REG - Kindred Group PLC 32Red Plc - RECOMMENDED CASH OFFER for 32Red by Kindred Group <Origin Href="QuoteRef">KINDsdb.ST</Origin> <Origin Href="QuoteRef">TTRL.L</Origin> - Part 2
23/02/2017 07:08
- Part 2: For the preceding part double click ID:nRSW6176Xa
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom or Gibraltar should inform themselves of, and observe, any
applicable requirements.
Forward Looking Statements
This announcement contains statements about Kindred and 32Red that are or may
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", "anticipates", "estimates", "projects" 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 Kindred's or 32Red's operations and potential
synergies resulting from the Offer; and (iii) the effects of government
regulation on Kindred's or 32Red's business.
Such forward looking statements involve 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. 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. Each
of Kindred and 32Red disclaims any obligation to update any forward looking or
other statements contained herein, except as required by applicable law.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate
for any period and no statement in this announcement should be interpreted to
mean that earnings or earnings per share for Kindred or 32Red, as appropriate,
for the current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share for Kindred or 32Red,
as appropriate.
Disclosure requirements
32Red is a Gibraltar company and is therefore not subject to the Code.
Accordingly, shareholders of 32Red and others dealing in 32Red Shares are not
obliged to disclose any of their dealings under the provisions of the Code.
However, market participants are requested to make disclosure of dealings as
if the Code applied and as if 32Red were in an "offer period" under the Code.
32Red Shareholders and persons considering the acquisition or disposal of any
interest in 32Red Shares are reminded that they are subject to the Disclosure
Guidance and Transparency Rules made by the UKLA and other applicable
regulatory rules regarding transactions in 32Red Shares.
If you are in any doubt as whether or not you should disclose dealings, you
should contact an independent financial adviser authorised by the Financial
Conduct Authority under the FSMA (or, if you are resident in a jurisdiction
other than the United Kingdom, a financial adviser authorised under the laws
of such jurisdiction).
In light of the foregoing, as provided in Rule 8.3(a) of the Code, any person
who is "interested" in one per cent. or more of any class of "relevant
securities" of 32Red 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") is requested to
make an Opening Position Disclosure following the commencement of the "offer
period" which begins upon the release of this announcement.
An Opening Position Disclosure should contain details of the person's
interests and short positions in, and rights to subscribe for, any "relevant
securities" of each of (i) 32Red and (ii) Kindred. Persons to whom Rule 8.3(a)
would have applied had the Code been applicable are requested to make an
Opening Position Disclosure by no later than 3:30 p.m. (London time) on the
tenth Business Day following the commencement of the "offer period" which
begins upon the release of this announcement. Relevant persons who undertake
"dealings" in the relevant securities of 32Red or a "securities exchange
offeror" prior to the deadline for making an Opening Position Disclosure are
requested instead to make a Dealing Disclosure.
Rule 8.3(b) of the Code provides that if any person is, or becomes
"interested" (directly or indirectly) in one per cent. or more of any class of
"relevant securities" of an offeree or of any "securities exchange offeror",
all "dealings" in any "relevant securities" of that offeree or of any
"securities exchange offeror" (including by means of an option in respect of,
or a derivative referenced to, any such "relevant securities") should be
publicly disclosed in a Dealing Disclosure by no later than 3:30 p.m. (London
time) on the Business Day following the date of the relevant transaction. In a
situation where the Code applies, this requirement would continue until the
date on which any "offer" becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. Under Rule 8 of the Code, a Dealing Disclosure would 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 (i)
32Red and (ii) any "securities exchange offeror", save to the extent that
these details have previously been disclosed under Rule 8.
Accordingly, in the case of both an Opening Position Disclosure and Dealing
Disclosure (if any), disclosures of interests in the shares of 32Red are
requested to be made.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire an "interest" in "relevant securities"
of 32Red or a "securities exchange offeror", they would, if the Code were
applicable, be deemed to be a single person for the purpose of Rule 8.3 of the
Code.
Consistent with the provisions of Rule 8.1 of the Code, Opening Position
Disclosures should be made by 32Red and by any "offeror", and all "dealings"
in "relevant securities" of 32Red by 32Red, by any "offeror" or by any persons
"acting in concert" with any of them, should be disclosed in a Dealing
Disclosure by no later than 12:00 p.m. (London time) on the Business Day
following the date of the relevant transaction.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
"securities". In particular, a person will be treated as having an "interest"
by virtue of the ownership or control of "securities", or by virtue of any
option in respect of, or derivative referenced to, "securities".
Terms in quotation marks are defined in the Code, which can be found on the
Panel's website. If you are in any doubt as to whether not you should disclose
a "dealing" by reference to the above, you should contact an independent
financial adviser authorised by the FCA under the FSMA.
