Rule 2.7 Announcement
11/12/2024 12:18
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RNS Number : 7230P Equals Group PLC 11 December 2024
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
11 December 2024
RECOMMENDED CASH ACQUISITION
of
Equals Group plc ("Equals")
by
Alakazam Holdings BidCo Limited ("BidCo")
a newly-incorporated company to be indirectly wholly-owned by a consortium
comprising (i) the TowerBrook Funds (ii) the J.C. Flowers Funds and (iii) the
Railsr Shareholders
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
· The boards of directors of each of Equals and BidCo are
pleased to announce that they have reached agreement on the terms of a
recommended all cash acquisition of the entire issued and to be issued
ordinary share capital of Equals (the "Acquisition"). The Acquisition is to be
effected by means of a scheme of arrangement under Part 26 of the Companies
Act.
· Under the terms of the Acquisition, Equals Shareholders
shall be entitled to receive:
140 pence in cash per Equals Share (the "Cash Value"),
comprising a cash consideration of 135 pence for each Equals Share (the "Cash
Consideration") plus a special dividend payment of 5 pence in cash per Equals
Share that the board of directors of Equals intends to declare prior to
completion of the Acquisition with the record and payment dates aligned with
the corresponding dates for determining entitlements to, and payment of, the
Cash Consideration due to Equal Shareholders under the terms of the
Acquisition (the "Special Dividend").
· The Cash Value values the entire issued and to be
issued share capital of Equals at approximately £283 million, and represents
a premium of approximately:
o 37 per cent. to the Closing Price per Equals Share of 102.5 pence on 31
October 2023 (being the last Business Day prior to the commencement of the
Offer Period);
o 30 per cent. to the volume-weighted average price of 107.3 pence per
Equals Share for the 3-month period ended 31 October 2023 (being the last
Business Day prior to the commencement of the Offer Period); and
o 20 per cent. to the volume-weighted average price of 117.0 pence per
Equals Share for the 3-month period ended 10 December 2024 (being the latest
practicable date prior to the date of this Announcement).
· The Cash Value implies an enterprise value multiple of
approximately 11.3 times Equals' Adjusted EBITDA for the twelve month period
ended 30 June 2024.
Dividends
· If, on or after the date of this Announcement and on or
prior to the Effective Date, any dividend, distribution, or other return of
value other than the Special Dividend is declared, made, or paid or becomes
payable by Equals, the Cash Consideration shall be reduced accordingly. In
such circumstances, Equals Shareholders would be entitled to retain any such
dividend, distribution, or other return of value declared, made, or paid.
Background to and reasons for the Acquisition
· In March 2023, a group of investors led by D Squared
Capital completed the acquisition of Railsr, the market-leading embedded
finance platform. Railsr is the trading name for Embedded Finance.
· Since its acquisition, Railsr's business has been
stabilised and recapitalised, it has strengthened its market position and is
on track to become a significant pan-European embedded finance platform.
· Following Equals' announcement in November 2023 that it
was conducting a review of its strategic options, Railsr and D Squared Capital
approached leading investors in the Fintech space to put together a consortium
to participate in the potential combination of Railsr and Equals to create a
market-leading business. The Consortium recognises that Equals has, over
several years, successfully established itself in the large and fast-growing
B2B international multi-currency banking and payments market.
· The Consortium believes that Equals has a number of key
strengths:
o a diverse set of high-performing, technology-enabled payments, cards and
banking products for corporate and personal clients;
o a highly scalable, purpose-built and unified platform, bringing together a
leading cloud-based technology stack and institutional-grade risk management
capabilities;
o a fulsome network of regulatory licenses and relationships with commercial
partners including banks and payment schemes providing global connectivity;
o a strong financial profile combining growth, robust profitability and cash
flow generation; and
o a proven and capable management team with strong track record of growth,
entrepreneurialism and delivery.
· The Consortium believes that this strategy has now
positioned Equals at an inflection point in its business development whereby
the Consortium may be able to accelerate the execution of its strategy when
combined with Railsr, a specialist embedded finance business, and with
increased access to further capital. Such a combination would potentially
create one of the largest and most capable embedded finance platforms in
Europe by bringing together Railsr's embedded finance solution and Equals'
cross-border transaction capabilities, providing an ability to serve customers
wishing to utilise or embed financial services products within their own
product offerings.
· The Consortium strongly believes that by combining
Equals' and Railsr's respective strengths in foreign exchange, payments and
banking services, it will further accelerate the right-to-win of the
respective businesses and have identified synergies in combination.
· For this purpose, BidCo and the Railsr Shareholders
have entered into a sale and purchase agreement (the "Railsr SPA"), pursuant
to which BidCo has agreed to acquire Railsr. It is intended that the Railsr
Acquisition will complete under the Railsr SPA shortly after the Effective
Date.
· Each of D Squared Capital, Moneta VC, TowerBrook and
J.C. Flowers have an extensive understanding of the underlying financial
services markets that Equals and Railsr operate in, a deep bench of
operational partners to support the combined management team and a proven
track record of successfully integrating and creating long-term value. These
capabilities will provide support to the combined Equals and Railsr management
teams to execute on their growth plan, identify future organic and inorganic
opportunities, and drive continued operational improvement.
Recommendation
· The Equals Directors, who have been so advised by
Canaccord Genuity and Lazard as to the financial terms of the Acquisition
(including the Special Dividend), consider the terms of the Acquisition to be
fair and reasonable. In providing its advice to the Equals Directors,
Canaccord Genuity and Lazard have taken into account the commercial
assessments of the Equals Directors.
· Accordingly, the Equals Directors intend to recommend
unanimously that Equals Shareholders vote in favour of the Scheme at the Court
Meeting and the resolutions to be proposed at the General Meeting, as the
Equals Directors have irrevocably undertaken to do in respect of their own
beneficial holdings of 4,194,384 Equals Shares, representing, in aggregate,
approximately 2.203 per cent. of the ordinary share capital of Equals in issue
on 10 December 2024 (being the latest practicable date prior to this
Announcement).
Shareholder support
· The boards of directors of each of Equals and BidCo are
pleased to note that BidCo has also received support for the Acquisition from
Equals Shareholders interested in 27,190,174 Equals Shares, representing, in
aggregate, approximately 14.283 per cent. of the existing issued ordinary
share capital of Equals on 10 December 2024 (being the latest practicable date
prior to the date of this Announcement).
· Taken together with the irrevocable undertakings given
by the Equals Directors, BidCo has therefore received irrevocable undertakings
in respect of a total of 31,384,558 Equals Shares representing, in aggregate,
approximately 16.486 per cent. of Equals' ordinary share capital in issue on
10 December 2024 (being the latest practicable date prior to this
Announcement).
· Further details of these irrevocable undertakings are
set out in Appendix III to this Announcement.
Information on BidCo and the Consortium
· BidCo is a newly formed private limited company
incorporated under the laws of England and Wales. BidCo was formed for the
purposes of the Acquisition and the Railsr Acquisition, has not traded since
its date of incorporation and has not entered into any obligations other than
in connection with the Acquisition and the Railsr Acquisition. As at the date
of this Announcement, BidCo is indirectly wholly-owned by (i) the TowerBrook
Funds; and (ii) the J.C. Flowers Funds, in equal shares. Following completion
of the Railsr SPA, which is expected to occur shortly after the Effective
Date, BidCo will be indirectly wholly-owned by (i) the TowerBrook Funds (ii)
the J.C. Flowers Funds and (iii) the Railsr Shareholders as to
28.75%:28.75%:42.50% respectively.
· Embedded Finance, trading as Railsr, is incorporated
and registered in England and Wales under company number 14698459 with its
registered office at Fora Montacute Yards, Shoreditch High Street, London,
England, E1 6HU.
Railsr is a market-leading embedded finance platform that provides
banking-as-a-service and cards-as-a-service with offerings such as card
issuing, virtual wallets and BIN sponsorship. Railsr is a Principal Visa and
Mastercard issuer and the company's APIs make it easy for developers to
integrate banking and card functionality into their products and services. The
Railsr platform is designed to be flexible and customisable to meet the
specific needs of each customer. The platform allows customers to focus on
their end-user embedded finance experience while Railsr manages financial
regulation, streamlined connectivity to popular payment schemes like SEPA,
UKFP, BACs, and SWIFT and relentless improvement of customer operations.
Railsr is controlled by global investors D Squared Capital and Moneta VC, each
holding interests in or managing or administering entities which directly hold
approximately 50% and 13% respectively of the voting rights in Railsr's share
capital (on a fully diluted basis), with the balance held by a combination of
global investors, high net worth individuals, and Railsr management.
· D Squared Capital is a global investment firm employing
a differentiated investment strategy to some of the world's most exciting
companies. D Squared Capital acts as a transformative capital source to
businesses, providing founders and companies solutions that offer value
creation across ever changing markets.
· Moneta VC is a fintech fund investing in innovative
startups who focus on meeting the needs created by the digital transformation
of the financial services industry.
· TowerBrook Capital Partners is a purpose-driven,
transatlantic investment management firm with assets under management of $21.6
billion. The firm is co-headquartered in London and New York and focuses on
making investments in companies headquartered in Europe and North America. As
a disciplined investor with a commitment to fundamental value, TowerBrook
seeks to deliver superior, risk-adjusted returns to investors on a consistent
basis, guided by TowerBrook Responsible Ownership(TM) principles which are
central to the firm's value creation strategy. TowerBrook partners with
talented, experienced managers and senior advisors who share the firm's values
and support its investment objectives, providing capital and resources to
transform the capabilities and prospects of the businesses in which it
invests, driving better outcomes for all stakeholders. TowerBrook takes an
entrepreneurial, multinational, single-team approach and since inception in
2001, has invested in more than 90 companies on both sides of the Atlantic.
TowerBrook is the first mainstream private equity firm to be certified as a B
Corporation, demonstrating leadership in its commitment to environmental,
social and governance (ESG) standards and responsible business practices.
TowerBrook has substantial experience within financial services, having
repeatedly invested in this sector, including in businesses such as The AA
(personal lines insurance and assistance), Premium Credit (insurance premium
financing), Rewards Network (financial technology company serving the US
credit card, loyalty and restaurant industries), Fortiva (consumer credit card
division of Atlanticus Holdings, an established originator, servicer and
acquirer of consumer receivables listed on the NASDAQ), and many others.
· Founded in 1998 by J. Christopher Flowers, J.C. Flowers
is led by an experienced team of senior professionals noted for their
financial services expertise, extensive global network of CEO and board-level
relationships and ability to execute complex transactions in the dynamic and
highly regulated financial services sector. Since inception, J.C. Flowers
Funds have invested more than $18 billion, including co-investment, in 66
portfolio companies across 18 countries.
J.C. Flowers is a leader in financial services investing and has a
differentiated investment strategy. It seeks to capitalize on market
inefficiencies due to regulatory change and asset complexity. Leveraging
decades of combined investment expertise, J.C. Flowers' teams identify and
structure investments that they believe have inherent deep value and will
benefit from J.C. Flowers' extensive operating expertise in the financial
services sector. J.C. Flowers' teams in New York, London and Palm Beach drive
value in J.C. Flowers' portfolio companies through operational transformation
and balance sheet optimization.
J.C. Flowers targets investments across all sub-sectors of the financial
services industry. J.C. Flowers Funds have been approved to invest in
financial services companies in 18 jurisdictions and has experience navigating
the complexities of the global regulatory landscape. J.C. Flowers Funds invest
in both more regulated, capital intensive businesses and capital-light,
service-oriented businesses.
Information on Equals
· Equals is incorporated and registered in England and
Wales (Registration number: 08922461) and its main country of operation is in
the United Kingdom. Equals Shares have been traded on AIM since 2014.
· Equals develops and sells scalable payment platforms to
enable organisations to move and easily manage their money flows through its
payment and card products.
· Equals' core brands are:
o Equals Money - an international, domestic and card payment platform
comprising the "Spend" and "Pay" products for 'just-in-time" expenditure needs
of our customers who range from Hollywood studios to dynamic start-ups and
fast-growing businesses
o Equals Money Solutions - an enterprise scale-up of the Equals Money
platform serving large corporates and financial institutions with complex
payments needs
o FairFX - a travel card and international payment product covering the
needs of high-net-worth individuals, international holidaymakers, and their
families
o CardOneMoney - UK focused product to meet the needs of small business and
individuals for everyday account processes, allowing them to run their
payments, direct debits, and cards via their account
o Equals Connect - a white label platform serving smaller FX providers
Timetable and Conditions
· It is intended that the Acquisition will be implemented
by way of a scheme of arrangement under Part 26 of the Companies Act (although
BidCo reserves the right to implement the Acquisition by way of a Takeover
Offer, subject to the Panel's consent and the terms of the Co-operation
Agreement).
· The Acquisition will be put to the Equals Shareholders
at the Court Meeting and the General Meeting. The Court Meeting and the
General Meeting are required to enable Equals Shareholders to consider, and if
thought fit, to vote in favour of the Scheme and its implementation. In order
to become Effective, the Scheme must be approved by a majority in number of
Scheme Shareholders voting at the Court Meeting, present and voting (and
entitled to vote), either in person or by proxy, representing at least 75 per
cent. in nominal value of the Scheme Shares voted by those Scheme
Shareholders. In addition, a special resolution implementing the Scheme must
be passed by Equals Shareholders representing at least 75 per cent. of votes
cast at the General Meeting. Following the Court Meeting, the Scheme must also
be sanctioned by the Court.
· The Acquisition is also subject to the Conditions and
terms set out in Appendix I to this Announcement, including, amongst other
things, the FCA Change in Control Conditions. Given the material significance
of the Railsr Acquisition to the Consortium's strategic plans for the Combined
Group, Equals Shareholders should be aware that, if the Railsr FCA Change in
Control Condition and/or the Railsr ACPR Condition (if relevant) is not
satisfied, it would be the Consortium's intention to seek the Panel's consent
to invoke the Railsr FCA Change in Control Condition and/or the Railsr ACPR
Condition to cause the Acquisition to lapse.
· Subject to the satisfaction or (where applicable)
waiver of the Conditions, the Acquisition is expected to become Effective
during Q2 2025.
· The Scheme Document, containing further information about
the Acquisition and notices of the Court Meeting and the General Meeting will
be distributed to Equals Shareholders (along with the Forms of Proxy for use
in connection with the Court Meeting and the General Meeting) as soon as
reasonably practicable and, in any event (save with the consent of the Panel),
within 28 days of the date of this Announcement.
· The Scheme Document will be made available by Equals on
its website at https://www.equalsplc.com/strategic-review.
Commenting on the Acquisition, Alan Hughes, Non-Executive Chairman of Equals,
said:
"Since our inception in 2007, the Equals Group has undergone significant
transformation and strong business growth to become one of the UK's leading
cross-border payment providers. Whilst the Board remains confident in the
Equals Group's long-term prospects, we also acknowledge the challenges of the
next phase of our strategy, and the need for scale to remain competitive in
attracting larger target clients.
During this long and complex Strategic Review we evaluated proposals from
various parties, including those from the Consortium. We are very appreciative
of our shareholders' patience throughout this extended process.
Earlier this year we received an initial proposal from the Consortium which
was revised and improved in July with an all-cash offer of 135p. Today's
recommended cash acquisition, valued at 140p, is a further improvement for
shareholders.
In recommending this transaction, the Board believes that it has secured a
future for the Equals Group in a private environment while delivering greater
value to shareholders than was ascribed to the Equals Group as a standalone
business executing an independent strategy."
Commenting on the Acquisition, Joseph Knoll, (Managing Director of
TowerBrook), Tim Hanford (Co-President of J.C. Flowers) and Dan Adler
(Director of Embedded Finance), said:
"Equals management have built a high quality business which is well-positioned
to benefit from the fast growing B2B international multi-currency banking and
payments market. We are delighted that our proposal has been recommended by
the Board and are excited by the prospect of working with the Combined Group
and its management. The strategic fit of Equals and Railsr is compelling and
the combination of their complementary strengths and capabilities is expected
to enhance the customer proposition and create a leading embedded finance,
foreign exchange and payments business. The Consortium believes the Combined
Group is an ideal platform for continued growth and innovation in Fintech and
we look forward to supporting the Combined Group's growth."
Commenting on the Acquisition, Lord Hammond (Chairman of Railsr), said:
"Today's announcement represents a major strategic step for Railsr at a
pivotal moment in the development of the embedded finance market. We are
creating a significant new player. At a time when there is much fragmentation
in the market, we will be well placed to provide an enhanced service to our
customers. Equals is a well-run company with strong brands. The board of
Railsr is confident that this combination will deliver real value for the
shareholders of the Combined Group.
I am looking forward, on completion, to working with Ian and Philippe as
Co-CEOs.
Fintech continues to be a major catalyst for economic growth and this new
group, one of the largest embedded finance companies in Europe, will be well
placed to contribute."
This summary should be read in conjunction with the full text of this
Announcement. The Acquisition shall be subject to the Conditions and further
terms set out in Appendix I to this Announcement and to the full terms and
conditions which shall be set out in the Scheme Document. Appendix II to this
Announcement contains the sources of information and bases of calculations of
certain information contained in this Announcement, Appendix III contains a
summary of the irrevocable undertakings in relation to this Acquisition and
Appendix IV contains definitions of certain expressions used in this summary
and in this Announcement.
