REG - K3 Bus Tech Grp PLC - Proposed Tender Offer, Cancellation & Notice of GM
02/07/2025 07:00
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RNS Number : 2972P K3 Business Technology Group PLC 02 July 2025
2 July
2025
THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR
PUBLICATION, RELEASE OR DISTRIBUTION IN WHOLE OR IN PART IN THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR ANY
OTHER JURISDICTION WHERE ITS RELEASE, PUBLICATION OR DISTRIBUTION IS OR MAY BE
UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN INVITATION TO PARTICIPATE
IN THE TENDER OFFER (AS DEFINED HEREIN) IN OR FROM ANY JURISDICTION IN OR FROM
WHICH, OR TO OR FROM ANY PERSON TO OR FROM WHOM, IT IS UNLAWFUL TO MAKE SUCH
OFFER UNDER APPLICABLE SECURITIES LAWS OR OTHERWISE.
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Group" or "the Company")
Proposed Return of up to £29.0 million to Shareholders by Way of a Tender
Offer for up to 34,117,647 Shares at 85 pence per Share
and
Cancellation of Admission of Shares to Trading on AIM
Publication of Circular and Notice of General Meeting
K3, which provides business-critical software solutions focused on fashion and
apparel brands, announces that it will shortly be posting a Circular (the
"Circular") setting out the details of a proposed return of capital to
Shareholders of up to £29.0 million as distribution from the proceeds of the
Nexsys Disposal (the "Tender Offer") and the proposed cancellation of
admission of shares to trading on AIM (the "De-Listing" and, together with the
proposed Tender Offer, the "Proposals").
Further to its announcement on 3 April 2025, the Company is seeking to return
up to approximately £29.0 million of cash to Qualifying Shareholders by way
of the Tender Offer. The Tender Offer will be conducted at a fixed price of 85
pence per Ordinary Share (the "Tender Price"), which represents the closing
mid-market price of an Ordinary Share on 1 July 2025 (being the "Latest
Practicable Date") and will be subject to the passing of the Tender Offer
Resolution.
If the maximum number of Ordinary Shares under the Tender Offer is acquired,
this would result in the purchase of approximately 74.3 per cent. of the
Company's current issued share capital. The Tender Offer and De-Listing remain
subject to approval by Shareholders at the General Meeting, to be held at the
offices of Cavendish Financial plc at One Bartholomew Close, London EC1A 7BL
11.00 a.m. on 18 July 2025.
The Circular sets out the background to and reasons for the Proposals, terms
and conditions of the Tender Offer and explains how Qualifying Shareholders
may tender Shares, should they wish to do so. The Circular will be published
on the Company's website at
https://www.k3btg.com/investor-centre/regulatory-news/#circulars
(https://www.k3btg.com/investor-centre/regulatory-news/#circulars) .
Unless otherwise defined, capitalised terms in this announcement shall have
the meaning set out in the Circular.
Enquiries:
K3 Business Technology Group plc Oliver Scott, Chairman T: c/o 020 3178 6378
www.k3btg.com (http://www.k3btg.com) Eric Dodd, Chief Executive Officer
Cavendish Capital Markets Julian Blunt/Callum Davidson/Trisyia Jamaludin T: 020 7220 0500
(NOMAD & Broker) (Corporate Finance)
Sunila De Silva
(Corporate Broking)
KTZ Communications Katie Tzouliadis/ Robert Morton T: 020 3178 6378
Expected Timetable
2025
Announcement of Tender Offer and De-Listing 2 July
Posting of the Circular 2 July
Tender Offer opens 2 July
Latest time and date for receipt of CREST Proxy Instructions for the General 11.00 a.m. on 16 July
Meeting
Latest time and date for receipt of Forms of Proxy for the General Meeting 11.00 a.m. on 16 July
General Meeting 11.00 a.m. on 18 July
Latest time and date for receipt of Tender Forms or for settlement of TTE 1.00 p.m. on 18 July
Instructions in respect of the Tender Offer
Record Date for participation in Tender Offer 6.00 p.m. on 18 July
Result of Tender Offer announced 21 July
CREST accounts settled in respect of unsold tendered Shares held in 22 July
uncertificated form
Payments through CREST made in respect of Shares held in uncertificated form by 28 July
successfully tendered
Cheques despatched in respect of Shares held in certificated form successfully by 28 July
tendered
Balancing certificates despatched in respect of unsold tendered Shares held in by 28 July
certificated form
Last day of dealings in the Shares on AIM 29 July
Cancellation of admission of the Shares to trading on AIM 30 July
Notes:
1 Each of the times and dates referred to in
the expected timetable above and elsewhere in this announcement may be
extended or brought forward at the discretion of the Company. If any of the
above times and/or dates change, the revised time(s) and/or date(s) will be
notified to Shareholders by an announcement through a Regulatory Information
Service.
