exchange is expected to be the
Business Day immediately prior to the Effective Date and no transfers will be
registered after 6.30 p.m. (London time) on that date.
On the Effective Date, share certificates in respect of DWF Shares will cease
to be valid and entitlements to DWF Shares held within the CREST system will
be cancelled. DWF Shareholders shall be required to return share
certificates to DWF or destroy them following the Effective Date.
It is also proposed that, following the Effective Date and after its shares
are delisted, DWF will be re-registered as a private limited company under the
relevant provisions of the Companies Act.
18. Disclosure of Interests in DWF securities
As at close of business on 20 July 2023 (being the last Business Day before
this Announcement), save for the irrevocable undertakings referred to in
paragraph 9 above, no member of the Bidco Group nor any of their directors,
nor, so far as Bidco is aware, any person acting in concert (within the
meaning of the Takeover Code) with any of them for the purposes of the
Acquisition had:
· any interest in or right to subscribe for any relevant
securities of DWF;
· any short positions in respect of relevant securities of
DWF (whether conditional or absolute and whether in the money or otherwise),
including any short position under a derivative, any agreement to sell or any
delivery obligation or right to require another person to purchase or take
delivery;
· borrowed or lent any relevant securities of DWF
(including, for these purposes, any financial collateral arrangements of the
kind referred to in Note 4 on Rule 4.6 of the Takeover Code), save for any
borrowed relevant securities of DWF which had been either on-lent or sold;
and/or
· entered into any dealing arrangement of the kind referred
to in Note 11 on the definition of acting in concert in the Takeover Code.
"Interests in securities" for these purposes and within the meaning of the
Takeover Code arise, in summary, when a person has long economic exposure,
whether absolute or conditional, to changes in the price of securities (and a
person who only has a short position in securities is not treated as
interested in those securities). Notwithstanding the above, a person will be
treated as having an 'interest' by virtue of the ownership, voting rights or
control of securities, or by virtue of any agreement to purchase, option in
respect of, or derivative referenced to, securities.
It has not been practicable for Bidco to make enquiries of all of its concert
parties in advance of the release of this Announcement. Therefore, all
relevant details in respect of Bidco's concert parties will be included in its
Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on
Rule 8 of the Takeover Code.
19. Consents
Each of Rothschild & Co, Fenchurch and Stifel has given and not withdrawn
its written consent to the publication of this Announcement with the inclusion
of the references to its name in the form and context in which they appear.
20. General
The Acquisition will be on the terms and subject to the Conditions set out in
Appendix 1 to this Announcement, and the full terms and conditions will be set
out in the Scheme Document. The bases and sources of certain financial
information contained in this Announcement are set out in Appendix 2 to this
Announcement. A summary of the irrevocable undertakings given in relation to
the Acquisition is contained in Appendix 3 to this Announcement. Certain
terms and expressions used in this Announcement are defined in Appendix 4 to
this Announcement.
The Scheme Document and the Forms of Proxy and the Forms of Election
accompanying the Scheme Document will be sent to DWF Shareholders within 28
days of this Announcement (or on such later date as may be agreed between
Bidco and DWF, with the consent of the Panel).
This Announcement does not constitute an offer or an invitation to purchase or
subscribe for any securities. Such offer will be contained in the Scheme
Document. DWF Shareholders are advised to read carefully the Scheme Document
and associated Forms of Proxy and Forms of Election once they have been
dispatched.
The availability of the Acquisition to DWF Shareholders who are not resident
in and citizens of the United Kingdom may be affected by the laws of the
relevant jurisdictions in which they are located or of which they are
citizens. Persons who are not resident in the United Kingdom should inform
themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdictions. DWF Shareholders who are in any doubt regarding such
matters should consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
21. Documents available on website
Copies of the following documents will be available promptly via a link on
DWF's website at
https://dwfgroup.com/en/investors/possible-offer-for-dwf-group-plc and Bidco's
website at www.dwfoffer.com, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, and in any event by no later
than noon on the Business Day following the date of this Announcement until
the end of the Acquisition:
· this Announcement and the 2.4 Announcement;
· documents relating to Bidco's financing of the
Acquisition;
· the irrevocable undertakings entered into by each of the
Directors and any DWF Partners and Senior Employees that have made an Opening
Position Disclosure pursuant to Rule 8 of the Takeover Code (referred to in
paragraph 9 above);
· a form of irrevocable undertaking entered into by certain
DWF Partners and Senior Employees (referred to in paragraph 9 above);
· the Confidentiality Agreement referred to in paragraph 14
above;
· the Co-operation Agreement referred to in paragraph 14
above; and
· the written consent letter from each of Rothschild &
Co, Fenchurch and Stifel as referred to in paragraph 19 above.
The content of the websites referred to in this Announcement is not
incorporated into and does not form part of this Announcement.
Enquiries:
Bidco and Inflexion +44 7767 481163
Sarah Gestetner
Rothschild & Co +44 20 7280 5000
(Financial Adviser to Bidco and Inflexion)
Ravi Gupta
Martin Tomaszewski
Harry Thompson
DWF Group plc +44 7971 983533
James Igoe, Head of Communications and IR
Fenchurch +44 20 7382 2222
(Joint Financial Adviser to DWF)
Kunal Gandhi
Philip Evans
Richard Locke
Ben Spalton
Stifel +44 20 7710 7600
(Joint Financial Adviser to DWF)
Robin Mann
Gareth Hunt
Fred Walsh
H/Advisors Maitland (Public Relations Adviser to DWF)
DWF-maitland@h-advisors.global
Sam Turvey +44 7827 836246
Sam Cartwright +44 7827 254561
Travers Smith LLP is acting as legal adviser to Bidco and Inflexion.
Dorsey & Whitney (Europe) LLP is acting as legal adviser to DWF and
Skadden, Arps, Slate, Meagher & Flom (UK) LLP is acting as equity
compensation legal adviser to DWF.
Disclaimers
Rothschild & Co, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively as financial adviser to Bidco and
Inflexion and for no one else in connection with the matters referred to in
this Announcement and will not be responsible to anyone other than Bidco and
Inflexion for providing the protections afforded to clients of Rothschild
& Co, nor for providing advice in relation to the Acquisition or any other
matters referred to in this Announcement. Neither Rothschild & Co nor any
of its affiliates (nor their respective directors, officers, employees or
agents) owes or accepts any duty, liability or responsibility whatsoever
(whether direct or indirect, whether in contract, in tort, under statute or
otherwise) to any person who is not a client of Rothschild & Co in
connection with this Announcement, any statement contained in this
Announcement, the Acquisition or otherwise. No representation or warranty,
express or implied, is made by Rothschild & Co as to the contents of this
Announcement.
Fenchurch, which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting exclusively as joint financial adviser
for DWF and no-one else in connection with the Acquisition described in this
Announcement and accordingly will not be responsible to anyone other than DWF
for providing the protections afforded to its clients nor for providing advice
in relation to the matters described in this Announcement.
Stifel, which is authorised and regulated by the FCA in the United Kingdom, is
acting exclusively as joint financial adviser, alongside Fenchurch, to DWF and
for no one else in connection with the matters referred to in this
Announcement and will not be responsible to anyone other than DWF for
providing the protections afforded to clients of Stifel, nor for providing
advice in relation to the Acquisition or any other matters referred to in this
Announcement.
Further information
This Announcement is for information purposes only and is not intended to, and
does not, constitute or form part of any offer or inducement to sell or an
invitation to purchase, otherwise acquire, subscribe for, sell or otherwise
dispose of, any securities or the solicitation of an offer to buy any
securities, any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise, nor shall there be any purchase, sale, issuance or
exchange of securities or such solicitation in any jurisdiction in which such
offer, solicitation, sale issuance or exchange is unlawful. The Acquisition
will be made solely by means of the Scheme Document (or, if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document), which will
contain the full terms and conditions of the Acquisition, including details of
how to vote in respect of the Acquisition. Any vote or other decision in
respect of, or other response to, the Acquisition should be made only on the
basis of the information in the Scheme Document (or, if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document).
This Announcement has been prepared in connection with proposals in relation
to a scheme of arrangement pursuant to and for the purpose of complying with
English law, the Listing Rules and the Takeover Code and information disclosed
may not be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of jurisdictions
outside England. Nothing in this Announcement should be relied on for any
other purpose.
DWF and Bidco will prepare the Scheme Document (or, if the Acquisition is
implemented by way of a Takeover Offer, the Offer Document) to be distributed
to DWF Shareholders at no cost to them. DWF and Bidco urge DWF Shareholders
to read the Scheme Document when it becomes available because it will contain
important information relating to the Acquisition.
This Announcement does not constitute a prospectus, prospectus equivalent
document or an exempted document.
Overseas jurisdictions
This Announcement has been prepared in accordance with and for the purpose of
complying with the laws of England and Wales, the Takeover Code, the Listing
Rules, and the Market Abuse Regulation (EU 596/2014) (which is part of UK law
by virtue of the European Union (Withdrawal) Act 2018) and the Disclosure
Guidance and Transparency Rules and information disclosed may not be the same
as that which would have been disclosed if this Announcement had been prepared
in accordance with the laws of jurisdictions outside England and Wales.
The release, publication or distribution of this Announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by the
laws of those jurisdictions and therefore any persons into whose possession
this Announcement comes should inform themselves of, and observe, such
restrictions. In particular, the ability of persons who are not resident in
the United Kingdom to vote their DWF Shares with respect to the Scheme and the
Court Meetings, or to execute and deliver forms of proxy appointing another to
vote at the applicable Court Meeting on their behalf may be affected by the
laws of the relevant jurisdictions in which they are located. Further details
in relation to the Overseas Shareholders will be contained in the Scheme
Document. Any failure to comply with any such restrictions may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such means from within a Restricted
Jurisdiction or any other jurisdiction if to do so would constitute a
violation of the laws of that jurisdiction. Accordingly, copies of this
Announcement and all documents relating to the Acquisition are not being, and
must not be, directly or indirectly, mailed or otherwise forwarded,
distributed or sent in, into or from a Restricted Jurisdiction where to do so
would violate the laws in that jurisdiction, and persons receiving this
Announcement and all documents relating to the Acquisition (including
custodians, nominees and trustees) must not mail or otherwise distribute or
send them in, into or from such jurisdictions where to do so would violate the
laws in that jurisdiction.