Enquiries:
TowerBrook +44 (0) 20 7451 2020
Filippo Cardini
J.C. Flowers +44 (0) 20 7710 0500
Tim Hanford
Railsr press@railsr.com
Philippe Morel
Iwona Jordan
PJT Partners (Financial Adviser to TowerBrook, J.C. Flowers, Railsr and BidCo) +44 (0) 20 3650 1100
Jonathan Hall
Basil Geoghegan
Ralph Van Den Abbeele
Rothschild & Co (Financial Adviser to TowerBrook, J.C. Flowers, Railsr and +44 (0) 20 7280 5000
BidCo)
Toby Ross
Guy Luff
William Rooney
Perella Weinberg Partners (Financial Adviser to J.C. Flowers) +44 (0) 20 7268 2800
Timm Schipporeit
Edyta Lipka
Equals via Burson Buchanan
Ian Strafford-Taylor
Richard Cooper
Canaccord Genuity (Financial Adviser, Nominated Adviser & Sole Broker to +44 (0) 20 7523 8000
Equals)
Sunil Duggal
Bill Gardiner
Max Hartley
Harry Rees
Lazard (Financial Adviser to Equals) +44 (0) 20 7187 2000
Nicholas Millar
Jason Welham
Burson Buchanan (Financial Communications for Equals) equals@buchanan.uk.com
Henry Harrison-Topham
Toto Berger
Stephanie Whitmore
Norton Rose Fulbright LLP is acting as legal adviser to TowerBrook and the
BidCo Group. Macfarlanes LLP is acting as legal adviser to J.C. Flowers.
Mishcon de Reya LLP is acting as legal adviser to Railsr. Ashurst LLP is
acting as legal adviser to Equals.
Important notices
PJT Partners, which is authorised and regulated by the Financial Conduct
Authority in the United Kingdom, is acting exclusively for TowerBrook, J.C.
Flowers, Railsr and BidCo and no-one else in connection with the Acquisition
and will not be responsible to anyone other than TowerBrook, J.C. Flowers,
Railsr and BidCo for providing the protections afforded to clients of PJT
Partners nor for providing advice in relation to the Acquisition. Neither PJT
Partners nor any of its subsidiaries, branches or affiliates nor any of 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 PJT Partners in connection with the Acquisition, any statement
contained herein or otherwise.
Rothschild & Co, which is authorised and regulated in the UK by the
Financial Conduct Authority, is acting exclusively as financial adviser to
TowerBrook, J.C. Flowers, Railsr and BidCo and no one else in connection with
the Acquisition and shall not be responsible to anyone other than TowerBrook,
J.C. Flowers, Railsr and BidCo for providing the protections afforded to
clients of Rothschild & Co nor for providing advice in connection with the
Acquisition or any matter referred to herein.
Perella Weinberg Partners, which is authorised and regulated in the UK by the
Financial Conduct Authority, is acting exclusively as financial adviser to
J.C. Flowers and no one else in connection with the Acquisition and shall not
be responsible to anyone other than J.C. Flowers for providing the protections
afforded to clients of Perella Weinberg Partners nor for providing advice in
connection with the Acquisition or any matter referred to herein. Neither
Perella Weinberg Partners nor any of its subsidiaries, branches or affiliates
and 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 Perella Weinberg Partners in connection with this
Announcement, any statement contained herein or otherwise.
Canaccord Genuity, which is authorised and regulated by the FCA in the United
Kingdom, is acting financial adviser exclusively for Equals and no-one else in
connection with the matters described in this Announcement and will not be
responsible to anyone other than Equals for providing the protections afforded
to clients of Canaccord Genuity nor for providing advice in relation to a
potential acquisition of Equals or any other matters referred to herein.
Neither Canaccord Genuity nor any of its affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Canaccord Genuity in connection with this Announcement, any
statement contained herein, to a potential acquisition of Equals or otherwise.
Lazard, which is authorised and regulated in the United Kingdom by the FCA, is
acting as financial adviser to Equals and no one else in connection with the
matters set out in this Announcement and will not be responsible to anyone
other than Equals for providing the protections afforded to clients of Lazard
nor for providing advice in relation to the matters set out in this
Announcement. Neither Lazard nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Lazard in connection with this Announcement, any statement
contained herein or otherwise.
Inside information
This Announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 as it forms part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of this
Announcement via a Regulatory Information Service, this inside information
will be considered to be in the public domain.
The person responsible for arranging for the release of this Announcement on
behalf of Equals is Richard Cooper, Chief Financial Officer.
Further information
This Announcement is for information purposes only and is not intended to and
does not constitute, or form part of, any offer to sell or an invitation to
purchase any securities; a solicitation of an offer to buy, otherwise acquire,
subscribe for, sell or otherwise dispose of any securities pursuant to the
Acquisition otherwise; or the solicitation of 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, together with any related forms of proxy, will contain the
full terms and conditions of the Acquisition, including details of how to vote
in respect of the Scheme. Any decision in respect of, or other response to,
the Acquisition should be made only on the basis of the information contained
in the Scheme Document (or, if the Acquisition is implemented by way of a
Takeover Offer, the Offer Document).
Equals will prepare the Scheme Document to be distributed to Equals
Shareholders. Equals and BidCo urge Equals Shareholders to read the Scheme
Document (or any other document by which the Acquisition is made) in full when
it becomes available because it will contain important information relating to
the Acquisition, including details of how to vote in respect of the Scheme.
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.
This Announcement does not constitute a prospectus or prospectus equivalent
document
Overseas shareholders
The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom, and the availability of the Acquisition to
Equals Shareholders who are not resident in the United Kingdom, may be
restricted by the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves about and observe
such restrictions. In particular, the ability of persons who are not resident
in the United Kingdom to vote their Equals Shares with respect to the Scheme
at the Court Meeting, or to execute and deliver forms of proxy appointing
another to vote at the 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 Overseas Shareholders will be contained in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
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 Code, and permitted by
applicable law and regulation, the Acquisition will not be made available,
directly or indirectly, in, into or from a Restricted 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, 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 Restricted
Jurisdiction. If the Acquisition is implemented by way of Takeover Offer
(unless otherwise permitted by applicable law or regulation), the Takeover
Offer may not be made, directly or indirectly, in or into, or by use of mails
or any other means or instrumentality (including, without limitation,
facsimile, e-mail or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the Takeover
Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted Jurisdiction.
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 and the 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 the United Kingdom. Nothing
in this Announcement should be relied on for any other purpose.
The Acquisition shall be subject to the applicable requirements of the Code,
the Panel, the London Stock Exchange, the Financial Conduct Authority and the
AIM Rules.
Additional information for investors in the United States
The Acquisition relates to shares of a UK company with a listing on AIM and is
proposed to be effected by means of a scheme of arrangement under the laws of
England and Wales. A transaction effected by means of a scheme of arrangement
is not subject to the tender offer rules or the proxy solicitation rules under
the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the requirements of United States tender offer and proxy
solicitation rules.
However, if BidCo were to elect to implement the Acquisition by means of a
Takeover Offer and determines to extend such Takeover Offer into the United
States, such Takeover Offer shall be made in compliance with all applicable
United States laws and regulations, including, without limitation, to the
extent applicable, Section 14(e) of the US Exchange Act and Regulation 14E
thereunder. Such a Takeover Offer would be made in the United States by BidCo
and no one else.
In the event that the Acquisition is implemented by way of Takeover Offer, in
accordance with normal United Kingdom practice and pursuant to Rule 14e-5(b)
of the US Exchange Act (if applicable), BidCo or its nominees, or its brokers
(acting as agents), may from time to time make certain purchases of, or
arrangements to purchase, shares or other securities of Equals outside of the
United States, other than pursuant such Takeover Offer, during the period in
which such Takeover Offer would remain open for acceptance. These purchases
may occur either in the open market at prevailing prices or in private
transactions at negotiated prices and would comply with applicable law,
including the US Exchange Act. Any information about such purchases or
arrangements to purchase shall be disclosed as required in the UK, shall be
reported to a Regulatory Information Service and shall be available on the
London Stock Exchange website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of its Equals
Shares pursuant to the Scheme may be a taxable transaction for United States
federal income tax purposes. Each Equals Shareholder is urged to consult their
independent professional adviser immediately regarding the tax consequences of
the Acquisition applicable to them, including under applicable United States
state and local, as well as overseas and other, tax laws.
Financial information relating to Equals included in this announcement and the
Scheme Document has been or shall have been prepared in accordance with
accounting standards applicable in the United Kingdom and may not be
comparable to financial information of United States companies or companies
whose financial statements are prepared in accordance with generally accepted
accounting principles in the United States (US GAAP). US GAAP differs in
certain significant respects from accounting standards applicable in the
United Kingdom. None of the financial information in this announcement has
been audited in accordance with auditing standards generally accepted in the
United States or the auditing standards of the Public Company Accounting
Oversight Board (United States).
It may be difficult for US holders of Equals Shares to enforce their rights
and any claim arising out of the US federal securities laws in connection with
the Acquisition, since BidCo and Equals are each organised in countries other
than the United States, and some or all of their officers and directors may be
residents of, and some or all of their assets may be located in, jurisdictions
other than the United States. As a result, US holders of Equals Shares may not
be able to effect service of process upon a non-US company or its officers or
directors or to enforce against them a judgment of a US court for violations
of federal or state securities laws of the United States, including judgments
based upon the civil liability provisions of the US federal securities laws.
US holders of Equals Shares 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 jurisdiction or judgment.
Neither the US Securities and Exchange Commission nor any US state securities
commission has approved or disproved or passed judgment upon the fairness or
the merits of the Acquisition or determined if this announcement is adequate,
accurate or complete. 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 or Equals may contain statements about BidCo,
the Consortium and Equals that are or may be deemed to be forward-looking
statements. All statements other than statements of historical facts included
in this Announcement may be forward-looking statements. Without limitation,
any statements preceded or followed by or that include the words "targets",
"plans", "believes", "expects", "aims", "intends", "will", "may", "shall",
"should", "anticipates", "estimates", "projects", "is subject to", "budget",
"scheduled", "forecast" or words or terms of similar substance or the negative
thereof, are forward-looking statements. Forward-looking statements include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of BidCo's or
Equals' operations and potential synergies resulting from the Acquisition; and
(iii) the effects of government regulation on BidCo's or Equals' business.
Such forward-looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations and projections of the
management of BidCo and Equals about future events, and are therefore subject
to risks and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors could cause actual
results to differ materially from those projected or implied in any
forward-looking statements, including: increased competition, the loss of or
damage to one or more key customer relationships, the failure of one or more
key suppliers, the outcome of business or industry restructuring, the outcome
of any litigation, changes in economic conditions, currency fluctuations,
changes in interest and tax rates, changes in laws, regulations or regulatory
policies, developments in legal or public policy doctrines, technological
developments, the failure to retain key management, or the timing and success
of future offer opportunities or major investment projects. Other unknown or
unpredictable factors could cause actual results to differ materially from
those in the forward-looking statements. Such forward-looking statements
should therefore be construed in light of such factors. Neither BidCo nor
Equals, nor any of their respective associates or directors, officers or
advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward-looking
statements in this Announcement will actually occur. Due to such uncertainties
and risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date hereof. All
subsequent oral or written forward looking statements attributable to any
member of the BidCo Group or the Equals Group, or any of their respective
associates, directors, officers, employees or advisers, are expressly
qualified in their entirety by the cautionary statement above.
BidCo, the Consortium and Equals expressly disclaim any obligation to update
any forward-looking or other statements contained herein, except as required
by applicable law or by the rules of any competent regulatory authority,
whether as a result of new information, future events or otherwise.
No profit forecasts or estimates
No statement in this Announcement is intended as, or is to be construed as, a
profit forecast, profit estimate or quantified financial benefit statement for
any period and no statement in this Announcement should be interpreted to mean
that earnings or earnings per share for Equals for the current or future
financial years would necessarily match or exceed the historical published
earnings or earnings per share for Equals.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the Announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) 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 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 shall
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 Panel's website at
http://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.
Information relating to Equals Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Equals Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Equals may be provided
to BidCo during the Offer Period as requested under Section 4 of Appendix 4 of
the Code.
Publication on website and availability of hard copies
A copy of this Announcement will be made available, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, on
Equals' website at https://www.equalsplc.com/strategic-review
(https://www.equalsplc.com/strategic-review) respectively by no later than 12
noon (London time) on the Business Day following the date of this
Announcement.
For the avoidance of doubt, the contents of these websites are not
incorporated into and do not form part of this Announcement.
Right to receive documents in hard copy form
Equals Shareholders, persons with information rights and participants in the
Equals Share Plans may request a hard copy of this Announcement, free of
charge, by: (i) contacting Link Group during business hours on +44 (0) 371 664
0300 (lines are open from 9.00 a.m. to 5.30 p.m., Monday to Friday (excluding
public holidays in England and Wales)); or (ii) by submitting a request via
email on shareholderenquiries@linkgroup.co.uk. A person so entitled may also
request that all future documents, announcements and information in relation
to the Acquisition be sent to them in hard copy form.
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.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, Equals confirms that as at the date
of this Announcement, it has in issue and admitted to trading on AIM
190,371,498 ordinary shares of 1 penny each. This includes 1,689,272 Equals
Shares which are held in the Share Incentive Plan trust. No Equals Shares are
held in treasury. The International Securities Identification Number (ISIN) of
Equals Shares is GB00BLS0XX25.
General
If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
11 December 2024
RECOMMENDED CASH ACQUISITION
of
Equals Group plc ("Equals")
by
Alakazam Holdings BidCo Limited ("BidCo")
a newly-incorporated company to be indirectly wholly-owned by a consortium
comprising (i) the TowerBrook Funds (ii) the J.C. Flowers Funds and (iii) the
Railsr Shareholders
to be implemented by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
1 Introduction
The boards of directors of each of BidCo and Equals are pleased to announce
that they have reached agreement on the terms of a recommended all cash offer
pursuant to which BidCo will acquire the entire issued and to be issued
ordinary share capital of Equals (the "Acquisition"). The Acquisition is to be
effected by means of a scheme of arrangement under Part 26 of the Companies
Act.
2 The Acquisition
Under the terms of the Acquisition, which shall be subject to the Conditions
and further terms set out in Appendix I to this Announcement and to be set out
in the Scheme Document, Equals Shareholders will be entitled to receive:
140 pence in cash per Equals Share (the "Cash Value"),
comprising a cash consideration of 135 pence for each Equals Share (the "Cash
Consideration") plus a special dividend payment of 5 pence in cash per
Equals Share that the board of directors of Equals intends to declare prior to
completion of the Acquisition with the record and payment dates aligned with
the corresponding dates for determining entitlements to, and payment of, the
Cash Consideration due to Equal Shareholders under the terms of the
Acquisition (the "Special Dividend").
The board of directors of Equals intends to declare the Special Dividend prior
to completion of the Acquisition with the record and payment dates aligned
with the corresponding dates for determining entitlements to, and payment of,
the Cash Consideration due to Equal Shareholders under the terms of the
Acquisition.
The Cash Value values the entire issued and to be issued share capital of
Equals at approximately £283 million, and represents a premium of
approximately:
· 37 per cent. to the Closing Price per Equals Share of 102.5 pence
on 31 October 2023 (being the last Business Day prior to the commencement of
the Offer Period);
· 30 per cent. to the volume-weighted average price of 107.3 pence
per Equals Share for the 3-month period ended 31 October 2023 (being the last
Business Day prior to the commencement of the Offer Period); and
· 20 per cent. to the volume-weighted average price of 117.0 pence
per Equals Share for the 3-month period ended 10 December 2024 (being the
latest practicable date prior to the date of this Announcement).
The Cash Value implies an enterprise value multiple of approximately 11.3
times Equals' Adjusted EBITDA for the twelve month period ended 30 June 2024.
If, on or after the date of this Announcement and on or prior to the Effective
Date, any dividend, distribution or other return of value is declared, made,
or paid, or becomes payable by Equals, the Cash Consideration shall be reduced
accordingly. In such circumstances, Equals Shareholders shall be entitled to
retain any such dividend, distribution, or other return of value declared,
made, or paid.
The Scheme Document, containing further information about the Acquisition and
notices of the Court Meeting and the General Meeting will be distributed to
Equals Shareholders (along with the Forms of Proxy for use in connection with
the Court Meeting and the General Meeting) as soon as reasonably practicable
and, in any event (save with the consent of the Panel), within 28 days of the
date of this Announcement.
3 Background to and reasons for the Acquisition
In March 2023, a group of investors led by D Squared Capital completed the
acquisition of Railsr, the market-leading embedded finance platform. Railsr is
the trading name for Embedded Finance.
Since its acquisition, Railsr's business has been stabilised and
recapitalised, it has strengthened its market position and is on track to
become a significant pan-European embedded finance platform.
Following Equals' announcement in November 2023 that it was conducting a
review of its strategic options, Railsr and D Squared Capital approached
leading investors in the Fintech space to put together a consortium to
participate in the potential combination of Railsr and Equals to create a
market-leading business. The Consortium recognises that Equals has, over
several years, worked to successfully establish itself in the large and
fast-growing B2B international multi-currency banking and payments market.
The Consortium believes that Equals has a number of key strengths:
· a diverse set of high-performing, technology-enabled payments,
cards and banking products for corporate and personal clients;
· a highly scalable, purpose-built and unified platform, bringing
together a leading cloud-based technology stack and institutional-grade risk
management capabilities;
· a fulsome network of regulatory licenses and relationships with
commercial partners including banks and payment schemes providing global
connectivity;
· a strong financial profile combining growth, robust profitability
and cash flow generation; and
· a proven and capable management team with strong track record of
growth, entrepreneurialism and delivery.
The Consortium believes that this strategy has now positioned Equals at an
inflection point in its business development whereby the Consortium may be
able to accelerate the execution of its strategy when combined with Railsr, a
specialist embedded finance business, and with increased access to further
capital. Such a combination would potentially create one of the largest and
most capable embedded finance platforms in Europe by bringing together
Railsr's embedded finance solution and Equals' cross-border transaction
capabilities, providing an ability to serve customers wishing to utilise or
embed financial services products within their own product offerings.
The Consortium strongly believes that by combining Equals' and Railsr's
respective strengths in foreign exchange, payments and banking services, it
will further accelerate the right-to-win of the respective businesses and have
identified synergies in combination.
For this purpose, BidCo and the Railsr Shareholders have entered into a sale
and purchase agreement (the "Railsr SPA"), pursuant to which BidCo has agreed
to acquire Railsr. It is intended that the Railsr Acquisition will complete
under the Railsr SPA shortly after the Effective Date.
