REG - MITIE Group PLC Marlowe PLC - Recommended cash and share offer for Marlowe PLC
05/06/2025 07:00
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RNS Number : 5853L MITIE Group PLC 05 June 2025
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
5 June 2025
RECOMMENDED CASH AND SHARE OFFER
for
MARLOWE PLC ("Marlowe")
by
MITIE TREASURY MANAGEMENT LIMITED ("Bidco"), A WHOLLY OWNED SUBSIDIARY OF
MITIE GROUP PLC ("Mitie")
to be effected by a scheme of arrangement under Part 26 of the Companies Act
2006
Summary
· The boards of Mitie and Marlowe are pleased to
announce that they have reached agreement on the terms of a unanimously
recommended cash and share offer pursuant to which Bidco, a wholly owned
subsidiary of Mitie, will acquire the entire issued and to be issued ordinary
share capital of Marlowe (the "Acquisition"). It is proposed that the
Acquisition will be effected by means of a scheme of arrangement of Marlowe
under Part 26 of the Companies Act.
· Under the terms of the Acquisition, each Marlowe
Shareholder will be entitled to receive:
for each Marlowe
Share
1.1 New Mitie Shares
and
290 pence in cash,
(together, the "Offer Consideration")
· Based on Mitie's closing share price of 160 pence
as of 4 June 2025 (being the latest practicable date prior to this
announcement), the Acquisition represents a total implied value of 466 pence
per Marlowe Share, valuing the entire issued and to be issued ordinary share
capital of Marlowe at approximately £366 million.
· The terms of the Acquisition:
· represent a premium of approximately 26.5 per cent.
to the closing price per Marlowe Share of 368 pence on 3 June 2025 (being the
day prior to the market speculation of an approach);
· represent a premium of approximately 38.8 per cent.
to the volume weighted average price per Marlowe Share of 335 pence during the
three-month period ended on 3 June 2025 (being the day prior to the market
speculation of an approach); and
· represent a premium of approximately 41.7 per cent.
to the volume weighted average price per Marlowe Share of 329 pence during the
six-month period ended on 3 June 2025 (being the day prior to the market
speculation of an approach).
· Under the terms of the Acquisition, Marlowe
Shareholders will, in aggregate, receive approximately 86,565,085 New Mitie
Shares. Immediately following Completion, Marlowe Shareholders will own
approximately 6.4 per cent. of the ordinary share capital of Mitie (based on
the existing issued ordinary share capital of Mitie and the fully diluted
share capital of Marlowe) as at 4 June 2025 (being the latest practicable date
prior to the date of this announcement).
· A Mix and Match Facility will also be made
available to Marlowe Shareholders (other than certain persons in the United
States and other Restricted Jurisdictions) in order to enable them to elect,
subject to off-setting elections, to vary the proportions in which they
receive cash and New Mitie Shares in respect of their holdings in Marlowe
Shares. However, the total number of New Mitie Shares to be issued and the
maximum aggregate amount of cash to be paid under the terms of the Acquisition
will not be varied as a result of elections under the Mix and Match Facility.
Commenting on the Acquisition, Phil Bentley, Chief Executive Officer of Mitie,
said:
"Mitie has transformed its business over the past eight years, disposing of
businesses where it could not build a leading position and adding scale
through the acquisitions of VSG and Interserve to become the UK's leading
Facilities Management company. Since then, acquisitions to add Projects
capabilities in Power & Grid Connections, Renewable Energy, Data Centres,
Fire & Security and Sustainability have pivoted the business to become the
UK's leading Facilities Transformation company.
With growing legislation around Fire, Security and Water & Air Quality,
our clients need a partner who can also offer a broad range of Facilities
Compliance capabilities. In a growing Testing, Inspection and Certification
(TIC) market valued at £7.6 billion per annum, Marlowe stands out as a leader
in Fire & Security and Water & Air and Asbestos compliance. Adding
Marlowe's c.3,000 highly respected colleagues to Mitie's capabilities and
providing access to Mitie's clients will generate significant revenue growth
opportunities as well as immediate cost efficiencies. We are excited about the
next chapter in Mitie's history to become a leading Facilities Compliance
provider."
Commenting on the Acquisition, Lord Ashcroft, Interim Non-Executive Chairman
of Marlowe, said:
· "The Acquisition represents excellent value for
Marlowe Shareholders and provides an opportunity to participate in potential
further value accretion through the new Mitie Shares which will be issued to
Marlowe Shareholders. Together, the Acquisition, the dividend of shares in
Optima Health on demerger at a value of 210p per share in September 2024, and
the 155p special dividend paid in July 2024, represent a total value of 831p
per Marlowe Share based on Mitie's share price on 4 June 2025. This equates to
a 164.5 per cent. premium on the Marlowe Share price low of 314p on 7 December
2023, prior to me joining the Marlowe board of directors in March 2024. In
addition, Marlowe Shareholders will have the opportunity to continue to
participate in Mitie as it integrates Marlowe's high quality TIC business into
the Enlarged Group. I have been consistent since taking up the role of Interim
Chairman in June 2024 that my aim was to maximise shareholder returns and the
Acquisition will be the final piece in that jigsaw. I have enjoyed my journey
with Marlowe and continue to enjoy my journey with Optima Health, where I
currently have a shareholding of 24.6%, and I hope shareholders will continue
to support me in other ventures."
Background to and reasons for the Acquisition
· The Mitie Three-Year Plan, which began in FY25 and
extends to FY27, pivots the business from being a UK leader in "Facilities
Management" to a leader in technology-led and data-driven "Facilities
Transformation" - transforming the built environment and the lived experience,
through our projects capabilities and bringing insights and better
decision-making for our clients through our leading data analytics
capabilities.
· Having built leadership positions in Engineering
Maintenance, Security and Hygiene, the plan is based on satisfying Mitie's
customers' needs and accelerating growth through the three pillars of key
account growth and scope increases; projects upsell; and M&A in
high-growth, high-margin adjacencies.
· Mitie's customers' needs continue to evolve, with
an increased demand for business-critical assurance as a result of new
legislation and tighter regulations impacting buildings and their owners, such
as those relating to fire and building safety, security, and the environment
as well as increasing insurance and sustainability requirements.
· This is the "Facilities Compliance" category in
which Marlowe is a leading provider of Testing, Inspection & Certification
("TIC") services to companies. The UK TIC market is valued at £7.6 billion
and is growing at 4-6 per cent. per annum, underpinned by the structural
trends outlined above. These trends support strong recurring revenues, based
on non-discretionary customer spend, as well as higher margins.
· Mitie currently provides a limited range of TIC
services across Fire & Security, Water & Air Hygiene and Asbestos
sub-sectors, generating revenue of c.£250 million per annum, of which around
one third is recurring maintenance revenue and two-thirds arises from
consultancy, projects, testing and inspections, and remedial works.
· With the benefit of Marlowe's broader service
capability, the Mitie Directors believe that there is a significant
opportunity to cross-sell and upsell regulatory-driven services across a
larger number of the Mitie Group's customers; capture additional margin where
services already provided by Mitie are currently subcontracted to third party
specialists (including Marlowe); and expand Mitie's project capabilities in
Fire, Security and Water. The Mitie Directors believe that the Acquisition of
Marlowe, being an established TIC specialist with annual revenue of £305
million as at 31 March 2025, will create a UK leader in each of the key
sub-sectors of TIC by combining Mitie's and Marlowe's complementary
capabilities. The Mitie Directors believe that the Enlarged Group will:
· provide a differentiated 'Total Fire' offering,
comprising a unified suite of Active and Passive Fire Systems solutions,
enhancing competitiveness in a £3.9 billion market and allowing it to secure
larger and more complex multi-site and national contracts;
· become a leading provider in the £1.1 billion
'Security Systems' market, via improved remote CCTV monitoring, increased
Alarm Receiving Centre connections and increased access to complex projects in
strategic market sectors; and
· add environmental services in a £2.6 billion
market, complementing Mitie Energy and Mitie Waste, and enable the development
of a 'Total Managed Water' offer, capturing a larger share of the water
management and treatment market and supporting our customers' sustainability
and resilience targets.
· Mitie has a proven track record of creating value
for shareholders via M&A, having successfully acquired and integrated c.20
businesses over the past eight years. Including the businesses that have been
disposed, this M&A activity has added a net c.£100 million of operating
profit to the Mitie Group from a net spend of c.£200 million, i.e. a payback
period of 2 years. The largest individual acquisition was Interserve
Facilities Management in 2020, from which Mitie has delivered £56 million of
cost synergies, compared to an initial expectation of £30 million.
· The Mitie Directors believe that the Enlarged Group
can be expected to deliver £30 million of pre-tax recurring operating cost
synergies, and expect to exit FY27 at 100% run rate. The Mitie Directors
expect all actions required to deliver the synergies to be completed by the
end of FY27, such that £30 million of synergies will be achieved in the
second full financial year following Completion (being FY28).
· In summary, the Mitie Directors believe that this
is a compelling opportunity to lead in Facilities Compliance and create
significant value for Mitie Shareholders. The Acquisition is expected to be
margin and earnings accretive in Mitie's first full year of ownership (being
FY27), whilst leverage is expected to reduce to within Mitie's target leverage
range on 0.75-1.5x. The Acquisition will make a meaningful contribution to the
strategic progress of Mitie and the delivery of the ambitious Mitie Three-Year
Plan targets.
Marlowe recommendation
· The Marlowe Directors, who have been so advised by
Cavendish as to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing its advice to the
Marlowe Directors, Cavendish has taken into account the commercial assessments
of the Marlowe Directors. In addition, the Marlowe Directors consider the
terms of the Acquisition to be in the best interests of Marlowe Shareholders
as a whole.
· Accordingly, the Marlowe Directors intend to
recommend unanimously that Marlowe Shareholders vote in favour of the Scheme
at the Court Meeting and the resolutions to be proposed at the General Meeting
as the Marlowe Directors intend to do in respect of their own beneficial
holdings of 15,988,625 Marlowe Shares, representing, in aggregate,
approximately 20.36 per cent. of the issued ordinary share capital of Marlowe
in issue on 4 June 2025 (being the latest practicable date prior to this
announcement).
Timetable and conditions
· It is intended that the Acquisition will be
effected by means of a Court-approved scheme of arrangement between Marlowe
and Marlowe Shareholders under Part 26 of the Companies Act, although Mitie
reserves the right to implement the Acquisition by means of a Takeover Offer
(subject to the consent of Marlowe and the Panel).
· The Acquisition is conditional on the approval of
Marlowe Shareholders and subject to the further Conditions and terms set out
in Appendix I to this announcement (which will be set out in full in the
Scheme Document).
· The Acquisition will be put to Marlowe Shareholders
at the Court Meeting and at the General Meeting. In order to become Effective,
the Scheme must be approved by a majority in number of the Marlowe
Shareholders voting at the Court Meeting, either in person or by proxy,
representing at least 75 per cent. in value of the Marlowe Shares voted. In
addition, special resolutions implementing the Scheme must be passed by
Marlowe Shareholders representing at least 75 per cent. of votes cast at the
General Meeting.
· The Scheme Document, containing further information
about the Acquisition and notices of the Court Meeting and the General
Meeting, will be distributed to Marlowe Shareholders (along with the Forms of
Proxy for use in connection with the Court Meeting and the General Meeting and
the Forms of Election in relation to the Mix and Match Facility) as soon as
practicable and, in any event, within 28 days of this announcement (or such
later date as Mitie, Bidco, Marlowe and the Panel may agree). The Scheme
Document will be made available by Mitie on its website at
https://www.mitie.com/ (https://www.mitie.com/) and by Marlowe on its website
at https://www.marloweplc.com/ (https://www.marloweplc.com/) .
· It is expected that the Scheme will become
effective in the third quarter of 2025, subject to the satisfaction or waiver
of the Conditions and certain further terms set out in Appendix I to this
announcement.
· If, on or after the date of this announcement and
on or prior to the Effective Date, any dividend, distribution, or other return
of capital is declared, made or paid, or becomes payable by Marlowe, Mitie and
Bidco reserve the right to reduce the Offer Consideration by an aggregate
amount up to the amount of such dividend, distribution, or other return of
capital, in which case references to the Offer Consideration will be deemed to
be a reference to the Offer Consideration as so reduced. In such
circumstances, Marlowe Shareholders will be entitled to retain any such
dividend, distribution, or other return of capital declared, made, or paid.
This summary should be read in conjunction with, and is subject to, the full
text of this announcement (including its appendices). The Acquisition will be
subject to the Conditions and further terms set out in Appendix I to this
announcement and to the full terms and conditions which will be set out in the
Scheme Document. Appendix II to this announcement contains the sources of
information and bases of calculations of certain information contained in this
announcement. Appendix III contains details of and bases of calculation of the
anticipated financial benefits of the Acquisition. Appendix IV to this
announcement contains definitions of certain expressions used in this summary
and in this announcement.