It should be noted that, for the purposes of the above summary of Rule 8 of
the Code, Kindred is not treated as a "securities exchange offeror" and
therefore there is no requirement to disclose interests or dealings in shares
of Kindred.
Electronic Communications
Please be aware that addresses, electronic addresses and certain information
provided by 32Red Shareholders, persons with information rights and other
relevant persons for the receipt of communications from 32Red may be provided
to Kindred during the Offer Period as requested under Section 4 of Appendix 4
of the Code to comply with Rule 2.12(c) 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
Kindred's and 32Red's websites at www.kindredplc.com/ and www.32Redplc.com/
respectively by no later than 12 noon (London time) on the Business Day
following this announcement. For the avoidance of doubt, the contents of those
websites are not incorporated and do not form part of this announcement.
You may request a hard copy of this announcement by contacting the Company
Secretary of 32Red by submitting a request in writing to the Company Secretary
at 32 Red plc, 741 Europort, Gibraltar. You may also request that all future
documents, announcements and information to be sent to you in relation to the
Offer should be 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.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
Part A: Conditions of the Offer
The Offer will be subject to the following Conditions:
1. valid acceptances being received (and not, where permitted,
withdrawn) by no later than 1.00 p.m. (London time) on the first closing date
of the Offer (or such later time(s) and/or dates(s) as Kindred may, in
accordance with the Code, decide) in respect of 32Red Shares which, together
with all other 32Red Shares acquired by Kindred (whether pursuant to the Offer
or otherwise) constitute not less than 75 per cent. (or such lower percentage
as Kindred may decide) in nominal value of 32Red Shares and represent not less
than 75 per cent. (or such lower percentage as Kindred may decide) of the
voting rights carried by the 32Red Shares, provided that this condition will
not be satisfied unless Kindred and/or any of its wholly-owned subsidiaries
shall have acquired, or agreed to acquire, pursuant to the Offer or otherwise,
32Red Shares carrying more than 50 per cent. of the voting rights normally
exercisable at general meetings of 32Red, including for this purpose any such
voting rights attaching to any 32Red Shares that are unconditionally allotted
fully paid or issued before the Offer becomes or is declared unconditional as
to acceptances whether pursuant to the exercise of outstanding subscription or
conversion rights or otherwise and for the purposes of this condition:
(a) 32Red Shares which have been unconditionally allotted but not
issued shall be deemed to carry the voting rights which they will carry upon
issue; and
(b) valid acceptances shall be deemed to have been received in respect
of 32Red Shares which are treated as having been acquired or contracted to be
acquired by Kindred by virtue of acceptances of the Offer.
2. Subject as stated in Part B below, the Offer will be conditional
upon satisfaction of the following Conditions and, accordingly, the Offer will
not be declared or become unconditional in all respects unless such Conditions
(as amended if appropriate) have been satisfied or, where relevant, waived:
Licensing authority of Gibraltar change of control approval
(a) the approval by the Licensing Authority (Gambling Division) of HM
Government of Gibraltar of the acquisition by Kindred of 32Red Shares
representing more than 50 per cent. of the voting rights carried by the 32Red
Shares and any matters pursuant to such acquisition which relate to the
control, management and operation of 32Red;
UK Gambling Commission change of control approval
(b) the making of a determination by the UKGC pursuant to section
102(4)(a) of the UK Gambling Act in respect of all operating licences (as such
term is defined in the UK Gambling Act) held by members of the Wider 32Red
Group that all such operating licences shall continue to have effect following
the acquisition by Kindred of 32Red Shares representing more than 50 per cent.