Each of D Squared Capital, Moneta VC, TowerBrook and J.C. Flowers have an
extensive understanding of the underlying financial services markets that
Equals and Railsr operate in, a deep bench of operational partners to support
the combined management team and a proven track record of successfully
integrating and creating long-term value. These capabilities will provide
support to the combined Equals and Railsr management teams to execute on their
growth plan, identify future organic and inorganic opportunities, and drive
continued operational improvement.
4 Recommendation
The Equals Directors, who have been so advised by Canaccord Genuity and Lazard
as to the financial terms of the Acquisition (including the Special Dividend),
consider the terms of the Acquisition to be fair and reasonable. In providing
its advice to the Equals Directors, Canaccord Genuity and Lazard have taken
into account the commercial assessments of the Equals Directors.
Accordingly, the Equals Directors intend to recommend unanimously that Equals
Shareholders vote in favour of the Scheme at the Court Meeting and the
resolution to be proposed at the General Meeting, as the Equals Directors have
irrevocably undertaken to do in respect of their own beneficial holdings of
4,194,384 Equals Shares, representing, in aggregate, approximately 2.203 per
cent. of the ordinary share capital of Equals in issue on 10 December 2024
(being the latest practicable date prior to this Announcement).
5 Background to and reasons for the recommendation
Background
Since its inception in 2007, Equals has undergone significant transformation
and strong business growth to become one of the UK's leading cross-border
payments providers.
In 2014, Equals successfully listed on the AIM market of the London Stock
Exchange as a means to enhance the Company's profile within its marketplace,
assist with business growth, and provide access to capital to support its
longer-term strategic objectives.
Under the current leadership of its management team, Equals' business model is
now focused on offering a comprehensive suite of payment products under one
unified and integrated platform to provide its B2B and B2C customers with easy
and low-cost solutions for domestic and international payments. Organic growth
has been driven by product investment, innovation, and strong sales
performance, supplemented by selected bolt-on M&A, including Equals'
recent acquisitions of Roqqett, a UK-based open banking payment platform
authorised by the FCA as both an AISP (Account Information Service Provider)
and PISP (Payment Initiation Service Provider) and Oonex SA, a
Belgian-regulated payments institution, to assist with its expansion into
Europe. Coupled with its ability to service US customers via its partnership
with Metropolitan Commercial Bank, Equals is developing its platform to become
a global payments group.
Since 2021, Equals has focused its strategy on growing its Solutions business,
a B2B proposition. This has been an important contributor to revenue, which
has grown from £29 million in 2020 to £96 million in 2023, and to Adjusted
EBITDA, which has grown from £1.1 million to £21 million over the same
period.
Whilst the Board remains confident in the long-term prospects of the business,
it also recognises the risks associated with the next phase of Equals'
strategy, and the need to scale the business in order for it to be competitive
in winning the clients that Equals is now seeking to attract. In the light of
this, the Board decided to conduct a review of the Company's strategic
options. On 1 November 2023, in response to market speculation, Equals
announced that as part of this review it had contacted a limited number of
potential counterparties to assess whether they could put forward a proposal
that could deliver greater value to Equals Shareholders than pursuing a
standalone, independent strategy. Pursuant to the requirements of the Code,
this announcement was made at a very early stage of outreach discussions and
as a result the strategic review process has been in the public domain for
longer than had initially been expected. The Board nevertheless considered it
to be in the best interest of Equals and its shareholders for discussions with
potential counterparties to continue during this period, taking into account a
number of factors which are summarised below.
Reasons for the recommendation
· The payments industry is highly competitive, rapidly changing and
continuously innovative given the emergence of new technologies, whilst also
increasingly subject to regulatory scrutiny and oversight. Equals competes
against a wide range of companies across the ecosystem including much larger
public and private entities with greater access to resources to adapt to the
evolving industry. Competition is also likely to intensify as the sector
consolidates and established non-financial institutions that operate outside
of the payments sector expand to compete with parts of the Equals business.
Scale is likely to become increasingly important given market consolidation
and the possibility that larger scale, well-funded, new competitors may enter
Equals' market. As a result, the Board believes the combination with Railsr
and backing by Towerbrook and J.C. Flowers significantly and immediately
improves the strategic positioning of Equals as well as providing access to
substantial funding in order to capitalise on the market growth opportunities,
which would benefit employees and clients. This includes executing on larger
scale and international acquisitions, which the Board believes would otherwise
not be possible for the Equals Group given Equals' current market
capitalisation and shareholder base.
· The proposed combination with Railsr presents an exciting
opportunity to build on Equals' significant progress and consistent growth to
date. Together, the Combined Group can offer a wider range of products to
service a larger customer base, resulting in a stronger overall platform
within an increasingly competitive market.
· The Board believes that the Acquisition provides an attractive
offer for Shareholders to realise an immediate cash value for their
investment, at a premium of 37 per cent. to the price of the Equals' Shares on
31 October 2023 (being the last Business Day prior to the announcement of the
Strategic Review). The Cash Value implies an enterprise value multiple of
approximately 11.3 times Equals' Adjusted EBITDA for the twelve month period
ended 30 June 2024.
· Notwithstanding the progress made in delivering Equals' strategy
and the strong track record that Equals has built as a public company, Equals,
like its competitors, has some exposure to certain B2B clients which are
considered to exhibit a higher risk profile. Furthermore, Equals relies on
several key commercial relationships with Tier 1 banks to serve these
customers. Whilst Equals enjoys trusted relationships with these institutions,
should those banks make policy decisions to limit or cease their exposure to
certain sectors in which Equals operates, there could be a significant
negative impact on the Equals business whilst it seeks to find alternative
counterparties. Similarly, changes in legislation or regulatory regimes could
limit the pool of clients that Equals is able to serve.
· Like its competitors, Equals has benefitted from the recent
higher interest rate environment. As set out in the Company's interim
results dated 10 September 2024, interest income comprised £9.6 million,
being 16% of H1'24 total revenues and 28% of H1'24 total gross profit.
However, as interest rates reduce, there could be some uncertainty in market
valuations of interest income over the medium term.
· The Board recognises that holders of a significant number of
Equals Shares have been invested in the Company for an extended period and
given the limited liquidity of Equals Shares it would be challenging for these
or any other significant Equals Shareholder to monetise their holdings should
they wish to. The Acquisition provides Shareholders with the opportunity to
immediately and fully crystalise the value of their holdings in cash at a
premium in an otherwise low liquidity stock, without the investment and
execution risk associated with the implementation of Equals' strategy.
Should the Acquisition not proceed, there could then be a sustained period of
share price volatility, particularly if some of Equals largest Shareholders
subsequently choose to exit their holdings.
The Equals Directors have carefully considered the proposal from BidCo and the
terms of the Cash Offer, and whilst the Equals Directors believe that Equals
is well-positioned to make continued progress as a standalone company listed
on AIM, they have concluded that the terms of the Acquisition fairly recognise
the value of the Equals business and provides Equals' Shareholders with an
opportunity to realise value, in cash in the near-term, the value of their
holdings in Equals at a material premium to the Closing Price per Equals Share
of 102.5 pence on 31 October 2023 (being the last Business Day prior to the
commencement of the Offer Period).
Further, the Equals Directors have also considered BidCo's stated intentions
for the business, management and employees and other stakeholders of Equals.
The Equals Directors believe that the Consortium is strongly positioned to
support Equals with the next phase of its growth, providing both access to
capital for further development and continuity for Equals' clients, employees
and other stakeholders. In addition, as a private company, Equals would be
better able to develop its business away from the parameters of operating in
public markets, and its associated costs.
Accordingly, having considered all of the above factors, the Equals Directors
intend to recommend unanimously the Acquisition to Equals Shareholders.
Conclusion of the Strategic Review
The Equals Directors confirm that this Announcement and the Acquisition bring
the Strategic Review to a successful conclusion and the Strategic Review has
now been terminated accordingly.
Trading
The Global macroeconomic environment continues to be challenging but is
showing signs of change, with consensus towards lower interest rates and
falling inflation but concurrently stalling economic growth. Against this
market backdrop, Equals continues to grow because it has a product and
capability suite that is hard to replicate.
Reported revenues were £119.6 million on a year-to-date basis as of 30
November 2024, as detailed below.
Revenue to End November Jan to Nov 2023 Jan to Nov 2024 YoY % Movement
Trading (£000's) 76,676 100,234 23,558 31%
Interest (£000's) 9,801 19,336 9,535 97%
Total Revenue (£000's) 86,477 119,570 33,093 38%
Working days 231 234 3 1%
Per Working Day (£000's) 374 511 137 36%
As a result, the performance for the 12 months ending 31 December 2024 is
expected to be in line with Board expectations.
6 Shareholder support
BidCo has received irrevocable undertakings from each of the Equals Directors
to vote in favour of the Scheme at the Court Meeting and the resolution to be
proposed at the General Meeting, in respect of a total of 4,194,384 Equals
Shares, representing, in aggregate, approximately 2.203 per cent. of the
ordinary share capital of Equals in issue on 10 December 2024 (being the
latest practicable date prior to this Announcement).
The boards of directors of each of Equals and BidCo are pleased to note that
BidCo has also received irrevocable undertakings to vote in favour of the
Scheme at the Court Meeting and the resolution to be proposed at the General
Meeting from Equals Shareholders in respect of a total of 27,190,174 Equals
Shares representing, in aggregate, approximately 14.283 per cent. of Equals'
issued ordinary share capital on 10 December 2024 (being the latest
practicable date prior to this Announcement).
BidCo has therefore received irrevocable undertakings in respect of a total of
31,384,558 Equals Shares representing, in aggregate, approximately 16.486 per
cent. of Equals' issued ordinary share capital on 10 December 2024 (being the
latest practicable date prior to this Announcement).
Further details of these irrevocable undertakings are set out in Appendix III
to this Announcement.
7 Information on BidCo and the Consortium
BidCo Group
BidCo is a newly formed private limited company incorporated under the laws of
England and Wales. BidCo was formed in connection with the Acquisition and the
Railsr Acquisition, has not traded since its date of incorporation and has not
entered into any obligations other than in connection with the Acquisition and
the Railsr Acquisition. BidCo is a wholly-owned subsidiary of Alakazam
Holdings Midco Limited (UK) ("MidCo").
MidCo is a newly formed private limited company incorporated under the laws of
England and Wales. MidCo was formed in connection with the Acquisition and the
Railsr Acquisition, has not traded since its date of incorporation and has not
entered into any obligations other than in connection with the Acquisition and
the Railsr Acquisition. MidCo is a wholly-owned subsidiary of Alakazam
Holdings 1 Limited (Jersey) ("JVCo").
JVCo is a newly formed private limited joint venture company incorporated
under the laws of Jersey. JVCo was formed in connection with the Acquisition
and the Railsr Acquisition, has not traded since its date of incorporation and
has not entered into any obligations other than in connection with the
Acquisition and the Railsr Acquisition. JVCo is a wholly-owned subsidiary of
Alakazam Consortium Holdings Ltd. ("CaymanCo").
CaymanCo is a newly formed private limited company incorporated under the laws
of the Cayman Islands. CaymanCo is wholly-owned by (i) the TowerBrook Funds
and (ii) the J.C. Flowers Funds, in equal shares. CaymanCo was formed in
connection with the Acquisition and the Railsr Acquisition for the purpose of
pooling the TowerBrook Funds' and J.C. Flowers Funds' interests in JVCo.
CaymanCo has not traded since its date of incorporation and has not entered
into any obligations other than in connection with the Acquisition and the
Railsr Acquisition.
Following completion of the Railsr SPA, shortly after the Effective Date, JVCo
will be wholly-owned by (i) CaymanCo and (ii) 1885 Holdings Limited ("Railsr
HoldCo") as to 57.50%:42.50%, respectively and therefore BidCo will be
indirectly wholly-owned by (i) the TowerBrook Funds (ii) the J.C. Flowers
Funds and (iii) the Railsr Shareholders as to 28.75%:28.75%:42.50%,
respectively.
Railsr HoldCo is a private limited company incorporated under the laws of
Jersey. Railsr HoldCo has been formed in connection with the Acquisition and
the Railsr Acquisition for the purpose of pooling the Railsr Shareholders'
holding in JVCo.
Railsr
Embedded Finance, trading as Railsr, is incorporated and registered in England
and Wales under company number 14698459 with its registered office at Fora
Montacute Yards, Shoreditch High Street, London, England, E1 6HU.
Railsr is a market-leading embedded finance platform that provides
banking-as-a-service and cards-as-a-service with offerings such as card
issuing, virtual wallets and BIN sponsorship. Railsr is a Principal Visa and
Mastercard issuer and the company's APIs make it easy for developers to
integrate banking and card functionality into their products and services. The
Railsr platform is designed to be flexible and customisable to meet the
specific needs of each customer. The platform allows customers to focus on
their end-user embedded finance experience while Railsr manages financial
regulation, streamlined connectivity to popular payment schemes like SEPA,
UKFP, BACs, and SWIFT and relentless improvement of customer operations.
Railsr is controlled by global investors D Squared Capital and Moneta VC, each
holding interests in or managing or administering entities which directly hold
approximately 50% and 13% respectively of the voting rights in Railsr's share
capital (on a fully diluted basis), with the balance held by a combination of
global investors, high net worth individuals, and Railsr management.
D Squared Capital is a global investment firm employing a differentiated
investment strategy to some of the world's most exciting companies. D Squared
Capital acts as a transformative capital source to businesses, providing
founders and companies solutions that offer value creation across ever
changing markets.
Moneta VC is a fintech fund investing in innovative startups who focus on
meeting the needs created by the digital transformation of the financial
services industry.
TowerBrook
TowerBrook is a purpose-driven, transatlantic investment management firm with
assets under management of $21.6 billion. The firm is co-headquartered in
London and New York and focuses on making investments in companies
headquartered in Europe and North America. As a disciplined investor with a
commitment to fundamental value, TowerBrook seeks to deliver superior,
risk-adjusted returns to investors on a consistent basis, guided by TowerBrook
Responsible Ownership(TM) principles which are central to the firm's value
creation strategy. TowerBrook partners with talented, experienced managers and
senior advisors who share the firm's values and support its investment
objectives, providing capital and resources to transform the capabilities and
prospects of the businesses in which it invests, driving better outcomes for
all stakeholders. TowerBrook takes an entrepreneurial, multinational,
single-team approach and since inception in 2001, has invested in more than 90
companies on both sides of the Atlantic. TowerBrook is the first mainstream
private equity firm to be certified as a B Corporation, demonstrating
leadership in its commitment to environmental, social and governance (ESG)
standards and responsible business practices.
TowerBrook has substantial experience within financial services, having
substantially invested in this sector, including in businesses such as The AA
(personal lines insurance and assistance), Premium Credit (insurance premium
financing), Rewards Network (financial technology company serving the US
credit card, loyalty and restaurant industries), Fortiva (consumer credit card
division of Atlanticus Holdings, an established originator, servicer and
acquirer of consumer receivables listed on the NASDAQ), and many others.
J.C. Flowers
Founded in 1998 by J. Christopher Flowers, J.C. Flowers is led by an
experienced team of senior professionals noted for their financial services
expertise, extensive global network of CEO and board-level relationships and
ability to execute complex transactions in the dynamic and highly regulated
financial services sector. Since inception, J.C. Flowers Funds have invested
more than $18 billion, including co-investment, in 66 portfolio companies
across 18 countries.
J.C. Flowers is a leader in financial services investing and has a
differentiated investment strategy. It seeks to capitalize on market
inefficiencies due to regulatory change and asset complexity. Leveraging
decades of combined investment expertise, J.C. Flowers' teams identify and
structure investments that they believe have inherent deep value and will
benefit from J.C. Flowers' extensive operating expertise in the financial
services sector. J.C. Flowers' teams in New York, London and Palm Beach drive
value in J.C. Flowers' portfolio companies through operational transformation
and balance sheet optimization.
J.C. Flowers targets investments across all sub-sectors of the financial
services industry. J.C. Flowers Funds have been approved to invest in
financial services companies in 18 jurisdictions and has experience navigating
the complexities of the global regulatory landscape. J.C. Flowers Funds invest
in both more regulated, capital intensive businesses and capital-light,
service-oriented businesses.
8 Information on Equals
Equals is incorporated and registered in England and Wales (Registration
number: 08922461) and its main country of operation is in the United Kingdom.
Equals Shares have been traded on AIM since 2014.
Equals develops and sells scalable payment platforms to enable organisations
to move and easily manage their money flows through its payment and card
products.
Equals' core brands are:
· Equals Money - an international, domestic and card payment
platform comprising the "Spend" and "Pay" products for 'just-in-time"
expenditure needs of our customers who range from Hollywood studios to dynamic
start-ups and fast-growing businesses
· Equals Money Solutions - an enterprise scale-up of the Equals
Money platform serving large corporates and financial institutions with
complex payments needs
· FairFX - a travel card and international payment product covering
the needs of high-net-worth individuals, international holidaymakers, and
their families
· CardOneMoney - UK focused product to meet the needs of small
business and individuals for everyday account processes, allowing them to run
their payments, direct debits, and cards via their account
· Equals Connect - a white label platform serving smaller FX
providers
9
Strategic plans for Equals, Equals Directors, management, employees and locations
Strategic plans
The Consortium believes that combining Equals and Railsr will further
accelerate both businesses' performance whilst also delivering synergies as a
result of integrating the businesses within the Combined Group.
The Consortium intends, that following completion of the Acquisition, Railsr
and Equals will continue to operate as separately branded businesses to
leverage the strength of both brands, keeping their respective regulatory
licences. Consistent with this, the Consortium intends for both businesses to
retain separate go-to-market functions including sales, product and design,
account management, customer service and customer oversight.
The Consortium intends to validate its initial assessment of both
organisations, its integration plans to combine the businesses and each
organisation's systems in the first three months following Completion. Post
validation, the Consortium intends to integrate together the significant
majority of non-go-to-market functions, including strategy, operations, risk
& compliance and finance & HR, in the first twelve months post
Completion. Similarly, the Consortium intends to rationalise the Combined
Group towards a single technology solution to best serve the needs of the
Combined Group's customers and support the growth ambitions of the Combined
Group. It is expected that the implementation of the Consortium's plans will
take up to two years post Completion with the significant majority of cost
rationalisation occurring within the first twelve months post Completion. The
Consortium expects that the Combined Group will take a customer-centric and
low-risk approach to the use and integration of the technology of both
businesses.
