REG - Kape Technologies - Response to Revised and Final Cash Offer

Kape TechnologiesAnnouncement

20/04/2023 08:15

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RNS Number : 8884W  Kape Technologies PLC  20 April 2023

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, 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.

 

FOR IMMEDIATE RELEASE

 

20 April 2023

 

Kape Technologies plc

("Kape," the "Company" or the "Group")

 

Response to Revised and Final Cash Offer

 

The independent directors of Kape, being all of the directors of Kape except
Pierre Lallia, who is a nominee of Unikmind Holdings Ltd (the "Independent
Directors"), note the announcement by Unikmind Holdings Ltd ("Unikmind") made
earlier today of a revised, improved and final cash offer to acquire the
entire issued and to be issued share capital of the Company not already held
by Unikmind at a price of US$3.60 per share, (the "Revised Offer Price" and
the "Revised Offer"). The Revised Offer Price is indicatively equivalent to
290 pence per Kape share based on the exchange rate of £1:US$1.2430 as at 20
April 2023 as derived from data provided by Bloomberg ("Revised Offer Exchange
Rate").

The Revised Offer represents (at the Revised Offer Exchange Rate) a premium
of:

·    26.5 per cent. to the closing price of 229 pence per Ordinary Share
on 8 December 2022 (being the day before the Initial Price Proposal (as
defined in the Rule 2.7 announcement of 9 December 2022) was made to Kape);
and

·    11.4 per cent. to the Closing Price of 260 pence per Ordinary Share
on 10 February 2023 (being the day before Unikmind made a cash offer at
US$3.44 per share (the "Original Offer Price") for the entire issued and to be
issued ordinary share capital of Kape not already held by it (the "Offer").

The Original Offer Price was indicatively equivalent to 277 pence per ordinary
share based on the Revised Offer Exchange Rate of £1:US$1.2430. The Revised
Offer Price therefore represents an indicative improvement in the Offer of 13
pence per ordinary share based on the Revised Offer Exchange Rate.

Further details of the Offer were set out in the offer document sent by
Unikmind to Kape's shareholders on 6 March 2023. The Independent Directors
note that Unikmind intends to publish a revised offer document on 21 April
2023 giving further details of the Revised Offer.

On 20 March 2023, the Company published a response document ("First Response
Document") to Kape Shareholders, noting that the Independent Directors, having
been so advised by Shore Capital and Citi on the financial terms of the Offer,
believed that the Offer price of $3.44 for each Kape Share materially
undervalued Kape and its future prospects.

The Independent Directors, advised by Citi and Shore Capital, have explored
alternatives to the Offer to realise greater value for shareholders and the
Company has spoken to third parties in order to gauge their interest in making
an alternative offer for the Company. Any such alternative offer would almost
certainly require the approval of the majority shareholders of Kape and there
is no certainty that Unikmind (which is the majority shareholder of Kape)
would support any such proposal even if it were to be recommended by the
Independent Directors. Despite interest, no firm proposal from a third party
has been received and the Company is no longer in discussions with any third
party.

View of the Independent Directors

 

The Independent Directors, having been so advised by Shore Capital and Citi on
the financial terms of the Revised Offer, are of the view that the Revised
Offer undervalues Kape and its future prospects. In providing their advice,
Shore Capital and Citi have taken into account the commercial assessments of
the Independent Directors.

Position of Dan Pomerantz

As set out in the announcement made by Unikmind, Dan Pomerantz, one of the
Independent Directors, who is beneficially interested in 25,375,642 Ordinary
Shares (c.5.92% of the total issued share capital of Kape (excluding ordinary
shares held in treasury) ("Issued Share Capital")), Peter Burchhardt, who is
beneficially interested in 24,320,814 Ordinary Shares (c.5.67% of Kape's
Issued Share Capital), Ran Greenberg, who is beneficially interested in
2,870,145 Ordinary Shares (c.0.67% of Kape's Issued Share Capital) and Ariel
Hochstadt, who is beneficially interested in 2,870,146 Ordinary Shares
(c.0.67% of Kape's Issued Share Capital) have irrevocably undertaken to accept
the Revised Offer.