of the voting rights carried by the 32Red Shares, such determination to be
made following an application in respect of the same submitted by 32Red to the
UKGC pursuant to section 102(2)(b) of the UK Gambling Act;
Cessation of 32Red's operations in Australia
(c) the cessation by 32Red of all of its online gambling services
(other than services required to return funds to players following such
cessation as soon as reasonably practicable) to, and the acceptance of bets
from, residents of Australia;
Other notifications, waiting periods and authorisations
(d) other than in respect of Conditions 2(a) and 2(b):
(i) all material notifications, filings or applications which are
necessary or are considered appropriate or desirable by Kindred (acting
reasonably) having been made in connection with the Offer and all appropriate
waiting periods (including any extensions thereof) under any applicable
legislation or regulation of any relevant jurisdiction having expired, lapsed
or been terminated (as appropriate);
(ii) all statutory and regulatory obligations in any jurisdiction
having been complied with in each case in respect of the Offer and all
Authorisations which are necessary or are reasonably considered appropriate in
any relevant jurisdiction for or in respect of the Offer and the acquisition
or the proposed acquisition of any shares or other securities in, or control
or management of, 32Red or any other member of the Wider 32Red Group by any
member of the Wider Kindred Group having been obtained in terms and in a form
reasonably satisfactory to Kindred from all appropriate Third Parties and
(without prejudice to the generality of the foregoing) from any persons or
bodies with whom any member of the Wider 32Red Group or the Wider Kindred
Group has entered into contractual arrangements in each case where the absence
of such Authorisation would have a material adverse effect on the Wider 32Red
Group taken as a whole; and
(iii) all such Authorisations remaining in full force and effect at the
time at which the Offer becomes or is declared unconditional in all respects
and there being no notice or intimation of an intention to revoke, suspend,
restrict, modify or not to renew any of such Authorisations;
General antitrust and regulatory
(e) other than in respect of Conditions 2(a) and (b), no antitrust
regulator or Third Party having announced or given notice of a decision to
take, institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference (and in each case, not having withdrawn
the same), or having required any action to be taken or otherwise having done
anything, or having enacted, made or proposed any statute, regulation,
decision, order or change to published practice (and in each case, not having
withdrawn the same) and there not continuing to be outstanding any statute,
regulation, decision or order which would or might reasonably be expected to:
(i) require, prevent or materially delay the divestiture or materially
alter the terms envisaged for such divestiture by any member of the Wider
Kindred Group or by any member of the Wider 32Red Group of all or any material
part of its businesses, assets or property or impose any material limitation
on the ability of all or any of them to conduct their respective businesses
(or any part thereof) or to own, control or manage any of their assets or
properties (or any material part thereof);
(ii) except pursuant to Part VIII of the Companies Act 2014 of
Gibraltar, require any member of the Wider Kindred Group or the Wider 32Red
Group to acquire or offer to acquire any shares, other securities (or the
equivalent) or interest in any member of the Wider 32Red Group or any member
of the Wider Kindred Group or any asset owned by any Third Party (other than
in the implementation of the Offer);
(iii) impose any material limitation on, or result in a material delay
in, the ability of any member of the Wider Kindred Group directly or
indirectly to acquire, hold or to exercise effectively all or any rights of
ownership in respect of shares or other securities in 32Red or on the ability
of any member of the Wider 32Red Group or any member of the Wider Kindred
Group directly or indirectly to hold or exercise effectively all or any rights
of ownership in respect of shares or other securities (or the equivalent) in,
or to exercise voting or management control over, any member of the Wider
32Red Group;
(iv) otherwise adversely affect (in any material respect) any or all of
the business, assets, profits or prospects of the Wider 32Red Group or the
Wider Kindred Group;
(v) result in any member of the Wider 32Red Group or any member of the
Wider Kindred Group ceasing to be able to carry on business under any name
under which, or in any jurisdiction in which it presently carries on
business;
(vi) make the Offer, its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control or management of,
32Red or any member of the Wider 32Red Group by any member of the Wider
Kindred Group void, unenforceable and/or illegal under the laws of any
relevant jurisdiction, or otherwise, directly or indirectly, materially
prevent or prohibit, restrict, restrain, or delay or otherwise materially
interfere with the implementation of, or impose material additional conditions
or obligations with respect to, or otherwise materially challenge, impede,
interfere with or require material amendment of, the Offer or the acquisition
or proposed acquisition of any shares or other securities in, or control or
management of, 32Red or any member of the Wider 32Red Group by any member of
the Wider Kindred Group;
(vii) require, prevent or materially delay a divestiture, or materially
alter the terms envisaged for such divestiture by any member of the Wider
Kindred Group or any member of the Wider 32Red Group of any shares or other
securities (or the equivalent) in any member of the Wider 32Red Group or any
member of the Wider Kindred Group; or
(viii) impose any material limitation on the ability of any member of the
Wider Kindred Group or any member of the Wider 32Red Group to conduct its