The availability of the Acquisition to DWF Shareholders who are not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in
the United Kingdom should inform themselves of, and observe, any applicable
requirements. To the fullest extent permitted by applicable law, the companies
and persons involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
The Acquisition shall be subject to English law and the jurisdiction of the
Court and to the applicable requirements of the Takeover Code, the Panel, the
London Stock Exchange, the FCA, the Listing Rules and the Registrar of
Companies.
Additional information for US investors in DWF
DWF Shareholders in the United States should note that the Acquisition relates
to the shares of an English company with a listing on the Main Market and is
proposed to be effected by means of a scheme of arrangement under English law.
This Announcement, the Scheme Document and certain other documents relating
to the Acquisition have been or will be prepared in accordance with English
law, the Takeover Code and UK disclosure requirements, format and style, all
of which differ from those in the United States. A transaction effected by
means of a scheme of arrangement is not subject to the tender offer rules or
the proxy solicitation rules under the US Exchange Act. Accordingly, the
Acquisition is subject to the disclosure requirements of and practices
applicable in the United Kingdom to schemes of arrangement, which differ from
the disclosure requirements of the United States tender offer and proxy
solicitation rules. If, in the future, Bidco exercises the right to
implement the Acquisition by way of a Takeover Offer and determines to extend
the offer into the United States, the Acquisition will be made in compliance
with applicable United States laws and regulations, including any applicable
exemptions under the US Exchange Act.
The Loan Notes, the Preference Shares, the Bidco Rollover Loan Notes, the
Midco 2 Rollover Loan Notes and the Bidco Rollover Preference Shares have not
been, and will not be, registered under the US Securities Act or with any
securities regulatory authority of any state or other jurisdiction of the
United States and may not be offered, sold, exercised, resold, transferred or
delivered, directly or indirectly, in or into the United States except
pursuant to an exemption from the registration requirements of the US
Securities Act. There will be no public offer of Loan Notes or Preference
Shares in the United States. Accordingly, the Partial Securities Alternative
is not being offered, and will not be offered, directly or indirectly in or
into, or by use of the mails of, or by any means or instrumentality of
interstate or foreign commerce of or of any facilities of a national
securities exchange of, the United States. This includes, but is not limited
to, facsimile transmission, electronic mail, telex, telephone, the internet
and other forms of electronic communication. The Partial Securities
Alternative may not be applied to by any such use, means, instrumentality or
facility from or within the United States or by persons located or resident in
the United States. Accordingly, materials allowing for the Partial Securities
Alternative are not being, and must not be, directly or indirectly mailed or
otherwise published, transmitted, distributed or forwarded (including, without
limitation, by custodians, nominees or trustees) in or into the United States
or to any US persons or any persons located or resident in the United States.
Any purported applicability of the Partial Securities Alternative resulting
directly or indirectly from a violation of these restrictions will be invalid
and any purported applicability of the Partial Securities Alternative made by
a person located in the United States or any agent, fiduciary or other
intermediary acting on a non-discretionary basis for a principal giving
instructions from within the United States will be invalid and will not be
accepted.
Each person electing to receive the Partial Securities Alternative will
represent that it is not a US person, it is not located in the United States
and it is not participating in the Acquisition from the United States or
acting on a non-discretionary basis for a principal that is not a US person,
it is located outside the United States and that it is not giving an order to
participate in the Partial Securities Alternative from the United States. For
the purposes of this and the above paragraph, "United States" means United
States of America, its territories and possessions (including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern
Mariana Islands), any state of the United States of America and the District
of Columbia.
DWF's financial statements, and all financial information that is included in
this Announcement, the Scheme Document or any other documents relating to the
Acquisition, have been or will be prepared in accordance with UK-adopted
international accounting standards and may not be comparable to financial
statements of companies in the United States or other companies whose
financial statements are prepared in accordance with US generally accepted
accounting principles.
The receipt of cash pursuant to the Acquisition by a US holder as
consideration for the transfer of its DWF Shares pursuant to the Scheme will
likely be a taxable transaction for United States federal income tax purposes
and under applicable United States state and local, as well as foreign and
other, tax laws. Each DWF Shareholder is urged to consult their independent
professional adviser immediately regarding the tax consequences of the
Acquisition applicable to them.
It may be difficult for US holders to enforce their rights and claims arising
out of the US federal securities laws, since Bidco and DWF are located in
countries other than the US, and some or all of their officers and directors
may be residents of countries other than the US. US holders may not be able
to sue a non-US company or its officers or directors in a non-US court for
violations of US securities laws. Further, it may be difficult to compel a
non-US company and its affiliates to subject themselves to a US court's
judgement.
In accordance with normal UK practice and consistent with Rule 14e-5(b) of the
US Exchange Act, (to the extent applicable) Bidco, certain affiliated
companies and their nominees or brokers (acting as agents) may make certain
purchases of, or arrangements to purchase, shares in DWF outside of the US,
other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes Effective, lapses or is otherwise withdrawn.
If such purchases or arrangements to purchase were to be made they would
occur either in the open market at prevailing prices or in private
transactions at negotiated prices and comply with applicable law, including
the US Exchange Act. Any information about such purchases or arrangements to
purchase will be disclosed as required in the United Kingdom, will be reported
to a Regulatory Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com
(http://www.londonstockexchange.com) .
Neither the United States Securities and Exchange Commission nor any US state
securities commission has approved or disapproved the Acquisition, passed upon
the merits or fairness of the Acquisition or passed any opinion upon the
accuracy, adequacy or completeness of this Announcement (nor will it do so in
respect of the Scheme Document). Any representation to the contrary is a
criminal offence in the United States.
Forward looking statements
This Announcement (including information incorporated by reference in this
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco, Inflexion, DWF, any member of the Wider Bidco
Group or any member of the Wider DWF Group may contain statements which are,
or may be deemed to be, "forward looking statements". Forward looking
statements are prospective in nature and are not based on historical facts,
but rather on current expectations and projections about future events, and
are therefore subject to risks and uncertainties which could cause actual
results to differ materially from the future results expressed or implied by
the forward looking statements.
The forward looking statements contained in this Announcement include
statements relating to the expected effects of the Acquisition on Bidco,
Inflexion, DWF, any member of the Wider Bidco Group or any member of the Wider
DWF Group (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts. Often, but not always, forward looking statements can be
identified by the use of forward looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "intends", "cost-saving", "intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words and phrases or
statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Forward looking
statements may include statements relating to the following: (i) future
capital expenditures, expenses, revenues, earnings, synergies, economic
performance, indebtedness, financial condition, dividend policy, losses and
future prospects; (ii) business and management strategies and the expansion
and growth of Bidco's, Inflexion's, DWF's, any member of the Wider Bidco
Group's or any member of the Wider DWF Group's operations and potential
synergies resulting from the Acquisition; and (iii) the effects of global
economic conditions and governmental regulation on Bidco's, Inflexion's,
DWF's, any member of the Wider Bidco Group's or any member of the Wider DWF
Group's business.
Although Bidco and DWF believe that the expectations reflected in such forward
looking statements are reasonable, Bidco, Inflexion, DWF, these forward
looking statements are not guarantees of future performance and the Wider
Bidco Group and the Wider DWF Group can give no assurance that such
expectations will prove to be correct. By their nature, forward looking
statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of
factors that could cause actual results and developments to differ materially
from those expressed or implied by such forward looking statements.
These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite regulatory and shareholder
approvals and the satisfaction of other Conditions; changes in the global
political, economic, business and competitive environments and in market and
regulatory forces; changes in future exchange and interest rates; changes in
tax rates; future business combinations or disposals; changes in general
economic and business conditions; changes in the behaviour of other market
participants; the anticipated benefits from the proposed transaction not being
realised as a result of changes in general economic and market conditions in
the countries in which Bidco, Inflexion, DWF, the Wider Bidco Group and/or the
Wider DWF Group operate; weak, volatile or illiquid capital and/or credit
markets; changes in the degree of competition in the geographic and business
areas in which Bidco, Inflexion, DWF, the Wider Bidco Group and/or the Wider
DWF Group operate; and changes in laws or in supervisory expectations or
requirements. Other unknown or unpredictable factors could cause actual
results to differ materially from those expected, estimated or projected in
the forward looking statements. If any one or more of these risks or
uncertainties materialises or if any one or more of the assumptions proves
incorrect, actual results may differ materially from those expected, estimated
or projected. Such forward looking statements should therefore be construed in
the light of such factors.
Neither Bidco, Inflexion, DWF, the Wider Bidco Group nor the Wider DWF Group,
nor any of their respective associates or directors, officers or advisers,
provide any representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward looking statements in this
Announcement will actually occur. Given these risks and uncertainties,
potential investors are cautioned not to place any reliance on these forward
looking statements.
Specifically, statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated.
Other than in accordance with their legal or regulatory obligations, neither
Bidco, Inflexion, DWF, the Wider Bidco Group nor the Wider DWF Group is under
any obligation, and each such person expressly disclaims any intention or
obligation to update or revise any forward looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts, estimates or qualified benefits statements
No statement in this Announcement, or incorporated by reference in this
Announcement, is intended as a profit forecast, profit estimate or quantified
benefits statement for any period and no statement in this Announcement should
be interpreted to mean that earnings or earnings per share for DWF for the
current or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for DWF.
Rounding
Certain figures included in this Announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Publication on website
A copy of this Announcement and the documents required to be published
pursuant to Rule 26.1 of the Takeover Code will be available, free of charge,
subject to certain restrictions relating to persons resident in Restricted
Jurisdictions on DWF's website at
https://dwfgroup.com/en/investors/possible-offer-for-dwf-group-plc and Bidco's
website at www.dwfoffer.com by no later than 12.00 p.m. on the Business Day
following this Announcement. For the avoidance of doubt, neither the content
of DWF's website and Bidco's website is incorporated into, or forms part of,
this Announcement.
Information relating to DWF Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by DWF Shareholders, persons with information rights and other
relevant persons for the receipt of communications from DWF may be provided to
Bidco and Inflexion during the Offer Period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.
Right to receive documents in hard copy form
Any person entitled to receive a copy of documents, announcements and
information relating to the Acquisition is entitled to receive such documents
in hard copy form free of charge. For persons who receive a copy of this
Announcement in electronic form or via a website notification, a hard copy of
this Announcement will not be sent unless so requested. A person may request
that all future documents, announcements and information in relation to the
Acquisition are sent to them in hard copy form.