Whilst Dan Pomerantz continues to believe that the intrinsic value of Kape is
higher than the monetary value ascribed to it by the Revised Offer, he has
concluded that, given his substantial interest in Kape and the value of that
interest, any opportunity to exit that interest in full in the future will be
severely reduced if either the Revised Offer is successful and Unikmind is
able to delist Kape from AIM, or if the Revised Offer does not proceed and
Kape remains as a listed entity with Unikmind retaining its controlling
interest. Accordingly, and when balancing the additional increase in the
Revised Offer Price of US$3.60 against the original Offer price of US$3.44
with the limited liquidity in the stock and the risks associated with a
potential de-listing, he has decided to accept the Revised Offer.

 

Other considerations

Unikmind will declare the Revised Offer unconditional if it reaches a level of
acceptances that, when aggregated with the Kape Shares already held by
Unikmind (together with any Kape Shares acquired or agreed to be acquired by
Unikmind), represents Kape Shares carrying in aggregate at least 70% of the
voting rights exercisable at a general meeting of Kape. Taking account of the
intentions of Dan Pomerantz, Peter Burchhardt, Ran Greenberg and Ariel
Hochstadt and Unikmind's existing holding of Kape Shares, Unikmind has now
holds or has received acceptances and irrevocable commitments in respect of
not less than 287,900,706 Ordinary Shares, equal to c.67.15 % of Kape's Issued
Share Capital.

In the First Response Document, the Independent Directors set out that if
Unikmind was to be successful in passing a delisting resolution in respect of
Kape and Kape ceased to be admitted to trading on AIM, Shareholders who had
not accepted the Offer would own shares in an unlisted company and, as
minority shareholders, would not be afforded the same level of protection as
was afforded to them whilst Kape remained admitted to trading on AIM,
including in relation to the upstreaming of funds from Kape to Unikmind.
Consequently, the liquidity, marketability and realisable value of Kape Shares
would likely be adversely affected and Shareholders' ability to dispose of
their Kape Shares would likely be materially reduced.

For this reason, the Independent Directors remain of the view that were
Unikmind to become successful in obtaining sufficient voting rights in Kape to
make the passing of a delisting resolution likely, Kape Shareholders would
have to seriously consider accepting the Revised Offer. Kape Shareholders who
anticipate realising greater value in their Kape Shares in the future, whilst
recognising and being willing to accept the risks associated with remaining as
an investor in an unlisted company controlled by Unikmind, may wish to remain
as shareholders in Kape in the event that Unikmind is successful in obtaining
sufficient voting rights in Kape to make the passing of a delisting resolution
likely.

The Independent Directors will write to Kape shareholders formally with their
views on the Revised Offer shortly.

The Independent Directors, excluding Dan Pomerantz, who are beneficially
interested in 947,375 Kape Shares in aggregate, representing approximately
0.22 per cent. of Kape's Issued Share Capital, do not intend to accept the
Revised Offer in respect of such Kape Shares at this time.

 Enquiries:

 Kape Technologies Plc                                                           via Vigo Consulting

 Ido Erlichman, Chief Executive Officer

 Oded Baskind, Chief Financial Officer

 Shore Capital (Joint Financial Adviser (Rule 3), Nominated Adviser & Joint      +44 (0)20 7408 4090
 Broker)

 Simon Fine / Toby Gibbs / Mark Percy / James Thomas / Iain Sexton

 Citigroup Global Markets Limited (Joint Financial Adviser)                      +44 (0)20 7986 4000

 Yishai Fransis / Simon Lindsay / David Ibanez / Robert Farrington
 Vigo Consulting (Financial Public Relations)                                    +44 (0)20 7390 0237

 Jeremy Garcia / Kendall Hill

 kape@vigoconsulting.com

 

 

Shore Capital is providing independent advice to Kape pursuant to Rule 3 of
the Takeover Code.

Bryan Cave Leighton Paisner LLP is acting as legal adviser to Kape in
connection with the Offer.

About Kape

Kape is a leading 'privacy-first' digital security software provider to
consumers. Through its range of privacy and security products, Kape focuses on
protecting consumers and their personal data as they go about their daily
digital lives.