business or to integrate or co-ordinate all or any part of its business with
all or any part of the business of any other member of the Wider Kindred Group
and/or the Wider 32Red Group,
and all applicable waiting and other time periods (including any extensions
thereof) during which any such antitrust regulator or Third Party could decide
to take, institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under the laws of
any jurisdiction in respect of, or otherwise intervene in the Offer or the
acquisition or proposed acquisition of any 32Red Shares having expired, lapsed
or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
(f) except as Disclosed, there being no provision of any arrangement,
agreement, lease, licence, franchise, permit or other instrument to which any
member of the Wider 32Red Group is a party or by or to which any such member
or any of its assets is or may be bound, entitled or be subject, or any event
or circumstance, which, as a consequence of the Offer or the acquisition or
the proposed acquisition by any member of the Wider Kindred Group of any
shares or other securities (or the equivalent) in 32Red or any member of the
Wider 32Red Group or because of a change in the control or management of any
member of the Wider 32Red Group or otherwise, could or might reasonably be
expected to result in (in any case to an extent which is or would be material
in the context of the Wider 32Red Group or the Wider Kindred Group taken as a
whole):
(i) any material borrowings by, or any other material indebtedness,
actual or contingent, of, or any grant available to, any member of the Wider
32Red Group being or becoming repayable, or capable of being declared
repayable, immediately or prior to its or their stated maturity date or
repayment date, or the ability of any such member to borrow monies or incur
any indebtedness being withdrawn or inhibited or becoming capable of being
withdrawn or inhibited;
(ii) the creation, save in the ordinary and usual course of business,
or enforcement of any mortgage, charge or other security interest over the
whole or any material part of the business, property or assets of any member
of the Wider 32Red Group or any such mortgage, charge or other security
interest (whenever created, arising or having arisen) becoming enforceable;
(iii) any liability of any member of the Wider 32Red to make any
material severance, termination, bonus or other payment to any of its
directors, other officers or employees;
(iv) any such arrangement, agreement, lease, licence, franchise, permit
or other instrument being terminated or the rights, liabilities, obligations,
interests or business of any member of the Wider 32Red Group under any such
arrangement, agreement, licence, permit, lease or instrument or the interests
or business of any member of the Wider 32Red Group in or with any other person
or body or firm or company (or any arrangement or arrangement relating to any
such interests or business) being or becoming capable of being terminated, or
adversely modified or affected or any onerous obligation or liability arising
or any adverse action being taken thereunder;
(v) any member of the Wider 32Red Group ceasing to be able to carry on
business under any name under which it presently carries on business;
(vi) the value of, or the financial or trading position or prospects of,
any member of the Wider 32Red Group being prejudiced or adversely affected, in
each case, in a material respect;
(vii) the creation or acceleration of any material liability (actual or
contingent) by any member of the Wider 32Red Group other than the creation of
liabilities incurred in the ordinary course of business;
(viii) any material assets owned or used by any member of the Wider 32Red
Group or any interest in any such material asset, being or falling to be
disposed of or charged or ceasing to be available to such member or any right
arising under which any such material asset or interest could be required to
be disposed of or charged or could cease to be available to such member; or
(ix) any requirement on any member of the Wider 32Red Group to acquire,
subscribe, pay up or repay any shares or other securities (other than as
contemplated by the terms of the Offer),
and no event having occurred which, under any provision of any arrangement,
agreement, licence, permit, franchise, lease or other instrument to which any
member of the Wider 32Red Group is a party or by or to which any such member
or any of its assets is or will become bound, entitled or subject, would or
might reasonably be expected to result in any of the events or circumstances
as are referred to in Conditions 2(f)(i) to (ix) (inclusive);
Certain events occurring since 31 December 2016
(g) except as Disclosed and except, where relevant, as between 32Red
and wholly owned subsidiaries of 32Red or as between wholly owned subsidiaries
of 32Red, no member of the Wider 32Red Group having since, 31 December 2016:
(i) issued or agreed to issue, or authorised or proposed or announced
its intention to authorise or propose the issue of, additional shares of any
class, or securities or securities convertible into, or exchangeable for, or
rights, warrants or options to subscribe for or acquire, any such shares,
securities or convertible securities or transferred or sold or agreed to
transfer or sell or authorised or proposed the transfer or sale of 32Red
Shares out of treasury (except for the issue or transfer out of treasury of
32Red Shares on the exercise of employee share options or vesting of employee
share awards in the ordinary course under the 32Red Share Plans);
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution (whether
payable in cash or otherwise) other than the Approved Dividend;
(iii) other than pursuant to the Offer implemented, effected, authorised
or proposed or announced its intention to implement, effect, authorise or
propose any merger, demerger, reconstruction, amalgamation, scheme, commitment
or acquisition or disposal of assets (in each case otherwise than in the
ordinary course of business) or shares or loan capital (or the equivalent