2 All times referred to in this announcement
are, unless otherwise stated, references to London time.
K3 BUSINESS TECHNOLOGY GROUP PLC
("K3" or "the Group" or "the Company")
Proposed Return of up to £29.0 million to Shareholders by Way of a Tender
Offer for up to 34,117,647 Shares at 85 pence per Share
and
Cancellation of Admission of Shares to Trading on AIM
Publication of Circular and Notice of General Meeting
1. Introduction
Following on from the Company's sale of NexSys Solutions Limited ("Nexsys")
which was completed on 6 January 2025 for cash consideration of approximately
£36 million (the "Nexsys Disposal"), and the capital reorganisation as
approved by the Court on 11 June 2025, the Company now intends to return up to
approximately £29.0 million of cash to Qualifying Shareholders by way of a
tender offer and subsequent repurchase from Cavendish of the Shares
successfully tendered (the "Tender Offer"). The Tender Offer will be conducted
at a fixed price of 85 pence per Share (the "Tender Price"). Once the Tender
Offer is completed the Directors are also proposing to de-list the Company
from AIM.
The Tender Offer is being made available to all Shareholders who are on the
Register at the close of business on 18 July 2025, with the exception of
holders in certain overseas jurisdictions. Qualifying Shareholders can decide
whether they want to tender some or (subject to scale back) all of their
Shares at a price of 85 pence per Share, being the closing mid-market price on
the Latest Practicable Date.
The Tender Offer is being made by Cavendish, the Company's corporate broker,
as principal on the basis that all Shares that it buys under the Tender Offer
will be purchased from it by the Company. The Company requires the authority
from Shareholders to purchase any such Shares and this is being sought at the
General Meeting to be held at the offices of Cavendish Financial Plc, One
Bartholomew Close, London, EC1A 7BL at 11.00 a.m. on 18 July 2025. The General
Meeting will also seek Shareholder approval for the Delisting Resolution.
The purpose of the Circular is to explain the terms and conditions of the
Tender Offer and subsequent repurchase of Shares and to explain how Qualifying
Shareholders may tender Shares, should they wish to do so, and the background
to and reasons for the Delisting and why the Board unanimously recommends that
Shareholders vote in favour of the Resolutions to be proposed at the General
Meeting, notice of which is set out in Part 9 of the Circular.
The Board is unanimously recommending Shareholders to vote in favour of the
Resolutions to be proposed at the General Meeting, as the Directors intend to
do in respect of their own beneficial holdings of Shares amounting to 0.14
per cent. in aggregate of the Company's issued share capital. The Directors
also intend to tender for no less than their Basic Entitlements in the Tender
Offer.
Further, both Kestrel Partners LLP ("Kestrel") and PJ Claesson have
irrevocably undertaken to tender for no less than their Basic Entitlements in
the Tender Offer and to vote in favour of the Tender Offer Resolution in
respect of their holdings of 13,274,493 Shares and 11,321,780 Shares,
respectively, amounting to 53.5 per cent. in aggregate of the issued share
capital.
2. Background to and reasons for the Tender Offer and the De-listing
When the Company announced the conditional sale of NexSys on 2 December 2024
the Board was clear that it anticipated returning a substantial proportion of
the net proceeds of the disposal to Shareholders. Since completion of the
NexSys Disposal the Board has focused on:
• stabilising the Group's remaining businesses, comprising the
K3 Products Division and the Third Party Solutions Division (the "Remaining
Group") with a view to returning the Group's continuing operations to a month
on month cashflow breakeven position from March 2025 onwards. In this regard
we are pleased to report that, with ongoing focus on cost discipline and cash
management, month on month cashflow breakeven was achieved in April and May
2025;
• reorganising the Company's balance sheet in order to permit a
lawful distribution of capital by way of a process such as the Tender Offer;
and
• assessing the different options through which it may
distribute capital to Shareholders, with the Board concluding that the Tender
Offer is the most suitable way of doing so quickly and efficiently, taking
into account the relative costs, complexity and timeframes of other possible
methods, as well as the likely tax treatment for and equality of treatment of
Shareholders.