In accordance with Rule 30.3 of the Takeover Code, DWF Shareholders, persons
with information rights and participants in DWF Share Plans may request a hard
copy of this announcement by contacting DWF's registrars, Equiniti Limited, on
+44 (0)371 384 2050 or by submitting a request in writing at Equiniti Limited,
Aspect House, Spencer Road, Lancing West Sussex BN99 6DA. Lines are open from
8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (except English and
Welsh public holidays). Calls are charged at the standard geographical rate
and will vary by provider. Calls from outside the United Kingdom will be
charged at the applicable international rate.
Please note the Shareholder Helpline cannot provide advice on the merits of
the Acquisition or the Scheme nor give any financial, investment, legal or tax
advice.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 p.m. (London time) on the 10th business day
following the commencement of the offer period and, if appropriate, by no
later than 3.30 p.m. (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or
of a securities exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.
General
Bidco reserves the right to elect, with the consent of the Panel, and subject
to the terms of Co-operation Agreement, to implement the Acquisition by way of
a Takeover Offer as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms or, if Bidco so decides,
on such other terms being no less favourable (subject to appropriate
amendments), so far as applicable, as those which would apply to the Scheme
and subject to the amendment referred to in Appendix 1 to this Announcement.
Upon sufficient acceptances being received in respect of such Takeover
Offer, Bidco intends to exercise its rights to apply the provisions of Chapter
3 of Part 28 of the Companies Act so as to acquire compulsorily the remaining
DWF Shares in respect of which the Takeover Offer has not been accepted.
Investors should be aware that Bidco may purchase DWF Shares otherwise than
under any Takeover Offer or the Scheme, including pursuant to privately
negotiated purchases.
If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor or
independent financial adviser duly authorised under FSMA if you are resident
in the United Kingdom or, if not, from another appropriate authorised
independent financial adviser.
APPENDIX 1
CONDITIONS TO AND FURTHER TERMS OF THE SCHEME AND THE ACQUISITION
PART A: CONDITIONS TO THE SCHEME AND THE ACQUISITION
Long Stop Date
1. The Acquisition will be conditional upon the Scheme
becoming unconditional and being Effective, subject to the provisions of the
Takeover Code, by no later than the Long Stop Date.
Scheme Approval
2. The Scheme will be conditional upon:
(a)
(i) its approval by a majority in number of Scheme
Shareholders, present and voting (and entitled to vote), either in person or
by proxy, at the Employee Shareholder Court Meeting (or at any adjournment of
the Employee Shareholder Court Meeting) and who represent at least 75 per
cent. in value of the Scheme Shares voted by those Scheme Shareholders;
(ii) its approval by a majority in number of Scheme
Shareholders, present and voting (and entitled to vote), either in person or
by proxy, at the Other Shareholder Court Meeting (or at any adjournment of the
Other Shareholder Court Meeting) and who represent at least 75 per cent. in
value of the Scheme Shares voted by those Scheme Shareholders; and
(iii) such Court Meetings being held on or before the 22nd
day after the expected date of such meetings to be set out in the Scheme
Document (or such later date as may be agreed by Bidco and DWF, with the
consent of the Panel, and the Court may approve (if such approval is
required));
(b)
(i) all Resolutions being duly passed by the requisite
majority or majorities of DWF Shareholders at the General Meeting (or at any
adjournment of the General Meeting); and
(ii) such General Meeting being held on or before the 22nd
day after the expected date of such meeting be set out in the Scheme Document
(or such later date as may be agreed by Bidco and DWF, with the consent of the
Panel, and the Court may approve (if such approval is required)); and
(c)
(i) the sanction of the Scheme by the Court (with or
without modification, but subject to any modification being on terms
acceptable to DWF and Bidco) and the delivery of a copy of the Court Order to
the Registrar of Companies; and
(ii) the Sanction Hearing being held on or before the 22nd
day after the expected date of such hearing to be set out in the Scheme
Document (or such later date as may be agreed by Bidco and DWF with the
consent of the Panel, and the Court may approve (if such approval is
required)).
Regulatory Clearances
3. In addition, subject as stated in Part B below and to
the requirements of the Panel, Bidco and DWF have agreed that the Acquisition
will be conditional upon the following Conditions and, accordingly, the Court
Order will not be delivered to the Registrar of Companies to make the Scheme
Effective unless such Conditions (as amended if appropriate) have been
satisfied or, where relevant, waived;
(a) a notification of the Acquisition having been
sent to the SRA and each of the following having occurred:
(i) the SRA having confirmed in writing, in accordance
with the SRA Authorisation Rules, the SRA Suitability Rules and the LSA 2007,
that each Bidco Restricted Interest Holder has been approved by the SRA as an
"owner" (as defined in the SRA S&R) of the DWF SRA Authorised Firms,
either on an unconditional or conditional basis; and
(ii) the SRA having confirmed in writing, in accordance
with the MLR 2017, that each Bidco Individual Role Holder has been approved as
a "beneficial owner, officer or manager" (as defined in regulation 26 of the
MLR 2017) of DWF Law LLP,
and no such approval has lapsed, expired or been revoked on the date on which
all other Conditions are satisfied or waived;
(b) a notification having been submitted to the
Polish Competition Authority and one of the following having occurred:
(i) the Polish Competition Authority issuing a decision
discontinuing the proceedings or returning the application on account of the
Acquisition not constituting a concentration under the Polish Competition
Regulations which requires the consent from the Polish Competition Authority
or not being subject to notification to the Polish Competition Authority under
the Polish Competition Regulations;
(ii) the Polish Competition Authority giving consent to
the Acquisition, issued by way of a decision in accordance with the Polish
Competition Regulations; or
(iii) the Polish Competition Authority not taking a decision
within the time limits set by the Polish Competition Regulations, as a result
of which consent for the Acquisition is deemed to be granted;
(c) a notification having been made and accepted
under the NSI Act and one of the following having occurred:
(i) the Secretary of State confirming before the end of
the review period that no further action will be taken in relation to the
Acquisition; or
(ii) in the event that the Secretary of State issues a
call-in notice in respect of the Acquisition:
A. the Secretary of State giving a final notification
pursuant to section 26(1)(b) of the NSI Act that no further action will be
taken under the NSI Act in relation to the call-in notice and the Acquisition;
or
B. the Secretary of State making a final order pursuant
to section 26(1)(a) of the NSI Act in relation to the Acquisition, save to the
extent that such an order prohibits the Acquisition; and
(d) a notification having been made to the GAC and
one of the following having occurred:
(i) the GAC granting antitrust clearance for the
Acquisition in accordance with Saudi Competition Law;
(ii) the GAC determining that the Acquisition does not
require a merger control filing under the Saudi Competition Law and waiving a
full review; or
(iii) the statutory review period under the Saudi
Competition Law lapsing without a decision being issued by the GAC and the
Acquisition deems to have been approved.
General Conditions
In addition, subject as stated in Part B below and to the requirements of the
Panel, Bidco and DWF have agreed that the Acquisition will be conditional upon
the following Conditions and, accordingly, the Court Order will not be
delivered to the Registrar of Companies to make the Scheme Effective unless
such Conditions (as amended if appropriate) have been satisfied or, where
relevant, waived:
Notifications, waiting periods and Authorisations
4. excluding any notification and/or filing required for
the purposes of the relevant confirmations, consents and/or orders referred to
in the Conditions at paragraphs 3(b), 3(c) and 3(d) (to which only those
Conditions shall apply, as applicable), all notifications, filings or
applications which are necessary or reasonably considered appropriate by Bidco
having been made in connection with the Acquisition and all necessary waiting
periods (including any extensions thereof) under any applicable legislation or
regulation of any jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any jurisdiction
having been complied with in each case in respect of the Acquisition and its
implementation and all Authorisations reasonably necessary or appropriate for
or in respect of the Acquisition and, except pursuant to Chapter 3 of Part 28
of the Companies Act, the acquisition of any shares or other securities in, or
control or management of, DWF or any other member of the Wider DWF Group by
any member of the Wider Bidco Group having been obtained in terms and in a
form reasonably satisfactory to Bidco (acting reasonably) from all appropriate
Third Parties or (without prejudice to the generality of the foregoing) from
any person or bodies with whom any member of the Wider DWF Group or the Wider
Bidco Group has entered into contractual arrangements and all such
Authorisations necessary or reasonably considered appropriate by Bidco to
carry on the business of any member of the Wider DWF Group in any jurisdiction
having been obtained and all such Authorisations remaining in full force and
effect and filings necessary for such purpose have been made and at the time
at which the Acquisition becomes otherwise wholly unconditional and there
being no notice or intimation of an intention to revoke, suspend, restrict,
modify or not to renew such Authorisations;
General antitrust and regulatory
5. excluding any notification and/or filing required for
the purposes of the relevant confirmations, consents and/or orders referred to
in the Conditions at paragraphs 3(b), 3(c) and 3(d) (to which only those
Conditions shall apply, as applicable), no antitrust regulator or Third Party
having given notice of a decision to take, institute, implement or threaten
any action, proceeding, suit, investigation, enquiry or reference (and in each
case, not having withdrawn the same), or having required any action to be
taken or otherwise having done anything, or having enacted, made or proposed
any statute, regulation, decision, order or change to published practice (and
in each case, not having withdrawn the same) and there not continuing to be
outstanding any statute, regulation, decision or order which in each case
would or might reasonably be expected to, in each case to an extent or in a
manner which is or would be material in the context of the Wider DWF Group
taken as a whole:
(a) require, prevent or delay the divestiture or
materially alter the terms envisaged for such divestiture by any member of the
Wider Bidco Group or by any member of the Wider DWF Group of all or any part
of its businesses, assets or property or impose any limitation on the ability
of all or any of them to conduct their businesses (or any part thereof) or to
own, control or manage any of their assets or properties (or any part
thereof);
(b) except pursuant to Chapter 3 of Part 28 of the
Companies Act, require any member of the Wider Bidco Group or the Wider DWF
Group to acquire or offer to acquire any shares, other securities (or the
equivalent) or interest in any member of the Wider DWF Group or any asset
owned by any Third Party (other than in the implementation of the
Acquisition);
(c) impose any material limitation on, or result
in a delay in, the ability of any member of the Wider Bidco Group directly or
indirectly to acquire, hold or to exercise effectively all or any rights of
ownership in respect of shares, loans or securities convertible into shares or
any other securities in any member of the Wider DWF Group or on the ability of
any member of the Wider DWF Group or any member of the Wider Bidco Group
directly or indirectly to hold or exercise effectively all or any rights of
ownership in respect of shares, loans or securities convertible into shares or
any other securities (or the equivalent) in, or to exercise voting or
management control over, any member of the Wider DWF Group;