Employees
The Consortium attaches great importance to the skills, knowledge, and
expertise of Equals' management and employees and, save as set below, expects
that the existing management and employees of Equals will be key to the
success of the Combined Group going forward and will continue to contribute to
the long-term success of the Combined Group. The Consortium believes that it
is well-positioned to accelerate Equals' growth and performance as part of the
Combined Group which will, in turn, create greater employment opportunities
for existing and future employees over the longer term.
Following completion of the Acquisition, certain headquarter functions which
have historically been related to Equals' status as a listed company may no
longer be required or will be reduced in size to reflect Equals ceasing to be
a listed company. This may impact a limited number of roles in specific areas.
The Consortium further expects to implement best of both efficiency
initiatives through changes to the workforce across the Combined Group where
there are duplicated or overlapping functions. Such changes may entail a
reduction of up to 20% of the current headcount across the Combined Group,
although the Consortium expects that overall headcount will increase in the
long-term as part of the Consortium's efforts to grow the Combined Group.
Any headcount reduction would take place up to two years following completion
of the Acquisition, the majority of which will occur in the twelve months
following completion, and following comprehensive planning and consultation
with affected employees and/or their representatives as required by law. Some
reduction in headcount may arise from natural attrition. The Consortium
intends to retain the best talent across the Combined Group. It is expected
that, where possible, the Combined Group will seek to review opportunities to
reallocate staff from discontinued roles arising from the restructuring to
other appropriate new roles that may be created from organic growth in the
Combined Group.
The Consortium confirms that, following completion of the Acquisition, the
existing contractual and statutory employment rights, including in relation to
pensions, of all Equals management and employees will be fully safeguarded in
accordance with applicable law.
Save as set out above, there will not be any material change in the conditions
of employment or in the balance of the skills and functions of the employees
and management of Equals.
Management
To ensure a successful and smooth integration, the Combined Group will be led
jointly by Philippe Morel, current CEO of Railsr, and Ian Strafford-Taylor,
current CEO of Equals, as Co-CEOs with Lord Philip Hammond becoming Chairman
of the Group on completion of the Acquisition. Additional members of the
Combined Group's executive team reporting to Mr. Morel and Mr.
Strafford-Taylor will be appointed at a later date.
It is intended that the non-executive directors of Equals and the CFO, Richard
Cooper, will resign as directors of Equals with effect from completion of the
Acquisition and be paid in lieu of their contractual notice periods.
Management incentivisation
Given their importance to the future success of the Combined Group, the
Consortium intends to put in place incentivisation arrangements for certain
members of Equals' management following completion of the Acquisition.
However, as at the date of this Announcement, there have been no discussions
between the Consortium and members of Equals' management regarding
incentivisation arrangements. The Consortium intends to initiate discussions
regarding appropriate incentivisation arrangements for certain members of
Equals' management following completion of the Acquisition.
Locations of business
The Combined Group will continue to be headquartered in London, United Kingdom
at the current Equals office with the existing Railsr London office being
vacated. Other than that, the Consortium have no plans to undertake any
material restructurings or changes to the locations of Equals' or Railsr's
locations of business.
Pension schemes
Equals does not operate or contribute to any defined benefit pension schemes
in respect of its employees.
Fixed assets
No significant changes are envisaged are envisaged by the Consortium with
respect to Equals' fixed assets.
Research and development
Although certain staff costs are capitalised given staff develop products and
solutions for the respective businesses, and are recognised as research and
development from a financial reporting perspective, neither Railsr or Equals
have dedicated research and development functions and the Consortium has no
intentions in this regard.
Trading facilities
Prior to the Scheme becoming Effective, application will be made by Equals for
the cancellation of trading of the Equals Shares on AIM to take effect on or
shortly after the Effective Date. The last day of dealings in Equals Shares is
expected to be the Business Day immediately prior to the Effective Date and no
transfers shall be registered after 6.00 p.m. on that date. On the Effective
Date, share certificates in respect of Equals Shares shall cease to be valid
and entitlements to Equals Shares held within the CREST system shall be
cancelled. It is also proposed that, following the Effective Date and after
its shares are de-listed, Equals shall be re-registered as a private limited
company. Please refer to Section 14 of this Announcement for further
information.
No post-offer undertakings
None of the statements in this Section 8 are "post-offer undertakings" for the
purposes of Rule 19.5 of the Code.
10 Equals Share Plans
Participants in the Equals Share Plans will be contacted regarding the effect
of the Acquisition on their rights under the Equals Share Plans and
appropriate proposals will be made to such participants in due course. Further
details of the terms of such proposals will also be included in the Scheme
Document.
11 Financing
The Cash Consideration payable to Equals Shareholders under the terms of the
Acquisition will be financed by equity to be invested by the TowerBrook Funds
and the J.C. Flowers Funds.
It is anticipated that certain existing investor groups in investment vehicles
managed and/or advised by affiliates of J.C. Flowers, or certain other third
party co-investors, may invest indirectly in BidCo in connection with the
Acquisition, via co-investment limited partnerships controlled by affiliates
of J.C. Flowers or through such other investment arrangements as may be
agreed. Further details will be provided if and when any such arrangements are
consummated.
PJT Partners, in its capacity as financial adviser to BidCo, confirms that it
is satisfied that sufficient resources are available to BidCo to satisfy in
full the Cash Consideration payable to Equals Shareholders under the terms of
the Acquisition.
12 Dividends
If, on or after the date of this Announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of value other than the
Special Dividend is declared, made or paid, or becomes payable by Equals, the
Cash Consideration shall be reduced accordingly. In such circumstances, Equals
Shareholders shall be entitled to retain any such dividend, distribution, or
other return of value declared, made, or paid.
13 Offer-related arrangements
TowerBrook Confidentiality Undertaking
TowerBrook and Equals entered into a confidentiality agreement dated 7
December 2023 (the "TowerBrook Confidentiality Undertaking") (as amended
pursuant to an amendment agreement entered into by TowerBrook and Equals dated
31 October 2024 (the "TowerBrook Confidentiality Undertaking Extension")
pursuant to which TowerBrook has undertaken to Equals to (a) hold confidential
information received by TowerBrook from Equals in relation to the Acquisition
in strict confidence, take all precautions necessary to maintain the
confidential status of such information, and not disclose it to any person
unless permitted by the terms of the TowerBrook Confidentiality Undertaking,
(b) use such confidential information only for the purposes of evaluating,
negotiating and implementing the Acquisition and not any other purposes
including competing with the Equals Group (c) comply with data protection
legislation in relation to the confidential information and (d) maintain a
list of all authorised recipients of the confidential information.
These confidentiality obligations on TowerBrook and unless otherwise
specified, the terms of the TowerBrook Confidentiality Undertaking generally,
are to remain in force for a period of 30 months from the date of the
TowerBrook Confidentiality Undertaking.
The TowerBrook Confidentiality Undertaking also contains customary standstill
provisions restricting TowerBrook with respect to securities in Equals in
accordance with the Code, which remain in force for a period of 18 months from
the date of the TowerBrook Confidentiality Undertaking. The TowerBrook
Confidentiality Undertaking also contains customary non-solicitation
provisions which will remain in force for a period of 18 months from the date
of the TowerBrook Confidentiality Undertaking in favour of Equals and
customary inside information provisions.
Railsr Confidentiality Undertaking
Railsr and Equals entered into a confidentiality agreement dated 11 December
2023 (the "Railsr Confidentiality Undertaking") (as amended pursuant to an
amendment agreement entered into by Railsr and Equals dated 31 October 2024
(the "Railsr Confidentiality Undertaking Extension") pursuant to which Railsr
has undertaken to Equals to (a) hold confidential information received by
Railsr from Equals in relation to the Acquisition in strict confidence, take
all precautions necessary to maintain the confidential status of such
information, and not disclose it to any person unless permitted by the terms
of the Railsr Confidentiality Undertaking, (b) use such confidential
information only for the purposes of evaluating, negotiating and implementing
the Acquisition and not any other purposes including competing with the Equals
Group (c) comply with data protection legislation in relation to the
confidential information and (d) maintain a list of all authorised recipients
of the confidential information.
These confidentiality obligations on Railsr and unless otherwise specified,
the terms of the Railsr Confidentiality Undertaking generally, are to remain
in force for a period of 30 months from the date of the Railsr Confidentiality
Undertaking.
The Railsr Confidentiality Undertaking also contains customary standstill
provisions restricting Railsr with respect to securities in Equals in
accordance with the Code, which remained in force for a period of 15 months
from the date of the Railsr Confidentiality Undertaking. The Railsr
Confidentiality Undertaking also contains customary non-solicitation
provisions which will remain in force for a period of 18 months from the date
of the Railsr Confidentiality Undertaking in favour of Equals and customary
inside information provisions.
Equals Confidentiality Undertaking
Railsr and Equals entered into a subsequent confidentiality agreement dated 15
February 2024 (the "Equals Confidentiality Undertaking") pursuant to which
Equals provided similar undertakings in relation to confidential information
as contained in the Railsr Confidentiality Undertaking in favour of Railsr.
The Equals Confidentiality Undertaking contains similar customary
non-solicitation provisions as the Railsr Confidentiality Undertaking.
The confidentiality obligations on Equals and unless otherwise specified, the
terms of the Equals Confidentiality Undertaking generally, are to remain in
force for a period of 2 years from the date of the Equals Confidentiality
Undertaking.
JCF Confidentiality Undertaking
Equals and J.C. Flowers & Co UK LLP entered into a confidentiality
agreement dated 14 February 2024 (the "JCF Confidentiality Undertaking") (as
amended pursuant to an amendment agreement entered into by J.C. Flowers &
Co UK LLP and Equals dated 31 October 2024 (the "JCF Confidentiality
Undertaking Extension") pursuant to which J.C. Flowers & Co UK LLP
provided similar undertakings to Equals as given by Railsr to Equals in the
Railsr Confidentiality Undertaking in relation to the Acquisition. The
remaining provisions of the JCF Confidentiality Undertaking are in
substantially the same form as the Railsr Confidentiality Undertaking.
Co-operation Agreement
On 11 December 2024, BidCo and Equals entered into the Co-operation Agreement
in relation to the Acquisition. Pursuant to the Co-operation Agreement:
· BidCo has agreed to be primarily responsible for contacting and
corresponding with the relevant regulatory authorities in relation to all
necessary filings, notifications and submissions in relation to the obtaining
of the Clearances as soon as reasonably practicable (and in any event so as to
enable the Scheme to become Effective by the Long Stop Date);
· BidCo has agreed to use all reasonable efforts to achieve the
satisfaction of the Regulatory Conditions;
· BidCo and Equals have agreed to certain customary undertakings to
co-operate in relation to satisfying the Regulatory Conditions; and
· BidCo has agreed to provide Equals with certain information as
may be reasonably requested and is required for the Scheme Document.
The Co-operation Agreement records the intention of BidCo and Equals to
implement the Acquisition by way of the Scheme, subject to BidCo's right to
switch to a Takeover Offer in certain circumstances. BidCo and Equals have
agreed to certain customary provisions if the Scheme should switch to a
Takeover Offer.
The Co-operation Agreement also contains provisions that shall apply in
respect of Equals Shareholders' dividend entitlements, directors' and
officers' insurance and the Equals Share Plans and other incentive and
enhanced redundancy arrangements.
The Co-operation Agreement shall terminate, among other things:
· if BidCo and Equals so agree in writing at any time prior to the
Effective Date;
· upon service of written notice by BidCo to Equals if: (i) prior
to the Long Stop Date, a third party announces a firm intention to make an
offer or revised offer for Equals which is publicly recommended by the Equals
Directors; (ii) the Equals Directors change their recommendation in certain
circumstances; or (iii) prior to the Long Stop Date, a competing proposal (A)
completes, becomes effective, or is declared or becomes unconditional or (B)
is recommended in whole or in part by the Equals Directors;
· upon written notice by either party to the other if: (i) the
Scheme is not approved by the requisite majority of Equals Shareholders at the
Court Meeting or the resolutions are not passed by the requisite majority of
Equals Shareholders at the General Meeting; (ii) the Court refuses to sanction
the Scheme; (iii) prior to the Long Stop Date, a third party announces a firm
intention to make an offer or revised offer for Equals which completes,
becomes effective or is declared or becomes unconditional in all respects; or
(iv) a competing proposal completes, becomes effective or is declared or
becomes unconditional;
· upon service of written notice by BidCo to Equals stating that a
Condition has been invoked by BidCo (where the invocation of the relevant
Condition has been permitted by the Panel) and that such Condition is
incapable of satisfaction by the Long Stop Date (and, if it is capable of
waiver, that BidCo will not waive the relevant Condition);
· if the Acquisition is withdrawn, lapses or terminates on or prior
to the Long Stop Date other than: (i) as a result of BidCo's exercise of the
right to switch to a Takeover Offer; or (ii) where it is otherwise to be
followed within five Business Days (or such other period agreed between BidCo
and Equals) by a firm offer announcement made by BidCo or any person acting in
concert with BidCo by a different offer or scheme of arrangement on
substantially the same or improved terms; or
· unless otherwise agreed by the parties in writing or required by
the Panel, on the Effective Date, if it has not occurred on or before the Long
Stop Date.
14 Structure of and Conditions to the Acquisition
It is intended that the Acquisition will be effected by means of a
Court-approved scheme of arrangement between Equals and the Scheme
Shareholders under Part 26 of the Companies Act, although BidCo reserves the
right to implement the Acquisition by means of a Takeover Offer (subject to
Panel consent 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 Equals. This is to be
achieved by the transfer of the Scheme Shares to BidCo, in consideration for
which the Scheme Shareholders shall receive the Cash Consideration.
The Acquisition shall be subject to the Conditions and further terms set out
below and in Appendix I to this Announcement and to be set out in the Scheme
Document and shall only become Effective, if, among other things, the
following events occur on or before 11.59 p.m. on the Long Stop Date:
· the approval of the Scheme by a majority in number of the Scheme
Shareholders who are present and vote (and are entitled to vote), whether in
person or by proxy, at the Court Meeting and who represent at least 75 per
cent. in value of the votes cast by those Scheme Shareholders;
· the resolutions required to approve and implement the Scheme
being duly passed by Equals Shareholders representing the requisite majority
or majorities of votes cast at the General Meeting (or any adjournment
thereof);
· certain regulatory approvals as described in Appendix I
(including the approval of the FCA and NBB (the relevant regulators of Equals)
and the approval of the FCA and ACPR (to the extent applicable) (the relevant
regulators of Railsr) are obtained (or waived, as applicable));
· satisfaction of merger control conditions in respect of the
United Kingdom, the European Union and Turkey and the satisfaction of a
foreign direct investment condition in respect of Belgium;
· the sanction of the Scheme by the Court (with or without
modification, but subject to any modification being on terms acceptable to
Equals and BidCo); and
· the delivery of a copy of the Court Order to the Registrar of
Companies.
Given the material significance of the Railsr Acquisition to the Consortium's
strategic plans for the Combined Group, Equals Shareholders should be aware
that, if the Railsr FCA Change in Control Condition and/or the Railsr ACPR
Condition (if relevant) is not satisfied, it would be the Consortium's
intention to seek the Panel's consent to invoke the Railsr FCA Change in
Control Condition and/or the Railsr ACPR Condition to cause the Acquisition to
lapse.
The Scheme will lapse if:
· the Court Meeting and the General Meeting are not held on or
before the 22nd day after the expected date of such meetings to be set out in
the Scheme Document in due course (or such later date, if any, (a) as BidCo
and Equals may agree or (b) (in a competitive situation) as may be specified
by BidCo with the consent of the Panel, and in each case that (if so required)
the Court may allow);
· the Court Hearing is not held on or before the 22nd day after the
expected date of such hearing as first announced by Equals through a
Regulatory Information Service (or such later date, if any, (a) as BidCo and
Equals may agree or (b) (in a competitive situation) as may be specified by
BidCo with the consent of the Panel, and in each case that (if so required)
the Court may allow); or
· the Scheme does not become Effective on or before the Long Stop
Date.
Subject to satisfaction (or waiver, where applicable) of the Conditions, the
Scheme is expected to become Effective during Q2 2025.
Upon the Scheme becoming Effective, it will be binding on all Scheme
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the General Meeting. The Cash Consideration for the
Acquisition (including in respect of the Special Dividend) will be despatched
to Scheme Shareholders no later than 14 days after the Effective Date.
Further details of the Scheme, including an indicative timetable for its
implementation, will be set out in the Scheme Document, which shall be
distributed to Equals Shareholders (along with the Forms of Proxy for use in
connection with the Court Meeting and the General Meeting) in due course.
15 The Railsr SPA
Under the terms of the Railsr SPA, subject to the necessary regulatory
approvals having been obtained, BidCo will acquire Railsr shortly after the
Effective Date and the Railsr Shareholders will ultimately become indirect
shareholders in JVCo.
Completion under the Railsr SPA is conditional only upon:
· BidCo having been approved by the FCA for the purpose of becoming
a controller of the Railsr UK Regulated Entity; and
· BidCo having confirmed to the Railsr Shareholders that all the
Conditions (other than (i) the Railsr ACPR Condition and (ii) any Conditions
which are capable of being satisfied only upon or following the sanction of
the Scheme by the Court).
The Railsr SPA is capable of termination by BidCo in the following
circumstances:
· if the conditions (described above) are not satisfied or waived
on or before the Long Stop Date;
· if the Scheme lapses;
· if BidCo determines that the FCA condition (described above) is
not satisfied;
· in certain circumstances if the Railsr Acquisition becomes
subject to the consent, approval or authorisation of the ACPR; and
· BidCo becomes aware of any event, matter or circumstance which
would prevent it from acquiring the entire issued share capital of Embedded
Finance on the date of completion under the Railsr SPA.