Kape has c. 7.4 million paying subscribers, supported by a team of over 1,400
people across ten locations worldwide. Kape has a proven track record of
revenue and EBITDA growth, underpinned by a strong business model which
leverages our digital marketing expertise.

Through its subscription-based platform, Kape has fast established a highly
scalable SaaS-based operating model, geared towards capitalising on the vast
global consumer digital privacy market.

www.kape.com (http://www.kape.com)

Important Notice

 

This announcement is not intended to, and does not, constitute or form part of
any offer, invitation or solicitation of any offer to purchase, otherwise
acquire, subscribe for, sell or otherwise dispose of, any securities or the
solicitation of any vote or approval in any jurisdiction, whether pursuant to
this announcement or otherwise.

 

The release, distribution or publication of this announcement in jurisdictions
outside the United Kingdom may be restricted by laws of the relevant
jurisdictions and therefore persons into whose possession this announcement
comes should inform themselves about, and observe, any such restrictions. Any
failure to comply with the restrictions may constitute a violation of the
securities law of any such jurisdiction.

 

Disclaimer

Shore Capital and Corporate Limited ("Shore Capital") which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority is acting
as joint financial adviser (Rule 3) and nominated adviser to Kape and no one
else in connection with the matters described in this announcement, and will
not be responsible to anyone other than Kape for providing the protections
afforded to clients of Shore Capital nor for providing advice in connection
with the Revised Offer, or any other matters referred to in this announcement.
Neither Shore Capital nor any of its affiliates, directors or employees owes
or accepts any duty, liability or responsibility whatsoever (whether direct or
indirect, consequential, whether in contract, in tort, in delict, under
statute or otherwise) to any person who is not a client of Shore Capital in
connection with this announcement, any statement contained herein, the Revised
Offer or otherwise. Shore Capital has given, and not withdrawn, its consent to
the inclusion in this announcement of the references to its name in the form
and context in which they appear.

 

Citigroup Global Markets Limited ("Citi"), which is authorised by the
Prudential Regulation Authority ("PRA") and regulated in the UK by the
Financial Conduct Authority ("FCA") and the PRA, is acting as joint financial
adviser for Kape and for no one else in connection with the matters described
in this announcement and will not be responsible to anyone other than Kape for
providing the protections afforded to clients of Citi nor for providing advice
in connection with the Revised Offer, or any other matters referred to in this
announcement. Neither Citi nor any of its affiliates, directors or employees
owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, consequential, whether in contract, in tort, in delict,
under statute or otherwise) to any person who is not a client of Citi in
connection with this announcement, any statement contained herein, the Revised
Offer or otherwise. Citi has given, and not withdrawn, its consent to the
inclusion in this announcement of the references to its name in the form and
context in which they appear.

 

Relevant securities in issue

In accordance with Rule 2.9 of the City Code on Takeovers and Mergers, Kape
(AIM: KAPE), the consumer security software business, confirms that as at
today's date, it has in issue and admitted to trading on the AIM market of the
London Stock Exchange, 428,730,880 ordinary shares of US$0.0001 each
(excluding ordinary shares held in treasury). The Company holds 2,543,924
Ordinary Shares in treasury and the Kape Technologies plc Employee Benefit
Trust holds 4,000,000 Ordinary Shares, the voting rights to which have been
waived. The total number of shares attracting voting rights is therefore
424,730,880. The International Securities Identification Number (ISIN) of the
ordinary shares is IM00BQ8NYV14.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% 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 pm
(London time) on the 10th business day following the commencement of the offer
period and, if appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any 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%
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 pm (London
time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.Opening Position
Disclosures must also be made by the offeree company and by any offeror and
Dealing Disclosures must also be made by the offeree company, by any offeror
and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).

Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. You should contact the Panel's Market Surveillance Unit on
+44 (0)20 7638 0129 if you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure.

Rule 26.1 disclosure

A copy of this announcement will be available (subject to certain restrictions
relating to persons resident in restricted jurisdictions) on Kape's website at
www.kape.com/investors by no later than 12 noon (London time) on 21 April
2023. The content of the website referred to in this announcement is not
incorporated into and does not form part of this announcement.

 

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