Integral to the above has been assessment of the quantum of the NexSys
Disposal proceeds considered appropriate to be retained within the Group to
leave it with sufficient working capital and restructuring funding to operate
debt free. This amount is expected to be approximately £6.0 million
(including £3.3 million of restricted cash, restricted until July 2026),
leaving approximately £29.0 million (after costs) to be returned by way of
the Tender Offer, equating to approximately 4 per cent. more than the entire
market capitalisation of K3 prior to the announcement of the sale of NexSys.
As the Group stated in its final results announcement for the year ended 30
November 2024 ("FY24") on 27 February 2025, FY24 was a challenging year,
especially at Global Accounts (the predominant part of the Third-Party
Solutions Division) whose revenue fell by approximately 41.4 per cent. Whilst
FY24 results were nonetheless in line with Board's expectations, with Third
Party Solutions' revenue now holding at a significantly reduced level with no
expectation of return to previous levels, the rate of deal closure in the K3
Products Division is slowing and further restructuring is still required. In
light of these prospects and the factors described below, the Board does not
believe that K3's future is best served by its continued admission to AIM.
Accordingly, the Board has now concluded that the De-Listing, following
completion of the Tender Offer, is in the best interests of the Company and
its Shareholders as a whole.
Whether or not the De-Listing Resolution is approved, the Board's focus
remains on delivering value to Shareholders. It is expected that this will be
achieved by maintaining strong financial discipline, continuing to simplify
the Group, as appropriate, through the sale of non-core businesses and to
judiciously invest in profitable growth opportunities. As further value is
realised and cash generated, the Board intends to return this to Shareholders
on a timely basis.
In reaching its conclusion in relation to the De-Listing, in addition to the
Group's trading prospects described above, the Board has also considered the
following factors:
• the scale and structure of the UK Small Cap market has changed
for the foreseeable future and K3 is too small to be of interest to the vast
majority of a reducing number of investors in UK publicly-quoted companies;
• In the opinion of the Board, the Tender Offer represents a
near term opportunity for Qualifying Shareholders to realise a large part of
the current value of their investment in the Company for cash;
• in the opinion of the Board, the level of free float in the
shares of the Company is not of a scale to attract sufficient interest from
institutional and other investors and it is difficult therefore to create a
more liquid market for its Shares to effectively or economically utilise its
AIM quotation;
• in light of the limited trading in the Shares, the costs
associated with maintaining the AIM quotation are considered by the Directors
to be disproportionately high when compared to the benefits, and the Board
believes that these funds could be better utilised; and
• the management time and the legal and regulatory burden
associated with maintaining the Company's admission to trading on AIM is, in
the Directors' opinion, disproportionate to the benefits to the Company.
If the De-Listing Resolution is not approved by Shareholders the Company will
remain liable for the ongoing professional and related costs associated with
maintaining its admission to AIM, which amounted to approximately £0.3
million during FY24.
Further information in relation to the proposed De-Listing is set out in
paragraph 5 below.
3. The Tender Offer
The Tender Offer will be implemented on the basis that Cavendish will acquire,
as principal, the successfully tendered Shares from all Shareholders (other
than certain Overseas Shareholders) ("Tendered Shares"). Full details of the
Tender Offer, including the terms and conditions on which it is being made,
are set out in Part 3 of the Circular and, in relation to Shareholders holding
Shares in a certificated form, on the Tender Form to be sent to them.
The Tender Offer is conditional on the passing of Resolution 1 (which will be
proposed as an ordinary resolution) set out in the notice of General Meeting
at the end of the Circular and the satisfaction of the other Conditions
specified in Part 3 of the Circular.
The Tender Offer (subject to the overriding terms and conditions set out in
Part 3 of the Circular) involves the following:
• The Tender Offer is being made to all Shareholders (other than
certain Overseas Shareholders) for the purchase of up to 34,117,647 Shares.
Under the Tender Offer, each Shareholder is entitled to have up to 74.3 per
cent. of his or her shareholding (representing his/her Basic Entitlement)
purchased by Cavendish at the Tender Price together with potentially further
purchases depending on the number of Shares tendered by other Shareholders.
Basic Entitlements will be calculated by the Receiving Agent as at the Record
Date by reference to the Qualifying Shareholder's holding of Shares as at that
date.
• The Tender Offer is being made at a price of 85 pence per
Share, being the closing mid-market price on the Latest Practicable Date, for
a maximum aggregate consideration of approximately £29.0 million.
• Successfully Tendered Shares will be purchased free of
commission and dealing charges.
• Shareholders (other than certain Overseas Shareholders) will
be able to decide to tender none, some or all of their Shares within the
overall limits of the Tender Offer.