Whilst the Acquisition is conditional upon obtaining those regulatory
approvals necessary to effect the Railsr Acquisition (being the Railsr FCA
Change in Control Condition and, if relevant, the Railsr ACPR Condition), the
Acquisition is not conditional upon the Railsr SPA itself having become
unconditional and/or not having been terminated.
The Panel has confirmed that Rule 13 of the Code will not apply to the Railsr
Acquisition or the terms and conditions of the Railsr SPA.
16 De-listing and re-registration of Equals
Prior to the Scheme becoming Effective, application will be made by Equals for
the cancellation of trading of the Equals Shares on AIM to take effect on or
shortly after the Effective Date. The last day of dealings in Equals Shares is
expected to be the Business Day immediately prior to the Effective Date and no
transfers shall be registered after 6.00 p.m. on that date.
On the Effective Date, share certificates in respect of Equals Shares shall
cease to be valid and entitlements to Equals Shares held within the CREST
system shall be cancelled.
Any Equals Shares issued before the Scheme Record Time which remain in issue
at 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 things,
provide that Equals' articles of association be amended to incorporate
provisions requiring, among other things and subject to the Scheme becoming
Effective, any Equals Shares issued or transferred after the Scheme Record
Time (other than to BidCo and/or its nominees) to be automatically transferred
to BidCo (or as BidCo may direct) on the same terms as the Acquisition (other
than terms as to timings and formalities) save that such Equals Shares shall
not carry any right to receive the Special Dividend. The provisions of Equals'
articles of association (as amended) will avoid any person (other than BidCo,
its nominees and any person to whom BidCo may direct the transfer of Equals
Shares after the Effective Date) holding and retaining Equals Shares after the
Effective Date.
It is also proposed that, following the Effective Date and after its shares
are de-listed, Equals shall be re-registered as a private limited company.
17 Disclosure of Interests in Equals
Except for the irrevocable undertakings referred to in paragraph 7 above and
Appendix III, as at the date of this Announcement, neither BidCo, nor any of
its directors, nor, so far as BidCo is aware, any person acting in concert
(within the meaning of the Code) with BidCo for the purposes of the
Acquisition:
· has any interest in, or right to subscribe for, any Equals Shares
nor does any such person have any short position in Equals Shares, including
any short position under a derivative, any agreement to sell, any delivery
obligation or right to require another person to purchase or take delivery of
Equals Shares;
· has borrowed or lent any Equals Shares or entered into any
financial collateral arrangements relating to Equals Shares; or
· is party to any dealing of the kind referred to in Note 11 on the
definition of acting in concert in the Code in relation to the relevant
securities of Equals.
18 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 for the Equals Shares as an alternative to the Scheme.
In such event, the Takeover Offer shall be implemented on the same terms, so
far as applicable, and subject to the terms of the Co-operation Agreement, as
those which would apply to the Scheme, subject to appropriate amendments,
including (without limitation) an acceptance condition set (subject to the
terms of the Co-operation Agreement) at a level permitted by the Panel.
The Acquisition shall be made subject to the Conditions and further terms set
out in Appendix I to this Announcement and to be set out in the Scheme
Document. The bases and sources of certain financial information contained in
this Announcement are set out in Appendix II to this Announcement. A summary
of the irrevocable undertakings given in relation to the Acquisition is
contained in Appendix III to this Announcement. Certain terms used in this
Announcement are defined in Appendix IV to this Announcement.
The Scheme Document, containing further information about the Acquisition and
notices of the Court Meeting and the General Meeting, will be distributed to
Equals Shareholders (along with the Forms of Proxy for use in connection with
the Court Meeting and the General Meeting) as soon as reasonably practicable
and, in any event (save with the consent of the Panel), within 28 days of the
date of this Announcement. The Scheme Document and Forms of Proxy shall be
made available to all Equals Shareholders at no charge to them.
PJT Partners, Rothschild & Co, Perella Weinberg Partners, Canaccord
Genuity and Lazard have each given and not withdrawn their consent to the
publication of this Announcement with the inclusion herein of the references
to their names in the form and context in which they appear.
19 Documents available on website
Copies of the following documents will be made available on Equals' website at
https://www.equalsplc.com/strategic-review
(https://www.equalsplc.com/strategic-review) until the Effective Date:
· this Announcement;
· the Confidentiality Undertakings;
· the Co-operation Agreement;
· the Consortium Bid Conduct Agreement;
· the Railsr SPA;
· the irrevocable undertakings referred to in
paragraph 6 above and summarised in Appendix III to this Announcement;
· documents relating to the financing of the Scheme
referred to in paragraph 11 above; and
· the written consent letters from each of PJT
Partners, Rothschild & Co, Perella Weinberg Partners, Canaccord Genuity
and Lazard referred to in paragraph 18 above.
The contents of the websites referred to in this Announcement and any websites
accessible from hyperlinks on these websites are not incorporated into and do
not form part of this Announcement.
Enquiries:
TowerBrook +44 (0) 20 7451 2020
Filippo Cardini
J.C. Flowers +44 (0) 20 7710 0500
Tim Hanford
Railsr press@railsr.com
Philippe Morel
Iwona Jordan
PJT Partners (Financial Adviser to TowerBrook, J.C. Flowers, Railsr and BidCo) +44 (0) 20 7650 1100
Jonathan Hall
Basil Geoghegan
Ralph Van Den Abbeele
Rothschild & Co (Financial Adviser to TowerBrook, J.C. Flowers, Railsr and +44 (0) 20 7280 5000
BidCo)
Toby Ross
Guy Luff
William Rooney
Perella Weinberg Partners (Financial Adviser to J.C. Flowers) +44 (0) 20 7268 2800
Timm Schipporeit
Edyta Lipka
Equals via Burson Buchanan
Ian Strafford-Taylor
Richard Cooper
Canaccord Genuity (Financial Adviser, Nominated Adviser & Sole Broker to +44 (0) 20 7523 8000
Equals)
Sunil Duggal
Bill Gardiner
Max Hartley
Harry Rees
Lazard (Financial Adviser to Equals) +44 (0) 20 7187 2000
Nicholas Millar
Jason Welham
Burson Buchanan (Financial Communications for Equals) equals@buchanan.uk.com (mailto:equals@buchanan.uk.com)
Henry Harrison-Topham
Toto Berger
Stephanie Whitmore
Norton Rose Fulbright LLP is acting as legal adviser to TowerBrook and the
BidCo Group. Macfarlanes LLP is acting as legal adviser to J.C. Flowers.
Mishcon de Reya LLP is acting as legal adviser to Railsr. Ashurst LLP is
acting as legal adviser to Equals.
Important notices
PJT Partners, which is authorised and regulated by the Financial Conduct
Authority in the United Kingdom, is acting exclusively for TowerBrook, J.C.
Flowers, Railsr and BidCo and no-one else in connection with the Acquisition
and will not be responsible to anyone other than TowerBrook, J.C. Flowers,
Railsr and BidCo for providing the protections afforded to clients of PJT
Partners nor for providing advice in relation to the Acquisition. Neither PJT
Partners nor any of its subsidiaries, branches or affiliates nor any of 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 PJT Partners in connection with the Acquisition, any statement
contained herein or otherwise.
Rothschild & Co, which is authorised and regulated in the UK by the
Financial Conduct Authority, is acting exclusively as financial adviser to
TowerBrook, J.C. Flowers, Railsr and BidCo and no one else in connection with
the Acquisition and shall not be responsible to anyone other than TowerBrook,
J.C. Flowers, Railsr and BidCo for providing the protections afforded to
clients of Rothschild & Co nor for providing advice in connection with the
Acquisition or any matter referred to herein.
Perella Weinberg Partners, which is authorised and regulated in the UK by the
Financial Conduct Authority, is acting exclusively as financial adviser to
J.C. Flowers and no one else in connection with the Acquisition and shall not
be responsible to anyone other than J.C. Flowers for providing the protections
afforded to clients of Perella Weinberg Partners nor for providing advice in
connection with the Acquisition or any matter referred to herein. Neither
Perella Weinberg Partners nor any of its subsidiaries, branches or affiliates
and 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 Perella Weinberg Partners in connection with this
Announcement, any statement contained herein or otherwise.
Canaccord Genuity, which is authorised and regulated by the FCA in the United
Kingdom, is acting financial adviser exclusively for Equals and no-one else in
connection with the matters described in this Announcement and will not be
responsible to anyone other than Equals for providing the protections afforded
to clients of Canaccord Genuity nor for providing advice in relation to a
potential acquisition of Equals or any other matters referred to herein.
Neither Canaccord Genuity nor any of its affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Canaccord Genuity in connection with this Announcement, any
statement contained herein, to a potential acquisition of Equals or otherwise.
Lazard, which is authorised and regulated in the United Kingdom by the FCA, is
acting as financial adviser to Equals and no one else in connection with the
matters set out in this Announcement and will not be responsible to anyone
other than Equals for providing the protections afforded to clients of Lazard
nor for providing advice in relation to the matters set out in this
Announcement. Neither Lazard nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or indirect,
whether in contract, in tort, under statute or otherwise) to any person who is
not a client of Lazard in connection with this Announcement, any statement
contained herein or otherwise.
Inside information
This Announcement contains inside information as stipulated under the Market
Abuse Regulations (EU) No. 596/2014 as it forms part of UK law by virtue of
the European Union (Withdrawal) Act 2018. Upon the publication of this
Announcement via a Regulatory Information Service, this inside information
will be considered to be in the public domain.
The person responsible for arranging for the release of this Announcement on
behalf of Equals is Richard Cooper, Chief Financial Officer.
Further information
This Announcement is for information purposes only and is not intended to and
does not constitute, or form part of, any offer to sell or an invitation to
purchase any securities; a solicitation of an offer to buy, otherwise acquire,
subscribe for, sell or otherwise dispose of any securities pursuant to the
Acquisition otherwise; or the solicitation of 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, together with any related forms of proxy, will contain the
full terms and conditions of the Acquisition, including details of how to vote
in respect of the Scheme. Any decision in respect of, or other response to,
the Acquisition should be made only on the basis of the information contained
in the Scheme Document (or, if the Acquisition is implemented by way of a
Takeover Offer, the Offer Document).
Equals will prepare the Scheme Document to be distributed to Equals
Shareholders. Equals and BidCo urge Equals Shareholders to read the Scheme
Document (or any other document by which the Acquisition is made) in full when
it becomes available because it will contain important information relating to
the Acquisition, including details of how to vote in respect of the Scheme.
The statements contained in this Announcement are made as at the date of this
Announcement, unless some other time is specified in relation to them, and
publication of this Announcement shall not give rise to any implication that
there has been no change in the facts set forth in this Announcement since
such date.
This Announcement does not constitute a prospectus or prospectus equivalent
document
Overseas shareholders
The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom, and the availability of the Acquisition to
Equals Shareholders who are not resident in the United Kingdom, may be
restricted by the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves about and observe
such restrictions. In particular, the ability of persons who are not resident
in the United Kingdom to vote their Equals Shares with respect to the Scheme
at the Court Meeting, or to execute and deliver forms of proxy appointing
another to vote at the 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 Overseas Shareholders will be contained in the Scheme Document
(or, if the Acquisition is implemented by way of a Takeover Offer, the Offer
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 Code, and permitted by
applicable law and regulation, the Acquisition will not be made available,
directly or indirectly, in, into or from a Restricted 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, 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 Restricted
Jurisdiction. If the Acquisition is implemented by way of Takeover Offer
(unless otherwise permitted by applicable law or regulation), the Takeover
Offer may not be made, directly or indirectly, in or into, or by use of mails
or any other means or instrumentality (including, without limitation,
facsimile, e-mail or other electronic transmission, telex or telephone) of
interstate or foreign commerce of, or any facility of a national, state or
other securities exchange of any Restricted Jurisdiction and the Takeover
Offer will not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted Jurisdiction.
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 and the 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 the United Kingdom. Nothing
in this Announcement should be relied on for any other purpose.
The Acquisition shall be subject to the applicable requirements of the Code,
the Panel, the London Stock Exchange, the Financial Conduct Authority and the
AIM Rules.
Additional information for investors in the United States
The Acquisition relates to shares of a UK company with a listing on AIM and is
proposed to be effected by means of a scheme of arrangement under the laws of
England and Wales. A transaction effected by means of a scheme of arrangement
is not subject to the tender offer rules or the proxy solicitation rules under
the US Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the requirements of United States tender offer and proxy
solicitation rules.
However, if BidCo were to elect to implement the Acquisition by means of a
Takeover Offer and determines to extend such Takeover Offer into the United
States, such Takeover Offer shall be made in compliance with all applicable
United States laws and regulations, including, without limitation, to the
extent applicable, Section 14(e) of the US Exchange Act and Regulation 14E
thereunder. Such a Takeover Offer would be made in the United States by BidCo
and no one else.
In the event that the Acquisition is implemented by way of Takeover Offer, in
accordance with normal United Kingdom practice and pursuant to Rule 14e-5(b)
of the US Exchange Act (if applicable), BidCo or its nominees, or its brokers
(acting as agents), may from time to time make certain purchases of, or
arrangements to purchase, shares or other securities of Equals outside of the
United States, other than pursuant such Takeover Offer, during the period in
which such Takeover Offer would remain open for acceptance. These purchases
may occur either in the open market at prevailing prices or in private
transactions at negotiated prices and would comply with applicable law,
including the US Exchange Act. Any information about such purchases or
arrangements to purchase shall be disclosed as required in the UK, shall be
reported to a Regulatory Information Service and shall be available on the
London Stock Exchange website at www.londonstockexchange.com.
The receipt of consideration by a US holder for the transfer of its Equals
Shares pursuant to the Scheme may be a taxable transaction for United States
federal income tax purposes. Each Equals Shareholder is urged to consult their
independent professional adviser immediately regarding the tax consequences of
the Acquisition applicable to them, including under applicable United States
state and local, as well as overseas and other, tax laws.
Financial information relating to Equals included in this announcement and the
Scheme Document has been or shall have been prepared in accordance with
accounting standards applicable in the United Kingdom and may not be
comparable to financial information of United States companies or companies
whose financial statements are prepared in accordance with generally accepted
accounting principles in the United States (US GAAP). US GAAP differs in
certain significant respects from accounting standards applicable in the
United Kingdom. None of the financial information in this announcement has
been audited in accordance with auditing standards generally accepted in the
United States or the auditing standards of the Public Company Accounting
Oversight Board (United States).
It may be difficult for US holders of Equals Shares to enforce their rights
and any claim arising out of the US federal securities laws in connection with
the Acquisition, since BidCo and Equals are each organised in countries other
than the United States, and some or all of their officers and directors may be
residents of, and some or all of their assets may be located in, jurisdictions
other than the United States. As a result, US holders of Equals Shares may not
be able to effect service of process upon a non-US company or its officers or
directors or to enforce against them a judgment of a US court for violations
of federal or state securities laws of the United States, including judgments
based upon the civil liability provisions of the US federal securities laws.
US holders of Equals Shares 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 jurisdiction or judgment.
Neither the US Securities and Exchange Commission nor any US state securities
commission has approved or disproved or passed judgment upon the fairness or
the merits of the Acquisition or determined if this announcement is adequate,
accurate or complete. 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 or Equals may contain statements about BidCo,
the Consortium and Equals that are or may be deemed to be forward-looking
statements. All statements other than statements of historical facts included
in this Announcement may be forward-looking statements. Without limitation,
any statements preceded or followed by or that include the words "targets",
"plans", "believes", "expects", "aims", "intends", "will", "may", "shall",
"should", "anticipates", "estimates", "projects", "is subject to", "budget",
"scheduled", "forecast" or words or terms of similar substance or the negative
thereof, are forward-looking statements. Forward-looking statements include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of BidCo's or
Equals' operations and potential synergies resulting from the Acquisition; and
(iii) the effects of government regulation on BidCo's or Equals' business.
Such forward-looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations and projections of the
management of BidCo and Equals about future events, and are therefore subject
to risks and uncertainties that could significantly affect expected results
and are based on certain key assumptions. Many factors could cause actual
results to differ materially from those projected or implied in any
forward-looking statements, including: increased competition, the loss of or
damage to one or more key customer relationships, the failure of one or more
key suppliers, the outcome of business or industry restructuring, the outcome
of any litigation, changes in economic conditions, currency fluctuations,
changes in interest and tax rates, changes in laws, regulations or regulatory
policies, developments in legal or public policy doctrines, technological
developments, the failure to retain key management, or the timing and success
of future offer opportunities or major investment projects. Other unknown or
unpredictable factors could cause actual results to differ materially from
those in the forward-looking statements. Such forward-looking statements
should therefore be construed in light of such factors. Neither BidCo nor
Equals, nor any of their respective associates or directors, officers or
advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward-looking
statements in this Announcement will actually occur. Due to such uncertainties
and risks, readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of the date hereof. All
subsequent oral or written forward looking statements attributable to any
member of the BidCo Group or the Equals Group, or any of their respective
associates, directors, officers, employees or advisers, are expressly
qualified in their entirety by the cautionary statement above.
BidCo, the Consortium and Equals expressly disclaim any obligation to update
any forward-looking or other statements contained herein, except as required
by applicable law or by the rules of any competent regulatory authority,
whether as a result of new information, future events or otherwise.
No profit forecasts or estimates
No statement in this Announcement is intended as, or is to be construed as, a
profit forecast, profit estimate or quantified financial benefit statement for
any period and no statement in this Announcement should be interpreted to mean
that earnings or earnings per share for Equals for the current or future
financial years would necessarily match or exceed the historical published
earnings or earnings per share for Equals.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or
more of any class of relevant securities of an offeree company or of any
securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the Announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) 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 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 shall
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 Panel's website at
http://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.
Information relating to Equals Shareholders
Please be aware that addresses, electronic addresses and certain information
provided by Equals Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Equals may be provided
to BidCo during the Offer Period as requested under Section 4 of Appendix 4 of
the Code.
Publication on website and availability of hard copies
A copy of this Announcement will be made available, subject to certain
restrictions relating to persons resident in Restricted Jurisdictions, on
Equals' website at https://www.equalsplc.com/strategic-review
(https://www.equalsplc.com/strategic-review) by no later than 12 noon (London
time) on the Business Day following the date of this Announcement.