(d) otherwise adversely affect any or all of the
business, assets, profits or prospects of any member of the Wider DWF Group or
the Wider Bidco Group;
(e) result in any member of the Wider DWF Group
ceasing to be able to carry on business under any name under which it
presently carries on business;
(f) make the Scheme or the Acquisition, its
implementation or the acquisition of any shares or other securities in, or
control or management of, DWF or any member of the Wider DWF Group by any
member of the Wider Bidco Group void, unenforceable and/or illegal under the
laws of any relevant jurisdiction, or otherwise, directly or indirectly
prevent or prohibit, restrict, restrain, or delay or otherwise interfere with
the implementation of, or impose additional conditions or obligations with
respect to, or otherwise challenge, impede, interfere or require material
amendment of the Scheme and/or the Acquisition or the acquisition of any
shares or other securities in, or control or management of, DWF or any member
of the Wider DWF Group by any member of the Wider Bidco Group;
(g) require, prevent or delay a divestiture by any
member of the Wider Bidco Group of any shares or other securities (or the
equivalent) in any member of the Wider DWF Group; or
(h) impose any limitation on the ability of any
member of the Wider Bidco Group or any member of the Wider DWF Group to
conduct, integrate or co-ordinate all or any part of its business with all or
any part of the business of any other member of the Wider Bidco Group and/or
the Wider DWF Group,
and all applicable waiting and other time periods (including any extensions of
them) during which any such antitrust regulator or Third Party could decide to
take, institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under the laws of
any jurisdiction in respect of the Acquisition or the acquisition of any DWF
Shares or otherwise intervene having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
6. except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other instrument
to which any member of the Wider DWF Group is a party or by or to which any
such member or any of its assets is or may be bound, entitled or subject to or
any event or circumstance which, as a consequence of the Acquisition or the
proposed acquisition or the acquisition by any member of the Wider Bidco Group
of any shares or other securities (or the equivalent) in DWF or because of a
change in the control or management of any member of the Wider DWF Group or
otherwise, would or might reasonably be expected to result in, in each case to
an extent which is material in the context of the Wider DWF Group as a whole:
(a) any monies borrowed by, or any other
indebtedness or liabilities, actual or contingent, of, or any grant available
to, any member of the Wider DWF Group being or becoming repayable, or capable
of being declared repayable, immediately or before its or their stated
maturity date or repayment date, or the ability of any such member to borrow
monies or incur any indebtedness being withdrawn or inhibited or being capable
of becoming or being withdrawn or inhibited;
(b) save in the ordinary course of business, 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 DWF Group or any such mortgage, charge or other
security interest (whenever created, arising or having arisen) being enforced
or becoming enforceable;
(c) any such arrangement, agreement, lease,
licence, franchise, permit or other instrument being terminated or becoming
capable of being terminated or adversely modified or the rights, liabilities,
obligations or interests of any member of the Wider DWF Group being terminated
or adversely modified or affected or any obligation or liability arising or
any adverse action being taken or arising thereunder;
(d) any liability of any member of the Wider DWF
Group to make any severance, termination, bonus or other payment to any of its
directors, or other officers;
(e) the rights, liabilities, obligations, interests
or business of any member of the Wider DWF Group or any member of the Wider
Bidco Group under any such arrangement, agreement, licence, permit, lease or
instrument or the interests or business of any member of the Wider DWF Group
or any member of the Wider Bidco Group in or with any other person or body or
firm or company (or any arrangement or agreement relating to any such
interests or business) being or becoming capable of being terminated, or
adversely modified or affected or any onerous obligation or liability arising
or any adverse action being taken thereunder;
(f) any member of the Wider DWF Group ceasing to
be able to carry on business under any name under which it presently carries
on business;
(g) the business, assets, profits, value of, or the
financial or trading position or prospects of, any member of the Wider DWF
Group being prejudiced or adversely affected; or
(h) the creation or acceleration of any liability
(actual or contingent) by any member of the Wider DWF Group other than trade
creditors or other liabilities incurred in the ordinary course of business,
and, except as Disclosed, no event having occurred which, under any provision
of any arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider DWF Group is a party or by or to
which any such member or any of its assets are bound, entitled or subject,
would or might result in any of the events or circumstances as are referred to
in Conditions 6(a) to (h);
Certain events occurring since 30 April 2022
7. except as Disclosed, no member of the Wider DWF Group
having since 30 April 2022:
(a) issued or agreed to issue or authorised or
proposed or announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities convertible into,
or exchangeable for, or rights, warrants or options to subscribe for or
acquire, any such shares, securities or convertible securities or transferred
or sold or agreed to transfer or sell or authorised or proposed the transfer
or sale of DWF Shares out of treasury (except, where relevant, as between DWF
and wholly-owned subsidiaries of DWF or between the wholly-owned subsidiaries
of DWF and except for the issue or transfer out of treasury of DWF Shares on
the exercise of employee share options or vesting of employee share awards in
the ordinary course under the DWF Share Plans);
(b) recommended, declared, paid or made or proposed
to recommend, declare, pay or make any bonus issue, dividend or other
distribution (whether payable in cash or otherwise) other than: (i) the
Special Dividend and (ii) dividends (or other distributions whether payable in
cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of DWF
to DWF or any of its wholly-owned subsidiaries;
(c) other than pursuant to the Acquisition (and
except for transactions between DWF and its wholly-owned subsidiaries or
between the wholly-owned subsidiaries of DWF) implemented, effected,
authorised or proposed or announced its intention to implement, effect,
authorise or propose any merger, demerger, reconstruction, amalgamation,
scheme, commitment or offer or disposal of assets or shares or loan capital
(or the equivalent thereof), in each case to an extent which is material in
the context of the Wider DWF Group taken as a whole;
(d) except for: (i) transactions between DWF and
its wholly-owned subsidiaries or between the wholly-owned subsidiaries of DWF;
and (ii) transactions in the ordinary course of business, disposed of, or
transferred, mortgaged or created any security interest over any material
asset or any right, title or interest in any asset or authorised, proposed or
announced any intention to do so, in each case to an extent which is material
in the context of the Wider DWF Group taken as a whole;
(e) except for transactions between DWF and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries of DWF,
issued, authorised or proposed or announced an intention to authorise or
propose, the issue of or made any change in or to the terms of any debentures
or become subject to any contingent liability or incurred or increased any
indebtedness, in each case to an extent which is material in the context of
the Wider DWF Group taken as a whole;
(f) entered into any licence or other disposal of
intellectual property rights of any member of the Wider DWF Group which are
material in the context of the Wider DWF Group taken as a whole;
(g) entered into or varied or authorised, proposed
or announced its intention to enter into or vary any contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, unusual or onerous nature
or magnitude or which is or which involves or could involve an obligation of a
nature or magnitude which is or could be materially restrictive on the
business of any member of the Wider DWF Group;
(h) entered into or varied the terms of, or made
any offer (which remains open for acceptance) to enter into or vary the terms
of any contract, service agreement, commitment or arrangement with any
director or senior executive of any member of the Wider DWF Group, save for
salary increases, bonuses or variations of the terms in the ordinary course;
(i) proposed, agreed to provide or modified the
terms of any share option scheme, incentive scheme or other benefit relating
to the employment or termination of employment of any employee of the Wider
DWF Group which are material in the context of the Wider DWF Group taken as a
whole;
(j) purchased, redeemed or repaid or announced
any proposal to purchase, redeem or repay any of its own shares or other
securities or reduced or, except in respect of the matters mentioned in
sub-paragraph (a) above, made any other change to any part of its share
capital;
(k) except for claims between DWF and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries of DWF,
waived, compromised or settled any claim otherwise than of an immaterial
amount in the ordinary course of business;
(l) terminated or varied the terms of any
agreement or arrangement between any member of the Wider DWF Group and any
other person in a manner which would or might reasonably be expected to have a
material adverse effect on the financial position of the Wider DWF Group taken
as a whole;
(m) except as disclosed on publicly available
registers, made any alteration to its articles of association or other
constitutional documents (other than in connection with the Scheme);
(n) except in relation to changes made or agreed as
a result of, or arising from, changes to legislation, made or agreed or
consented to any change to:
(i) the terms of the trust deeds and rules constituting
the pension scheme(s) established by any member of the Wider DWF Group for its
directors, employees or their dependants;
(ii) the contributions payable to any such scheme(s) or to
the benefits which accrue, or to the pensions which are payable, thereunder;
(iii) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or
(iv) the basis upon which the liabilities (including
pensions) of such pension schemes are funded, valued, made, agreed or
consented to;
(o) been unable, or admitted in writing that it is
unable, to pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, 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 which is material in the
context of the Wider DWF Group taken as a whole or in the context of the
Acquisition;
(p) taken or proposed any steps, corporate action
or had any legal proceedings instituted or threatened against it in relation
to the suspension of payments, a moratorium of any indebtedness, its
winding-up (voluntary or otherwise), dissolution, reorganisation or for the
appointment of a receiver, administrator, manager, administrative receiver,
trustee or similar officer of all or any of its assets or revenues or any
analogous or equivalent steps or proceedings in any jurisdiction or appointed
any analogous person in any jurisdiction or had any such person appointed;
(q) except for transactions between DWF and its
wholly-owned subsidiaries or between the wholly-owned subsidiaries, made,
authorised, proposed or announced an intention to propose any change in its
loan capital;
(r) entered into, implemented or authorised the
entry into, any joint venture, asset or profit sharing arrangement,
partnership, composition, assignment, reconstruction, amalgamation,
commitment, scheme or other similar transaction or arrangement (other than the
Scheme) which is material in the context of the Wider DWF Group taken as a
whole or in the context of the Acquisition;
(s) having taken (or agreed or proposed to take)
any action which requires or would require, the consent of the Panel or the
approval of DWF Shareholders in general meeting in accordance with, or as
contemplated by, Rule 21.1 of the Takeover Code; or
(t) entered into any agreement, arrangement,
commitment or contract or passed any resolution or made any offer (which
remains open for acceptance) with respect to or announced an intention to, or
to propose to, effect any of the transactions, matters or events referred to