For the purposes of Rule 28 of the Takeover Code, quantified financial
benefits statements contained in this announcement are the responsibility of
Mitie and the Mitie Directors. Appendix III sets out the anticipated
quantified financial benefits statements relating to cost savings and
synergies arising out of the Acquisition and provides underlying information
and bases of belief. Appendix III also includes reports from Mitie's reporting
accountant, PwC, and its financial adviser, Lazard, in connection with the
anticipated quantified financial benefits statements, as required pursuant to
Rule 28.1(a) of the Takeover Code, and provides underlying information and
bases for the accountant's and financial adviser's respective reports. Each of
PwC and Lazard has given and not withdrawn its consent to the publication of
its report in this announcement in the form and context in which it is
included pursuant to Rule 23.2 of the Takeover Code.
There will be a Mitie investor and analyst presentation at 9.30 a.m. (London
time) via a live webcast on 5 June 2025 available at
https://webcasts.umcdn.com/mit037
(https://urldefense.com/v3/__https:/webcasts.umcdn.com/mit037__;!!G416Ov7nCA!uXuD2k9qQav24vWOhHZ3lAxegIi85v7xeQq0y0dLQmZaH6pFMV7maepwdpGun5G43x9qZu1e335b-BGzVIZCF3NGk1g$)
.
Enquiries:
Mitie
Peter Dickinson, Chief Legal Officer +44 7768 215 013
Kate Heseltine, Group IR and Corporate Finance Director +44 7384 439 112
H/Advisors Maitland (PR Adviser to Mitie) +44 790 000 0777
Neil Bennett
Lazard (Financial Adviser to Mitie) +44 20 7187 2000
Vasco Litchfield
Louise Campbell
Marlowe
Adam Councell, Chief Financial Officer +44 20 3813 8498
FTI Consulting (PR Adviser to Marlowe) +44 20 3727 1340
Nick Hasell
Alex Le May
Cavendish Capital Markets Limited (Financial Adviser and Rule 3 Adviser to +44 20 7220 0500
Marlowe)
Ben Jeynes
Henrik Persson
George Lawson
Elysia Bough
Linklaters LLP is retained as legal adviser to Mitie.
Allen Overy Shearman Sterling LLP is retained as legal adviser to Marlowe.
The person responsible for the release of this announcement on behalf of Mitie
is Peter Dickinson (Chief Legal Officer) and on behalf of Marlowe is
Christopher Bone (Company Secretary).
Important notices
Lazard & Co., Limited ("Lazard") which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively as
financial adviser to Mitie and no one else in connection with the Acquisition
and will not be responsible to anyone other than Mitie for providing the
protections afforded to clients of Lazard nor for providing advice in
connection with the Acquisition or any matter referred to herein. Neither
Lazard nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Lazard
in connection with this announcement, any statement contained herein or
otherwise.
Cavendish Capital Markets Limited ("Cavendish") which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to Marlowe and no one else in connection with
the Acquisition and will not be responsible to anyone other than Marlowe for
providing the protections afforded to clients of Cavendish nor for providing
advice in connection with the Acquisition or any matter referred to herein.
Neither Cavendish nor any of its affiliates (nor their respective directors,
officers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of
Cavendish in connection with this announcement, any statement contained
herein, the Acquisition or otherwise. No representation or warranty, express
or implied, is made by Cavendish as to the contents of this announcement.
This announcement is for information purposes only. It is not intended to and
does not constitute, or form part of, an offer, invitation or the solicitation
of an 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, pursuant to the Acquisition or otherwise nor will there be any
sale, issuance or transfer of securities in any jurisdiction in contravention
of applicable law or regulation.
The Acquisition is intended to be made by means of the Scheme Document which,
together with the Forms of Proxy and Forms of Election in relation to the Mix
and Match Facility, will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
This announcement has been prepared for the purpose of complying with English
law and the Takeover Code and the information disclosed may not be the same as
that which would have been disclosed if this announcement had been prepared in
accordance with the laws and regulations of jurisdictions outside England and
Wales.
The Acquisition will be subject to the applicable requirements of the Takeover
Code, the Panel, the AIM Rules, the London Stock Exchange and the Financial
Conduct Authority.
Marlowe will prepare the Scheme Document to be distributed to Marlowe
Shareholders. Marlowe urges Marlowe Shareholders to read the Scheme Document
(including the related Forms of Proxy and the Forms of Election in relation to
the Mix and Match Facility) when it becomes available because it will contain
important information in relation to the Acquisition, the New Mitie Shares and
the Enlarged Group. Any vote in respect of the Scheme or other response in
relation to the Acquisition should be made only on the basis of the
information contained in the Scheme Document.
This announcement does not constitute a prospectus, a prospectus equivalent
document, or prospectus exemption document.
Overseas Shareholders
The release, publication or distribution of this announcement, in whole or in
part, directly or indirectly, in or into certain jurisdictions other than the
United Kingdom may be restricted by law or regulations of those jurisdictions.
Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable
requirements.
Unless otherwise determined by Mitie and Bidco or required by the Takeover
Code, and permitted by applicable law and regulation, the Acquisition will not
be made available, directly or indirectly, in, into or from a Restricted
Jurisdiction where to do so would violate the laws or regulations in that
jurisdiction and no person may vote in favour of the Acquisition by any such
use, means, instrumentality or form within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the laws or
regulations of that jurisdiction. Accordingly, copies of this announcement and
all documents relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate the laws
or regulations in that jurisdiction, and persons receiving this announcement
and all documents relating to the Acquisition (including custodians, nominees
and trustees) must not mail or otherwise distribute or send them in, into or
from such jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Marlowe Shareholders who are not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable
requirements.
The New Mitie Shares may not be offered, sold or delivered, directly or
indirectly, in, into or from any Restricted Jurisdiction or to, or for the
account or benefit of, any Restricted Overseas Persons except pursuant to an
applicable exemption from, or in a transaction not subject to, applicable
securities laws or regulations of those jurisdictions.
Additional information for US investors
The Acquisition relates to shares of an English company and is proposed to be
effected by means of a scheme of arrangement under the laws of England and
Wales. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules under the US
Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the disclosure requirements of United States tender offer and
proxy solicitation rules.
The receipt of consideration by a US holder for the transfer of its Marlowe
Shares pursuant to the Scheme will be a taxable transaction for United States
federal income tax purposes. Each Marlowe Shareholder is urged to consult
their independent professional adviser immediately regarding the tax
consequences of the Acquisition applicable to them, including under applicable
United States state and local, as well as overseas and other, tax laws.
In accordance with normal United Kingdom practice and pursuant to Rule 14-e-5
of the US Exchange Act, Mitie and Bidco or their nominees, or their brokers
(acting as agents), may from time to time make certain purchases of, or
arrangements to purchase, shares or other securities of Marlowe outside of the
US, other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or in
private transactions at negotiated prices. Any information about such
purchases or arrangements to purchase will be disclosed as required in the
United Kingdom, will be reported to a Regulatory Information Service and will
be available on the London Stock Exchange website at
www.londonstockexchange.com (http://www.londonstockexchnage.com/) .
Financial information relating to Marlowe included in this announcement and
the Scheme Document has been or will have been prepared in accordance with
accounting standards applicable in the United Kingdom and may not be
comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the United States.
The New Mitie Shares issued pursuant to the Scheme will not be registered
under any US state securities laws and may only be issued to persons resident
in a state pursuant to an exemption from the registration requirements of the
securities laws of such state.
For the purpose of qualifying for the exemption provided by Section 3(a)(10)
of the US Securities Act, Marlowe will advise the Court that its sanctioning
of the Scheme will be relied on by Mitie and Bidco as an approval of the
Scheme following a hearing on its fairness to Marlowe Shareholders, at which
Court hearing all Marlowe Shareholders are entitled to attend in person or
through counsel to support or oppose the sanctioning of the Scheme and with
respect to which notification will be given to all such holders.
Mitie is organised under the laws of Scotland and Bidco and Marlowe are
organised under the laws of England and Wales. Some or all of the officers and
directors of Mitie, Bidco and Marlowe, respectively, are residents of
countries other than the United States. In addition, most of the assets of the
Mitie, Bidco and Marlowe are located outside the United States. As a result,
it may be difficult for US shareholders of Marlowe to effect service of
process within the United States upon Mitie, Bidco or Marlowe or their
respective officers or directors or to enforce against them a judgment of a US
court predicated upon the federal or state securities laws of the United
States. Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's judgement. It may not be
possible to sue Mitie, Bidco or Marlowe or their respective directors or
officers in a non-US court for violations of US securities laws.
Forward looking statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Marlowe, any member of the Marlowe Group, Mitie, or
any member of the Mitie Group (which includes Bidco) contain statements which
are, or may be deemed to be, "forward looking statements". Such forward
looking statements are prospective in nature and are not based on historical
facts, but rather on current expectations and on numerous assumptions
regarding the business strategies and the environment in which Marlowe, any
member of the Marlowe Group, Mitie, any member of the Mitie Group, or the
Enlarged Group will operate in the future and are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied by those statements. The forward looking statements
contained in this announcement relate to Marlowe, any member of the Marlowe
Group, Mitie, any member of the Mitie Group, or the Enlarged Group's future
prospects, developments and business strategies, the expected timing and scope
of the Acquisition and other statements other than historical facts. In some
cases, these forward looking statements can be identified by the use of
forward looking terminology, including the terms "believes", "estimates",
"will look to", "would look to", "plans", "prepares", "anticipates",
"expects", "is expected to", "is subject to", "budget", "scheduled",
"forecasts", "synergy", "strategy", "goal", "cost-saving", "projects"
"intends", "may", "will", "shall" or "should" or their negatives or other
variations or comparable terminology. Forward-looking statements may include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Mitie's,
any member of the Mitie Group, Marlowe's, or any member of the Marlowe Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of global economic conditions and governmental regulation on
Mitie's, any member of the Mitie Group, Marlowe's, or any member of the
Marlowe Group's business. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. These events and circumstances includes changes
in the global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in tax rates,
future business combinations or disposals, and any epidemic, pandemic or
disease outbreak. If any one or more of these risks or uncertainties
materialises or if any one or more of the assumptions prove incorrect, actual
results may differ materially from those expected, estimated or projected.
Such forward looking statements should therefore be construed in the light of
such factors.
Neither Marlowe, any member of the Marlowe Group, Mitie, or any member of the
Mitie Group, nor any of their respective associates or directors, officers or
advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward looking
statements in this announcement will actually occur. Given these risks and
uncertainties, potential investors should not place any reliance on forward
looking statements.
Specifically, statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature involve, risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Enlarged Group, there may be additional
changes to the Enlarged Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.
The forward looking statements speak only at the date of this announcement.
All subsequent oral or written forward-looking statements attributable to
Mitie, any member of the Mitie Group, Marlowe, or any member of the Marlowe
Group, or any of their respective associates, directors, officers, employees
or advisers, are expressly qualified in their entirety by the cautionary
statement above.
Marlowe, the Marlowe Group, Mitie and the Mitie Group expressly disclaim any
obligation to update such statements other than as required by law or by the
rules of any competent regulatory authority, whether as a result of new
information, future events or otherwise.
No profit forecasts or estimates
Other than as set out in paragraph 10 in this announcement, 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 Mitie or Marlowe, as appropriate, for the
current or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for Mitie or Marlowe, as
appropriate.
Quantified Financial Benefits Statement
Appendix III to this announcement sets out the anticipated Quantified
Financial Benefits Statement and contains details of, and bases of calculation
of, the anticipated financial benefits of the Acquisition, together with the
related reports from Mitie's reporting accountant, PwC, and Mitie's financial
adviser, Lazard, as required under Rule 28.1(a) of the Takeover Code, and
provides underlying information and bases for the accountant's and financial
adviser's respective reports. Lazard, as financial adviser to Mitie, has
provided such report for the purposes of the Takeover Code stating that, in
its opinion and subject to the terms of the report, the Quantified Financial
Benefits Statement, for which the Mitie Directors are responsible, has been
prepared with due care and consideration. Each of PwC and Lazard has given and
not withdrawn its consent to the publication of its respective report in this
announcement in the form and context in which it is included pursuant to Rule
23.2 of the Takeover Code.
For the purpose of Rule 28 of the Takeover Code, the Quantified Financial
Benefits Statement contained in this announcement is the responsibility of
Mitie and the Mitie Directors. Any statement of intention, belief or
expectation for the Enlarged Group following the Effective Date is an
intention, belief or expectation of the Mitie Directors and not of the Marlowe
Directors.
The statements in the Quantified Financial Benefits Statement relate to future
actions and circumstances which, by their nature, involve risks, uncertainties
and contingencies. As a result, the cost savings and synergies referred to may
not be achieved, may be achieved later or sooner than estimated, or those
achieved could be materially different from those estimated. No statement in
the Quantified Financial Benefits Statement should be construed as a profit
forecast or interpreted to mean that the Enlarged Group's earnings in the
first full year following the Effective Date, or in any subsequent period,
would necessarily match or be greater than or be less than those of Mitie
and/or Marlowe for the relevant preceding financial period or any other
period.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of: (i) the
offeree company and; (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of: (i) the offeree company; and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3 of the Takeover
Code.