For the avoidance of doubt, the contents of these websites are not
incorporated into and do not form part of this Announcement.
Right to receive documents in hard copy form
Equals Shareholders, persons with information rights and participants in the
Equals Share Plans may request a hard copy of this Announcement, free of
charge, by: (i) contacting Link Group during business hours on +44 (0) 371 664
0300 (lines are open from 9.00 a.m. to 5.30 p.m., Monday to Friday (excluding
public holidays in England and Wales)); or (ii) by submitting a request via
email on shareholderenquiries@linkgroup.co.uk. A person so entitled may also
request that all future documents, announcements and information in relation
to the Acquisition be sent to them in hard copy form.
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.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, Equals confirms that as at the date
of this Announcement, it has in issue and admitted to trading on AIM
190,371,498 ordinary shares of 1 penny each. This includes 1,689,272 Equals
Shares which are held in the Share Incentive Plan trust. No Equals Shares are
held in treasury. The International Securities Identification Number (ISIN) of
Equals Shares is GB00BLS0XX25.
General
If you are in any doubt about the contents of this Announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
Part A: Conditions to the Scheme and the Acquisition
1 The Acquisition is conditional upon the Scheme becoming
unconditional and Effective, subject to the provisions of the Code, by no
later than 11.59 p.m. on the Long Stop Date.
2 The Scheme shall be subject to the following conditions:
2.1
(i) its approval by a majority in number of the Scheme
Shareholders who are present and voting (and entitled to vote), either in
person or by proxy, at the Court Meeting and at any separate class meeting
which may be required (or any adjournment thereof), and who represent not less
than 75 per cent. in value of the Scheme Shares voted by those Scheme
Shareholders; and
(ii) such Court Meeting and any such separate class meeting
(or any adjournment thereof) being held on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme Document in due
course (or such later date, if any, (a) as BidCo and Equals may agree or (b)
(in a competitive situation) as may be specified by BidCo with the consent of
the Panel, and in each case (if so required) with the approval of the Court);
2.2
(i) the resolution(s) required to implement the Scheme
being duly passed by Equals Shareholders representing not less than 75 per
cent. of the votes cast at the General Meeting (or any adjournment thereof);
and
(ii) such General Meeting (or any adjournment thereof) being
held on or before the 22nd day after the expected date of such meeting to be
set out in the Scheme Document in due course (or such later date, if any, (a)
as BidCo and Equals may agree or (b) (in a competitive situation) as may be
specified by BidCo with the consent of the Panel, and in each case (if so
required) with the approval of the Court);
2.3
(i) the sanction of the Scheme by the Court (with or
without modification, but subject to any modification being on terms
acceptable to Equals and BidCo) and the delivery of a copy of the Court Order
to the Registrar of Companies; and
(ii) the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing as first announced by Equals
through a Regulatory Information Service (or such later date, if any, (a) as
BidCo and Equals may agree or (b) (in a competitive situation) as may be
specified by BidCo with the consent of the Panel, and in each case (if so
required) with the approval of the Court);
3 In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition shall be conditional upon the
following Conditions and, accordingly, the Court Order shall not be delivered
to the Registrar of Companies unless such Conditions (as amended, if
appropriate) have been satisfied or, where relevant, waived:
Competition and FDI
CMA
(a) either:
(i) following confirmation in writing that the UK
Competition and Markets Authority (the "CMA") has no further questions in
relation to the Acquisition in response to a briefing paper submitted to it,
and as at the date on which all other Conditions are satisfied or waived, in
relation to the Acquisition, the CMA not having:
(A) requested in writing submission of a merger notice
pursuant to section 96 of the Enterprise Act 2002 (the "EA");
(B) indicated to either party in writing that it intends, or
is considering whether, to commence a Phase 1 investigation;
(C) indicated in writing that the statutory review period in
which the CMA has to decide whether to make a reference under section 34ZA EA
has begun; or
(D) requested in writing documents, information or attendance
by witnesses (including under section 109 of the EA) which indicate that it is
considering whether to request submission of a merger notice or whether to
commence the aforementioned statutory review period; or
(ii) the CMA issuing a decision in terms satisfactory to
BidCo that it is not the CMA's intention to subject the Acquisition or any
matter arising therefrom or related thereto or any part of it to a reference
under section 33 of the EA (a "Phase 2 CMA Reference"), such decision being
either unconditional or conditional on the CMA's acceptance of undertakings in
lieu under section 73 of the EA which are satisfactory to BidCo (or the
applicable time period for the CMA to issue either decision having expired
without it having done so and without it having made a Phase 2 CMA Reference)
and there having been no decision by the Secretary of State to make a
reference under sections 45 or 62 of the EA;
EUMR
(b) insofar as the Acquisition constitutes, or is deemed to
constitute, a concentration with a Union dimension within the meaning of
Council Regulation (EC) 139/2004 (as amended) (the "EU Merger Regulation"),
or, following a request pursuant to Article 22(1) of the EU Merger Regulation,
the European Commission decides (or is deemed to have decided) that it shall
examine the Acquisition pursuant to Article 22(3) of the EU Merger Regulation,
the European Commission:
(i) issuing a decision in terms reasonably satisfactory to
BidCo under Articles 6(1)(b) or 6(2) of the EU Merger Regulation declaring the
Acquisition compatible with the internal market (or having been deemed to do
so pursuant to Article 10(6) of the EU Merger Regulation); or
(ii) issuing a decision to refer (or being deemed to have
taken a decision to refer) the Acquisition in whole or in part to the
competent authorities of one or more Member States of the European Union under
Articles 4 or 9 of the EU Merger Regulation and (A) each such authority
issuing a decision with equivalent effect to that in Condition 3(b)(i) with
respect to those parts of the Acquisition referred to it and (B) where
applicable, the European Commission issuing a decision as referred to in
Condition 3(b)(i) with respect to any part of the Acquisition retained by it;
Turkey
(c) insofar as the Acquisition constitutes, or is deemed to
constitute, a notifiable acquisition pursuant to the Act on the Protection of
Competition (Law No. 4054, as amended ("Law No. 4054"), Communiqué No. 2010/4
on Mergers and Acquisitions Subject to the Approval of the Competition Board
(the "Communiqué") and Communiqué No. 2022/2 on the Amendment of the
Communiqué, following notification of the Acquisition to the Turkish
Competition Board, either:
(i) the Turkish Competition Board having declined
jurisdiction over the Acquisition or having approved the Acquisition
unconditionally or on terms reasonably satisfactory to BidCo; or
(ii) the applicable waiting period having expired pursuant
to Article 10 of Law No. 4054;
Belgium
(d) insofar as the Acquisition constitutes, or is deemed to
constitute, a notifiable transaction within the meaning of Article 4 of the
Belgian Cooperation Agreement of 30 November 2022 establishing a foreign
direct investment screening mechanism (the "Belgian Cooperation Agreement"),
the Interfederal Screening Commission ("ISC") shall examine the Acquisition:
(i) having granted (or being deemed as of right, or by
operation of the Belgian Cooperation Agreement, to have been granted by the
ISC) its unconditional clearance under the Belgian Cooperation Agreement; or
(ii) having granted its unconditional clearance by means of
the expiry of the deadline provided by the Belgian Cooperation Agreement for
the review of the Acquisition without the adoption of an express decision; or
(iii) having granted (or being deemed as of right, or by
operation of the Belgian Cooperation Agreement, to have been granted by the
ISC) its conditional clearance under the Belgian Cooperation Agreement and any
conditions, prescriptions, recommendations and obligations that are necessary
to allow the completion of the Acquisition to occur pursuant to such
conditional clearance having been satisfied or complied with;
Approval of the FCA
(e) BidCo and each such shareholder of BidCo who would be a
controller of the Equals UK Regulated Entities on completion of the
Acquisition:
(i) being treated as having been approved by the FCA for
the purposes of Section 189(6) of FSMA;
(ii) having obtained approval in writing from the FCA under
Section 189(4)(a) unconditionally; or
(iii) having obtained approval in writing from the FCA under
Section 189(7) of FSMA with conditions reasonably satisfactory to BidCo,
in each case becoming a controller of the Equals UK Regulated Entities, where
for the purposes of this clause, "control" and "controller" shall have the
meaning given to it in Part XII of FSMA (the "Equals FCA Change in Control
Condition");
(f) BidCo and each such shareholder of BidCo who would be a
controller of the Railsr UK Regulated Entity on completion of the Acquisition:
(i) being treated as having been approved by the FCA for
the purposes of Section 189(6) of FSMA;
(ii) having obtained approval in writing from the FCA under
Section 189(4)(a) unconditionally; or
(iii) having obtained approval in writing from the FCA under
Section 189(7) of FSMA with conditions reasonably satisfactory to BidCo,
in each case becoming a controller of the Railsr UK Regulated Entity, where
for the purposes of this clause, "control" and "controller" shall have the
meaning given to it in Part XII of FSMA, (the "Railsr FCA Change in Control
Condition" and together with the Equals FCA Change in Control Condition, the
"FCA Change in Control Conditions");
Approval of the NBB
(g) BidCo and each such shareholder of BidCo who would be a
controller of the Equals Belgian Regulated Entity on completion of the
Acquisition having obtained approval in writing from the NBB under Article 25
of the Belgian law of 11 March 2018 on the status and supervision of payment
and electronic money institutions (the "Belgian Law of 11 March 2018"), in
each case becoming a controller of the Equals Belgian Regulated Entity, where
for the purposes of this clause, "control" and "controller" shall have the
meaning given to it in Article 2, 43° of the Belgian Law of 11 March 2018
(the "NBB Change in Control Condition");
Approval of the ACPR
(h) in the event that the Railsr French Regulated Entity has
obtained authorisation from the French banking authority (Autorité de
Contrôle Prudentiel et de Résolution, the "ACPR") to become an electronic
money institution within the meaning of Article L. 526-1 French Monetary and
Financial Code (Code Monétaire et Financier), BidCo and each shareholder of
BidCo who would be a controller of the Railsr French Regulated Entity on
completion of the Acquisition having obtained approval (i) in writing from the
ACPR in accordance with Article L. 526-13 of the French monetary and financial
Code (Code monétaire et financier) and Article 7 of the French administrative
order (arrêté) of 2 May 2013 on the prudential regulation of electronic
money institutions (the "French Order"), either unconditionally or with
conditions reasonably satisfactory to BidCo, or (ii) via an implied decision
from the ACPR pursuant to Article 13 of the French Order, where for the
purposes of this clause, "control" and "controller" shall be construed in
accordance with Article 7 of the French Order (the "Railsr ACPR Condition");
Other third party clearances
(i) the waiver (or non-exercise within any applicable time
limits) by any relevant government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or investigative body,
court, trade agency, association, institution, any entity owned or controlled
by any relevant government or state, or any other body or person whatsoever in
any jurisdiction (each a "Third Party") of any termination right, right of
pre-emption, first refusal or similar right (which is material in the context
of the Wider Equals Group taken as a whole or in the context of the
Acquisition) arising as a result of or in connection with the Acquisition
including, without limitation, its implementation and financing or the
proposed direct or indirect acquisition of any shares or other securities in,
or control or management of, Equals by BidCo or any member of the Wider BidCo
Group;
(j) all notifications, filings or applications which are
necessary or appropriate having been made in connection with the Acquisition
and all statutory or regulatory obligations in any jurisdiction having been
complied with in connection with the Acquisition or the acquisition by any
member of the Wider BidCo Group of any shares or other securities in, or
control of, Equals and all authorisations, orders, grants, recognitions,
determinations, confirmations, consents, licences, clearances, permissions,
exemptions and approvals deemed necessary or appropriate by BidCo or any
member of the Wider BidCo Group for or in respect of the Acquisition
including, without limitation, its implementation and financing or the
proposed direct or indirect acquisition of any shares or other securities in,
or control of, Equals or any member of the Wider Equals Group by any member of
the Wider BidCo Group having been obtained in terms and in a form satisfactory
to BidCo from all appropriate Third Parties or persons with whom any member of
the Wider Equals Group has entered into contractual arrangements and all such
authorisations, orders, grants, recognitions, determinations, confirmations,
consents, licences, clearances, permissions, exemptions and approvals deemed
necessary or appropriate to carry on the business of any member of the Wider
Equals Group which are material in the context of the BidCo Group or the
Equals Group as a whole or for or in respect of the Acquisition including,
without limitation, its implementation or financing remaining in full force
and effect and all filings necessary for such purpose having been made and
there being no notice or intimation of any intention to revoke or not to renew
any of the same at the time at which the Acquisition becomes otherwise
unconditional and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with;
(k) no 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 enacted, made or proposed any statute, regulation, decision or order,
or change to published practice or having taken any other step, and there not
continuing to be outstanding any statute, regulation, decision or order, which
in each case would or might reasonably be expected to:
(i) require, prevent or delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture by any
member of the Wider BidCo Group or any member of the Wider Equals Group of all
or any portion of their respective businesses, assets or property or impose
any limitation on the ability of any of them to conduct their respective
businesses (or any of them) or to own any of their respective assets or
properties or any part thereof which, in any such case, is material in the
context of the Wider BidCo Group or the Wider Equals Group in either case
taken as a whole or in the context of the Acquisition;
(ii) require, prevent or delay the divestiture by any member
of the Wider BidCo Group of any shares or other securities in Equals;
(iii) 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 or to hold or to exercise effectively any rights of ownership in
respect of shares or loans or securities convertible into shares or any other
securities (or the equivalent) in any member of the Wider Equals Group or the
Wider BidCo Group or to exercise voting or management control over any such
member;
(iv) otherwise adversely affect the business, assets, profits
or prospects of any member of the Wider BidCo Group or of any member of the
Wider Equals Group to an extent which is material in the context of the Wider
BidCo Group or the Wider Equals Group in either case taken as a whole or in
the context of the Acquisition;
(v) make the Acquisition or its implementation or the
acquisition or proposed acquisition by BidCo or any member of the Wider BidCo
Group of any shares or other securities in, or control of Equals void,
illegal, and/or unenforceable under the laws of any jurisdiction, or
otherwise, directly or indirectly, restrain, restrict, prohibit, delay,
challenge or otherwise interfere with the same, or impose additional
conditions or obligations with respect thereto;
(vi) require any member of the Wider BidCo Group or the Wider
Equals Group to offer to acquire any shares or other securities (or the
equivalent) or interest in any member of the Wider Equals Group or the Wider
BidCo Group owned by any third party;
(vii) impose any limitation on the ability of any member of the
Wider Equals Group to integrate or co-ordinate its business, or any part of
it, with the businesses of any other members which is adverse to and material
in the context of the Wider Equals Group taken as a whole or in the context of
the Acquisition; or
(viii) result in any member of the Wider Equals Group ceasing to
be able to carry on business under any name under which it presently does so,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such Third Party could institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any Equals Shares
having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement etc.