in this Condition 7;
No adverse change, litigation, regulatory enquiry or similar
8. except as Disclosed, since 30 April 2022 there having
been:
(a) no adverse change and no circumstance having
arisen which would or might be expected to result in any adverse change or
deterioration in, the business, assets, value, financial or trading position
or profits or prospects or operational performance of any member of the Wider
DWF Group which is material in the context of the Wider DWF Group taken as a
whole or is material in the context of the Acquisition;
(b) no litigation, arbitration proceedings,
prosecution or other legal proceedings having been threatened, announced or
instituted by or against or remaining outstanding against or in respect of,
any member of the Wider DWF Group or to which any member of the Wider DWF
Group is or may become a party (whether as claimant, defendant or otherwise)
having been threatened, announced, instituted or remaining outstanding by,
against or in respect of, any member of the Wider DWF Group, in each case
which is or might reasonably be expected to be material in the context of the
Wider DWF Group taken as a whole or is material in the context of the
Acquisition;
(c) no enquiry, review or investigation by, or
complaint or reference to, any Third Party against or in respect of any member
of the Wider DWF Group having been threatened, announced or instituted or
remaining outstanding by, against or in respect of any member of the Wider DWF
Group, in each case which might reasonably be expected to have a material
adverse effect on the Wider DWF Group taken as a whole or is material in the
context of the Acquisition;
(d) no contingent or other liability having arisen
or become apparent to Bidco or increased which is reasonably likely to affect
adversely the business, assets, financial or trading position or profits or
prospects or operational performance of any member of the Wider DWF Group to
an extent which is material in the context of the Wider DWF Group taken as a
whole or is material in the context of the Acquisition;
(e) no steps having been taken and no omissions
having been made which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by any member of
the Wider DWF Group which is necessary for the proper carrying on of its
business and the withdrawal, cancellation, termination or modification of
which might reasonably be expected to have a material adverse effect on the
Wider DWF Group taken as a whole or is material in the context of the
Acquisition; and
(f) no member of the Wider DWF Group having
conducted its business in breach of any applicable laws or regulations which
might reasonably be expected to have a material adverse effect on the Wider
DWF Group taken as a whole or in the context of the Acquisition;
No discovery of certain matters regarding information or liabilities
9. except as Disclosed, Bidco not having discovered that:
(a) any financial, business or other information
concerning the Wider DWF Group publicly announced before the date of this
Announcement or disclosed at any time to any member of the Wider Bidco Group
by or on behalf of any member of the Wider DWF Group before the date of this
Announcement is misleading, contains a material misrepresentation of any fact,
or omits to state a fact necessary to make that information not misleading and
which is, in any case, material in the context of the Wider DWF Group taken as
a whole;
(b) any member of the Wider DWF Group or any
partnership, company or other entity in which any member of the Wider DWF
Group has a significant economic interest and which is not a subsidiary
undertaking of DWF is subject to any liability, contingent or otherwise which
is material in the context of the Wider DWF Group taken as a whole or material
in the context of the Acquisition;
(c) there is or is reasonably likely to be any
obligation or liability (whether actual or contingent) or requirement to make
good, remediate, repair, reinstate or clean up any property, asset or any
controlled waters currently or previously owned, occupied, operated or made
use of or controlled by any past or present member of the Wider DWF Group (or
on its behalf), or in which any such member may have or previously have had or
be deemed to have had an interest, under any environmental legislation, common
law, regulation, notice, circular, Authorisation or order of any Third Party
in any jurisdiction or to contribute to the cost thereof or associated
therewith or indemnify any person in relation thereto; or
(d) circumstances exist (whether as a result of
making the Acquisition or otherwise) which would be reasonably likely to lead
to any Third Party instituting (or whereby any member of the Wider DWF Group
would be likely to be required to institute), an environmental audit or take
any 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
to make good, repair, reinstate or clean up any property of any description or
any asset now or previously owned, occupied or made use of by any past or
present member of the Wider DWF Group (or on its behalf) or by any person for
which a member of the Wider DWF Group is or has been responsible, or in which
any such member may have or previously have had or be deemed to have had an
interest, which is material in the context of the Wider DWF Group taken as a
whole or material in the context of the Acquisition;
Intellectual property
10. no circumstance having arisen or event having occurred
in relation to any intellectual property owned or used by any member of the
Wider DWF Group, including:
(a) any member of the Wider DWF Group losing its
title to any intellectual property used in its business, or any intellectual
property owned by the Wider DWF Group being revoked, cancelled or declared
invalid, which is material in the context of the Wider DWF Group taken as a
whole;
(b) any claim being asserted in writing or
threatened in writing by any person challenging the ownership of any member of
the Wider DWF Group to, or the validity or effectiveness of, any of its
intellectual property; or
(c) any agreement regarding the use of any
intellectual property licensed to or by any member of the Wider DWF Group
being terminated or varied, which is material in the context of the Wider DWF
Group taken as a whole; and
Anti-corruption, sanctions and criminal property
11. except as Disclosed, Bidco not having discovered:
(a) (i) any past or present member, director,
officer or employee of the Wider DWF Group is or has at any time engaged in
any activity, practice or conduct would constitute an offence under the
Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, as amended, or
any other anti-corruption legislation applicable to the Wider DWF Group; or
(ii) any person that performs or has performed services for or on behalf of
the Wider DWF Group is or has at any time engaged in any activity, practice or
conduct in connection with the performance of such services which would
constitute an offence under the Bribery Act 2010, the US Foreign Corrupt
Practices Act of 1977, as amended, or any other applicable anti-corruption
legislation;
(b) any asset of any member of the Wider DWF Group
constitutes criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition) or proceeds
of crime under any other applicable law, rule, or regulation concerning money
laundering or proceeds of crime or any member of the Wider DWF Group is found
to have engaged in activities constituting money laundering under any
applicable law, rule, or regulation concerning money laundering;
(c) any past or present member, director, officer
or employee of the Wider DWF Group, or any other person for whom any such
person may be liable or responsible, has engaged in any business with, made
any investments in, made any funds or assets available to or received any
funds or assets from: (i) any government, entity or individual in respect of
which US, UK or European Union persons, or persons operating in those
territories, are prohibited from engaging in activities or doing business, or
from receiving or making available funds or economic resources, by applicable
US, UK or European Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control or HM
Treasury & Customs; or (ii) any government, entity or individual targeted
by any of the economic sanctions of the United Nations, the United States, the
United Kingdom, the European Union or any of its member states; or
(d) a member of the Wider DWF Group has engaged in
any transaction or conduct which would cause any member of the Wider Bidco
Group to be in breach of any applicable law or regulation upon its Acquisition
of DWF, including the economic sanctions of the United States Office of
Foreign Assets Control or HM Treasury & Customs, or any government, entity
or individual targeted by any of the economic sanctions of the United Nations,
the United States, the United Kingdom, the European Union or any of its member
states.
PART B: CERTAIN FURTHER TERMS OF THE ACQUISITION
1. Conditions 2(a), 2(b) and 3 to 11 (inclusive) of Part
A above must each be fulfilled, determined by Bidco to be or to remain
satisfied or (if capable of waiver) be waived by Bidco prior to the
commencement of the Sanction Hearing, failing which the Scheme will, with the
consent of the Panel (if required), lapse.
2. Notwithstanding the paragraph above, subject to the
requirements of the Panel and the Takeover Code, Bidco reserves the right in
its sole discretion to waive:
(a) the deadline set out in Condition 1 of Part A
above, and any deadlines set out in Condition 2 of Part A above for the timing
of the Court Meetings, the General Meeting and the Sanction Hearing. If any
such deadline is not met, Bidco shall make an announcement by 8.00 a.m. on the
Business Day following such deadline confirming whether it has invoked or
waived the relevant Condition or agreed with DWF to extend the deadline in
relation to the relevant Condition. In all other respects, Conditions 1 and
2 of Part A above cannot be waived; and
(b) in whole or in part, all or any of Conditions 3
to 11 (inclusive) of Part A above.
3. Bidco shall be under no obligation to waive or treat
as satisfied any of the Conditions that it is entitled (with the consent of
the Panel and subject to the requirements of the Takeover Code) to invoke, by
a date earlier than the latest date specified above for the fulfilment or
waiver thereof, notwithstanding that the other Conditions may at such earlier
date have been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be capable of
fulfilment.
4. If Bidco is required by the Panel to make an offer for
DWF Shares under the provisions of Rule 9 of the Takeover Code, Bidco may make
such alterations to any of the above Conditions and terms of the Acquisition
as are necessary to comply with the provisions of that Rule.
5. Under Rule 13.5(a) of the Takeover Code, Bidco may
only invoke a Condition that is subject to Rule 13.5(a) of the Takeover Code
so as to cause the Acquisition not to proceed, to lapse or to be withdrawn
with the consent of the Panel. The Panel will normally only give its consent
if the circumstances which give rise to the right to invoke the Condition are
of material significance to Bidco in the context of the Acquisition. This
will be judged by reference to the facts of each case at the time that the
relevant circumstances arise. Conditions 1, 2(a), 2(b) and 2(c) of Part A
above and, if applicable, any acceptance condition if the Acquisition is
implemented by means of a Takeover Offer, are not subject to Rule 13.5(a) of
the Takeover Code.
6. Any Condition that is subject to Rule 13.5(a) of the
Takeover Code may be waived by Bidco.
7. Each of the Conditions will be regarded as a separate
Condition and will not be limited by reference to any other Condition.
8. Bidco reserves the right to elect to implement the
Acquisition by way of a Takeover Offer as an alternative to the Scheme
(subject to the Panel's consent and the terms of the Co-operation Agreement).
In such event, the Acquisition will be implemented on the same terms (subject
to appropriate amendments including (without limitation) the inclusion of an
acceptance condition which will be set at 90 per cent. (or such lesser
percentage as Bidco may decide after, to the extent necessary, consultation
with the Panel, being in any case more than 50 per cent. of the voting rights
attaching to DWF Shares) of shares to which the Acquisition relates and those
required by, or deemed appropriate by, Bidco under applicable law, so far as
applicable) as those which would apply to the Scheme. Further, if sufficient
acceptances of such Takeover Offer are received and/or sufficient DWF Shares
are otherwise acquired, it is the intention of Bidco to apply the provisions
of the Companies Act to acquire compulsorily any outstanding DWF Shares to
which such Takeover Offer relates.