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 of the Takeover Code).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether
you are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by Marlowe Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Marlowe may be
provided to Bidco during the Offer Period as requested under Section 4 of
Appendix 4 of the Takeover 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
Mitie's and Marlowe's websites at https://www.mitie.com/ and
https://www.marloweplc.com/ respectively by no later than 12 noon (London
time) on the business day after the date of this announcement. For the
avoidance of doubt, the contents of these websites are not incorporated into
and do not form part of this announcement.
Marlowe Shareholders, persons with information rights and participants in the
Marlowe Share Plans may request a hard copy of this announcement by: (i)
contacting MUFG Corporate Markets (UK) Limited during business hours on 0371
664 0391 if calling from the United Kingdom, or +44 (0)371 664 0391 if calling
from outside the United Kingdom (lines are open from 9.00 a.m. to 5.30 p.m.
(London time), Monday to Friday (excluding public holidays in England and
Wales)); or (ii) submitting a request in writing to MUFG Corporate Markets
(UK) Limited, Central Square, 29 Wellington Street, Leeds LS1 4DL, United
Kingdom. A person so entitled may also request that all future documents,
announcements and information in relation to the Acquisition be sent to them
in hard copy form.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
5 June 2025
RECOMMENDED CASH AND SHARE OFFER
for
MARLOWE PLC ("Marlowe")
by
MITIE TREASURY MANAGEMENT LIMITED ("Bidco"), A WHOLLY OWNED SUBSIDIARY OF
MITIE GROUP PLC ("Mitie")
1 Introduction
The boards of Mitie and Marlowe are pleased to announce that they have reached
agreement on the terms of a unanimously recommended cash and share offer
pursuant to which Bidco, a wholly owned subsidiary of Mitie, will acquire the
entire issued and to be issued ordinary share capital of Marlowe (the
"Acquisition"). It is proposed that the Acquisition will be effected by means
of a scheme of arrangement of Marlowe under Part 26 of the Companies Act.
2 The Acquisition
Under the terms of the Acquisition, which will be subject to the Conditions
and further terms set out below and in Appendix I to this announcement and the
full terms and conditions which will be set out in the Scheme Document, each
Marlowe Shareholder will be entitled to receive:
for each Marlowe
Share
1.1 New Mitie Shares
and
290 pence in cash,
(together, the "Offer Consideration")
Based on Mitie's closing share price of 160 pence as of 4 June 2025 (being the
latest practicable date prior to this announcement), the Acquisition
represents a total implied value of 466 pence per Marlowe Share, valuing the
entire issued and to be issued ordinary share capital of Marlowe at
approximately £366.4 million.
The terms of the Acquisition:
· represent a premium of approximately 26.5 per cent.
to the closing price per Marlowe Share of 368 pence on 3 June 2025 (being the
day prior to the market speculation of an approach);
· represent a premium of approximately 38.8 per cent.
to the volume weighted average price per Marlowe Share of 335 pence during the
three-month period ended on 3 June 2025 (being the day prior to the market
speculation of an approach); and
· represent a premium of approximately 41.7 per cent.
to the volume weighted average price per Marlowe Share of 329 pence during the
six-month period ended on 3 June 2025 (being the day prior to the market
speculation of an approach).
Under the terms of the Acquisition, Marlowe Shareholders will, in aggregate,
receive approximately 86,565,085 New Mitie Shares. Immediately following
Completion, Marlowe Shareholders will own approximately 6.4 per cent. of the
ordinary share capital of Mitie (based on the existing issued ordinary share
capital of Mitie and the fully diluted share capital of Marlowe) as at 4 June
2025 (being the latest practicable date prior to the date of this
announcement).
A Mix and Match Facility will also be made available to Marlowe Shareholders
(other than certain persons in the United States and other Restricted
Jurisdictions) in order to enable them to elect, subject to off-setting
elections, to vary the proportions in which they receive cash and New Mitie
Shares in respect of their holdings in Marlowe Shares. However, the total
number of New Mitie Shares to be issued and the maximum aggregate amount of
cash to be paid under the terms of the Acquisition will not be varied as a
result of elections under the Mix and Match Facility.
If, on or after the date of this announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of capital is declared, made
or paid, or becomes payable by Marlowe, Mitie and Bidco reserve the right to
reduce the Offer Consideration by an aggregate amount up to the amount of such
dividend, distribution, or other return of capital, in which case references
to the Offer Consideration will be deemed to be a reference to the Offer
Consideration as so reduced. In such circumstances, Marlowe Shareholders will
be entitled to retain any such dividend, distribution, or other return of
capital declared, made, or paid.
The Scheme Document will be distributed to Marlowe Shareholders (along with
the Forms of Proxy for use in connection with the Court Meeting and the
General Meeting and the Forms of Election in relation to the Mix and Match
Facility) as soon as reasonably practicable and, in any event, within 28 days
of this announcement (or such later date as Mitie, Bidco, Marlowe and the
Panel may agree) and the Court Meeting and the General Meeting will be held as
soon as practicable thereafter. Subject to the satisfaction or, where
permitted, waiver of the Conditions, it is expected that the Scheme will
become Effective in the third quarter of 2025.
An expected timetable of principal events relating to the Acquisition and
further information on the actions to be taken by Marlowe Shareholders will be
provided in the Scheme Document.
3 Background to and reasons for the Acquisition
The Mitie Three-Year Plan, which began in FY25 and extends to FY27, pivots the
business from being a UK leader in "Facilities Management" to a leader in
technology-led and data-driven "Facilities Transformation" - transforming the
built environment and the lived experience, through our projects capabilities
and bringing insights and better decision-making for our clients through our
leading data analytics capabilities.
Having built leadership positions in Engineering Maintenance, Security and
Hygiene, the plan is based on satisfying Mitie's customers' needs and
accelerating growth through the three pillars of key account growth and scope
increases; projects upsell; and M&A in high-growth, high-margin
adjacencies.
Mitie's customers' needs continue to evolve, with an increased demand for
business-critical assurance as a result of new legislation and tighter
regulations impacting buildings and their owners, such as those relating to
fire and building safety, security, and the environment as well as increasing
insurance and sustainability requirements.
This is the "Facilities Compliance" category in which Marlowe is a leading
provider of Testing, Inspection & Certification ("TIC") services to
companies. The UK TIC market is valued at £7.6 billion and is growing at 4-6
per cent. per annum, underpinned by the structural trends outlined above.
These trends support strong recurring revenues, based on non-discretionary
customer spend, as well as higher margins.
Mitie currently provides a limited range of TIC services across Fire &
Security, Water & Air Hygiene and Asbestos sub-sectors, generating revenue
of c.£250 million per annum, of which around one third is recurring
maintenance revenue and two-thirds arises from consultancy, projects, testing
and inspections, and remedial works.
With the benefit of Marlowe's broader service capability, the Mitie Directors
believe that there is a significant opportunity to cross-sell and upsell
regulatory-driven services across a larger number of the Mitie Group's
customers; capture additional margin where services already provided by Mitie
are currently subcontracted to third party specialists (including Marlowe);
and expand Mitie's project capabilities in Fire, Security and Water. The Mitie
Directors believe that the Acquisition of Marlowe, being an established TIC
specialist with annual revenue of £305 million as at 31 March 2025, will
create a UK leader in each of the key sub-sectors of TIC by combining Mitie's
and Marlowe's complementary capabilities. The Mitie Directors believe that
the Enlarged Group will:
· provide a differentiated 'Total Fire' offering,
comprising a unified suite of Active and Passive Fire Systems solutions,
enhancing competitiveness in a £3.9 billion market and allowing it to secure
larger and more complex multi-site and national contracts;
· become a leading provider in the £1.1 billion
'Security Systems' market, via improved remote CCTV monitoring, increased
Alarm Receiving Centre connections and increased access to complex projects in
strategic market sectors; and
· add environmental services in a £2.6 billion
market, complementing Mitie Energy and Mitie Waste, and enable the development
of a 'Total Managed Water' offer, capturing a larger share of the water
management and treatment market and supporting our customers' sustainability
and resilience targets.
Mitie has a proven track record of creating value for shareholders via
M&A, having successfully acquired and integrated c.20 businesses over the
past eight years. Including the businesses that have been disposed, this
M&A activity has added a net c.£100 million of operating profit to the
Mitie Group from a net spend of c.£200 million, i.e. a payback period of 2
years. The largest individual acquisition was Interserve Facilities Management
in 2020, from which Mitie has delivered £56 million of cost synergies,
compared to an initial expectation of £30 million.
The Mitie Directors believe that the Enlarged Group can be expected to deliver
£30 million of pre-tax recurring operating cost synergies, and expect to exit
FY27 at 100% run rate. The Mitie Directors expect all actions required to
deliver the synergies to be completed by the end of FY27, such that £30
million of synergies will be achieved in the second full financial year
following Completion (being FY28).
In summary, the Mitie Directors believe that this is a compelling opportunity
to lead in Facilities Compliance and create significant value for Mitie
Shareholders. The Acquisition is expected to be margin and earnings accretive
in Mitie's first full year of ownership (being FY27), whilst leverage is
expected to reduce to within Mitie's target leverage range on 0.75-1.5x. The
Acquisition will make a meaningful contribution to the strategic progress of
Mitie and the delivery of the ambitious Mitie Three-Year Plan targets.
4 Financial benefits and effects of the Acquisition and
potential synergies
Financial benefits and effects
The Mitie Directors believe that the Acquisition will have compelling
financial benefits, which will accelerate the delivery of the ambitious Mitie
Three-Year Plan targets.
Specifically, the Mitie Directors believe that the Acquisition to have the
following financial effects:
· Meaningful earnings enhancement: the Acquisition
will be EPS accretive for the Enlarged Group on an adjusted earnings per share
basis in the first full year following Completion (FY27), with high single
digit accretion in the second full year following Completion (FY28);
· Supports growth ahead of underlying markets:
following Completion, the addition of Marlowe's annual revenues of over £300
million will make a significant step towards Mitie's FY27 target for Enlarged
Group revenues, with increased scale and capability within TIC services
supporting future organic growth within Mitie's existing customer base and
well ahead of the underlying FM market;
· Margin accretive: the Acquisition will be
immediately accretive to the Enlarged Group's operating profit margin before
other items, with accretion increasing as potential synergies (as described
below) are delivered; and
· Value creative: the ROIC for the Acquisition will
materially exceed Mitie's weighted average cost of capital. The Enlarged
Group's ROIC is expected to remain comfortably ahead of the 20 per cent.
target included in the Mitie Three-Year Plan.
Mitie intends to maintain a strong and robust balance sheet, with average net
leverage for the Enlarged Group at the end of the current financial year
(FY26) expected to be c.1.4x, within Mitie's published target range of 0.75x
to 1.5x. Thereafter, the Group expects leverage to quickly reduce through cash
generation and increasing profitability.
Mitie has a strong record of value creation delivered through its proactive
capital deployment policy. In the near-term, as separately announced on the
date of this announcement, Mitie is suspending its £125 million share buyback
programme, launched on 16 April 2025, with immediate effect. Mitie intends to
maintain its progressive dividend policy and commitment to the purchase of all
shares to fulfil employee incentive schemes. As leverage reduces within its
stated target range, Mitie expects to actively pursue further opportunities to
accelerate its strategic progress through infill M&A and to continue to
return surplus funds to Mitie Shareholders via share buyback programmes.
Potential synergies
The Mitie Directors, having reviewed and analysed the potential cost synergies
of the Acquisition, based on their knowledge of Marlowe's business and the UK
TIC market, and taking into account the factors they can influence, believe
that the Enlarged Group can deliver £30 million of pre-tax recurring
operating cost synergies in the second full financial year following
Completion (being FY28).
Mitie intends to approach integration of the two businesses with the aim of
retaining and motivating talent from across the Enlarged Group and combining
the strengths of both teams to create a best-in-class organisation. The
integration of the businesses will involve combining the Marlowe business and
group functions into the Mitie Business Services division.
The quantified operating cost synergies are expected to be realised primarily
from:
(i) Support Functions: approximately 55 per cent. of the total
annual recurring pre-tax cost synergies are expected to arise primarily from
the removal of duplicative corporate, head office, administrative, support and
other central management functions;
(ii) Procurement: approximately 20 per cent. of the total annual
recurring pre-tax cost synergies are expected to be generated through
leveraging enhanced economies of scale and spend across key materials,
consumables and other third-party costs;
(iii) Operational effectiveness: approximately 15 per cent. of the
total annual recurring pre-tax cost synergies are expected to be generated
through the adoption of Mitie's operating model and service delivery
effectiveness to Marlowe's operations as well as improved route density within
the enlarged operations; and
(iv) Property: approximately 10 per cent. of the total annual
recurring pre-tax cost synergies are expected to be generated through the
rationalisation of property.