thereof) in any undertaking or undertakings in any such case to an extent
which is material in the context of the Wider 32Red Group taken as a whole;
(iv) disposed of, or transferred, mortgaged or created any security
interest over any material asset or any right, title or interest in any
material asset or authorised, proposed or announced any intention to do so in
any such case to an extent which is material in the context of the Wider 32Red
Group taken as a whole;
(v) issued or authorised or proposed or announced an intention to
authorise or propose the issue of, or made any change in or to the terms of,
any debentures or become subject to any contingent liability or incurred or
increased any indebtedness which in any such case is material in the context
of the Wider 32Red Group taken as a whole;
(vi) entered into or varied or authorised, proposed or announced its
intention to enter into or vary any material contract, arrangement, agreement,
transaction or commitment (whether in respect of capital expenditure or
otherwise) which is of a long term, unusual or onerous nature or magnitude or
which is or which involves or which might reasonably be likely to involve an
obligation of a nature or magnitude which is reasonably likely to be
materially onerous on the business of any member of the Wider 32Red Group and
which, in any such case, when taken together with any other such material
transaction, arrangement, agreement, contract or commitment, is material in
the context of the Wider 32Red Group taken as a whole;
(vii) entered into or varied to a material extent the terms of, or made
any offer (which remains open for acceptance) to enter into or vary to a
material extent the terms of any contract, service agreement, commitment or
arrangement with any director or, except for salary increases, bonuses or
variations of terms, in the ordinary course of business, senior executive of
any member of the Wider 32Red Group;
(viii) proposed, agreed to provide or modified the terms of any share
option scheme, incentive scheme or other benefit relating to the employment or
termination of employment of any employee of the Wider 32Red Group which are
material in the context of the Wider 32Red Group taken as a whole, save as
agreed in writing between 32Red and Kindred;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities or reduced
or, except in respect of the matters mentioned in sub-paragraph (i) above,
made any other change to any part of its share capital;
(x) waived, compromised or settled any claim which is material in the
context of the Wider 32Red Group taken as a whole;
(xi) terminated or varied the terms of any agreement or arrangement
between any member of the Wider 32Red Group and any other person in a manner
which would or might reasonably be expected to have a material adverse effect
on the financial position of the Wider 32Red Group taken as a whole;
(xii) made any material alteration to its memorandum or articles of
association or other incorporation documents which in any such case is
material in the context of the Offer as a whole;
(xiii) except in relation to changes made as required by legislation or
changes to legislation, made or agreed or consented to any change to:
(a) the terms of the trust deeds and rules constituting the pension
scheme(s) established by any member of the Wider 32Red Group for its directors
or 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, made, agreed or consented to,
to an extent which is in any such case material in the context of the Wider
32Red Group;
(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 in any such case where such is material in the context of the Wider
32Red Group taken as a whole;
(xv) (other than in respect of any member of the Wider 32Red Group which
is dormant and was solvent at the relevant time) taken or proposed any steps
or corporate action or had any legal proceedings instituted or threatened
against it in relation to the suspension of payments, a moratorium of any
indebtedness, its winding-up (voluntary or otherwise), dissolution,
reorganisation or for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any material
part of its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person in any
jurisdiction or had any such person appointed which in any such case is
material in the context of the Wider 32Red Group taken as a whole;
(xvi) made, authorised, proposed or announced an intention to propose any
change in its loan capital which in any such case is material in the context
of the Wider 32Red Group taken as a whole;
(xvii) entered into, implemented or authorised the entry into, any joint
venture, asset or profit sharing arrangement, partnership or merger of
business or corporate entities; or
(xviii) entered into any agreement, arrangement, commitment or contract or
passed any resolution or made any offer (which remains open for acceptance)
with respect to or announced an intention to, or to propose to, effect any of
the transactions, matters or events referred to in this Condition 2(g);
No adverse change, litigation, regulatory enquiry or similar
(h) except as Disclosed, since 31 December 2016:
(i) no adverse change having occurred in, and no circumstance having
arisen which would or might reasonably be expected to result in any adverse
change in, the business, assets, financial or trading position or profits or
prospects or operational performance of any member of the Wider 32Red Group
which in any such case is material in the context of the Wider 32Red Group
taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings by or against any member of the Wider 32Red Group or to which any
member of the Wider 32Red Group is or may become a party (whether as claimant,
defendant or otherwise) having been threatened, announced or instituted or
remaining outstanding by, against or in respect of, any member of the Wider
32Red Group, in each case, in circumstances which might reasonably be expected
to have a material adverse effect on the Wider 32Red Group taken as a whole;