• Tenders in excess of a Shareholders' Basic Entitlement can
only be accepted to the extent that other Shareholders tender less than their
Basic Entitlement or do not tender any Shares.
• All Shares validly tendered by any Shareholder up to their
Basic Entitlement are intended to be accepted in full.
• The Tender Form to be completed by Shareholders who hold their
Shares in certificated form contains a box to enable those Shareholders who
wish to tender their Basic Entitlement to do so (Box 2A). If Shares are held
in certificated form and this box is ticked, the Receiving Agent will
calculate Basic Entitlements on the Record Date. If Shareholders wish to
tender a different number of Shares to their Basic Entitlement, such number of
Shares can be inserted in the alternate box provided on the Tender Form (Box
2B).
• Shareholders who hold their Shares in uncertificated form
(i.e. in CREST) and who wish to tender their Basic Entitlement should send a
TTE instruction through CREST to the member account set out in paragraph
3.3(v) of Part 3 of the Circular. The Receiving Agent will calculate Basic
Entitlements on the Record Date and return any excess Shares. If Shareholders
wish to tender a different number of Shares to their Basic Entitlement, they
should send a TTE Instruction through CREST to the same member account
specifying such number of Shares that they wish to tender.
• If the total number of Shares validly tendered by all
Shareholders equates to a number greater than 34,117,647 Shares, tenders are
intended to be accepted in the order set out below:
- all Shares validly tendered by any Shareholder up to their Basic
Entitlement are intended to be accepted in full; and
- all Shares validly tendered by Shareholders in excess of their
Basic Entitlements will be satisfied at the discretion of the Board. The
number of Shares to be purchased in the Tender Offer will not, in any event,
exceed 34,117,647 Shares.
• All successfully Tendered Shares purchased by Cavendish will
be repurchased from Cavendish by the Company pursuant to the Repurchase
Agreement and will be immediately cancelled and will not rank for any future
dividends.
• Any rights of Shareholders who choose not to tender their
Shares will be unaffected, however, the reduction in the Company's issued
share capital is likely to result in a further reduction in the liquidity of
the Shares in the secondary market. Attention is also drawn to section 5 below
regarding the effects of the De-Listing.
Shareholders who are in any doubt as to the contents of the Circular or as to the action to be taken should immediately consult their stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under FSMA.
4. Repurchase Agreement
Under the Repurchase Agreement, the parties have agreed that, subject to,
amongst other things, the sum of approximately £29.0 million (equal to the
Tender Price multiplied by the maximum number of Shares that could be
repurchased under the Tender Offer) being received by Cavendish (or its
custodian) by no later than 5.00 p.m. on 23 July 2025 (or such later time
and/or date as may be agreed by Cavendish and the Company) and the Tender
Offer becoming unconditional in all respects and not lapsing or terminating in
accordance with its terms, Cavendish shall, as principal, purchase, "on
exchange", at the Tender Price, Shares successfully tendered to it, up to a
maximum aggregate value, at the Tender Price, of approximately £29.0 million.
The Company has agreed that, immediately following the purchase by Cavendish
of all Shares which it has agreed to purchase as principal under the terms of
the Tender Offer, the Company will purchase from Cavendish all such Shares at
a price per Share equal to the Tender Price. All transactions will be carried
out on the London Stock Exchange.
Under the Repurchase Agreement, the Company has agreed to cancel any Shares
purchased by it under the Tender Offer. The Repurchase Agreement contains
certain warranties from Cavendish in favour of the Company concerning its
authority to enter into the Repurchase Agreement and to make the purchase of
Shares pursuant thereto. The Repurchase Agreement also contains warranties and
undertakings from the Company in favour of Cavendish and incorporates an
indemnity in favour of Cavendish in respect of any liability which it may
suffer in relation to the performance of its obligations under the Tender
Offer. The Company will also be liable to pay Cavendish's fees, costs and
expenses under the terms of Cavendish's engagement by the Company in
connection with the Tender Offer.