(l) save as Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to which any
member of the Wider Equals Group is a party or by or to which any such member
or any of its assets may be bound, entitled or subject, or any circumstance
which in consequence of the Acquisition or the acquisition or proposed
acquisition of any shares or other securities (or equivalent) in Equals or
because of a change in the control or management of Equals or otherwise, could
or might result in any of the following to an extent which is material and
adverse in the context of the Wider Equals Group, or the Wider BidCo Group, in
either case taken as a whole, or in the context of the Acquisition:
(i) any moneys borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any such member,
being or becoming repayable or capable of being declared repayable immediately
or earlier than their or its stated maturity date or repayment date or the
ability of any such member to borrow moneys or incur any indebtedness being
withdrawn or inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of any such
member thereunder being terminated or adversely modified or affected or any
obligation or liability arising or any action being taken or arising
thereunder;
(iii) any asset or interest of any such member being or
failing to be disposed of or charged or ceasing to be available to any such
member or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
such member otherwise than in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business, property,
assets or interest of any such member;
(v) the rights, liabilities, obligations or interests of any
such member, or the business of any such member with, any person, firm,
company or body (or any arrangement or arrangements relating to any such
interest or business) being terminated, adversely modified or affected;
(vi) the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business
under any name under which it presently does so; or
(viii) the creation or acceleration of any liability, actual or
contingent, by any such member (including any material tax liability or any
obligation to obtain or acquire any material authorisation, order, grant,
recognition, determination, confirmation, consent, licence, clearance,
permission, exemption, approval, notice, waiver, concession, agreement or
exemption from any Third Party or any person) other than trade creditors or
other liabilities incurred in the ordinary course of business or in connection
with the Acquisition,
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the
Wider Equals Group is a party or by or to which any such member or any of its
assets may be bound, entitled or subject, would or might reasonably be
expected to result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (viii) of this Condition;
Certain events occurring since Last Accounts Date
(m) save as Disclosed, no member of the Wider Equals Group having,
since the Last Accounts Date:
(i) save as between Equals and wholly-owned subsidiaries
of Equals or for Equals Shares issued under or pursuant to the exercise of
options and vesting of awards granted under the Equals Share Plans, issued or
agreed to issue, authorised or proposed the issue of additional shares of any
class;
(ii) save as between Equals and wholly-owned subsidiaries of
Equals or for the grant of options and awards and other rights under the
Equals Share Plans, issued or agreed to issue, authorised or proposed the
issue of securities convertible into shares of any class or rights, warrants
or options to subscribe for, or acquire, any such shares or convertible
securities;
(iii) other than to another member of the Equals Group,
recommended, declared, paid or made or made or proposed to recommend, declare,
pay or make any bonus issue, dividend or other distribution whether payable in
cash or otherwise;
(iv) save for intra-Equals Group transactions, merged or
demerged with any body corporate or acquired or disposed of or transferred,
mortgaged or charged or created any security interest over any assets or any
right, title or interest in any asset (including shares and trade investments)
or authorised or proposed or announced any intention to propose any merger,
demerger, acquisition or disposal, transfer, mortgage, charge or security
interest, in each case, other than in the ordinary course of business and, in
each case, to the extent which is material in the context of the Wider Equals
Group taken as a whole or in the context of the Acquisition;
(v) save for intra-Equals Group transactions, made or
authorised or proposed or announced an intention to propose any change in its
loan capital in each case, to the extent which is material in the context of
the Wider Equals Group taken as a whole or in the context of the Acquisition;
(vi) save for intra-Equals Group transactions, issued,
authorised or proposed the issue of, or made any change in or to, any
debentures or, save in the ordinary course of business, incurred or increased
any indebtedness or become subject to any contingent liability;
(vii) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, save in respect to the matters mentioned in sub-paragraphs (i) or (ii)
above, made any other change to any part of its share capital in each case, to
the extent which is material in the context of the Wider Equals Group taken as
a whole in the context of the Acquisition;
(viii) save for intra-Equals Group transactions, implemented, or
authorised, proposed or announced its intention to implement, any
reconstruction, merger, demerger, amalgamation, scheme, commitment or other
transaction or arrangement otherwise than in the ordinary course of business;
(ix) entered into or varied or authorised, proposed or
announced its intention to enter into or vary any contract, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which is of a long term, onerous or unusual nature or magnitude or
which is or could be restrictive on the business of any member of the Wider
Equals Group or the Wider BidCo Group or which involves or could involve an
obligation of such a nature or magnitude which is other than in the ordinary
course of business and which is material in the context of the Wider Equals
Group taken as a whole or in the context of the Acquisition;
(x) (other than in respect of a member which is dormant and
was solvent at the relevant time) taken any corporate action or steps or had
any legal proceedings started or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, or petition
presented or made for its winding-up, dissolution or reorganisation or for the
appointment of a receiver, administrative receiver, administrator, manager,
trustee or similar officer of all or any part of its assets or revenues or any
analogous proceedings in any jurisdiction or appointed any analogous person in
any jurisdiction or had any such person appointed, in each case, to the extent
which is material in the context of the Wider Equals Group taken as a whole or
in the context of the Acquisition;
(xi) entered into any contract, transaction or arrangement
which would be restrictive on the business of any member of the Wider Equals
Group or the Wider BidCo Group other than of a nature and extent which is
normal in the context of the business concerned;
(xii) waived or compromised any claim otherwise than in the
ordinary course of business which is material in the context of the Wider
Equals Group taken as a whole or in the context of the Acquisition;
(xiii) made any material alteration to its memorandum or articles
of association or other incorporation documents;
(xiv) 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;
(xv) entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or passed any
resolution or made any offer (which remains open for acceptance) with respect
to or announced any intention to, or proposed to, effect any of the
transactions, matters or events referred to in this Condition 3(m)(iii);
(xvi) made or agreed or consented to any change to:
(A) the terms of the trust deeds or other governing documents
constituting the pension scheme(s) established by any member of the Wider
Equals Group for its directors, employees or their dependents;
(B) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable thereunder;
(C) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or determined; or
(D) the basis upon which the liabilities (including pensions)
of such pension schemes are funded, valued or made,
in each case, to an extent which is material in the context of the Wider
Equals Group taken as a whole or in the context of the Acquisition;
(xvii) proposed, agreed to provide or modified the terms of any of
the Equals Share Plans or other benefit constituting a material change
relating to the employment or termination of employment of a material category
of persons employed by the Wider Equals Group or which constitutes a material
change to the terms or conditions of employment of any senior employee of the
Wider Equals Group, save as agreed by the Panel (if required) and by BidCo, or
entered into or changed the terms of any contract with any director or senior
executive;
(xviii) taken (or agreed or proposed to take) any action which
requires, or would require, the consent of the Panel or the approval of Equals
Shareholders in general meeting in accordance with, or as contemplated by,
Rule 21.1 of the Code;
(xix) entered into or varied in a material way the terms of, any
contracts, agreement or arrangement with any of the directors or senior
executives of any members of the Wider Equals Group; or
(xx) waived or compromised any claim which is material in the
context of the Wider Equals Group taken as a whole or in the context of the
Acquisition, otherwise than in the ordinary course;
No adverse change, litigation or regulatory enquiry
(n) save as Disclosed, since the Last Accounts Date:
(i) no adverse change or deterioration having occurred in
the business, assets, financial or trading position or profits or prospects or
operational performance of any member of the Wider Equals Group which, in any
such case, is material in the context of the Wider Equals Group taken as a
whole or in the context of the Acquisition and no circumstances have arisen
which would or might reasonably be expected to result in such adverse change
or deterioration;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Equals Group is or
may become a party (whether as a plaintiff, defendant or otherwise) and no
enquiry, review or investigation by, or complaint or reference to, any Third
Party or other investigative body against or in respect of any member of the
Wider Equals Group having been instituted, announced, implemented or
threatened by or against or remaining outstanding in respect of any member of
the Wider Equals Group which in any such case has had or might reasonably be
expected to have a material adverse effect on the Wider Equals Group taken as
a whole or in the context of the Acquisition;
(iii) no contingent or other liability of any member of the
Wider Equals Group having arisen or become apparent to BidCo or increased
which has had or might reasonably be expected to have a material adverse
effect on the Wider Equals Group taken as a whole or in the context of the
Acquisition;
(iv) no enquiry or investigation by, or complaint or reference
to, any Third Party having been threatened, announced, implemented, instituted
by or remaining outstanding against or in respect of any member by or the
Wider Equals Group which in any case is material in the context of the Wider
Equals Group taken as a whole;
(v) no member of the Wider Equals Group having conducted its
business in breach of any applicable laws and regulations and which is
material in the context of the Wider Equals Group as a whole or in the context
of the Acquisition; and
(vi) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any licence or
permit held by any member of the Wider Equals Group which is necessary for the
proper carrying on of its business and the withdrawal, cancellation,
termination or modification of which has had, or would reasonably be expected
to have, an adverse effect which is material in the context of the Wider
Equals Group taken as a whole or in the context of the Acquisition;
No discovery of certain matters
(o) save as Disclosed, BidCo not having discovered:
(i) that any financial, business or other information
concerning the Wider Equals Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider Equals Group
is materially misleading, contains a material misrepresentation of fact or
omits to state a fact necessary to make that information not misleading, in
each case, to an extent which is material in the context of the Wider Equals
Group taken as a whole or in the context of the Acquisition;
(ii) that any member of the Wider Equals Group or
partnership, company or other entity in which any member of the Wider Equals
Group has a significant economic interest and which is not a subsidiary
undertaking of Equals, is subject to any liability (contingent or otherwise)
which is not disclosed in the annual report and accounts of Equals Group for
the financial year ended 31 December 2023 or the interim report and accounts
of Equals Group for the financial period ended 30 June 2024, in each case, to
the extent which is material in the context of the Wider Equals Group taken as
a whole or in the context of the Acquisition; or
(iii) any information which affects the import of any
information disclosed at any time by or on behalf of any member of the Wider
Equals Group and which is material in the context of the Wider Equals Group
taken as a whole or in the context of the Acquisition;
(p) save as Disclosed, BidCo not having discovered that:
(i) any past or present member of the Wider Equals Group
has failed to comply with any and/or all applicable legislation or regulation,
of any jurisdiction with regard to the use, treatment, handling, storage,
carriage, disposal, spillage, release, discharge, leak or emission of any
waste or hazardous substance or any substance likely to impair the environment
or harm human health or animal health or otherwise relating to environmental
matters or the health and safety of humans, or that there has otherwise been
any such use, treatment, handling, storage, carriage, disposal, spillage,
release, discharge, leak or emission (whether or not the same constituted a
non-compliance by any person with any such legislation or regulations, and
wherever the same may have taken place) any of which storage, carriage,
disposal, spillage, release, discharge, leak or emission would be likely to
give rise to any liability (actual or contingent) or cost on the part of any
member of the Wider Equals Group and which is material in the context of the
Wider Equals Group taken as a whole or in the context of the Acquisition;
(ii) there is, or is likely to be, for any reason
whatsoever, any liability (actual or contingent) of any past or present member
of the Wider Equals Group to make good, remediate, repair, reinstate or clean
up any property or any controlled waters now or previously owned, occupied,
operated or made use of or controlled by any such past or present member of
the Wider Equals Group (or on its behalf) or by any person for which a member
of the Wider Equals 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,
under any environmental legislation, regulation, notice, circular or order of
any Third Party and which is material in the context of the Wider Equals Group
taken as a whole or in the context of the Acquisition;
(iii) circumstances exist (whether as a result of the making
of the Acquisition or otherwise) which would be reasonably likely to lead to
any Third Party instituting, or whereby any member of the Wider BidCo Group or
any present or past member of the Wider Equals Group would be likely to be
required to institute, an environmental audit or take any other steps which
would in any such case be reasonably likely to result in any liability
(whether actual or contingent) to improve, modify existing or install new
plant, machinery or equipment or carry out changes in the processes currently
carried out or make good, remediate, repair, re-instate or clean up any land
or other asset currently or previously owned, occupied or made use of by any
past or present member of the Wider Equals Group (or on its behalf) or by any
person for which a member of the Wider Equals 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
Equals Group taken as a whole or in the context of the Acquisition; or
(iv) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any product or
process of manufacture or materials used therein currently or previously
manufactured, sold or carried out by any past or present member of the Wider
Equals Group which claim or claims would be likely, materially and adversely,
to affect any member of the Wider Equals Group and which is material in the
context of the Wider Equals Group taken as a whole or in the context of the
Acquisition; and
Anti-corruption, economic sanctions, criminal property and money laundering
(q) save as Disclosed, BidCo not having discovered that:
(i) (A) any past or present member, director, officer or
employee of the Wider Equals Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence under the
Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other
applicable anti-corruption or anti-bribery law, rule or regulation or any
other applicable law, rule, or regulation concerning improper payments or
kickbacks or (B) any person that performs or has performed services for or on
behalf of the Wider Equals 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 or any other applicable anti-corruption
or anti-bribery law, rule or regulation or any other applicable law, rule, or
regulation concerning improper payments or kickbacks; or
(ii) any asset of any member of the Wider Equals 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 Equals Group is
found to have engaged in activities constituting money laundering under any
applicable law, rule, or regulation concerning money laundering; or
(iii) any past or present member, director, officer or
employee of the Wider Equals Group, or any other person for whom any such
person may be liable or responsible, is or has engaged in any conduct which
would violate applicable economic sanctions or dealt with, made any
investments in, made any funds or assets available to or received any funds or
assets from:
(A) any government, entity or individual in respect of which
US, 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 US, UK or
European Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control, or HM
Revenue and Customs; or
(B) 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, save that this shall
not apply if and to the extent that it is or would be unenforceable by reason
of breach of any applicable Blocking Law; or
(iv) any past or present member, director, officer or employee
of the Wider Equals Group, or any other person for whom any such person may be
liable or responsible:
(A) has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
U.S. Anti-Terrorism Act;
(B) has engaged in conduct which would violate any relevant
anti-boycott law, rule, or regulation or any applicable export controls,
including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State;
(C) has engaged in conduct which would violate any relevant
laws, rules, or regulations concerning human rights, including but not limited
to any law, rule, or regulation concerning false imprisonment, torture or
other cruel and unusual punishment, or child labour; or
(D) is debarred or otherwise rendered ineligible to bid for or
to perform contracts for or with any government, governmental instrumentality,
or international organisation or found to have violated any applicable law,
rule, or regulation concerning government contracting or public procurement;
or
(v) any member of the Wider Equals Group is or has been
engaged in any transaction which would cause BidCo or any member of the Wider
BidCo Group to be in breach of any law or regulation upon its acquisition of
Equals, including but not limited to the economic sanctions of the United
States Office of Foreign Assets Control, or HM Revenue and Customs, or any
other relevant government authority.
Part B: Certain further terms of the Acquisition
1. Subject to the requirements of the Panel and the Code, BidCo reserves
the right in its sole discretion to waive:
(a) the deadline set out in paragraph 1 of Part A of this Appendix I, and
any of the deadlines set out in paragraph 2 of Part A of this Appendix I for
the timing of the Court Meeting, the General Meeting and the Court 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 Equals (or, as the case may be,
the Panel) to extend the deadline in relation to the relevant Condition; and
(b) in whole or in part, all or any of the Conditions set out in Part A of
this Appendix I, except for the Conditions set out in paragraph 2.1(i), 2.2(i)
and 2.3(i) of Part A of this Appendix I which cannot be waived.
2. Conditions set out in paragraph 3 of Part A of this Appendix I must
each be satisfied or (if capable of waiver) be waived by BidCo by no later
than 11.59 p.m. on the Long Stop Date. BidCo shall be under no obligation to
waive (if capable of waiver), to determine to be or remain satisfied or to
treat as satisfied any of the Conditions set out in paragraph 3 of Part A of
this Appendix I that it is entitled (with the consent of the Panel and subject
to the requirements of the 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 such Conditions may not be capable of fulfilment.
3. Under Rule 13.5(a) of the Code, BidCo may not invoke a Condition to the
Acquisition so as to cause the Acquisition not to proceed, to lapse or to be
withdrawn unless the circumstances which give rise to the right to invoke the
Condition are of material significance to BidCo in the context of the
Acquisition. BidCo may only invoke a condition that is subject to Rule 13.5(a)
with the consent of the Panel and any condition that is subject to Rule
13.5(a) may be waived by BidCo. Conditions set out in paragraphs 2 of Part A
of this Appendix I 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 Code.
4. If BidCo is required by the Panel to make an offer for Equals Shares
under the provisions of Rule 9 of the Code, BidCo may make such alterations to
any of the Conditions and the terms of the Acquisition as are necessary to
comply with the provisions of Rule 9 of the Code.
5. 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 an event, the
Acquisition will be implemented on the same terms and conditions, and subject
to the terms of the Co-operation Agreement, as those which would apply to the
Scheme, subject to appropriate amendments including (without limitation) the
inclusion of an acceptance condition set at 90 per cent. of the Equals Shares
to which such Takeover Offer relates (or such lesser percentage as BidCo may
determine, subject to the rules of the Code and in consultation with the
Panel, being in any case more than 50 per cent. of the Equals Shares), or any
amendments required by, or deemed appropriate by, BidCo under applicable law
or any amendments necessary to reflect the Takeover Offer.
6. Equals Shares which will be acquired pursuant to the Acquisition will
be acquired 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 whatsoever and together with all rights now or
hereafter attaching or accruing to them, including voting rights and the right
to receive and retain in full all dividends and other distributions (if any)
declared, made or paid (other than the Special Dividend) or any other return
of capital or value (whether by reduction of share capital or share premium
account or otherwise) by reference to a record date after the Effective Date.
7. If, on or after the date of this Announcement and on or prior to the
Effective Date, any dividend, distribution or other return of value other than
the Special Dividend is announced, declared, made, or paid or becomes payable
in respect of Equals, BidCo reserves the right (without prejudice to any right
BidCo may have, with the consent of the Panel, to invoke the Condition set out
in paragraph 3(m)(iii) of Part A of this Appendix I) to reduce the Cash
Consideration payable under the terms of the Acquisition by an amount up to
the amount of any such dividend, other distribution or return of value, in
which case any reference in this Announcement or in the Scheme Document to the
Cash Consideration will be deemed to be a reference to the Cash Consideration
so reduced. If (but only to the extent) BidCo exercises this right or makes
such a reduction in respect of a dividend, other distribution or return of
value, Equals Shareholders shall be entitled to receive and retain any such
dividend, distribution, or other return of value declared, made, or paid. For
the avoidance of doubt, any exercise by BidCo of its rights referred to in
this paragraph shall not be regarded as constituting any revision or variation
of the Acquisition.
8. Except with the Panel's consent, settlement of the Cash Consideration
to which any Scheme Shareholder is entitled under the Scheme will be
implemented in full in accordance with the terms of the Scheme without regard
to any lien, right of set-off, counterclaim or other analogous right to which
BidCo may otherwise be, or claim to be, entitled as against such Scheme
Shareholder and will be effected in the manner described in this Announcement.
9. 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, email 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 where to do so would violate the laws of that
jurisdiction.
10. The Acquisition is governed by the law of England and Wales and is
subject to the jurisdiction of the courts of England and Wales and to the
Conditions and further terms set out in this Appendix I and to be set out in
the Scheme Document. The Co-operation Agreement and any dispute or claim
arising out of, or in connection with it, (whether contractual or
non-contractual in nature) is governed by English law (save to the extent
expressly set out therein) and is subject to the jurisdiction of the courts of
England and Wales. The Acquisition is subject to the applicable requirements
of the Code, the AIM Rules, the Panel, the London Stock Exchange and the
Financial Conduct Authority.
11. Each of the Conditions shall be regarded as a separate Condition and
shall not be limited by reference to any other Condition.
12. The Acquisition is subject to, inter alia, the Conditions set out in
Part A and the further terms of the Acquisition set out in Part B of this
Appendix I to this Announcement. The Acquisition is also subject to the full
terms and conditions which will be set out in the Scheme Document and such
further terms as may be required to comply with the provisions of the Code.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
i. As at 10 December 2024 (being the latest practicable date prior to
the date of this Announcement), Equals has in issue and admitted to trading on
AIM 190,371,498 ordinary shares of 1 penny each. This includes 1,689,272
Equals Shares which are held in the Share Incentive Plan trust. No Equals
Shares are held in treasury. The International Securities Identification
Number (ISIN) of Equals Shares is GB00BLS0XX25.
ii. Any references to the issued and to be issued share capital of
Equals are based on:
a. the 190,371,498 Equals Shares referred to in paragraph i above; and
b. up to 11,963,000 Equals Shares which may be issued on or after the date
of this Announcement to satisfy the exercise of options or vesting of awards
pursuant to the Equals Share Plans.
iii. References in this announcement to the Cash Value are based on the
Cash Consideration of 135 pence in cash together with the Special Dividend of
5 pence per share in cash and have been calculated on the basis of the issued
and to be issued share capital of Equals (as set out in paragraph ii above).
iv. Unless otherwise stated, all prices and Closing Prices for Equals
Shares are closing middle market quotations derived from the LSE Daily
Official List (SEDOL).
v. Unless otherwise stated, the financial information relating to Equals
is extracted from the audited consolidated financial statements of Equals for
the financial year to 31 December 2023, prepared in accordance with UK-adopted
International Accounting Standards in conformity with the requirements of the
Companies Act 2006.
vi. The volume-weighted average price of an Equals Share for the 3-month
period ended 31 October 2023 is derived from Bloomberg reported volume data
and estimated from the beginning of 31 July 2023 to the end of 31 October 2023
(being the Business Day before the commencement of the Offer Period).
vii. The volume-weighted average price of an Equals Share for the 3-month
period ended 10 December 2024 is derived from Bloomberg reported volume data
and estimated from the beginning of 10 September 2024 to the end of 10
December 2024 (being the latest practicable date prior to the date of this
Announcement).
viii. Certain figures included in this announcement have been subject to
rounding adjustments.