The Mitie Directors expect that approximately 50 per cent. of the annual
pre-tax operating cost synergies will be realised in the first full financial
year following Completion (being FY27). All actions required to deliver the
synergies are expected to be completed at the end of FY27, such that £30m of
synergies will be achieved in the second full financial year following
Completion (being FY28).
The Mitie Directors estimate that the realisation of the quantified cost
synergies will result in one-off costs of approximately £27 million. Aside
from these one-off integration costs, no material dis-synergies are expected
in connection with the Acquisition.
The identified cost synergies will accrue as a direct result of the
Acquisition and would not be achieved on a standalone basis.
These statements of estimated cost savings and synergies relate to future
actions and circumstances which, by their nature, involve risks, uncertainties
and contingencies. As a result, the cost savings and synergies referred to may
not be achieved, may be achieved later or sooner than estimated, or those
actually achieved could be materially different from those estimated. For the
purposes of Rule 28 of the Takeover Code, the statements of estimated cost
savings and synergies contained in this announcement are solely the
responsibility of Mitie and the Mitie Directors.
These statements are not intended as a profit forecast and should not be
interpreted as such.
Appendix III to this announcement includes a copy of these statements of
anticipated cost savings and synergies arising out of the Acquisition and
provides underlying information and bases of belief. Appendix III to this
announcement also includes reports from Mitie's reporting accountant, PwC and
its financial adviser, Lazard, in connection with anticipated quantified
financial benefits statements, as required pursuant to Rule 28.1(a) of the
Takeover Code, and provides underlying information and bases for the
accountant's and financial adviser's respective reports. Each of PwC and
Lazard has given and not withdrawn its consent to the publication of its
report in this announcement in the form and context in which it is included
pursuant to Rule 23.2 of the Takeover Code.
5 Background to and reasons for the recommendation
Marlowe has made excellent progress against its strategic plan to focus on its
TIC division, having completed the divestment of certain GRC software and
service assets for £430 million in June 2024 and subsequently demerging its
Occupational Health division in September 2024. The Marlowe Directors believe
that Marlowe's focus now on its Fire Safety & Security and Water & Air
Hygiene businesses will mean Marlowe is well positioned to continue to service
the highly regulated, business-critical service markets across TIC that the
Marlowe Directors believe provide strong recurring revenues based on
non-discretionary customer spend.
The Marlowe Directors remain confident in Marlowe's ability to succeed as an
independent business. However, notwithstanding the strength of the business
and the opportunities for continued growth, the Marlowe Directors recognise
that the market for Marlowe shares remains relatively illiquid, which could
present a challenge for Marlowe Shareholders seeking to fully monetise their
holdings in Marlowe should they wish to do so.
The Marlowe Directors also believe that, in light of the historical trading of
the Marlowe Shares, the Offer Consideration presents an opportunity for
Marlowe Shareholders to accelerate the crystallisation of a certain value from
their investment. In addition, the Offer Consideration allows Marlowe
Shareholders to participate in the future of the Enlarged Group through a
retained interest in the New Mitie Shares.
The Acquisition provides an opportunity for Marlowe Shareholders to achieve an
attractive premium to the current share price.
In addition to the financial terms of the Acquisition, in considering the
intention to recommend the Acquisition, the Marlowe Directors have also given
due consideration to Mitie's intention statements with respect to the future
operations of the business, including Mitie's intentions regarding the
creation of a leading UK player in Facilities Compliance. The Marlowe
Directors also note the value Mitie places on the skills, experience and
expertise of Marlowe's management and employees and welcome Mitie's statements
regarding their importance, value and anticipated contribution to the future
success of the Enlarged Group.
6 Marlowe recommendation
The Marlowe Directors, who have been so advised by Cavendish as to the
financial terms of the Acquisition, consider the terms of the Acquisition to
be fair and reasonable. In providing its advice to the Marlowe Directors,
Cavendish has taken into account the commercial assessments of the Marlowe
Directors. In addition, the Marlowe Directors consider the terms of the
Acquisition to be in the best interests of Marlowe Shareholders as a whole.
Accordingly, the Marlowe Directors intend to recommend unanimously that
Marlowe Shareholders vote in favour of the Scheme at the Court Meeting and the
resolutions to be proposed at the General Meeting as the Marlowe Directors
intend to do in respect of their own beneficial holdings of 15,988,625 Marlowe
Shares, in aggregate, representing approximately 20.36 per cent. of the issued
ordinary share capital of Marlowe in issue on 4 June 2025 (being the latest
practicable date prior to this announcement).
7 Mix and Match Facility
Marlowe Shareholders (other than certain persons in the United States and
other Restricted Jurisdictions) may elect, subject to off-setting elections,
to vary the proportions in which they receive cash and New Mitie Shares in
respect of their holdings in Marlowe Shares. However, the total number of New
Mitie Shares to be issued and the maximum aggregate amount of cash to be paid
under the terms of the Acquisition will not be varied as a result of elections
under the Mix and Match Facility. Accordingly, satisfaction of elections made
by Marlowe Shareholders under the Mix and Match Facility will depend on the
extent to which other Marlowe Shareholders make off-setting elections.
To the extent that elections cannot be satisfied in full, they will be scaled
down on a pro rata basis. As a result, Marlowe Shareholders who make an
election under the Mix and Match Facility will not necessarily know the exact
number of New Mitie Shares or the amount of cash they will receive until
settlement of the consideration due to them under the terms of the
Acquisition. The Mix and Match Facility is conditional upon the Acquisition
becoming Effective.
Elections under the Mix and Match Facility will not affect the entitlements of
those Marlowe Shareholders who do not make such elections.
Further details in relation to the Mix and Match Facility will be contained in
the Scheme Document.
8 Information on Mitie
Mitie is the United Kingdom's leading Facilities Transformation company, with
approximately 76,000 colleagues as at 31 March 2025 and reported group revenue
of £5.1 billion for the year ended 31 March 2025.
Mitie's Facilities Transformation offering comprises a comprehensive suite of
facilities management and facilities transformation project capabilities and
professional services and solutions delivered through three divisions:
· Business Services: Business Services is the United
Kingdom's largest provider of technology-led security & hygiene services
across c.2,500 contracts with sector expertise in retail, transport &
aviation, central government, police and financial & professional
services. It also provides landscaping and waste services. Mitie's Spanish
business is reported within the division.
· Technical Services: Technical Services is the
United Kingdom's largest provider of engineering maintenance services,
managing facilities and critical assets across c.350 contracts. The division
delivers projects in high growth areas of building infrastructure,
decarbonisation, power and grid connections and telecoms infrastructure to
help customers transform their built environment.
· Communities: The Communities division delivers
facilities transformation services as a trusted partner to the public sector
across local government & education, healthcare and care & custody.
The division operates over 100 PFI and traditional commercial contracts.
The Mitie Shares are listed on the Equity Shares (Commercial Companies)
category of the Official List and admitted to trading on the Main Market.
Mitie has a credit rating of BBB from DBRS Morningstar.
9 Information on Marlowe
· Marlowe is a leading testing, inspection and
certification service provider in the United Kingdom which provides
business-critical services which ensure that its customers comply with strict
regulations and insurance requirements across Fire Safety and Security and
Water and Air Hygiene.
· Marlowe services approximately 27,000 customers
across office complexes, high streets & leisure facilities, manufacturing
plants and industrial estates. Marlowe's customers include local authorities,
facilities management providers, multi-site NHS trusts, FTSE 100 companies and
thousands of SMEs.
· Marlowe's business operates through two divisions:
· Fire, Safety and Security: This division provides a
comprehensive range of services (including design, installation, maintenance,
monitoring and technical support) to ensure fire safety, security and
compliance with associated regulations. Marlowe's Fire, Safety and Security
division employs approximately 650 safety specialists.
· Water Treatment and Air Hygiene: This division
provides services to help manufacturers, commercial businesses and public
organisations maintain safe water & air systems and to comply with water
& air safety and environmental regulations. Marlowe's water treatment and
air hygiene division employs approximately 1,000 water and air safety
professionals.
· In its latest financial year ended 31 March 2025,
Marlowe delivered unaudited revenues of £305 million. Further details of
Marlowe's current trading and financial performance in the year ended 31 March
2025 are set out in paragraph 10 below. The Marlowe Shares are admitted to
trading on AIM. Marlowe's issued share capital comprises 78,522,547 ordinary
shares which, based on the closing price of a Marlowe share of 368 pence on 3
June 2025 (being the day prior to the market speculation of an approach),
equated to a market capitalisation of approximately £289 million.
10 Current trading and outlook
10.1 Mitie (and Mitie FY27 Profit Forecast)
On the date of this announcement, Mitie published its FY25 full year audited
results for the year ended 31 March 2025 (the "Mitie FY25 Results"). A copy of
the Mitie FY25 Results is available on Mitie's website at
https://www.mitie.com/ (https://www.mitie.com/) .
Mitie FY27 Profit Forecast
In October 2023 (and periodically referred to since), Mitie first published
the Mitie Three-Year Plan targets for FY25 - FY27 which were predicated on
inorganic growth, including targets going to the profitability of Mitie as
follows:
· "High single digit revenue compound annual growth rate
· >5 per cent. operating profit margin by FY27
· EBITDA >£300m by FY27"
Such targets in the Mitie Three-Year Plan, when taken together, constitute a
profit forecast for the purposes of Rule 28.2 of the Takeover Code (the "Mitie
FY27 Profit Forecast").
Basis of preparation
The Mitie FY27 Profit Forecast has been prepared on a basis consistent with
the Mitie Group's accounting policies which are in accordance with IFRS. These
policies are consistent with those applied in the preparation of the Mitie
FY25 Results.
Assumptions
The Mitie FY27 Profit Forecast is based on the assumptions listed below.
Factors outside the influence or control of the Mitie Directors:
· there will be no material changes to existing prevailing
macroeconomic, regulatory or political conditions in the markets and regions
in which the Mitie Group operates;
· the interest, inflation and tax rates in the markets and regions
in which the Mitie Group operates will remain materially unchanged from the
prevailing rates;
· there will be no material adverse events that will have a
significant impact on the Mitie Group's financial performance;
· there will be no business disruptions that materially affect
Mitie or its key customers, including natural disasters, acts of terrorism or
technological issues or interruptions;
· there will be no material change in employee attrition rates and
no material change in the Mitie Group's labour costs, including medical and
pension and other post-retirement benefits driven by external parties or
regulations;
· there will be no material impact on stakeholder relationships
arising from the Acquisition or otherwise; and
· there will be no material changes in legislation or regulatory
requirements impacting on the Mitie Group's operations or on its accounting
policies.
Factors within the influence or control of the Mitie Directors:
· there will be no material change in the operational strategy of
Mitie; and
· there will be no material change in the dividend or capital
allocation policies of Mitie.
The Mitie Directors' confirmation
The Mitie Directors have considered the Mitie FY27 Profit Forecast and confirm
that it remains valid as at the date of this announcement, has been properly
compiled on the basis of the assumptions set out above and the basis of the
accounting used is consistent with the Mitie Group's accounting policies and
those that Mitie applied in the preparation of the Mitie FY25 Financial
Results.
10.2 Marlowe
On 28 April 2025, Marlowe published its trading update for the year ended 31
March 2025 (the "Marlowe FY25 Trading Update"). A copy of the Marlowe FY25
Trading Update is available on Marlowe's website at
https://www.marloweplc.com/ (https://www.marloweplc.com/) .
11 Directors, management, employees, pensions and locations
Mitie's strategic plans and intentions for Marlowe
Prior to this announcement, consistent with market practice, Mitie has been
granted limited access to Marlowe's senior management for the purposes of
confirmatory due diligence and conducting its synergy assessment. This process
has informed Mitie's view on the prospects of the Enlarged Group, the
potential synergies described in paragraph 4 above and Mitie's initial plans
for the integration of the Marlowe Group.
In connection with the work described above, Mitie's management has developed
a preliminary integration plan for the Enlarged Group. Mitie will continue to
review Marlowe's business in the period prior to Completion and Mitie expects
that the operational review and the more detailed integration plan will be
substantially concluded during the period prior to Completion. Following
Completion, Mitie will be well placed to review, refine and implement this
integration plan. Key areas of focus in the operational review and development
of an integration plan include:
· a review of the existing and future potential
strategy of Marlowe, including an evaluation of opportunities for accelerating
growth;
· a detailed review of Marlowe's operations across
each of the markets in which it operates;
· a detailed review of Mitie's synergy and cost
saving assessment, primarily focused on the Enlarged Group's administrative
functions, operating model, procurement and property portfolio. The review
will include the evaluation of duplicative roles across Mitie and Marlowe's
respective businesses, including corporate, head office, administrative,
support and other central management functions; and
· the finalisation of an integration programme
designed to minimise disruption to employees, customers and suppliers whilst
delivering the expected benefits of the Acquisition.