5. The De-Listing
a) Effects of the De-Listing
The principal effects of the De-Listing will be that:
• there will not be a formal market mechanism enabling the
Shareholders to trade Shares;
• while the Shares will remain freely transferrable, it is
possible that the liquidity and marketability of the Shares will, in the
future, be more constrained than at present and the value of such shares may
be adversely affected as a consequence. Shareholders will note however, as set
out above, that the Directors believe that the existing liquidity in the
Shares is, in any event, limited. Shareholders should also note that the
Directors intend to establish the Matched Bargain Facility with effect from
De-Listing, as referred to below, though no representation is made that this
will guarantee liquidity in the future;
• in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their investment
in the Company at any given time;
• the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no longer apply and
the Company will no longer be subject to UK MAR or the Disclosure Guidance and
Transparency Rules and so will therefore no longer be required to disclose
significant shareholdings in the Company;
• Shareholders will no longer be afforded the protections given
by the AIM Rules and the requirement that the Company seek Shareholder
approval for certain corporate actions, where applicable, including
substantial transactions, reverse takeovers, and fundamental changes in the
Company's business;
• the levels of transparency and corporate governance within the
Company may not be as stringent as for a company quoted on AIM;
• Cavendish will cease to be the Company's nominated adviser and
the Company will cease to have a broker;
• stamp duty will be payable on transfers of Shares as the
Shares will no longer be traded on AIM; and
• the De-Listing may have personal taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax position
should consult their own professional independent tax adviser.
Shareholders should note that the Takeover Code will continue to apply to the
Company provided its registered office is in the UK, the Channel Islands or
the Isle of Man for a period of two years following the date of the
De-Listing. After this period, the Code will cease to apply to the Company.
Further details regarding the scope and applicability of the Takeover Code are
set out in paragraph 8 below.
The Company will also continue to be bound by the Companies Act (which
requires shareholder approval for certain matters) following the De-Listing.
The above considerations are not exhaustive, and Shareholders should seek
their own independent advice when assessing the likely impact of the
De-Listing on them.
b) Process for De-Listing
Under the AIM Rules, the De-Listing can only be effected by the Company after
securing a special resolution of Shareholders in a general meeting and the
expiry of a period of 20 clear Business Days from the date on which notice of
the De-Listing is given to the London Stock Exchange. In addition, a period of
at least five clear Business Days following Shareholders' approval of the
De-Listing is required before the De-Listing may become effective. The Notice
of General Meeting contains a special resolution which seeks the approval of
Shareholders for the De-Listing. Assuming that the De-Listing Resolution is
approved, the De-Listing is expected to take place at 7.00 a.m. on 30 July
2025.
c) Provision of information, services and facilities following the De-Listing
The Company currently intends to continue to provide certain information,
services and facilities to Shareholders following the De-Listing. The Company
intends to:
• continue to communicate information about the Company
(including annual accounts) to its Shareholders, as required by the Companies
Act;
• continue, for at least 12 months following the Cancellation,
to maintain its website, www.k3btg.com (http://www.k3btg.com/) and to post
updates on the website from time to time, although Shareholders should be
aware that there will be no obligation on the Company to include all of the
information required under the Disclosure Guidance and Transparency Rules, AIM
Rule 26, UK MAR or to update the website as currently required by the AIM
Rules; and
• make available to Shareholders, by way of J P Jenkins' Matched
Bargain Facility, the means to buy and sell Shares on a matched bargain basis
following the De-Listing. J P Jenkins is an appointed representative of
Prosper Capital LLP, which is authorised and regulated by the FCA.
It is intended that the Matched Bargain Facility will operate for a minimum of
12 months after the De-Listing. The Directors' current intention is that it
will continue beyond that time but Shareholders should note that it could be
withdrawn and therefore inhibit the ability to trade the Shares. Further
details will be communicated to the Shareholders at the relevant time.
6. Overseas Shareholders
The attention of Qualifying Shareholders who are citizens, residents or
nationals of countries outside the UK wishing to participate in the Tender
Offer is drawn to paragraph 6 (entitled "Overseas Shareholders") in Part 3 of
the Circular.
7. Taxation
Qualifying Shareholders should be aware that there may be tax considerations
that they should take into account when deciding whether or not and/or the
extent to which to participate in the Tender Offer. A summary of the taxation
consequences of the Tender Offer for UK resident Shareholders is set out in
Part 5 of the Circular. It should be noted that this tax summary is merely a
guide to current tax law and practice in the UK. Shareholders are advised to
consult their own professional advisers regarding their own tax position.
8. Takeover Code
The Code is issued and administered by the Panel. The Code currently applies
to the Company and, accordingly, Shareholders are entitled to the protections
afforded by the Code.
The Code and the Panel operate principally to ensure that shareholders in an
offeree company are treated fairly and are not denied an opportunity to decide
on the merits of a takeover and that shareholders in the offeree company of
the same class are afforded equivalent treatment by an offeror. The Code also
provides an orderly framework within which takeovers are conducted. In
addition, it is designed to promote, in conjunction with other regulatory
regimes, the integrity of the financial markets.