9. The DWF Shares to be acquired under the Acquisition
will be acquired with full title guarantee, fully paid and free from all
liens, equities, charges, encumbrances, options, rights of pre-emption and any
other third party rights and interests of any nature and together with all
rights now or hereafter attaching or accruing to them, including, without
limitation, voting rights and the right to receive and retain in full all
dividends and other distributions (if any) declared, made or paid, or any
other return of value (whether by reduction of share capital or share premium
account or otherwise) made, on or after the Effective Date (other than the
Special Dividend or any dividend in respect of which a corresponding reduction
in the Transaction Value has been made as described in paragraph 10 below).
10. The DWF Directors intend to declare and pay the Special
Dividend of 3 pence per DWF Share to DWF Shareholders on the register of
member of DWF at the Scheme Record Time. The Special Dividend is conditional
upon, and only payable if, the Acquisition becomes Effective. The Special
Dividend will not reduce the Cash Offer.
If any dividend, distribution and/or other return of value is announced,
declared, made or paid or becomes payable in respect of DWF Shares on or after
the date of this Announcement and before the Effective Date (other than the
Special Dividend), Bidco reserves the right (without prejudice to any right of
Bidco, with the consent of the Panel, to invoke Condition 7(b) of Part A
above) to reduce the Cash Offer by the amount of any such dividend,
distribution and/or other return of value. If Bidco exercises its right to
reduce the Cash Offer by all or part of the amount of any dividend,
distribution and/or other return of value (other than the Special Dividend),
the relevant eligible DWF Shareholders will be entitled to receive and retain
such dividend, distribution and/or other return of value, and any reference in
this Announcement to the Cash Offer will be deemed to be a reference to the
Cash Offer as so reduced.
Any exercise by Bidco of its rights referred to in the above paragraph shall
be the subject of an announcement and, for the avoidance of doubt, shall not
be regarded as constituting any revision or variation of the terms of the
Scheme. If and to the extent that any such dividend, distribution and/or
other return of value (other than the Special Dividend) has been declared or
announced but not paid or made or is not payable in respect of the DWF Shares
prior to the Effective Date or by reference to a record date prior to the
Effective Date or such dividend, distribution and/or other return of value
(other than the Special Dividend) is: (i) transferred pursuant to the
Acquisition on a basis which entitles Bidco to receive the dividend, other
distribution and/or other return of value and to retain it or (ii) cancelled
before payment, the Transaction Value shall not be subject to change in
accordance with the above paragraph.
11. The availability of the Acquisition to persons not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Any person who is subject to the laws of any jurisdiction
other than the United Kingdom should inform themselves about and observe any
applicable requirements. Further information in relation to Overseas
Shareholders will be contained in the Scheme Document.
12. The Acquisition is not being made, directly or
indirectly, in, into or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail or other
electronic transmission, telex or telephone) of interstate or foreign commerce
of, or of any facility of a national, state or other securities exchange of,
any Restricted Jurisdiction.
13. The Scheme will be governed by the laws of England and
Wales and will be subject to the jurisdiction of the courts of England and
Wales and to the Conditions and further terms set out in this Appendix 1 and
to the full terms and conditions to be set out in the Scheme Document in due
course. The Scheme will be subject to the applicable requirements of the
Takeover Code, the Panel, the London Stock Exchange, the Listing Rules, the
FCA and the Registrar of Companies.
Appendix
2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context otherwise
requires, the following sources and bases have been used:
1. The "Latest Practicable Date" for the purposes of this
Announcement means close of business on 19 July 2023 (being the latest
practicable Business Day before the date of this Announcement on which the
share register of DWF has been verified for the purpose of the two different
classes of DWF Shareholders).
2. The equity value of DWF's entire issued and to be
issued ordinary share capital has been calculated on the basis of 341,979,578
DWF Shares in issue as at 20 July 2023.
3. The value of the Acquisition, based on the Transaction
Value, of approximately £342 million is calculated on the basis of the issued
and to be issued share capital of DWF (as set out in paragraph 2 above).
4. The premium calculations to the price per DWF Share
used in this Announcement have been calculated by reference to:
a) the Closing Price on 7 July 2023 (being the last Business Day before
the commencement of the Offer Period) of 65.5 pence per DWF Share, derived
from Bloomberg;
b) the daily volume weighted average share price for the one month
period ended on 7 July 2023 (being the last Business Day before the date of
the commencement of the Offer Period) of 55.0 pence per DWF Share, derived
from Bloomberg; and
c) the daily volume weighted average share price for the three month
period ended on 7 July 2023 (being the last Business Day before the date of
the commencement of the Offer Period) of 58.3 pence per DWF Share, derived
from Bloomberg.
5. The Closing Price on any particular date is taken from
the Daily Official List.
6. Volume weighted average prices have been derived from
Bloomberg and have been rounded to the nearest single decimal place.
7. Based on the information available to DWF's share
registrar, Equiniti Limited, as at the Latest Practicable Date:
a) the number of issued ordinary shares that are attributable to the
Employee Shareholder share class have been calculated on the basis of
180,685,501 DWF Shares; and
b) the number of issued ordinary shares that are attributable to the
Other Shareholder share class have been calculated on the basis of 161,294,077
DWF Shares.
8. Certain figures included in this Announcement have
been subject to rounding adjustments.
APPENDIX 3
IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT
1. DWF Directors
The following DWF Directors have given irrevocable undertakings to vote in
favour of the Scheme at the Employee Shareholder Court Meeting and the
Resolutions to be proposed at the General Meeting and, if Bidco exercises its
right to implement the Acquisition by way of a Takeover Offer (subject to the
consent of the Panel and the terms of the Co-operation Agreement), to accept
or procure acceptance of such Takeover Offer, in each case in respect of their
own legal and/or beneficial holdings (or those DWF Shares over which they have
control and are held by their close relatives and related trusts) of DWF
Shares as well as any further DWF Shares of which they may become the legal
and/or beneficial holder (whether as a result of the vesting of awards under
the DWF Share Plans or otherwise):
Name Total Number of DWF Shares Percentage of Scheme Shares entitled to vote at the Employee Shareholder Court Percentage of issued share capital of DWF
Meeting
Chris Stefani 597,787 0.33% 0.17%
Chris Sullivan 409,836 0.23% 0.12%
Jonathan Bloomer 40,000 0.02% 0.01%
Luke Savage 32,693 0.02% 0.01%
Matthew Doughty 2,669,421 1.48% 0.78%
Michele Cicchetti 1,779,644 0.98% 0.52%
Nigel Knowles 2,677,211 1.48% 0.78%
Seema Bains 1,400,000 0.77% 0.41%
Teresa Colaianni 49,180 0.03% 0.01%
Total 9,655,772 5.34% 2.82%
In addition, each of the irrevocable undertakings received from the DWF
Directors (other than the Independent Non-Executive Directors) in respect of
8,820,221 DWF Shares representing approximately 2.6 per cent. of the ordinary
share capital of DWF in issue as at the Latest Practicable Date include an
undertaking to accept the Partial Securities Alternative in respect of the DWF
Shares held by them as at the Latest Practicable Date. The undertaking to
accept the Partial Securities Alternative was not given by any DWF Directors
in respect of any DWF Shares of which they may become the legal or beneficial
holder as a result of the vesting of awards under the DWF Share Plans.
These irrevocable undertakings remain binding in the event a higher competing
offer is made for DWF and will only cease to be binding if:
· the Scheme Document is not sent to DWF Shareholders
within 28 days (or such longer period as DWF and Bidco agree, and the Panel
consent);
· where Bidco has elected (in accordance with and subject
to the terms of the Co-operation Agreement and with Panel consent) to proceed
with the implementation of the Acquisition by way of a Takeover Offer and the
Offer Document is not sent to DWF Shareholders within 28 days;
· Bidco announces, with consent of the Panel, that it does
not intend to make or proceed with the Acquisition and no new, revised or
replacement Takeover Offer or Scheme is announced by Bidco in accordance with
Rule 2.7 of the Takeover Code at the same time;
· the Scheme (or Takeover Offer, as applicable) lapses or
is withdrawn in accordance with its terms and no new, revised or replacement
Takeover Offer or Scheme is announced by Bidco by such time;
· the Acquisition has not become effective or, in the event
Bidco has elected (in accordance with and subject to the terms of the
Co-operation Agreement and with Panel consent) to proceed with the
implementation of the Acquisition by way of a Takeover Offer, the Takeover
Offer has not become unconditional, in each case by the Long Stop Date; or
· the date on which any competing offer for the entire
issued and to be issued share capital of DWF is declared unconditional (if
implemented by way of a takeover offer) or, if proceeding by way of a scheme
of arrangement, becomes effective.
2. DWF Partners and Senior Employees
Certain DWF Partners and Senior Employees have given irrevocable undertakings
to vote in favour of the Scheme at the Employee Shareholder Court Meeting and
the Resolutions to be proposed at the General Meeting and, if Bidco exercises
its right to implement the Acquisition by way of a Takeover Offer (subject to
the consent of the Panel and the terms of the Co-operation Agreement), to
accept or procure acceptance of such Takeover Offer, in each case in respect
of their own legal and/or beneficial holdings (or those DWF Shares over which
they have control and are held by their close relatives and related trusts) of
DWF Shares as well as any further DWF Shares of which they may become the
legal and/or beneficial holder (whether as a result of the vesting of awards
under the DWF Share Plans or otherwise). A summary of the irrevocable
undertaking received from DWF Partners and Senior Employees is set out below:
Banding of DWF Shares held by the DWF Partners and Senior Employees (% of DWF Number of DWF Partners and Employees in this range Total number of DWF Shares currently held Percentage of Scheme Shares entitled to vote at the Employee Shareholder Court Percentage of issued share capital of DWF represented in this range
Shares in issue) Meeting
0.80% - 1.20% 7 23,334,466 12.91% 6.82%
0.60% - 0.79% 17 39,810,080 22.03% 11.64%
0.40% - 0.59% 18 30,265,405 16.75% 8.85%
0.20% - 0.39% 23 25,189,499 13.94% 7.37%
<0.20% 42 13,771,227 7.62% 4.03%
Total 107 132,370,677 73.26% 38.71%
In addition, irrevocable undertakings from 80 DWF Partners and Senior
Employees in respect of 89,259,223 DWF Shares representing approximately 26.1
per cent. of the ordinary share capital of DWF in issue as at the Latest
Practicable Date include an undertaking to accept the Partial Securities
Alternative by electing to receive the Rollover Alternative in respect of the
DWF Shares held by them as at the Latest Practicable Date. Irrevocable
undertakings from 10 DWF Partners and Senior Employees in respect of
16,142,600 DWF Shares representing approximately 4.7 per cent. of the ordinary
share capital of DWF in issue as at the Latest Practicable Date include an
undertaking to accept the Partial Securities Alternative by electing to
receive the Reinvestment Alternative. The undertaking to accept the Partial
Securities Alternative was not given by any DWF Partners and Senior Employees
in respect of any DWF Shares of which they may become the legal or beneficial
holder as a result of the vesting of awards under the DWF Share Plans.