In further refining, and in implementing, the integration plan, there will be
a clear focus on maintaining operational excellence and client and customer
service. A key objective of integration will be the careful delivery of the
cost synergies and other benefits of the Acquisition.
Mitie intends to substantially complete the implementation of an integration
plan within twelve months of Completion, with potential synergies expected to
be realised fully in the second full financial year following Completion
(being FY28).
Employees and management
Mitie greatly values the skills, experience and expertise of Marlowe's
management and employees and attaches great importance to their value and
contribution in the context of the future success of the Enlarged Group.
Identifying and retaining key staff following Completion is of critical
importance to Mitie. Mitie believes that employees of the Enlarged Group will
benefit from greater growth and career opportunities through being part of a
larger organisation.
As such, Mitie intends to approach employee and management integration,
following Completion, with the aim of retaining and motivating the best talent
across the Enlarged Group to create a best-in-class organisation. The
integration of the businesses will involve combining the Marlowe business and
group functions into the Mitie Business Services division.
Based on Mitie's preliminary assessment, Mitie anticipates that, in order to
achieve the expected benefits of the Acquisition, there will be a reduction in
the workforce as a result of overlapping functions, including corporate, head
office, administrative, support and other central management functions; in
aggregate this would constitute approximately 0.5 per cent. of the Enlarged
Group's employee base (around 300 employees).
The planning, preparation, finalisation and implementation of any headcount
reductions will be subject to comprehensive planning and appropriate
engagement with stakeholders, including affected employees and prior
consultation of appropriate employee representative bodies. Mitie will not be
in a position to assess what proportion of such headcount reduction will be
realised at each of Mitie and Marlowe (as part of the Enlarged Group) until it
has further progressed its operational review and integration plan, which are
expected to be substantially concluded during the period prior to Completion,
however, it is expected that redundancies at Marlowe will not be material in
the context of its c.3,000 employees.
It is anticipated that efforts will be made to mitigate headcount reductions
made as a result of redundancies, via natural attrition, the elimination of
vacant roles and alternative job opportunities via redeployment within the
Enlarged Group. Any individuals impacted will be treated in a manner
consistent with Mitie's high standards, culture and practices.
Mitie confirms that, upon Completion, the existing contractual and statutory
employment rights of all management and employees of Marlowe and its
subsidiaries will be fully safeguarded in accordance with applicable law.
It is intended that, upon Completion, each of the non-executive members of the
Marlowe Board will resign from their office as a director of Marlowe.
Pension schemes
Mitie does not intend to make any changes to the agreed employer contributions
into Marlowe's existing defined contribution pension schemes or the admission
of new members to such pension schemes following Completion.
Incentivisation arrangements
Mitie has not entered into, nor had any discussions regarding, any form of
incentive arrangements with any member of Marlowe's management and does not
intend to enter into any such discussions prior to the Effective Date.
Locations, headquarters, HQ functions, fixed assets and research and
development
As part of its integration planning process, Mitie will look to simplify the
Enlarged Group's office footprint. Where there is geographic overlap, Mitie
intends, where feasible, to consolidate the existing sites and in these cases,
the aim would be to relocate staff to nearby locations of the Enlarged Group
as required, subject to any required information and consultation with
affected employees and/or their representatives in accordance with applicable
law. Mitie anticipates maintaining Marlowe's head office in central London for
at least two months from Completion and, after such time, relevant employees
would be relocated to Mitie's nearby central London headquarters. Save as set
out above, Mitie does not have any current intention to redeploy any of the
fixed assets of the Marlowe Group.
Marlowe does not currently have a research and development function and Mitie
has no plans in this regard.
Trading Facilities
Marlowe is currently admitted to trading on AIM and, as set out in paragraph
18 below, an application will be made to the London Stock Exchange to cancel
trading in Marlowe Shares on AIM and re-register it as a private company.
No statements in this paragraph 11 constitute "post-offer undertakings" for
the purposes of Rule 19.5 of the Takeover Code.
12 Marlowe Incentive Plans
Participants in the Marlowe Incentive Plans will be contacted regarding the
effect of the Acquisition on their rights under the Marlowe Incentive Plans
and, where required, appropriate proposals will be made to participants in the
Marlowe Share Plans pursuant to Rule 15 of the Takeover Code in due course.
Further details of the terms of such proposals will be included in the Scheme
Document (or, if Mitie has elected (with the consent of the Panel and Marlowe)
to exercise its right to implement the Acquisition by way of an Offer, the
Offer Document) and in separate letters to be sent to participants in the
Marlowe Share Plans (where necessary).
13 Financing
Mitie is funding the cash consideration payable pursuant to the Acquisition,
together with certain fees and expenses in connection with the Acquisition,
through new debt financing.
Prior to the release of this announcement, Bidco has entered into a bridge
facility agreement in an amount of up to £240,000,000 (the "Bridge Facility
Agreement") arranged by Lloyds Bank PLC and National Westminster Bank PLC,
Bidco will draw a loan pursuant to the Bridge Facility Agreement to satisfy in
full the cash consideration payable to Marlowe Shareholders. The initial
maturity date falls twelve months after the date of the Bridge Facility
Agreement.
Lazard, financial adviser to Mitie, confirms that it is satisfied that
sufficient resources are available to Mitie to satisfy in full the cash
consideration payable to Marlowe Shareholders under the terms of the
Acquisition.
Further information on the financing of the Acquisition will be set out in the
Scheme Document.
14 Offer-related arrangements
Confidentiality Agreement
Mitie and Marlowe entered into a confidentiality and standstill agreement
dated 8 May 2025 (the "Confidentiality Agreement") pursuant to which each
party has undertaken to: (i) keep confidential information relating to, inter
alia, the Acquisition and the other party and not to disclose it to third
parties (other than to certain permitted parties) unless required by law or
regulation; and (ii) use the confidential information only in connection with
the Acquisition.
These confidentiality obligations will remain in force for a period of twelve
months from the date of the Confidentiality Agreement. Mitie also agreed to
certain standstill undertakings, all of which ceased to apply upon the release
of this announcement.
This agreement also includes customary non-solicitation obligations on the
Mitie Group.
Co-operation Agreement
Mitie, Bidco and Marlowe have entered into a co-operation agreement dated 5
June 2025 (the "Co-operation Agreement"), pursuant to which, among other
things:
· Mitie and Bidco have agreed to take all necessary
steps to secure the Authorisations necessary to satisfy the Conditions;
· Mitie, Bidco and Marlowe have agreed to certain
undertakings to co-operate and provide each other with information, assistance
and access in relation to the filings, submissions and notifications to be
made in relation to such Authorisations;
· Mitie and Bidco have agreed to provide Marlowe with
certain information for the purposes of the Scheme Document and to otherwise
assist with the preparation of the Scheme Document; and
· Mitie, Bidco and Marlowe have agreed certain
arrangements in respect of directors' and officers' insurance, the Marlowe
Incentive Plans and certain other employee incentive arrangements.
The Co-operation Agreement also records the intention of Mitie, Bidco and
Marlowe to implement the Acquisition by way of the Scheme and the agreement
from Bidco and Mitie not to proceed by way of a Takeover Offer without consent
from Marlowe and the Panel.
The Co-operation Agreement will be terminated in certain circumstances,
including (but not limited to):
· if Mitie and Marlowe so agree in writing at any
time before the Effective Date;
· upon service of a written notice by one party to
another if a Marlowe Adverse Recommendation Change (as defined in the
Co-Operation Agreement) occurs;
· if the Scheme does not become effective in
accordance with its terms by the Long-stop Date;
· if the Scheme is withdrawn or lapses in each case
as a result of Mitie or Bidco invoking any Condition with the Panel's consent
prior to the Long-stop Date (unless otherwise agreed between Mitie and
Marlowe); or
· immediately if a Competing Transaction (as defined
in the Co-Operation Agreement) becomes effective or becomes unconditional.
Clean Team Agreement
Mitie and Marlowe entered into a clean team agreement dated 19 May 2025 (the
"Clean Team Agreement"), the purpose of which is to set out the terms
governing the disclosure of commercially sensitive information by or on behalf
of Marlowe or Mitie (as applicable) to certain specified employees of Marlowe
or Mitie (as applicable), who are not involved in the day-to-day commercial or
strategic operations and decisions of Mitie or Marlowe (as applicable), and
their respective external advisers only, as well as the related analysis,
reporting and potential return or destruction of such information.
Confidentiality and Joint Defense Agreement
Mitie, Marlowe and their respective external legal counsels have entered into
a confidentiality and joint defence agreement dated 20 May 2025 (the
"Confidentiality and Joint Defense Agreement"), the purpose of which is to
ensure that the exchange and/or disclosure of certain materials relating to
the parties only takes place between their respective external legal counsels
and external experts, and does not diminish in any way the confidentiality of
such materials and does not result in a waiver of privilege, right or immunity
that might otherwise be available.
15 New Mitie Shares
The New Mitie Shares will, when issued, be ordinary shares in the capital of
Mitie with a nominal value of 2.5 pence each, will be fully paid and rank pari
passu in all respects with the Mitie Shares in issue at the date of this
announcement.
Fractions of New Mitie Shares will not be issued pursuant to the Acquisition.
Entitlements to New Mitie Shares pursuant to the Acquisition will be rounded
down to the nearest whole number of New Mitie Shares.
Fractional entitlements to New Mitie Shares will be aggregated and allotted
and issued to a nominee appointed by Mitie and such shares will then be sold
in the market and the net proceeds of sale will be distributed in due
proportion to the Marlowe Shareholders entitled to them. However, individual
fractional entitlements to amounts (net of expenses) not exceeding £5 will
not be paid to persons who would otherwise be entitled to them under the
Acquisition, but will be retained for the benefit of the Enlarged Group.
16 Dividends
Mitie and Marlowe have agreed that until the Effective Date, Mitie will
declare its dividends in accordance with the Mitie Dividend Policy.
Mitie and Marlowe expect the Scheme to become Effective in the third quarter
of 2025. It is expected that the New Mitie Shares to be issued to Marlowe
Shareholders pursuant to the Acquisition will be issued prior to the last
cum-dividend trading date for the Mitie FY26 Interim Dividend and,
accordingly, if that were to occur, the Marlowe Shareholders that receive and
continue to hold New Mitie Shares at the relevant date will rank for the Mitie
FY26 Interim Dividend.
If, on or after the date of this announcement and on or prior to the Effective
Date, any dividend, distribution, or other return of capital is declared, made
or paid, or becomes payable by Marlowe, Mitie and Bidco shall be entitled to
reduce the Offer Consideration by an aggregate amount up to the amount of such
dividend, distribution, or other return of capital, in which case references
to the Offer Consideration will be deemed to be a reference to the Offer
Consideration as so reduced. In such circumstances, Marlowe Shareholders will
be entitled to retain any such dividend, distribution, or other return of
capital declared, made, or paid.
17 Structure of and Conditions to the Acquisition
It is intended that the Acquisition will be effected by means of a
Court-approved scheme of arrangement between Marlowe and Marlowe Shareholders
under Part 26 of the Companies Act. Mitie reserves the right to implement the
Acquisition by means of a Takeover Offer (subject to the consent of Marlowe
and the Panel).
The purpose of the Scheme is to provide for Bidco to become the holder of the
entire issued and to be issued ordinary share capital of Marlowe. This is to
be achieved by the transfer of the Marlowe Shares to Bidco, in consideration
for which the Marlowe Shareholders will receive the Offer Consideration (being
the cash consideration and the New Mitie Shares) on the basis set out in
paragraph 2 of this announcement.
The Acquisition will be subject to the Conditions and further terms set out
below and in Appendix I to this announcement and to be set out in the Scheme
Document and will only become effective, if, among other things, the following
events occur on or before 11.59 p.m. (London time) on the Long-stop Date:
(i) the approval of the Scheme by a majority in number of the
Marlowe Shareholders who are present and vote, whether in person or by proxy,
at the Court Meeting and who represent 75 per cent. in value of the Marlowe
Shares voted by those Marlowe Shareholders;
(ii) the resolutions required to approve and implement the
Scheme being duly passed by Marlowe Shareholders representing the requisite
majority or majorities of votes cast at the General Meeting;
(iii) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to
Marlowe, Bidco and Mitie);
(iv) the delivery of a copy of the Court Order to the Registrar of
Companies; and
(v) the satisfaction of the UK National Security Condition and
the Irish Foreign Direct Investment Condition (as set out in paragraphs 3(b)
and (c) of Part A of Appendix I to this announcement).
The Scheme will lapse if:
· the Court Meeting and the General Meeting are not
held by the 22(nd) day after the expected date of such meetings to be set out
in the Scheme Document in due course (or such later date as may be agreed
between Mitie, Bidco and Marlowe);
· the Court Hearing is not held by the 22(nd) day
after the expected date of such hearing to be set out in the Scheme Document
in due course (or such later date as may be agreed between Mitie, Bidco and
Marlowe); or
· the Scheme does not become effective by 11.59 p.m.