The Code is based upon a number of General Principles, which are essentially
statements of standards of commercial behaviour. The General Principles apply
to takeovers and other matters to which the Code applies. They are applied by
the Panel in accordance with their spirit in order to achieve their underlying
purpose.
In addition to the General Principles, the Code contains a series of rules.
Like the General Principles, the rules are to be interpreted to achieve their
underlying purpose. Therefore, their spirit must be observed as well as their
letter. The Panel may derogate or grant a waiver to a person from the
application of a rule in certain circumstances.
The Takeover Code applies to any company which has its registered office in
the UK, the Channel Islands or the Isle of Man if any of its equity share
capital or other transferable securities carrying voting rights are admitted
to trading on a UK regulated market, a UK MTF, or a stock exchange in the
Channel Islands or the Isle of Man. The Code therefore applies to the Company
as its securities are admitted to trading on AIM, which is a UK multilateral
trading facility ("MTF").
The Code also applies to any company which has its registered office in the
UK, the Channel Islands or the Isle of Man if any of its securities were
admitted to trading on a UK regulated market, a UK MTF, or a stock exchange in
the Channel Islands or the Isle of Man at any time during the preceding two
years.
Accordingly, if the De-Listing is approved by Shareholders at the General
Meeting and becomes effective, the Code will continue to apply to the Company
for a period of two years after the De-Listing, following which the Code will
cease to apply to the Company.
While the Code continues to apply to the Company, a mandatory cash offer will
be required to be made if either:
(a) any person acquires an interest in shares which (taken together with
the shares in which the person or any person acting in concert with that
person is interested) carry 30 per cent. or more of the voting rights of the
company; or
(b) any person, together with persons acting in concert with that
person, is interested in shares which in the aggregate carry not less than 30
per cent. of the voting rights of a company but does not hold shares carrying
more than 50 per cent. of such voting rights and such person, or any person
acting in concert with that person, acquires an interest in any other shares
which increases the percentage of shares carrying voting rights in which that
person is interested.
Brief details of the Takeover Panel, and of the protections afforded by the
Code, are set out in Part 6 of the Circular.
Before voting on the De-Listing, Shareholders may want to take independent
professional advice from an appropriate independent financial adviser.
Cavendish will purchase, as principal, voting shares under the Tender Offer
which could result in Cavendish acquiring an interest in Shares carrying 30
per cent. or more of the voting rights of the Company. Promptly following such
purchase, under the terms of the Repurchase Agreement, Cavendish will sell all
such Shares to the Company and the Company will buy and thereafter cancel all
such Shares. Accordingly, a waiver has been obtained from the Panel on
Takeovers and Mergers in respect of the application of Rule 9 to the purchase
by Cavendish of the voting shares under the Tender Offer.
9. Action to be taken
General Meeting
Whether or not Shareholders intend to attend the General Meeting in person,
they are encouraged to submit a proxy vote online.
Shareholders can appoint proxies electronically via the MUFG Corporate Markets
Investor Centre app or via the web browser at
https://uk.investorcentre.mpms.mufg.com/ so that the instruction is received
by MUFG Corporate Markets by not later than 11.00 a.m. on 16 July 2025. CREST
members can also appoint proxies by using the CREST electronic proxy
appointment service and transmitting a CREST Proxy Instruction in accordance
with the procedures set out in the CREST Manual so that it is received by MUFG
Corporate Markets (under CREST participant RA10) by not later than 11.00 a.m.
on 16 July 2025. The time of receipt will be taken to be the time from which
MUFG is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST. An institutional investor may also be able to appoint a
proxy electronically via the Proxymity platform, a process which has been
agreed by the Company and approved by the Registrar. For further information
regarding Proxymity, please go to www.proxymity.io. (http://www.proxymity.io/)
If Shareholders are in any doubt as to the action they should take, they are
recommended to seek their own independent advice.
Tender Offer
Only Qualifying Shareholders whose names appeared on the Register as at 6.00
p.m. on the Record Date are able to participate in the Tender Offer in respect
of the Shares held as at that date. Qualifying Shareholders who hold Shares in
certificated form who have acquired Shares in the period between the date of
the Circular and the Record Date can obtain a Tender Form by contacting the
Receiving Agent as set out on page 15 of the Circular.
(a) Shares held in certificated form
Qualifying Shareholders who hold Shares in certificated form and who wish to
participate in the Tender Offer should follow the instructions on the Tender
Form provided to them and return it to the Receiving Agent, together with
their share certificates or other document(s) of title, to arrive by no later
than 1.00 p.m. on 18 July 2025. Qualifying Shareholders who hold their Shares
in certificated form should also send their original share certificate(s) in
respect of the Shares tendered with their Tender Form.