APPENDIX III
IRREVOCABLE UNDERTAKINGS
The following Equals Directors have given irrevocable undertakings to vote in
favour of the Scheme at the 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, to accept or procure acceptance of
such offer:
Part A - Equals Directors' Irrevocable Undertakings
Name of Equals Director Number of Equals Shares in respect of which undertaking is given Percentage of Equals issued share capital as at 10 December 2024 (excluding
shares under option)
Ian Strafford-Taylor 2,607,750 1.370%
Richard Cooper 1,458,334 0.766%
Sian Herbert 77,800 0.041%
Alan Hughes 46,000 0.024%
Christopher Bones 4,500 0.002%
TOTAL 4,194,384 2.203%
These irrevocable undertakings also extend to any shares acquired by the
Equals Directors as a result of the vesting of awards or the exercise of
options under the Equals Share Plans.
The obligations of the Equals Directors under the irrevocable undertakings
shall lapse and cease to have effect on and from the following occurrences:
· BidCo announces (with the consent of the Panel) after the date of
this Announcement that it does not intend to proceed with the Acquisition; and
· the Scheme does not become Effective before the Long Stop Date
(other than in circumstances where the BidCo has, prior to such date, elected
to proceed by way of a Takeover Offer and announced the same in accordance
with the requirements of Paragraph 8 of Appendix 7 to the Code, and such
Takeover Offer has not lapsed or been withdrawn).
Part B - Non-director Equals Shareholder irrevocable undertakings
Name of Equals Shareholder giving undertaking Number of Equals Shares in respect of which undertaking is given Percentage of Equals issued share capital as at 10 December 2024
Ashley Levett 22,291,833 11.710%
Stephen Heath 4,898,341 2.573%
TOTAL 27,190,174 14.283%
The obligations of the non-director Equals Shareholders under the irrevocable
undertakings shall lapse and cease to have effect on and from the following
occurrences:
· BidCo announces (with the consent of the Panel) after the date of
this Announcement that it does not intend to proceed with the Acquisition; and
· the Scheme does not become Effective before the Long Stop Date
(other than in circumstances where the BidCo has, prior to such date, elected
to proceed by way of a Takeover Offer and announced the same in accordance
with the requirements of Paragraph 8 of Appendix 7 to the Code, and such
Takeover Offer has not lapsed or been withdrawn).
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context requires otherwise:
ACPR has the meaning given to it in paragraph 3(h) of Part A of Appendix I of this
Announcement
Acquisition has the meaning given to it in paragraph 1
AIM the Alternative Investment Market, a market operated by the London Stock
Exchange
AIM Rules the AIM Rules for Companies as published by the London Stock Exchange, as
amended from time to time
Announcement this announcement
Authorisations regulatory authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions or approvals
Belgian Law of 11 March 2018 has the meaning given to it in paragraph 3(g) of Part A of Appendix I of this
Announcement
Belgian Cooperation Agreement has the meaning given to it in paragraph 3(d) of Part A of Appendix 1 of this
Announcement
BidCo Alakazam Holdings BidCo Limited, a private limited company incorporated under
the laws of England and Wales with registered number 16081426 (or if BidCo
elects, a nominee or wholly-owned subsidiary of BidCo notified in writing to
Equals prior to publication of the Scheme Document (or, if applicable, the
Offer Document))
BidCo Directors the board of directors of BidCo at the time of this Announcement or, where the
context so requires, the directors of BidCo from time to time
BidCo Group JVCo and its group undertakings from time to time
Blocking Law means (i) any provision of Council Regulation (EC) No 2271/1996 of 22 November
1996 (or any law or regulation implementing such Regulation in any member
state of the European Union); or (ii) any provision of Council Regulation (EC)
No 2271/1996 of 22 November 1996, as it forms part of domestic law of the
United Kingdom by virtue of the European Union (Withdrawal) Act 2018
Board the board of directors of Equals
Business Day a day (other than Saturdays, Sundays and public holidays in the UK) on which
banks are open for business in London
Canaccord Genuity Canaccord Genuity Limited
Cash Consideration has the meaning given to it in paragraph 2
Cash Value has the meaning given to it in paragraph 2
Clearances any approvals, consents, clearances, permissions, confirmations, comfort
letters and waivers that may need to be obtained and waiting periods that may
need to have expired, from or under any of the laws, regulations or practices
applied by any Relevant Authority (or under any agreements or arrangements to
which any Relevant Authority is a party), in each case that are necessary
and/or expedient to satisfy the Regulatory Conditions
Closing Price the closing middle market price of an Equals Share on a particular trading day
as derived from the AIM Appendix of the Daily Official List
CMA has the meaning given to it in paragraph 3(a)(i) of Part A of Appendix I of
this Announcement
Code the City Code on Takeovers and Mergers, as amended from time to time
Combined Group the combined Equals Group, BidCo Group and Railsr Group following completion
of the Acquisition and the Railsr Acquisition
Communiqué has the meaning given to it in paragraph 3(c) of Part A of Appendix I of this
Announcement
Companies Act the Companies Act 2006, as amended from time to time
Conditions the conditions to the implementation of the Acquisition, as set out in Part A
of Appendix I to this Announcement and to be set out in the Scheme Document
Confidentiality Undertakings means the TowerBrook Confidentiality Undertaking, the TowerBrook
Confidentiality Undertaking Extension, Railsr Confidentiality Undertaking, the
Railsr Confidentiality Undertaking Extension, Equals Confidentiality
Undertaking, the JCF Confidentiality Undertaking and the JCF Confidentiality
Undertaking Extension
Consortium the consortium comprising: (i) the TowerBrook Funds; (ii) the J.C. Flowers
Funds; and (iii) the Railsr Shareholders
Consortium Bid Conduct Agreement the agreement dated on the date of this Announcement between TowerBrook, J.C.
Flowers and Railsr relating to the implementation of the Acquisition
Co-operation Agreement the agreement dated on the date of this Announcement between Equals and BidCo
relating to, among other things, the implementation of the Acquisition, as
described in paragraph 13 of this Announcement
Court the High Court of Justice in England and Wales
Court Hearing the hearing by the Court of the application to sanction the Scheme under Part
26 of the Companies Act
Court Meeting the meeting of Scheme Shareholders to be convened pursuant to an order of the
Court under the Companies Act for the purpose of considering and, if thought
fit, approving the Scheme (with or without amendment), including any
adjournment thereof, notice of which is to be contained in the Scheme Document
Court Order the order of the Court sanctioning the Scheme
CREST the system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by Euroclear
Daily Official List the Daily Official List published by the London Stock Exchange
Dealing Arrangement an arrangement of the kind referred to in Note 11(a) on the definition of
acting in concert in the Code
Dealing Disclosure has the same meaning as in Rule 8 of the Code
Disclosed the information fairly disclosed by, or on behalf of Equals, (i) in the annual
report and accounts of Equals Group for the financial period ended 31 December
2023, (ii) in the interim report and accounts of the Equals Group for the
financial period ended 30 June 2024; (iii) in this Announcement; (iv) in any
other Announcement to a Regulatory Information Service by, or on behalf of,
Equals prior to the date of this Announcement; or (vi) as otherwise fairly
disclosed to BidCo and the Consortium (or its respective officers, employees,
agents or advisers) (including via the virtual data room operated by or on
behalf of Equals in respect of the Acquisition and any management presentation
in connection with the Acquisition attended by Equals and any member of the
Consortium (or its respective officers, employees, agents or advisers)) prior
to the date of this Announcement
Discretionary Incentive Plan the Equals Group 2021 Discretionary Incentive Plan adopted on 18 October 2021
EA has the meaning given to it in paragraph 3(a)(i)(A) of Part A of Appendix I of
this Announcement
Embedded Finance Embedded Finance Limited, a private limited company incorporated in and
registered in England and Wales under company number 14698459 with its
registered office at Fora Montacute Yards, Shoreditch High Street, London,
England, E1 6HU
Equals or the Company Equals Group plc
Equals Belgian Regulated Entity Equals Money Europe S.A.
Equals Confidentiality Undertaking has the meaning given to it in paragraph 13
Equals Directors the board of directors of Equals at the time of this Announcement or, where
the context so requires, the directors of Equals from time to time
Equals FCA Change in Control Condition the Condition set out at paragraph 3(e) of Appendix I of this Announcement
Equals Group Equals and its group undertakings from time to time
Equals Share Plans each of Equals' share plans, including the Discretionary Incentive Plan, the
Share Incentive Plan, the FairFX Group Share Option Plan and various
standalone option agreements
Equals Shareholders the holders of Equals Shares
Equals Shares the existing unconditionally allotted or issued and fully paid ordinary shares
of 1 penny each in the capital of Equals and any further such ordinary shares
which are unconditionally allotted or issued before the Scheme becomes
Effective
Equals UK Regulated Entities means Equals Money International Limited, Equals Money plc, Equals Money UK
Limited, Equals Connect Limited and Roqqett Ltd
Effective in the context of the Acquisition:
(a) if the Acquisition is implemented by way of the Scheme, the
Scheme having become effective pursuant to its terms; or
(b) if the Acquisition is implemented by way of a Takeover Offer,
such Takeover Offer having become or been declared unconditional in accordance
with the Code
Effective Date the date on which the Acquisition becomes Effective
Euroclear Euroclear UK & Ireland International Limited
EU Merger Regulation has the meaning given to it in paragraph 3(b) of Part A of Appendix 1 of this
Announcement
FairFX Group Share Option Plan the FairFX Group Share Option Plan adopted on 28 July 2014
FCA or Financial Conduct Authority the Financial Conduct Authority acting in its capacity as the competent
authority for the purposes of Part VI of FSMA
FCA Change in Control Conditions the Equals FCA Change in Control Condition and the Railsr FCA Change in
Control Condition
Forms of Proxy the forms of proxy for use in connection with each of the Court Meeting and
the General Meeting, which shall accompany the Scheme Document
FSMA the Financial Services and Markets Act 2000, as amended from time to time
General Meeting the general meeting of Equals Shareholders (including any adjournment thereof)
to be convened in connection with the Scheme
IFRS International Financial Reporting Standards
ISC has the meaning given to it in paragraph 3(d) of Part A of Appendix 1 of this
Announcement
J.C. Flowers J.C. Flowers & Co. LLC
J.C. Flowers Funds funds managed or advised by J.C. Flowers & Co. LLC
JCF Confidentiality Undertaking has the meaning given to it in paragraph 13
JCF Confidentiality Undertaking Extension has the meaning given to it in paragraph 13
JVCo has the meaning given to it in paragraph 7
Last Accounts Date 31 December 2023
Law No. 4054 has the meaning given to it in paragraph 3(c) of Part A of Appendix I of this
Announcement
Lazard Lazard & Co., Limited
London Stock Exchange London Stock Exchange plc
Long Stop Date 30 June 2025, or such later date: (i) as may be agreed in writing by BidCo and
Equals (with the Panel's consent, if required); or (ii) (in a competitive
situation) as may be specified by BidCo with the consent of the Panel; or
(iii) as the Panel may direct under the Note on Section 3 of Appendix 7 of the
Code, and, in each case, as the Court may approve (if such approval is
required)
MidCo has the meaning given to it in paragraph 7
NBB the National Bank of Belgium
NBB Change in Control Condition the Condition set out at paragraph 3(g) of Part A of Appendix I of this
Announcement
Offer Document the document containing a Takeover Offer
Offer Period the current offer period (as defined by the Code) relating to Equals, which
commenced on 1 November 2023
Opening Position Disclosure has the same meaning as in Rule 8 of the Code
Overseas Shareholders Equals Shareholders (or nominees of, or custodians or trustees for Equals
Shareholders) not resident in, or nationals or citizens of, the United Kingdom
Panel the Panel on Takeovers and Mergers
Perella Weinberg Partners Perella Weinberg UK Limited
Phase 2 CMA Reference has the meaning given to it in paragraph 3(c)(ii) of Part A of Appendix I of
this Announcement
PJT Partners PJT Partners (UK) Limited
Railsr Embedded Finance, trading as "Railsr"
Railsr ACPR Condition the Condition set out at paragraph 3(h) of Appendix I of this Announcement
Railsr Acquisition the acquisition of Railsr pursuant to the Railsr SPA
Railsr Confidentiality Undertaking has the meaning given to it in paragraph 13
Railsr Confidentiality Undertaking Extension has the meaning given to it in paragraph 13
Railsr FCA Change in Control Condition the Condition set out at paragraph 3(f) of Appendix I of this Announcement
Railsr French Regulated Entity Embedded Finance Europe SAS, a wholly-owned subsidiary of Embedded Finance,
incorporated and registered in France under SIREN 981 525 363
Railsr Group Railsr and its group undertakings from time to time
Railsr HoldCo has the meaning given to it in paragraph 7
Railsr Shareholders the shareholders of Embedded Finance
Railsr SPA has the meaning given to it in paragraph 3
Railsr UK Regulated Entity PayrNet Ltd
Regulatory Conditions means the Conditions set out in paragraphs 3(a) to 3(h) of Part A of Appendix
I of this Announcement
Regulatory Information Service any information service authorised from time to time by the FCA for the
purpose of disseminating regulatory Announcements
Relevant Authority any central bank, ministry, governmental, quasi-governmental, supranational
(including the European Union), statutory, regulatory or investigative body,
authority or tribunal (including any national or supranational anti-trust,
competition or merger control authority, any sectoral ministry or regulator
and any foreign investment review body), national, state, municipal or local
government (including any subdivision, court, tribunal, administrative agency
or commission or other authority thereof), any entity owned or controlled by
them, any private body exercising any regulatory, taxing, importing or other
authority, trade agency, association, institution or professional or
environmental body in any jurisdiction, including, for the avoidance of doubt,
the Panel
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 is sent or made available to Equals Shareholders
Rothschild & Co N.M. Rothschild & Sons Limited
Scheme or Scheme of Arrangement the proposed scheme of arrangement under Part 26 of the Companies Act between
Equals and Scheme Shareholders in connection with the Acquisition, with or
subject to any modification, addition or condition approved or imposed by the
Court and agreed by Equals and BidCo
Scheme Document the document to be sent to Equals Shareholders containing, amongst other
things, the Scheme and the notices convening the Court Meeting and the General
Meeting
Scheme Shareholder a holder of Scheme Shares
Scheme Shares (a) the Equals Shares in issue at the date of the Scheme Document; (b) any
Equals Shares issued after the date of the Scheme Document and prior to the
Scheme Voting Record Time; and (c) any Equals Shares issued at or after the
Scheme Voting Record Time and prior to the Scheme Record Time in respect of
which the original or any subsequent holder thereof is bound by the Scheme, or
shall by such time have agreed in writing to be bound by the Scheme
Scheme Record Time the time and date specified as such in the Scheme Document, expected to be
6.00 p.m. on the Business Day immediately after the Court Hearing, or such
other time as Equals and BidCo may agree
Scheme Voting Record Time the date and time specified in the Scheme Document by reference to which
entitlement to vote at the Court Meeting will be determined, expected to be
6.00 p.m. on the day which is two Business Days before the Court Meeting or,
if the Court Meeting is adjourned to 6.00 p.m. on the day which is two
Business Days before the date of such adjourned Court Meeting
Share Incentive Plan the Equals Group Share Incentive Plan adopted on 25 November 2021
Significant Interest in relation to an undertaking, a direct or indirect interest of 20 per cent.
or more of the total voting rights conferred by the equity share capital (as
defined in section 548 of the Companies Act) of such undertaking
Special Dividend has the meaning given to it in paragraph 2
Strategic Review the strategic review announced by board of directors of Equals on 01 November
2023
Takeover Offer should the Acquisition be implemented by way of a takeover offer as defined in
Chapter 3 of Part 28 of the Companies Act, the offer to be made by or on
behalf of BidCo to acquire the entire issued and to be issued ordinary share
capital of Equals and, where the context admits, any subsequent revision,
variation, extension or renewal of such takeover offer
TowerBrook TowerBrook Capital Partners (U.K.) LLP
TowerBrook Confidentiality Undertaking has the meaning given to it in paragraph 13
TowerBrook Confidentiality Undertaking Extension has the meaning given to it in paragraph 13
TowerBrook Funds funds managed or advised by TowerBrook and its affiliates
Third Party each of a central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, administrative, fiscal or
investigative body, court, trade agency, association, institution,
environmental body, employee representative body or any other body or person
whatsoever in any jurisdiction
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
United States or US 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 1934
Wider BidCo Group JVCo and its subsidiary undertakings, associated undertakings and any other
undertaking in which JVCo and/or such undertakings (aggregating their
interests) have a Significant Interest
Wider Equals Group Equals and its subsidiary undertakings, associated undertakings and any other
undertaking in which Equals and/or such undertakings (aggregating their
interests) have a Significant Interest
For the purposes of this Announcement, "subsidiary", "subsidiary undertaking"
and "undertaking" have the respective meanings given thereto by the Companies
Act and "associated undertaking" has the meaning given thereto by paragraph 19
of Schedule 6 to the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008, other than paragraph 19(1)(b) of Schedule 6 to
those regulations which shall be excluded for this purpose.
All references to "pounds", "pounds Sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.
All references to "US$", "$" and "US Dollars" are to the lawful currency of
the United States.
All the times referred to in this Announcement are London times unless
otherwise stated.
References to the singular include the plural and vice versa.
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