These irrevocable undertakings remain binding in the event a higher competing
offer is made for DWF and will only cease to be binding if:
· the Scheme Document is not sent to DWF Shareholders
within 28 days (or such longer period as DWF and Bidco agree, and the Panel
consent);
· where Bidco has elected (in accordance with and subject
to the terms of the Co-operation Agreement and with Panel consent) to proceed
with the implementation of the Acquisition by way of a Takeover Offer and the
Offer Document is not sent to DWF Shareholders within 28 days;
· Bidco announces, with consent of the Panel, that it does
not intend to make or proceed with the Acquisition and no new, revised or
replacement Takeover Offer or Scheme is announced by Bidco in accordance with
Rule 2.7 of the Takeover Code at the same time;
· the Scheme (or Takeover Offer, as applicable) lapses or
is withdrawn in accordance with its terms and no new, revised or replacement
Takeover Offer or Scheme is announced by Bidco by such time;
· the Acquisition has not become effective or, in the event
Bidco has elected (in accordance with and subject to the terms of the
Co-operation Agreement and with Panel consent) to proceed with the
implementation of the Acquisition by way of a Takeover Offer, the Takeover
Offer has not become unconditional, in each case by the Long Stop Date; or
· the date on which any competing offer for the entire
issued and to be issued share capital of DWF is declared unconditional (if
implemented by way of a takeover offer) or, if proceeding by way of a scheme
of arrangement, becomes effective.
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context requires otherwise:
"2.4 Announcement" the announcement of a possible offer for the entire issued, and to be issued,
ordinary share capital of DWF, made by the board of directors of DWF on 10
July 2023 in accordance with Rule 2.4 of the Takeover Code and which first
identified Inflexion as a potential offeror;
"Acquisition" the proposed acquisition by Bidco of the entire issued, and to be issued,
ordinary share capital of DWF, other than Excluded Shares, to be implemented
by means of the Scheme (or should Bidco elect (subject to the consent of the
Panel and the terms of the Co-operation Agreement) by means of a Takeover
Offer) and, where the context requires, any subsequent revision, variation,
extension or renewal thereof;
"Announcement" this announcement (including the summary and Appendices to this announcement);
"Authorisations" authorisations, orders, determinations, grants, recognitions, confirmations,
consents, licences, clearances, certificates, permissions, exemptions or
approvals, in each case of a Third Party;
"Bidco" Aquila Bidco Limited, a private company limited by shares and incorporated in
England and Wales with company number 14972770;
"Bidco Group" Topco, Midco 1, Midco 2, Bidco and their respective subsidiary undertakings;
"Bidco Individual Role Holder" any SRA Relevant Person who, for the purposes of regulation 26 of the MLR
2017, has been identified by DWF, Bidco and the SRA as requiring approval from
the SRA, as a result of the Acquisition, to become the beneficial owner,
officer or manager of DWF Law LLP as of the Effective Date;
"Bidco Restricted Interest Holder" (a) any member of the Bidco Group and any SRA Relevant Person; and
(b) any "parent undertaking" (as defined in Schedule 13 of the LSA 2007) of a
member of the Bidco Group and any SRA Relevant Person to any "parent
undertaking" of a member of the Bidco Group (other than those persons already
set out at (a) above), who, for the purposes of the LSA 2007, has been
identified by DWF, Bidco and the SRA as requiring approval from the SRA to
hold, as a result of the Acquisition, a SRA Restricted Interest in the DWF SRA
Authorised Firms as of the Effective Date;
"Bidco Rollover Loan Notes" the unsecured £0.01 loan notes to be issued under a loan note instrument to
be executed by Bidco;
"Bidco Rollover Preference Shares" the non-voting preference shares of £0.01 each in the share capital of Bidco;
"Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks
in London are open for normal business;
"Cash Offer" the cash consideration payable to DWF Shareholders pursuant to the
Acquisition, comprising 97 pence in cash per DWF Share;
"CCPA" means the Polish act on the protection of competition and consumers (Ustawa o
ochronie konkurencji I konsumentów) of 16 February 2007 (unified text--
Journal of Laws 2021, item 275), as amended;
"Closing Price" the closing middle market price of a DWF Share as derived from the Daily
Official List on any particular trading date;
"Co-operation Agreement" the co-operation agreement entered into between Bidco and DWF dated 21 July
2023 relating to, amongst other things, the implementation of the Acquisition;
"Companies Act" the Companies Act 2006, as amended;
"Conditions" the conditions to the Acquisition, as set out in Appendix 1 to this
Announcement and to be set out in the Scheme Document and "Condition" shall
mean any one of them;
"Confidentiality Agreement" the confidentiality agreement entered into between Inflexion and DWF dated 9
January 2023 in respect of the Acquisition;
"Court" the High Court of Justice in England and Wales;
"Court Meetings" the Employee Shareholder Court Meeting and the Other Shareholder Court Meeting
and "Court Meeting" shall mean any one of them;
"Court Order" the order of the Court sanctioning the Scheme under Part 26 of the Companies
Act;
"CREST" the relevant system (as defined in the CREST Regulations) in respect of which
Euroclear is the operator (as defined in the CREST Regulations) in accordance
with which securities may be held and transferred in uncertificated form;
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755) (including
as it forms part of domestic law of the United Kingdom by virtue of the
European Union (Withdrawal) Act 2018), as amended from time to time;
"Daily Official List" the Daily Official List published by the London Stock Exchange;
"Disclosed" the information disclosed by, or on behalf of DWF: (i) in the annual report
and audited accounts of the Wider DWF Group for the financial year ended 30
April 2022; (ii) in this Announcement; or (iii) in any other announcement to a
Regulatory Information Service by, or on behalf of DWF before the publication
of this Announcement;
"DWF" DWF Group plc;
"DWF Articles" the articles of association of DWF as amended from time to time;
"DWF Directors" the directors of DWF;
"DWF Partners and Senior Employees" certain individual employees and/or partners (other than DWF Directors) who
hold DWF Shares and are in senior positions in the DWF business;
"DWF Share Plans" (a) the DWF Group plc Buy-As-You-Earn Plan 2019 and the DWF LLP Sub-Group
Buy-As-You-Earn Plan 2019;
(b) the DWF Group plc Deferred Bonus Plan 2019 and the DWF LLP Sub-Group
Deferred Bonus Plan 2019; and
(c) the DWF Group plc Equity Incentive Plan 2019 and the DWF LLP Sub-Group
Equity Incentive Plan 2019,
each as amended from time to time;
"DWF Shareholders" holders of DWF Shares;
"DWF Shares" the ordinary shares of 1 pence each in the share capital of DWF from time to
time;
"DWF SRA Authorised Firms" Acumension Limited, DWF Advocacy Limited, DWF Costs Limited, DWF Law LLP and
Greyfern Law Limited;
"EBT" the DWF Employee Benefit Trust constituted by a trust deed between DWF and the
Trustee dated 25 January 2019;
"Effective" in the context of the Acquisition: (i) if the Acquisition is implemented by
way of the Scheme, the Scheme having become effective pursuant to its terms;
or (ii) if the Acquisition is implemented by way of a Takeover Offer, the
Takeover Offer having been declared or having become unconditional in
accordance with the requirements of the Takeover Code;
"Effective Date" the date on which the Acquisition becomes Effective;
"Employee Shareholders" any DWF Shareholder and/or participant in the DWF Share Plans that is at the
Voting Record Time:
(a) an employee, director, officer and/or partner of or consultant providing
services to DWF or any member of the Wider DWF Group or any close relative or
related trust
(b) (as such terms are defined in the Takeover Code) thereof;
(c) the EBT; or
(d) the RST;
"Employee Shareholder Court Meeting" the meeting of Employee Shareholders to be convened at the direction of the
Court pursuant to Part 26 of the Companies Act for the purpose of considering
and, if thought fit, approving the Scheme (with or without amendment), and
including any adjournment, postponement or reconvening thereof;
"Euroclear" Euroclear UK & International Limited;
"Excluded Shares" any DWF Shares at the Scheme Record Time which (if any):
(a) are owned or controlled by the Bidco Group; or
(b) are held by DWF as treasury shares (within the meaning of the Companies
Act);
"FCA" or "Financial Conduct Authority" the Financial Conduct Authority of the United Kingdom or its successor from
time to time, acting in its capacity as the competent authority for the
purposes of Part VI of FSMA;
"FCA Handbook" the FCA's Handbook of rules and guidance as amended from time to time;
"Fenchurch" Fenchurch Advisory Partners LLP;
"Forms of Election" the forms of election relating to the Partial Securities Alternative which
will accompany the Scheme Document;
"Forms of Proxy" the forms of proxy for use at the Court Meetings and the General Meeting which
will accompany the Scheme Document;
"FSMA" the Financial Services and Markets Act 2000, as amended from time to time;
"GAC" the Saudi Arabian General Authority for Competition;
"General Meeting" the general meeting of DWF Shareholders to be convened in connection with the
Scheme to consider and, if thought fit, to approve the Resolutions (with or
without amendment), which is expected to be held as soon as the preceding
Court Meetings shall have concluded or been adjourned, and including any
adjournment, postponement or reconvening thereof;
"Independent Non-Executive Directors" each of Jonathan Bloomer, Chris Sullivan, Samantha Tymms, Luke Savage and
Teresa Colaianni;
"Inflexion" Inflexion Private Equity Partners LLP (acting as adviser to the Inflexion
Funds);
"Inflexion Funds" (a) Inflexion Buyout Fund VI (No.1) Limited Partnership; and
(b) Inflexion Buyout Fund VI (No.2) Limited Partnership;
"Latest Practicable Date" has the meaning given to it in paragraph 1 of Appendix 2 to this Announcement;
"Listing Rules" the rules and regulations made by the FCA under FSMA, and contained in the
FCA's publication of the same name;
"Loan Notes" the unsecured £0.01 loan notes to be issued under a loan note instrument to
be executed by Midco 1;
"London Stock Exchange" London Stock Exchange plc or its successor;
"Long Stop Date" 11.59 p.m. on 21 July 2024 (or such later date as DWF and Bidco may, with the
consent of the Panel, agree and, if required, as the Court may approve);
"LSA 2007" Legal Services Act 2007 (as amended);
"Main Market" the main market for trading in listed securities operated by the London Stock
Exchange;
"Midco 1" Aquila Midco 1 Limited, a private company limited by shares and incorporated