(b) Shares held in uncertificated form
Qualifying Shareholders who hold their Shares in uncertificated form (that
is, in CREST) and who wish to participate in the Tender Offer should tender
electronically through CREST so that the TTE Instruction settles no later than
1.00 p.m. on 18 July 2025.
Further details of the procedures for tendering and settlement are set out in
Part 3 of the Circular.
Shareholders who do not wish to participate in the Tender Offer should not
complete the Tender Form and should not make or arrange for a TTE Instruction.
10. General
Any repurchase of Shares pursuant to the Repurchase Agreement will be
financed solely from the Company's existing cash resources. No borrowings
will be incurred by the Company in respect of any repurchase of Shares
pursuant to the Repurchase Agreement.
If Shareholders choose not to tender their Shares under the Tender Offer,
their holding will be unaffected, save for the fact that, assuming the
successful completion of the Tender Offer and subsequent repurchase of Shares
by the Company, they will end up holding a greater percentage of the issued
share capital of the Company than they did before the Tender Offer as there
will be fewer Shares in issue after completion of the Tender Offer and
subsequent repurchase of Shares. Attention is also drawn to section 5 above
regarding the De-Listing.
11. Irrevocable undertakings
The Company has received irrevocable undertakings to tender Shares under the
Tender Offer from Kestrel and PJ Claesson pursuant to which they have each
committed to tender for no less than their Basic Entitlements in the Tender
Offer and to vote in favour of the Tender Offer Resolution in respect of their
current holdings of 13,274,493 Shares and 11,321,780 Shares respectively
amounting to 53.5 per cent. in aggregate of the current issued share capital.
12. Related party transaction
The entering into by the Company of the undertakings referred to in paragraph
11 above constitute related party transactions under AIM Rule 13. Both Kestrel
and PJ Claesson are substantial shareholders of the Company as defined in the
AIM Rules for Companies. The independent Directors consider that, having
consulted with the Company's nominated adviser, Cavendish, the terms of these
undertakings are fair and reasonable insofar as Shareholders are concerned. As
a partner of and being beneficially interested in Kestrel and in 355,360
Shares held within funds managed by Kestrel, Oliver Scott is not deemed to be
an independent Director for these purposes.
13. Issued Shares following the Tender Offer
Assuming that the maximum number of Shares under the Tender Offer are bought
back by the Company and cancelled, the Company's issued share capital will be
reduced by 34,117,647 Shares to 11,814,732 Shares. An announcement setting out
the Company's new issued share capital for the purposes of making DTR 5.1.2
notifications will be made following any purchase by the Company of Shares
from Cavendish in relation to the Tender Offer.
14. Further information
Shareholders' attention is drawn to the information contained in the rest of
the Circular, including, in particular, the terms and conditions of the Tender
Offer in Part 3 of the Circular.
15. Recommendation
The Board considers the Resolutions to be in the best interests of
Shareholders as a whole. Accordingly, the Board recommends that Shareholders
vote in favour of the Resolutions to be proposed at the General Meeting, as
the Directors intend to do for their respective individual beneficial
holdings of, in aggregate, 65,286 Shares, representing approximately 0.14 per
cent. of the Company's issued share capital as at the Latest Practicable Date.
Oliver Scott, Tom Crawford and Lavinia Alderson also intend to tender for no
less than their Basic Entitlements in respect of their current shareholdings
(amounting to 0.14 per cent. in aggregate of the current issued share
capital).
The Directors are making no recommendation to Qualifying Shareholders in
relation to participation in the Tender Offer itself. If Shareholders are in
any doubt as to the action they should take, they are recommended to seek
their own independent advice.