(iii) no enquiry, review or investigation by, or complaint or reference
to, any Third Party against or in respect of any member of the Wider 32Red
Group having been threatened, announced or instituted or remaining outstanding
by, against or in respect of any member of the Wider 32Red Group, in each
case, in circumstances which might reasonably be expected to have a material
adverse effect on the Wider 32Red Group taken as a whole;
(iv) no contingent or other liability having arisen or become apparent
to 32Red or other than in the ordinary course of business increased which is
reasonably likely to affect adversely the business, assets, financial or
trading position or profits or prospects of any member of the Wider 32Red
Group to an extent which is material in the context of the Wider 32Red Group
taken as a whole;
(v) no steps having been taken and no omissions having occurred which
are reasonably likely to result in the withdrawal (without replacement),
cancellation, termination or modification of any licence held by any member of
the Wider 32Red Group which is necessary for the proper carrying on of its
business and the withdrawal, cancellation, termination or modification of
which might reasonably be expected to have a material adverse effect on the
Wider 32Red Group taken as a whole;
No discovery of certain matters regarding information and liabilities
(i) except as Disclosed, Kindred not having discovered in relation to
the Wider 32Red Group:
(i) that any financial, business or other information concerning the
Wider 32Red Group publicly announced prior to the date of this announcement or
disclosed to any member of the Wider Kindred Group by or on behalf of any
member of the Wider 32Red Group at any time prior to the date of this
announcement is misleading, contains a misrepresentation of any fact, or omits
to state a fact necessary to make that information not misleading, and which
was not subsequently corrected before the date of this announcement by
disclosure either publically via a Regulatory Information Service or in
writing to Kindred, and, in any such case, to an extent which is material in
the context of the Wider 32Red Group taken as a whole;
(ii) that any member of the Wider 32Red Group or any partnership,
company or other entity in which any member of the Wider 32Red Group has a
significant economic interest and which is not a subsidiary undertaking of
32Red is, otherwise than in the ordinary course of business, subject to any
liability, contingent or otherwise which is material in the context of the
Wider 32Red Group taken as a whole; or
(iii) that any past or present member of the Wider 32Red Group has not
complied in any respect with all applicable legislation, regulations or other
requirements of any jurisdiction, or any Authorisations, relating to the use,
treatment, storage, carriage, disposal, discharge, spillage, release, leak or
emission of any waste or hazardous substance or any substance likely to impair
the environment (including property) or harm human health or otherwise
relating to environmental matters or the health and safety of humans, which
non-compliance would be likely to give rise to any liability including any
penalty for non-compliance (whether actual or contingent) on the part of any
member of the Wider 32Red Group which in any such case is material in the
context of the Wider 32Red Group taken as a whole;
Anti-corruption
(iv) that any member of the Wider 32Red Group or any person that
performs or has performed services for or on behalf of any such member is or
has engaged in any activity, practice or conduct which would constitute an
offence under the Bribery Act 2010 or any other applicable anti-corruption
legislation; or
No criminal property
(v) that any asset of any member of the Wider 32Red Group constitutes
criminal property as defined by section 340(3) of the Proceeds of Crime Act
2002 (but disregarding paragraph (b) of that definition).
Part B: Certain further terms of the Offer
1. Kindred reserves the right to waive, in whole or in part,
Conditions 2(a) to (i) (inclusive), so far as they relate to 32Red, the Wider
32Red Group or any part thereof. Condition 1 shall not be capable of being
waived.
2. Kindred and 32Red have agreed, in accordance with 32Red's articles
of association, to observe and comply with the Code in relation to the conduct
and execution of the Offer (including where the acquisition of the 32Red
Shares by Kindred is to be implemented by way of a Scheme pursuant to
paragraph 7 of this Part B) as though 32Red, Kindred and the Offer were
subject to the Code.
3. The Offer will lapse if the acquisition of 32Red by Kindred is
referred to the Chair of the Competition and Markets Authority for the
constitution of a group under Schedule 4 to the Enterprise and Reform Act 2013
before 1:00 p.m. (London time) on the first closing date or the time and date
on which the Offer becomes or is declared unconditional as to acceptances
(whichever is the later).
4. If the Offer lapses, it will cease to be capable of further
acceptances, and persons accepting the Offer and Kindred shall thereupon cease
to be bound by acceptances submitted at or prior to the time the Offer
lapses.
5. The Offer will lapse, and will not proceed, unless all of the
Conditions relating to the Offer have been fulfilled or (if capable of waiver)
waived by, or where appropriate, have been determined by Kindred to be and
remain satisfied by, midnight on the twenty-first day after the later of:
(a) the first closing date of the Offer; and
(b) the date on which the Offer becomes unconditional as to
acceptances,
or such later date as Kindred and 32Red may agree. Kindred shall not be under
any obligation to waive (if capable of waiver), to determine to be or remain
satisfied or to treat as fulfilled any of Conditions 2(a) to (i) (inclusive)
by a date earlier than the latest date for the fulfilment of that Condition
notwithstanding that the other Conditions of the Offer may at such earlier
date have been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such Conditions may not be capable of
fulfilment.