in England and Wales with company number 14971961;
"Midco 2" Aquila Midco 2 Limited, a private company limited by shares and incorporated
in England and Wales with company number 14972051;
"Midco 2 Rollover Loan Notes" the unsecured £0.01 loan notes to be issued under a loan note instrument to
be executed by Midco 2;
"Meetings" the Court Meetings and/or the General Meeting, as the case may be;
"MLR 2017" Money Laundering, Terrorist Financing and Transfer of Funds (Information on
the Payer) Regulations 2017 (as amended);
"NSI Act" the National Security and Investment Act 2021;
"Offer Document" should the Acquisition be implemented by way of a Takeover Offer, the document
which would be sent to DWF Shareholders containing, amongst other things, the
terms and conditions of the Takeover Offer;
"Offer Period" the offer period (as defined by the Takeover Code) relating to DWF, which
commenced on 10 July 2023 (being the date of the 2.4 Announcement) and ending
on the earlier of: (i) the Effective Date and/or (ii) the date on which the
Scheme lapses or is withdrawn (or such other date as the Takeover Code may
provide or the Panel may decide);
"Official List" the Official List of the FCA;
"Opening Position Disclosure" has the same meaning given to it in Rule 8 of the Takeover Code;
"Other Shareholders" any DWF Shareholder and/or participant in the DWF Share Plans that is not an
Employee Shareholder at the Voting Record Time;
"Other Shareholder Court Meeting" the meeting of Other Shareholders to be convened at the direction of the Court
pursuant to Part 26 of the Companies Act for the purpose of considering and,
if thought fit, approving the Scheme (with or without amendment), and
including any adjournment, postponement or reconvening thereof;
"Overseas Shareholders" holders of Scheme Shares who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside the United Kingdom;
"Panel" the Panel on Takeovers and Mergers;
"Partial Securities Alternative" the alternative to the Cash Offer whereby DWF Shareholders (other than DWF
Shareholders resident or located in a Restricted Jurisdiction) may elect to
receive for each DWF Share held either (at their discretion):
(a) the Rollover Alternative; or
(b) the Reinvestment Alternative;
"Polish Competition Authority" the Polish Competition and Consumer Protection Office;
"Polish Competition Regulations" means all laws and regulations which regulate competition between businesses
operating in the Republic of Poland or the sale and purchase of such
businesses, including the CCPA;
"Power of Attorney" the power of attorney to be included in the Forms of Election, pursuant to
which any eligible DWF Shareholders who validly elect to receive the Partial
Securities Alternative will irrevocably appoint Bidco, and any director of, or
person authorised by, Bidco, as their attorney and/or agent to execute on
their behalf all documents necessary or desirable to give effect to the terms
of the Acquisition (including the rollover or reinvestment mechanics (as
applicable) described in paragraph 11 above);
"Preference Shares" the non-voting preference shares of £0.01 each in the share capital of Topco;
"Put and Call Option Deed" the put and call option deed to be entered into between Topco, Midco 1, Midco
2, Bidco and, pursuant to the Power of Attorney, eligible DWF Shareholders;
"Registrar of Companies" the Registrar of Companies in England and Wales;
"Regulatory Conditions" means the Conditions contained in paragraph 3 of Part A of Appendix 1 to this
Announcement;
"Regulatory Information Service" a regulatory information service as defined in the FCA Handbook;
"Reinvestment Alternative" if an eligible DWF Shareholder elects to receive the Partial Securities
Alternative, an election to receive 100 pence in cash (which shall include the
Special Dividend), 40 pence of which (being 40 per cent. of the Transaction
Value) shall be reinvested by subscribing for Loan Notes or Preference Shares
(as applicable);
"relevant securities" "relevant securities" as defined in the Takeover Code;
"Resolutions" the resolution(s) to be proposed at the General Meeting necessary to
facilitate the implementation of the Scheme, including, without limitation, a
resolution to amend the DWF Articles by adoption and inclusion of a new
article (in terms approved by Bidco) under which any DWF Shares issued or
transferred after the Scheme Record Time (other than to Bidco and its
nominees) shall be automatically transferred to Bidco (or as it may direct)
and, where applicable, for the Cash Offer (excluding the Special Dividend) to
be paid to the transferee or to the original recipient of the DWF Shares so
transferred or issued on the same terms as the Acquisition (other than terms
as to timings and formalities);
"Restricted Jurisdiction" any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition (including this Announcement) is sent or made available to DWF
Shareholders in that jurisdiction;
"Rollover Alternative" if an eligible DWF Shareholder elects to receive the Partial Securities
Alternative, an election to receive 65 pence (being 65 per cent. of the
Transaction Value) as Loan Notes or Preference Shares (as applicable) and the
remaining 35 pence (being 35 per cent. of the Transaction Value) as cash
(which shall include the Special Dividend);
"Rothschild & Co" N.M. Rothschild & Sons Limited;
"RST" the DWF Reward Share Trust constituted by a trust deed between DWF and the
Trustee dated 25 January 2019;
"Sanction Hearing" the Court hearing to sanction the Scheme;
"Saudi Competition Law" Saudi Competition Law, Royal Decree No M/75 dated 29/06/1440H (6 March 2019 G)
of the Kingdom of Saudi Arabia as amended from time to time;
"Scheme" the proposed scheme of arrangement under Part 26 of the Companies Act between
DWF and Scheme Shareholders, with or subject to any modification, addition or
condition approved or imposed by the Court and agreed by DWF and Bidco, to
implement the acquisition of the entire issued and to be issued share capital
of DWF by Bidco;
"Scheme Document" the document to be sent to DWF Shareholders containing, amongst other things,
the Scheme and the notices convening the Court Meetings and the General
Meeting;
"Scheme Record Time" the time and date to be specified in the Scheme Document, expected to be 6.30
p.m. on the Business Day immediately prior to the Effective Date, or such
later time as Bidco and DWF may agree;
"Scheme Shareholders" holders of Scheme Shares;
"Scheme Shares" all DWF Shares which remain in issue at the Scheme Record Time and are:
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document but before the
Voting Record Time; and/or
(c) (if any) issued at or after the Voting Record Time and before the Scheme
Record Time, either on terms that the original or any subsequent holders
thereof shall be bound by the Scheme or in respect of which the holders
thereof shall have agreed in writing to be bound by the Scheme,
excluding, in each case, any Excluded Shares;
"Secretary of State" the Secretary of State in the Cabinet Office (and, where the context requires,
includes the Investment Security Unit within the Cabinet Office);
"Senior Debt Facilities" the facilities agreement dated 21 July 2023 and entered into between, amongst
others, Midco 2, ICG Alternative Investment Limited as mandated lead arranger,
Global Loan Agency Services Limited as agent and GLAS Trust Corporation
Limited as security agent;
"Significant Interest" in relation to an undertaking, a direct or indirect interest in 20 per cent.
or more of the total voting rights or equity share capital of such
undertaking;
"Special Dividend" a special dividend of 3 pence per DWF Share, which is conditional on the
Acquisition becoming Effective;
"SRA" the Solicitors Regulation Authority;
"SRA Authorisation Rules" SRA Authorisation of Firms Rules;
"SRA Relevant Person" a partner, member, shareholder, employee or officer of, or consultant to, any
member of the Bidco Group;
"SRA Restricted Interest" as defined in Schedule 13 of the LSA 2007;
"SRA S&R" SRA Standards and Regulations;
"SRA Suitability Rules" SRA Assessment of Character and Suitability Rules;
"Stifel" Stifel Nicolaus Europe Limited;
"Takeover Code" the Takeover Code issued by the Panel, as amended from time to time;
"Takeover Offer" subject to the consent of the Panel and the terms of the Co-operation
Agreement, should the Acquisition be implemented by way of a takeover offer as
defined in Chapter 3 of Part 28 of the Companies Act, the offer to be made by
or on behalf of Bidco to acquire the entire issued and to be issued share
capital of DWF, other than Excluded Shares and, where the context admits, any
subsequent revision, variation, extension or renewal of such offer;
"Third Party" any relevant central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, administrative, fiscal or
investigative body, court, trade agency, association, institution,
environmental body, employee representative body, any entity owned or
controlled by any relevant government or state, or any other body or person
whatsoever in any jurisdiction;
"Topco" Aquila Topco Limited, a private company limited by shares and incorporated in
England and Wales with company number 14971854;
"Topco Articles" the articles of association of Topco as amended from time to time;
"Trustee" Ocorian Trustees (Jersey) Limited in its (separate) capacity as trustee of the
EBT and the RST (as the context requires);
"UK" or "United Kingdom" United Kingdom of Great Britain and Northern Ireland;
"US" or "United States" the United States of America, its territories and possessions, any state of
the United States of America, the District of Columbia and all other areas
subject to its jurisdiction and any political sub-division thereof;
"US Exchange Act" the United States Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder;
"Voting Record Time" the time and date to be specified in the Scheme Document by reference to which
entitlement to vote at the Court Meetings and the General Meeting will be
determined, expected to be 6.30 p.m. on the day which is two days (excluding
non-working days) before the date of the Court Meetings and the General
Meeting or, if a Court Meeting and/or the General Meeting is adjourned, 6.30
p.m. on the day which is two days (excluding non-working days) before the date
of such adjourned Meeting;
"Wider Bidco Group" Bidco, funds advised and managed by Inflexion and each of their respective
subsidiary undertakings, associated undertakings, and any other undertaking
(including any joint venture, partnership, firm or company) in which Bidco
and/or all such undertakings (aggregating their interests) have a Significant
Interest; and
"Wider DWF Group" DWF and its subsidiary undertakings, associated undertakings, and any other
undertaking (including any joint venture, partnership, firm or company) in
which DWF and/or all such undertakings (aggregating their interests) have a
Significant Interest.
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