(London time) on the Long-stop Date,
provided, however, that the deadlines for the timing of the Court Meeting, the
General Meeting and the Court Hearing as set out above may be waived by Mitie
and Bidco, and the deadline for the Scheme to become Effective may be extended
by agreement between Mitie, Bidco and Marlowe.
Subject to satisfaction (or waiver, where applicable) of the Conditions, the
Scheme is expected to become Effective in the third quarter of 2025.
Upon the Scheme becoming Effective, it will be binding on all Marlowe
Shareholders, irrespective of whether or not they attended or voted at the
Court Meeting or the General Meeting.
Further details of the Scheme, including an indicative timetable for its
implementation, will be set out in the Scheme Document which will be
distributed to Marlowe Shareholders (along with Forms of Proxy for voting in
respect of the Court Meeting and the General Meeting and the Forms of Election
in relation to the Mix and Match Facility) as soon as reasonably practicable
and in any event within 28 days of the date of this announcement or such later
date as Mitie, Bidco, Marlowe and the Panel may agree, and that the Court
Meeting and the General Meeting will be held as soon as practicable
thereafter.
18 Listing of New Mitie Shares, de-listing of Marlowe Shares and
re-registration
Application will be made to the FCA and the London Stock Exchange,
respectively, for the New Mitie Shares to be admitted to the Official List and
to trading on Main Market. It is expected that Admission will become effective
and dealings for normal settlement in the New Mitie Shares will commence at or
shortly after 8.00 a.m. (London time) on the first Business Day following the
Effective Date.
Prior to the Scheme becoming effective, Marlowe will make an application to
the London Stock Exchange for the cancellation of trading of Marlowe Shares on
AIM to take effect from or shortly after the Effective Date. The last day of
dealings in Marlowe Shares on AIM is expected to be the Business Day
immediately prior to the Effective Date and no transfers will be registered
after 6.00p.m. (London time) on that date.
On the Effective Date, share certificates in respect of Marlowe Shares will
cease to be valid and entitlements to Marlowe Shares held within the CREST
system will be cancelled.
It is also proposed that, following the Effective Date and after the Marlowe
Shares are delisted, Marlowe will be re-registered as a private limited
company.
19 Disclosure of interests in Marlowe
As at the close of business on 4 June 2025 (being the latest practicable date
prior to the date of this announcement) neither Mitie, Bidco, nor any of their
directors, nor, so far as Mitie and Bidco are aware, any person acting in
concert (within the meaning of the Takeover Code) with them has:
· any interest in or right to subscribe for any
relevant securities of Marlowe;
· any short positions in respect of relevant Marlowe
Shares (whether conditional or absolute and whether in the money or
otherwise), including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person to purchase
or take delivery;
· any Dealing Arrangement, in relation to Marlowe
Shares or in relation to any securities convertible into Marlowe Shares;
· borrowed nor lent any relevant Marlowe Shares
(including, for these purposes, any financial collateral arrangements of the
kind referred to in Note 3 on Rule 4.6 of the Takeover Code), save for any
borrowed shares which had been either on-lent or sold.
'Interests in securities' for these purposes arise, in summary, when a person
has long economic exposure, whether absolute or conditional, to changes in the
price of securities (and a person who only has a short position in securities
is not treated as interested in those securities). In particular, a person
will be treated as having an 'interest' by virtue of the ownership, voting
rights or control of securities, or by virtue of any agreement to purchase,
option in respect of, or derivative referenced to, securities.
It has not been practicable for Mitie to make enquiries of all of its concert
parties in advance of the release of this announcement. Therefore, all
relevant details in respect of Mitie's concert parties will be included in the
Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on
Rule 8 of the Takeover Code.
20 General
The Acquisition will be made on the terms and subject to the Conditions and
further terms set out in Appendix I to this announcement and included in the
Scheme Document. The sources of information and bases of calculations
contained in this announcement are set out in Appendix II to this
announcement. Appendix III contains details of and bases of calculation of the
anticipated financial benefits of the Acquisition. Certain terms used in this
Announcement are defined in Appendix IV to this announcement.
It is expected that the Scheme Document will be distributed to Marlowe
Shareholders (along with the Forms of Proxy for use in connection with the
Court Meeting and the General Meeting and the Forms of Election in relation to
the Mix and Match Facility) as soon as practicable and, in any event, within
28 days of this announcement (or such later date as Mitie, Bidco, Marlowe and
the Panel may agree). The Scheme Document, Forms of Proxy and Forms of
Election will be made available to all Marlowe Shareholders at no charge to
them.
Lazard and Cavendish have each given and not withdrawn their consent to the
publication of this announcement with the inclusion herein of the references
to their names in the form and context in which they appear.
PwC has given and not withdrawn its consent to the publication of its report
in Part B of Appendix III to this announcement in the form and context in
which it is included pursuant to Rule 23.2 of the Takeover Code.
There will be a Mitie investor and analyst presentation at 9.30 a.m. (London
time) on 5 June 2025 via a live webcast available at
https://webcasts.umcdn.com/mit037
(https://urldefense.com/v3/__https:/webcasts.umcdn.com/mit037__;!!G416Ov7nCA!uXuD2k9qQav24vWOhHZ3lAxegIi85v7xeQq0y0dLQmZaH6pFMV7maepwdpGun5G43x9qZu1e335b-BGzVIZCF3NGk1g$)
.
21 Documents available on website
Copies of the following documents will be made available on Mitie's and
Marlowe's websites at https://www.mitie.com/ and https://www.marloweplc.com/
respectively until the Effective Date:
· this announcement;
· the documents relating to the financing of the
Acquisition referred to in paragraph 13 of this announcement;
· the Confidentiality Agreement;
· the Co-operation Agreement;
· the Clean Team Agreement;
· the Confidentiality and Joint Defense Agreement;
and
· consent letters from each of Lazard, PwC and
Cavendish.
Enquiries:
Mitie
Peter Dickinson, Chief Legal Officer +44 746 871 2932
Kate Heseltine, Group IR and Corporate Finance Director +44 738 443 9112
H/Advisors Maitland (PR Adviser to Mitie) +44 790 000 0777
Neil Bennett
Lazard (Financial Adviser to Mitie) +44 20 7187 2000
Vasco Litchfield
Louise Campbell
Marlowe
Adam Councell, Chief Financial Officer +44 20 3813 8498
FTI Consulting (PR Adviser to Marlowe) +44 20 3727 1340
Nick Hasell
Alex Le May
Cavendish Capital Markets Limited (Financial Adviser and Rule 3 Adviser to +44 20 7220 0500
Marlowe)
Ben Jeynes
Henrik Persson
George Lawson
Elysia Bough
Linklaters LLP is retained as legal adviser to Mitie.
Allen Overy Shearman Sterling LLP is retained as legal adviser to Marlowe.
Important notices
Lazard & Co., Limited ("Lazard") which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively as
financial adviser to Mitie and no one else in connection with the Acquisition
and will not be responsible to anyone other than Mitie for providing the
protections afforded to clients of Lazard nor for providing advice in
connection with the Acquisition or any matter referred to herein. Neither
Lazard nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of Lazard
in connection with this announcement, any statement contained herein or
otherwise.
Cavendish Capital Markets Limited ("Cavendish") which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to Marlowe and no one else in connection with
the Acquisition and will not be responsible to anyone other than Marlowe for
providing the protections afforded to clients of Cavendish nor for providing
advice in connection with the Acquisition or any matter referred to herein.
Neither Cavendish nor any of its affiliates (nor their respective directors,
officers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client of
Cavendish in connection with this announcement, any statement contained
herein, the Acquisition or otherwise. No representation or warranty, express
or implied, is made by Cavendish as to the contents of this announcement.
This announcement is for information purposes only. It is not intended to and
does not constitute, or form part of, an offer, invitation or the solicitation
of an 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, pursuant to the Acquisition or otherwise nor will there be any
sale, issuance or transfer of securities in any jurisdiction in contravention
of applicable law or regulation.
The Acquisition is intended to be made by means of the Scheme Document which,
together with the Forms of Proxy and Forms of Election in relation to the Mix
and Match Facility, will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
This announcement has been prepared for the purpose of complying with English
law and the Takeover Code and the information disclosed may not be the same as
that which would have been disclosed if this announcement had been prepared in
accordance with the laws and regulations of jurisdictions outside England and
Wales.
The Acquisition will be subject to the applicable requirements of the Takeover
Code, the Panel, the AIM Rules, the London Stock Exchange and the Financial
Conduct Authority.
Marlowe will prepare the Scheme Document to be distributed to Marlowe
Shareholders. Marlowe urges Marlowe Shareholders to read the Scheme Document
(including the related Forms of Proxy and the Forms of Election in relation to
the Mix and Match Facility) when it becomes available because it will contain
important information in relation to the Acquisition, the New Mitie Shares and
the Enlarged Group. Any vote in respect of the Scheme or other response in
relation to the Acquisition should be made only on the basis of the
information contained in the Scheme Document.
This announcement does not constitute a prospectus, a prospectus equivalent
document, or prospectus exemption document.
Overseas Shareholders
The release, publication or distribution of this announcement, in whole or in
part, directly or indirectly, in or into certain jurisdictions other than the
United Kingdom may be restricted by law or regulations of those jurisdictions.
Persons who are not resident in the United Kingdom or who are subject to other
jurisdictions should inform themselves of, and observe, any applicable
requirements.
Unless otherwise determined by Mitie and Bidco or required by the Takeover
Code, and permitted by applicable law and regulation, the Acquisition will not
be made available, directly or indirectly, in, into or from a Restricted
Jurisdiction where to do so would violate the laws or regulations in that
jurisdiction and no person may vote in favour of the Acquisition by any such
use, means, instrumentality or form within a Restricted Jurisdiction or any
other jurisdiction if to do so would constitute a violation of the laws or
regulations of that jurisdiction. Accordingly, copies of this announcement and
all documents relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed or sent in,
into or from a Restricted Jurisdiction where to do so would violate the laws
or regulations in that jurisdiction, and persons receiving this announcement
and all documents relating to the Acquisition (including custodians, nominees
and trustees) must not mail or otherwise distribute or send them in, into or
from such jurisdictions where to do so would violate the laws in that
jurisdiction.
The availability of the Acquisition to Marlowe Shareholders who are not
resident in the United Kingdom may be affected by the laws of the relevant
jurisdictions in which they are resident. Persons who are not resident in the
United Kingdom should inform themselves of, and observe, any applicable
requirements.
The New Mitie Shares may not be offered, sold or delivered, directly or
indirectly, in, into or from any Restricted Jurisdiction or to, or for the
account or benefit of, any Restricted Overseas Persons except pursuant to an
applicable exemption from, or in a transaction not subject to, applicable
securities laws or regulations of those jurisdictions.
Additional information for US investors
The Acquisition relates to shares of an English company and is proposed to be
effected by means of a scheme of arrangement under the laws of England and
Wales. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer rules or the proxy solicitation rules under the US
Exchange Act.
Accordingly, the Acquisition is subject to the disclosure and procedural
requirements applicable in the United Kingdom to schemes of arrangement which
differ from the disclosure requirements of United States tender offer and
proxy solicitation rules.
The receipt of consideration by a US holder for the transfer of its Marlowe
Shares pursuant to the Scheme will be a taxable Acquisition for United States
federal income tax purposes. Each Marlowe Shareholder is urged to consult
their independent professional adviser immediately regarding the tax
consequences of the Acquisition applicable to them, including under applicable
United States state and local, as well as overseas and other, tax laws.
In accordance with normal United Kingdom practice and pursuant to Rule 14-e-5
of the US Exchange Act, Mitie and Bidco, their nominees, or their brokers
(acting as agents), may from time to time make certain purchases of, or
arrangements to purchase, shares or other securities of Marlowe outside of the
US, other than pursuant to the Acquisition, until the date on which the
Acquisition and/or Scheme becomes effective, lapses or is otherwise withdrawn.
These purchases may occur either in the open market at prevailing prices or in
private Acquisitions at negotiated prices. Any information about such
purchases or arrangements to purchase will be disclosed as required in the UK,
will be reported to a Regulatory Information Service and will be available on
the London Stock Exchange website at www.londonstockexchange.com
(http://www.londonstockexchnage.com/) .
Financial information relating to Marlowe included in this announcement and
the Scheme Document has been or will have been prepared in accordance with
accounting standards applicable in the United Kingdom and may not be
comparable to financial information of US companies or companies whose
financial statements are prepared in accordance with generally accepted
accounting principles in the United States.
The New Mitie Shares issued pursuant to the Scheme will not be registered
under any US state securities laws and may only be issued to persons resident
in a state pursuant to an exemption from the registration requirements of the
securities laws of such state.