DEFINITIONS
"AIM" the AIM Market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies published by the London Stock Exchange from time
to time
"Basic Entitlement" 74.3 per cent. (rounded down to the nearest whole number) of the Shares held
by the Qualifying Shareholder on the Record Date
"Board" the board of Directors, including any duly constituted committee thereof
"Business Day" any day other than a Saturday, Sunday or public holiday in England and Wales
and Jersey on which clearing banks in London and St Helier are open for
general banking business
"Cavendish" Cavendish Capital Markets Limited, nominated adviser and broker to the Company
"certificated" or not in uncertificated form
"in certificated form"
"Circular" the document posted to Shareholders dated 2 July 2025
"Company" K3 Business Technology Group Plc
"CREST" the facilities and procedures for the time being of the relevant system of
which Euroclear has been approved as operator pursuant to the CREST
Regulations
"CREST Manual" the compendium of documents entitled CREST Manual issued by Euroclear from
time to time and comprising the CREST Reference Manual, the CREST Central
Counterparty Service Manual, the CREST International Manual, the CREST Rules,
CCSS Operations Manual and the CREST Glossary of Terms
"CREST member" a person who has been admitted by Euroclear as a system-member (as defined in
the CREST Regulations)
"CREST participant" a person who is, in relation to CREST, a system participant (as defined in the
CREST Regulations)
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
"De-Listing" the proposed cancellation of admission of the Shares to trading on AIM
"De-Listing Resolution" Resolution 2, which is proposed as a special resolution, to approve the
De-Listing, as set out in the Notice of General Meeting
"Directors" the directors of the Company, whose names appear on page 5 of the Circular
"Euroclear" Euroclear UK & International Limited, the operator of CREST
"FCA" Financial Conduct Authority
"FSMA" the Financial Services and Markets Act 2000
"General Meeting" the general meeting of the Company convened for 11.00 a.m. on 18 July 2025 in
accordance with the Notice set out at the end of the Circular
"Group" the Company and/or any or all of its existing subsidiaries and subsidiary
undertakings
"Latest Practicable Date" 1 July 2025, being the latest practicable date prior to the publication of the
Circular
"MUFG Corporate Markets" a trading name of MUFG Corporate Markets Limited
"London Stock Exchange" London Stock Exchange plc
"Matched Bargain Facility" the unregulated matched bargain trading facility operated by J P Jenkins
"NexSys" the Company's former subsidiary, NexSys Solutions Limited, sale of which was
completed on 6 January 2025
"Nexsys Disposal" the Company's sale of NexSys which was completed on 6 January 2025 for cash
consideration of approximately £36 million
ordinary shares of 5p each in the capital of the Company (and each a "Share")
"Shares"
"Overseas Shareholders" a Shareholder who is resident in, or a citizen of, a jurisdiction outside the
United Kingdom
"Panel" the Panel on Takeovers and Mergers
"Qualifying Shareholders" Shareholders on the Register at the Record Date other than those who are
Restricted Shareholders
"Receiving Agent" MUFG Corporate Markets
"Record Date" the record date for the Tender Offer, being 6.00 p.m. on 18 July 2025
"Register" the register of Shareholders
"Regulatory Information Service" a regulatory information service approved by the FCA and on the list of
regulatory information services maintained by the FCA
"Repurchase Agreement" the agreement dated 2 July 2025 between the Company and Cavendish whereby the
Company has agreed to purchase, and Cavendish has agreed to sell to the
Company, as an on-market purchase and at a price per Share equal to the Tender
Price, all of the Shares purchased by Cavendish pursuant to the Tender Offer
as summarised in paragraph 4 of Part 1 of the Circular
"Resolutions" together, the resolutions to be proposed at the General Meeting in relation to
the Tender Offer and the Delisting
"Restricted Jurisdiction" any of the following jurisdictions: Australia; Canada; Japan; New Zealand; the
Republic of South Africa; or the United States
"Restricted Shareholder" a Shareholder who is a resident in, or a citizen or national of, a Restricted
Jurisdiction or any other jurisdiction where the mailing of the Circular or
the Tender Form in, into or from such jurisdiction would constitute a
violation of the laws of such jurisdiction
"Shareholders" holders of Shares
"Takeover Code" The City Code on Takeovers and Mergers
"Tender Form" the tender form issued by the Company for use by certificated Shareholders in
connection with the Tender Offer
"Tender Offer" the invitation by Cavendish to Shareholders (other than Restricted
Shareholders) to tender up to 34,117,647 Shares in aggregate, representing
approximately 74.3 per cent. of the Shares in issue on the Record Date, for
purchase on the terms and subject to the conditions set out in the Circular
and, where applicable, the Tender Form
"Tender Offer Resolution" Resolution 1, which is proposed as an ordinary resolution, to approve the
Tender Offer, as set out in the Notice of General Meeting
"Tender Price" the fixed price of 85 pence per Share at which Shares will be purchased
pursuant to the Tender Offer
"TTE Instruction" a transfer to escrow instruction (as defined by the CREST Manual)
"uncertificated form" or recorded in the Register as being held in uncertificated form in CREST and
"in uncertificated form" title to which may be transferred by means of CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland
"UK MAR" the Market Abuse Regulation (EU) No. 596/2014 as it forms part of English law
by virtue of the European Union (Withdrawal) Act 2018
"United States" or "US" the United States of America, its territories and possessions, any state of
the United States and the District of Columbia
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