6. The 32Red Shares acquired under the Offer shall 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
and together with all rights 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, paid or payable on or after the date of
this announcement, save in respect of the Approved Dividend). Accordingly,
insofar as a dividend or other distribution (other than the Approved Dividend)
is declared, made, paid or payable by 32Red on or after the date of this
announcement, Kindred reserves the right (without prejudice to any right of
Kindred to invoke Condition 2(g)(ii) above) to reduce the consideration
payable under the Offer in respect of a 32Red Share by the aggregate amount of
such dividend or distribution (excluding associated tax credit).
If any such dividend or distribution (other than the Approved Dividend) is
paid or made before the Offer is declared or becomes wholly unconditional, if
Kindred exercises its rights described in this paragraph, any reference in
this announcement to the consideration payable under the Offer shall be deemed
to be a reference to the consideration as so reduced.
To the extent that such a dividend or distribution has been declared but not
paid prior to the Offer being declared or becoming wholly unconditional and
such dividend or distribution is cancelled, then the consideration payable
under the Offer shall not be subject to change in accordance with this
paragraph. If the Offer is declared or becomes wholly unconditional before the
payment date for the Approved Dividend (being 23 March 2017), Kindred agrees
that in no circumstances will it procure or permit 32Red to cancel, revoke,
reduce or delay the payment of the Approved Dividend on 23 March 2017.
Any exercise by Kindred of its rights referred to in this paragraph shall be
the subject of an announcement and, for the avoidance of doubt, shall not be
regarded as constituting any revision or variation of the Offer.
7. Kindred reserves the right to elect to implement the acquisition of
the 32Red Shares by way of a Scheme as an alternative to a Takeover Offer. In
such event, the Scheme will be implemented on the same terms (subject to
appropriate amendments), so far as applicable, as those which could apply to
the Offer.
8. The availability of the Offer to persons not resident in the United
Kingdom or Gibraltar may be affected by the laws and regulations of the
relevant jurisdictions. Persons who are not resident in the United Kingdom or
Gibraltar should inform themselves about and observe any applicable
requirements.
9. The Offer is not being made, directly or indirectly, in, into or
from, or by use of the mails of, or by any means of instrumentality
(including, but not limited to, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce of, or of
any facility of a national, state or other securities exchange of, any
jurisdiction where to do so would violate the laws and regulations of that
jurisdiction.
10. Save as provided in the following sentence, the Offer will be
governed by the laws of England and Wales and will be subject to the exclusive
jurisdiction of the English courts and to the Conditions and further terms set
out in this Appendix I and to be set out in the Offer Document and the Code
(in all substantive respects, unless otherwise agreed by or on behalf of
Kindred and 32Red). The Offer will be a Takeover Offer (unless Kindred elects
to implement the Offer by way of a Scheme).
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
(a) The aggregate Offer value of approximately £175.6 million is
based on the Offer price of 196 pence per 32Red Share on the basis of the
fully-diluted number of 32Red Shares in issue referred to in paragraph (c)
below.
(b) At the close of business on 22 February 2017 (being the last
Business Day prior to the date of this announcement), 32Red had in issue
85,347,528 ordinary shares.
(c) Any reference to the fully-diluted share capital of 32Red is
based on:
i. the 85,347,528 32Red Shares referred to in paragraph (b) above;
and
ii. the 4,237,008 32Red Shares which may be issued on or after the
date of this announcement on the exercise of options or vesting of awards
under the 32Red Share Plans.
(d) Any reference to the value of the fully-diluted share capital of
32Red is based on the price of 196 pence per 32Red Share and the number of
32Red Shares referred to in paragraph (c) above.
(e) Closing prices for 32Red Shares are taken from Bloomberg.com.
Unless otherwise stated, all closing prices for 32Red Shares are closing
middle market prices derived from this sources.
(f) Volume weighted average closing prices are derived from
Bloomberg.com.
(g) Unless otherwise stated, the financial information relating to
32Red is extracted or derived (without any adjustment) from the annual results
of the 32Red Group for the financial year ended 31 December 2015, prepared in
accordance with IFRS.
(h) Unless otherwise stated, the financial information relating to
Kindred is extracted or derived (without any adjustment) from the 2016
unaudited year-end report for Kindred released on 14 February 2017.
(i) The market capitalisation of Kindred has been translated from
Swedish Krona into pounds sterling using an exchange rate of £1.00 to 11.183
SEK which was derived from Bloomberg.com as at 5.00 p.m. on 22 February 2017
(being the last date prior to the date of this announcement).