For the purpose of qualifying for the exemption provided by Section 3(a)(10)
of the US Securities Act, Marlowe will advise the Court that its sanctioning
of the Scheme will be relied on by Mitie and Bidco as an approval of the
Scheme following a hearing on its fairness to Marlowe Shareholders, at which
Court hearing all Marlowe Shareholders are entitled to attend in person or
through counsel to support or oppose the sanctioning of the Scheme and with
respect to which notification will be given to all such holders.
Mitie is organised under the laws of Scotland, and Bidco and Marlowe are
organised under the laws of England and Wales. Some or all of the officers and
directors of Mitie, Bidco and Marlowe, respectively, are residents of
countries other than the United States. In addition, most of the assets of
Mitie, Bidco and Marlowe are located outside the United States. As a result,
it may be difficult for US shareholders of Marlowe to effect service of
process within the United States upon Mitie, Bidco or Marlowe or their
respective officers or directors or to enforce against them a judgment of a US
court predicated upon the federal or state securities laws of the United
States. Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's judgement. It may not be
possible to sue Mitie, Bidco, Marlowe or their respective directors or
officers in a non-US court for violations of US securities laws.
Forward looking statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Marlowe, any member of the Marlowe Group, Mitie, or
any member of the Mitie Group (which includes Bidco) contain statements which
are, or may be deemed to be, "forward looking statements". Such forward
looking statements are prospective in nature and are not based on historical
facts, but rather on current expectations and on numerous assumptions
regarding the business strategies and the environment in which Marlowe, any
member of the Marlowe Group, Mitie, any member of the Mitie Group, or the
Enlarged Group will operate in the future and are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied by those statements. The forward looking statements
contained in this announcement relate to Marlowe, any member of the Marlowe
Group, Mitie, any member of the Mitie Group, or the Enlarged Group's future
prospects, developments and business strategies, the expected timing and scope
of the Acquisition and other statements other than historical facts. In some
cases, these forward looking statements can be identified by the use of
forward looking terminology, including the terms "believes", "estimates",
"will look to", "would look to", "plans", "prepares", "anticipates",
"expects", "is expected to", "is subject to", "budget", "scheduled",
"forecasts", "synergy", "strategy", "goal", "cost-saving", "projects"
"intends", "may", "will", "shall" or "should" or their negatives or other
variations or comparable terminology. Forward-looking statements may include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Mitie's,
any member of the Mitie Group, Marlowe's, or any member of the Marlowe Group's
operations and potential synergies resulting from the Acquisition; and (iii)
the effects of global economic conditions and governmental regulation on
Mitie's, any member of the Mitie Group, Marlowe's, or any member of the
Marlowe Group's business. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. These events and circumstances includes changes
in the global, political, economic, business, competitive, market and
regulatory forces, future exchange and interest rates, changes in tax rates,
future business combinations or disposals, and any epidemic, pandemic or
disease outbreak. If any one or more of these risks or uncertainties
materialises or if any one or more of the assumptions prove incorrect, actual
results may differ materially from those expected, estimated or projected.
Such forward looking statements should therefore be construed in the light of
such factors.
Neither Marlowe, any member of the Marlowe Group, Mitie, or any member of the
Mitie Group, nor any of their respective associates or directors, officers or
advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward looking
statements in this announcement will actually occur. Given these risks and
uncertainties, potential investors should not place any reliance on forward
looking statements.
Specifically, statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature involve, risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Enlarged Group, there may be additional
changes to the Enlarged Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.
The forward looking statements speak only at the date of this announcement.
All subsequent oral or written forward-looking statements attributable to
Mitie, any member of the Mitie Group, Marlowe, or any member of the Marlowe
Group, or any of their respective associates, directors, officers, employees
or advisers, are expressly qualified in their entirety by the cautionary
statement above.
Marlowe, the Marlowe Group, Mitie and the Mitie Group expressly disclaim any
obligation to update such statements other than as required by law or by the
rules of any competent regulatory authority, whether as a result of new
information, future events or otherwise.
No profit forecasts or estimates
Other than as set out in paragraph 10 in this announcement, 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 Mitie or Marlowe, as appropriate, for the
current or future financial years would necessarily match or exceed the
historical published earnings or earnings per share for Mitie or Marlowe, as
appropriate.
Quantified Financial Benefits Statement
Appendix III to this announcement sets out the anticipated Quantified
Financial Benefits Statement and contains details of, and bases of calculation
of, the anticipated financial benefits of the Acquisition, together with the
related reports from Mitie's reporting accountant, PwC, and Mitie's financial
adviser, Lazard, as required under Rule 28.1(a) of the Takeover Code, and
provides underlying information and bases for the accountant's and financial
adviser's respective reports. Lazard, as financial adviser to Mitie, has
provided such report for the purposes of the Takeover Code stating that, in
its opinion and subject to the terms of the report, the Quantified Financial
Benefits Statement, for which the Mitie Directors are responsible, has been
prepared with due care and consideration. Each of PwC and Lazard has given and
not withdrawn its consent to the publication of its respective report in this
announcement in the form and context in which it is included pursuant to Rule
23.2 of the Takeover Code.
For the purpose of Rule 28 of the Takeover Code, the Quantified Financial
Benefits Statement contained in this announcement is the responsibility of
Mitie and the Mitie Directors. Any statement of intention, belief or
expectation for the Enlarged Group following the Effective Date is an
intention, belief or expectation of the Mitie Directors and not of the Marlowe
Directors.
The statements in the Quantified Financial Benefits Statement relate to future
actions and circumstances which, by their nature, involve risks, uncertainties
and contingencies. As a result, the cost savings and synergies referred to may
not be achieved, may be achieved later or sooner than estimated, or those
achieved could be materially different from those estimated. No statement in
the Quantified Financial Benefits Statement should be construed as a profit
forecast or interpreted to mean that the Enlarged Group's earnings in the
first full year following the Effective Date, or in any subsequent period,
would necessarily match or be greater than or be less than those of Mitie
and/or Marlowe for the relevant preceding financial period or any other
period.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree company or of
any securities exchange offeror (being any offeror other than an offeror in
respect of which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following the
commencement of the offer period and, if later, following the announcement in
which any securities exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of (i) the
offeree company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no
later than 3.30 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the 10th business day following the announcement in
which any securities exchange offeror is first identified. Relevant persons
who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes,
interested in 1 per cent. or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a Dealing
Disclosure if the person deals in any relevant securities of the offeree
company or of any securities exchange offeror. A Dealing Disclosure must
contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of
each of (i) the offeree company and (ii) any securities exchange offeror(s),
save to the extent that these details have previously been disclosed under
Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be
made by no later than 3.30 p.m. (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3 of the Takeover
Code.
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 of the Takeover Code).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market
Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether
you are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Electronic communications
Please be aware that addresses, electronic addresses and certain information
provided by Marlowe Shareholders, persons with information rights and other
relevant persons for the receipt of communications from Marlowe may be
provided to Mitie during the Offer Period as requested under Section 4 of
Appendix 4 of the Takeover 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
Mitie's and Marlowe's websites at https://www.mitie.com/ and
https://www.marloweplc.com/ respectively by no later than 12 noon (London
time) on the business day after the date of this announcement. For the
avoidance of doubt, the contents of these websites are not incorporated into
and do not form part of this announcement.
Marlowe Shareholders, persons with information rights and participants in the
Marlowe Share Plans may request a hard copy of this announcement by: (i)
contacting MUFG Corporate Markets (UK) Limited during business hours on 0371
664 0391 if calling from the United Kingdom, or +44 (0)371 664 0391 if calling
from outside the United Kingdom (lines are open from 8.30 a.m. to 5.30 p.m.
(London time), Monday to Friday (excluding public holidays in England and
Wales)); or (ii) submitting a request in writing to MUFG Corporate Markets
(UK) Limited, Central Square, 29 Wellington Street, Leeds LS1 4DL, United
Kingdom. A person so entitled may also request that all future documents,
announcements and information in relation to the Acquisition be sent to them
in hard copy form.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
Part A: Conditions to the Scheme and the Acquisition
1 The Acquisition is conditional upon the Scheme becoming
unconditional and effective, subject to the Takeover Code, by no later than
11.59 p.m. (London time) on the Long-stop Date.
2 The Scheme will be subject to the following conditions:
2.1
(i) its approval by a majority in number of the Marlowe
Shareholders who are present and vote, whether in person or by proxy, at the
Court Meeting and who represent 75 per cent. or more in value of the Marlowe
Shares voted by those Marlowe Shareholders; and
(ii) such Court Meeting being held on or before the 22nd day
after the expected date of the Court Meeting to be set out in the Scheme
Document in due course (or such later date, if any: (a) as may be agreed by
Mitie, Bidco and Marlowe; or (b) (in a competitive situation) as may be
specified by Mitie and Bidco with the consent of the Panel, and in each case
that (if so required) the Court may allow);
2.2
(i) the resolutions required to implement the Scheme being
duly passed by Marlowe Shareholders representing 75 per cent. or more of votes
cast at the General Meeting; and
(ii) such General Meeting being held on or before the 22nd
day after the expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date, if any: (a) as may be agreed by
Mitie, Bidco and Marlowe; or (b) (in a competitive situation) as may be
specified by Mitie and Bidco with the consent of the Panel, and in each case
that (if so required) the Court may allow);
2.3
(i) the sanction of the Scheme by the Court (with or
without modification but subject to any modification being on terms acceptable
to Marlowe, Mitie and Bidco) and the delivery of a copy of the Court Order to
the Registrar of Companies; and
(ii) the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing to be set out in the Scheme
Document in due course (or such later date, if any: (a) as may be agreed by
Mitie, Bidco and Marlowe; or (b) (in a competitive situation) as may be
specified by Mitie and Bidco with the consent of the Panel, and in each case
that (if so required) the Court may allow);
3 In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition will be conditional upon the
following Conditions and, accordingly, the necessary actions to make the
Scheme Effective will not be taken unless such Conditions (as amended if
appropriate) have been satisfied or, where relevant, waived:
Admission of the New Mitie Shares
(a)
(i) the FCA having acknowledged to Mitie or its agent (and
such acknowledgement not having been withdrawn) that the application for the
admission of the New Mitie Shares to the Equity Shares (Commercial Companies)
category of the Official List has been approved and (after satisfaction of any
conditions to which such approval is expressed to be subject ("listing
conditions")) will become effective as soon as a dealing notice has been
issued by the FCA and any listing conditions have been satisfied; and
(ii) the London Stock Exchange having acknowledged to Mitie
or its agent (and such acknowledgement not having been withdrawn) that the New
Mitie Shares will be admitted to trading on the Main Market;
Official authorisations, regulatory clearances and Third Party clearances
UK National Security
(b)
(i) if the Acquisition is a notifiable acquisition under
the National Security and Investment Act 2021 (the "NSI Act"), the requisite
notification having been made and the Secretary of State confirming that no
further action will be taken under the NSI Act in relation to the Acquisition
or making a final order under the NSI Act in respect of the Acquisition, the
provisions of which allow the Acquisition to proceed; and
(ii) as at the date on which all other Conditions are
satisfied or waived, the Secretary of State not having made any interim order
preventing the Acquisition becoming Effective (or any such order having been
withdrawn);
the ("UK National Security Condition");
Irish Foreign Direct Investment
(c) if the Acquisition is notifiable to the Minister for
Enterprise, Trade and Employment (including any successor in relation to its
trade responsibilities) (the "Minister") under Section 10(1) of the Screening
of Third Country Transactions Act 2023 (the "Screening Act"), the requisite
notification having been made and accepted by the Minister and either:
(i) the Minister having confirmed in writing his or her
screening decision under section 16(1) of the Screening Act that the
Acquisition does not affect, or would not be likely to affect, the security or
public order of the Republic of Ireland; or
(ii) the Minister having informed the parties in writing of
his or her screening decision under section 16(1) of the Screening Act that
the Acquisition affects, or would be likely to affect, the security or public
order of the Republic of Ireland and that the Acquisition may only be
completed in accordance with a direction made under section 18(3) of the
Screening Act, the provisions of which allow the Acquisition to proceed; or
(iii) the Minister having informed the parties in writing of
his or her election not to issue a screening notice under section 14(1) of the
Screening Act on the grounds that the Acquisition does not constitute a
notifiable transaction; or
(iv) the period specified in section 16(3) of the Screening
Act, including, if applicable, any period of extension under Section 20 of the
Screening Act, has elapsed without the Minister having made a Screening
Decision under Section 16(1) of the Screening Act such that the Acquisition is
deemed by virtue of Section 16(4) of the Screening Act to be subject to a
screening decision to the effect that it has not affected, or would not be
likely to affect, the security or public order of the Republic of Ireland;
the ("Irish Foreign Direct Investment Condition");
General Third Party approvals
(d) the waiver (or non-exercise within any applicable time
limits) by any relevant government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental, employee representative,
administrative, fiscal, or investigative body, court, trade agency,
association or institution (each a "Third Party") of any termination right,
right of pre-emption, first refusal, or similar right (which is material in