APPENDIX III IRREVOCABLE UNDERTAKINGS
All of the irrevocable undertakings referred to below include undertakings to
accept (or procure acceptance of) the Offer and, if Kindred exercises its
right to implement the Offer by way of a Scheme, to vote in favour of the
Scheme and any resolution(s) proposed in order to implement such Scheme:
32Red Directors' Hard Irrevocable Undertakings
Edward Ware 19,463,419 22.8%
John Hodgson 5,440,000 6.4%
Jonathan Hale 1,634,225 1.9%
David Fish 9,125,000 10.7%
Patrick Harrison 843,479 1.0%
Matthew Booth 366,958 0.4%
David Bowen 120,200 0.1%
David Bowen
120,200
0.1%
32Red Shareholders' Hard Irrevocable Undertakings
32Red plc Employee Benefit Trust 385,009 0.5%
Bonneville Investment Holdings 10,000,000 11.7%
Bruno Callaghan 4,788,054 5.6%
Paul Crowther 2,250,000 2.6%
Jonathan Richard Binns 2,000,000 2.3%
Campbell family trust 1,854,632 2.2%
Campbell family trust
1,854,632
2.2%
The irrevocable undertakings referred to above will only cease to be binding
if:
(a) this announcement has not been issued on or before 5:00 p.m.
(London time) on 24 February 2017 (or such later date as Kindred and 32Red may
agree); or
(b) the Offer lapses or is withdrawn and no new, revised or replacement
Offer (which is no less favourable to the 32Red Shareholders than the offer
set out in this announcement) has been announced in its place or is announced
at the same time; or
(c) if the Offer is implemented by way of a Scheme, the Scheme
terminates or lapses in accordance with its terms or otherwise becomes
incapable of becoming effective; or
(d) the Offer becomes or is declared wholly unconditional (or, if the
Offer is implemented by way of a Scheme, the Scheme becomes effective).
32Red Shareholders' Soft Irrevocable Undertakings
Miton Asset Management 2,430,256 2.8%
Miton Asset Management
2,430,256
2.8%
The above irrevocable undertaking will only cease to be binding if:
(a) this announcement has not been issued on or before 5:00 p.m.
(London time) on 24 February 2017 (or such later date as Kindred and 32Red may
agree); or
(b) the Offer lapses or is withdrawn and no new, revised or replacement
Offer is announced at the same time; or
(c) a third party makes a competing offer for the entire issued share
capital of 32Red at a value which (in 32Red's reasonable opinion on the advice
of Numis) exceeds the value of the consideration offered under the terms of
the Offer by 10% or more per 32Red Share; or
(d) in the event that the Offer is implemented by way of a Scheme, the
Scheme terminates or lapses in accordance with its terms or otherwise becomes
incapable of becoming effective; or
(e) the Offer becomes or is declared wholly unconditional (or, if the
Offer is implemented by way of a Scheme, the Scheme becomes effective).
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the
context requires otherwise:
"32Red" 32Red plc;
"32Red Board" the board of 32Red Directors;
"32Red Directors" the directors of 32Red;
"32Red Group" 32Red and its subsidiary undertakings and, where the context permits, each of them;
"32Red Share Plans" the 32Red plc Employee Share Option Plan and the 32Red plc Long-Term Incentive Plan;
"32Red Shareholders" the holders of 32Red Shares;
"32Red Shares" the ordinary shares of 0.2 pence each in the capital of 32Red;
"AIM" the AIM Market operated by the London Stock Exchange
"AIM Rules" the AIM Rules for Companies (July 2016) as published by the London Stock Exchange which set out the rules and responsibilities in relation to a company with a class of securities admitted to AIM, as amended from time to time
"Approved Dividend" the second interim dividend of 4 pence per 32Red Share announced by 32Red on 23 February 2017;
"Australia" the Commonwealth of Australia, its states, territories and possessions and all areas subject to its jurisdiction and any political sub-division thereof;
"Authorisations" regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals;
"Business Day" a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are open for business in the City of London and Gibraltar;
"CET" Central European Time;
"Code" the City Code on Takeovers and Mergers;
"Companies Act" the UK Companies Act 2006;
"Conditions" the conditions to the implementation of the Offer, as set out Appendix I to this announcement and to be set out in the Offer Document;
"Confidentiality Agreement" the confidentiality agreement entered into between 32Red and Kindred dated 22 December 2016;
"Data Room" means the information made available for inspection in the virtual data room under the project name Silver Data hosted via DropBox;
"Dealing Disclosure" has the same meaning as in Rule 8 of the Code;
"Disclosed" any information disclosed by, or on behalf of, 32Red: (i) in any other announcement to a Regulatory Information Service by or on behalf of 32Red prior to the publication of this announcement; or (ii) as otherwise fairly disclosed in writing (including, without limitation, in the Data Room made available to Kindred and its professional advisers) by or on behalf of 32Red or any of its advisers to Kindred (or any of its officers, employees, agents or advisers) prior to the
date of this announcement;
"EBITDA" earnings before interest, tax, depreciation and amortisation;
"EU" the European Union;
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