the context of the Wider Marlowe Group taken as a whole or in the context of
the Acquisition) arising as a result of or in connection with the Acquisition
including, without limitation, its implementation and financing or the
proposed direct or indirect acquisition of any shares or other securities in,
or control or management of, Marlowe by Mitie or any member of the Wider Mitie
Group;
(e) excluding in relation to the CMA, all necessary
notifications, filings or applications having been made in connection with the
Acquisition and all necessary waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any jurisdiction
having expired, lapsed or been terminated (as appropriate) and all statutory
and regulatory obligations in any jurisdiction having been complied with in
each case in respect of the Acquisition and all necessary Authorisations in
any jurisdiction for or in respect of the Acquisition including, without
limitation, its implementation and financing or, except pursuant to Chapter 3
of Part 28 of the Companies Act, the acquisition or the proposed acquisition
of any shares or other securities in, or control or management of, Marlowe or
any other member of the Wider Marlowe Group by any member of the Wider Mitie
Group having been obtained from all appropriate Third Parties or (without
prejudice to the generality of the foregoing) from any person or bodies with
whom any member of the Wider Marlowe Group or the Wider Mitie Group has
entered into contractual arrangements and all such Authorisations necessary to
carry on the business of any member of the Wider Marlowe Group in any
jurisdiction having been obtained and all such Authorisations remaining in
full force and effect at the time at which the Acquisition becomes otherwise
effective and there being no notice or intimation of an intention to revoke,
suspend, restrict, modify or not to renew such Authorisations;
General antitrust and regulatory
(f) other than in relation to the approvals referred to in
Conditions 3(b) and 3(c) above and excluding in relation to the CMA, no Third
Party having given notice of a decision to take, institute, implement or
threaten any action, proceeding, suit, investigation, enquiry or reference
(and in each case, not having withdrawn the same), or having 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 Mitie Group or by any member of the Wider Marlowe Group of all or
any material part of its businesses, assets or property or impose any
limitation on the ability of all or any of them to conduct their businesses
(or any part thereof) or to own, control or manage any of their assets or
properties (or any part thereof);
(ii) except pursuant to Chapter 3 of Part 28 of the
Companies Act, require any member of the Wider Mitie Group or the Wider
Marlowe Group to acquire or offer to acquire any shares, other securities (or
the equivalent) or interest in any member of the Wider Marlowe Group or any
asset owned by any third party (other than in the implementation of the
Acquisition);
(iii) impose any material limitation on, or result in a
material delay in, the ability of any member of the Wider Mitie 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 Marlowe or on the
ability of any member of the Wider Marlowe Group or any member of the Wider
Mitie 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 Marlowe Group;
(iv) otherwise adversely affect any or all of the business,
assets, profits or prospects of any member of the Wider Marlowe Group or any
member of the Wider Mitie Group;
(v) result in any member of the Wider Marlowe Group or any
member of the Wider Mitie Group ceasing to be able to carry on business under
any name under which it presently carries on business;
(vi) make the Acquisition, its implementation or the
acquisition or proposed acquisition of any shares or other securities in, or
control or management of, Marlowe by any member of the Wider Mitie 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 to a material extent or otherwise materially
interfere with the implementation of, or impose material additional conditions
or obligations with respect to, or otherwise materially challenge, impede,
interfere or require material amendment of the Acquisition or the acquisition
or proposed acquisition of any shares or other securities in, or control or
management of, Marlowe by any member of the Wider Mitie Group;
(vii) require, prevent or materially delay a divestiture by any
member of the Wider Mitie Group of any shares or other securities (or the
equivalent) in any member of the Wider Marlowe Group or any member of the
Wider Mitie Group; or
(viii) impose any material limitation on the ability of any member
of the Wider Mitie Group of any member of the Wider Marlowe Group to conduct,
integrate or co-ordinate all or any part of its business with all or any part
of the business of any other member of the Wider Mitie Group and/or the Wider
Marlowe 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 the Acquisition or the acquisition or proposed
acquisition of any Marlowe Shares or otherwise intervene having expired,
lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
(g) except as Disclosed, and in each case to an extent which is
material in the context of the Wider Marlowe Group taken as a whole, there
being no provision of any arrangement, agreement, lease, licence, franchise,
permit or other instrument to which any member of the Wider Marlowe 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 Acquisition or because of a change in the control or
management of any member of the Wider Marlowe Group or otherwise, would
reasonably be expect to result in:
(i) any monies borrowed by, or any other indebtedness,
actual or contingent, of, or any grant available to, any member of the Wider
Marlowe 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 being capable of becoming or
being withdrawn or inhibited;
(ii) save in the ordinary course of business, the creation
or enforcement of any mortgage, charge or other security interest over the
whole or any part of the business, property or assets of any member of the
Wider Marlowe Group or any such mortgage, charge or other security interest
(whenever created, arising or having arisen) becoming enforceable;
(iii) any such arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or the rights,
liabilities, obligations or interests of any member of the Wider Marlowe Group
thereunder being adversely affected or any onerous obligation or liability
arising or any adverse action being taken or arising thereunder;
(iv) any liability of any member of the Wider Marlowe Group to
make any severance, termination, bonus or other payment to any of its
directors, or other officers;
(v) the rights, liabilities, obligations, interests or
business of any member of the Wider Marlowe Group under any such arrangement,
agreement, licence, permit, lease or instrument or the interests or business
of any member of the Wider Marlowe 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;
(vi) any member of the Wider Marlowe Group ceasing to be able
to carry on business under any name under which it presently carries on
business;
(vii) the value of, or the financial or trading position or
prospects of, any member of the Wider Marlowe Group being prejudiced or
adversely affected; or
(viii) the creation or acceleration of any liability (actual or
contingent) by any member of the Wider Marlowe Group other than trade
creditors or other liabilities incurred in the ordinary course of business,
and, save as Disclosed, no event having occurred which, under any provision of
any arrangement, agreement, licence, permit, franchise, lease or other
instrument to which any member of the Wider Marlowe Group is a party or by or
to which any such member or any of its assets are bound, entitled or subject,
would reasonably be expected to result in any of the events or circumstances
as are referred to in Conditions (g)(i) to (viii), in each case to an extent
which is material in the context of the Wider Marlowe Group taken as a whole;
Certain events occurring since 31 March 2024
(h) except as Disclosed, no member of the Wider Marlowe Group,
in each case to an extent which is material in the context of the Wider
Marlowe Group taken as a whole, having since 31 March 2024:
(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 Marlowe Shares out of treasury (except, where relevant, as between Marlowe
and subsidiaries of Marlowe or between the subsidiaries of Marlowe and except
for the issue or transfer out of treasury of Marlowe Shares on the exercise of
employee share options or vesting of employee share awards in the ordinary
course under the Marlowe 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 dividends (or other
distributions whether payable in cash or otherwise) lawfully paid or made by
any subsidiary of Marlowe to Marlowe or any of its subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions between Marlowe and its subsidiaries or between the subsidiaries
of Marlowe and transactions in the ordinary course of business), 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 or
shares or loan capital (or the equivalent thereof) in any undertaking or
undertakings;
(iv) except for transactions between Marlowe and its
subsidiaries or between subsidiaries of Marlowe and except for transactions in
the ordinary course of business disposed of, or transferred, mortgaged or
created any security interest over any material asset or any right, title or
interest in any material asset or authorised, proposed or announced any
intention to do so;
(v) (except for transactions between Marlowe and its
subsidiaries or between subsidiaries of Marlowe) issued, authorised or
proposed or announced an intention to authorise or propose, the issue of or
made any change in or to the terms of any debentures or become subject to any
contingent liability or incurred or increased any indebtedness;
(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) except in the ordinary course of business,
which is of a long term, unusual or onerous nature or magnitude or which is or
which involves or could involve an obligation of a nature or magnitude which
is reasonably likely to be materially restrictive on the business of any
member of the Wider Marlowe Group;
(vii) except in the ordinary course of business, entered into or
varied 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 senior executive of any member
of the Wider Marlowe Group, except for salary increases, bonuses or variations
of terms in the ordinary course;
(viii) proposed, agreed to provide or modified the terms of any
share incentive scheme, share option scheme, incentive scheme or other benefit
relating to the employment or termination of employment of any employee of the
Wider Marlowe Group;
(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) except in the ordinary course of business, waived,
compromised or settled any claim;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Marlowe Group and any other person
in a manner which would reasonably be expected to have a material adverse
effect on the financial position of the Wider Marlowe Group taken as a whole;
(xii) (except as disclosed on publicly available registers or
otherwise in connection with the Scheme) made any material alteration to its
memorandum or articles of association or other incorporation documents;
(xiii) except in relation to changes made or agreed as a result
of, or arising from law or changes to law or legislation, made or agreed or
consented to any significant change to:
(a) the terms of the trust deeds and rules constituting the
pension scheme(s) established by any member of the Wider Marlowe Group for its
directors, employees or their dependants;
(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
Marlowe 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;
(xv) (other than in respect of a member of the Wider Marlowe
Group which is dormant and was solvent at the relevant time) taken or proposed
any steps, corporate action or had any legal proceedings instituted or
threatened in writing 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;
(xvi) (except for transactions between Marlowe and its
subsidiaries or between subsidiaries), made, authorised, proposed or announced
an intention to propose any change in its loan capital;
(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 (save for the Scheme);
(xviii) taken (or agreed to take) any action which requires or would
require, the consent of the Panel or the approval of Marlowe Shareholders in
general meeting in accordance with, or as contemplated by, Rule 21.1 of the
Takeover Code; or
(xix) 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 (h);
No adverse change, litigation, regulatory enquiry or similar
(i) except as Disclosed, since 31 March 2024 there having
been:
(i) no adverse change and no circumstance having arisen
which would 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 Marlowe Group which is
material in the context of the Wider Marlowe Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened in writing, announced or
instituted by or against or remaining outstanding against or in respect of,
any member of the Wider Marlowe Group or to which any member of the Wider
Marlowe Group is or is reasonably likely to become a party (whether as
claimant, defendant or otherwise) having been threatened in writing,
announced, instituted or remaining outstanding by, against or in respect of,
any member of the Wider Marlowe Group, in each case which would reasonably be
expected to have a material adverse effect on the Wider Marlowe 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
Marlowe Group having been threatened, announced or instituted or remaining
outstanding by, against or in respect of any member of the Wider Marlowe
Group, in each case which would reasonably be expected to have a material
adverse effect on the Wider Marlowe Group taken as a whole;
(iv) no contingent or other liability having arisen or become
apparent to Mitie or increased other than in the ordinary course of business
which is reasonably likely to affect adversely the business, assets, financial
or trading position or profits or prospects of any member of the Wider Marlowe
Group to an extent which is material in the context of the Wider Marlowe Group
taken as a whole; and
(v) no steps having been taken and no omissions having been
made which are reasonably likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of the Wider
Marlowe Group which is necessary for the proper carrying on of its business
and the withdrawal, cancellation, termination or modification of which would
reasonably be expected to have a material adverse effect on the Wider Marlowe
Group taken as a whole;
No discovery of certain matters regarding information, liabilities and
environmental issues
(j) except as Disclosed, and in each case to an extent which
is material in the context of the Wider Marlowe Group taken as a whole, Mitie
not having discovered that:
(i) any financial, business or other information
concerning the Wider Marlowe Group publicly announced prior to the date of
this announcement or disclosed at any time to any member of the Wider Mitie
Group by or on behalf of any member of the Wider Marlowe Group prior to the
date of this announcement is materially misleading, contains a material
misrepresentation of any fact, or omits to state a fact necessary to make that
information not misleading, in any such case to a material extent;
(ii) any member of the Wider Marlowe Group or any
partnership, company or other entity in which any member of the Wider Marlowe
Group has a significant economic interest and which is not a subsidiary
undertaking of Marlowe is, otherwise than in the ordinary course of business,
subject to any liability, contingent or otherwise;
(iii) any past or present member of the Wider Marlowe Group
has not complied in any material respect with any applicable legislation,
regulations or other requirements of any jurisdiction or any Authorisations
relating to the storage, carriage, disposal, discharge, or emission of any
waste or hazardous substance or any substance likely to materially impair the
environment (including property) or harm human or animal 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 material liability
including any penalty for non-compliance (whether actual or contingent) on the
part of any member of the Wider Marlowe Group;
(iv) there has been a material disposal, discharge,
accumulation, emission, or the migration of any waste or hazardous substance
or any substance likely to materially impair the environment (including any
property) or harm human or animal health (whether or not giving rise to
non-compliance with any law or regulation), which would be likely to give rise
to any material liability (whether actual or contingent) on the part of any
member of the Wider Marlowe Group; or
(v) there is or is reasonably likely to be any material
obligation or liability (whether actual or contingent) or requirement,
including circumstances which would be reasonably likely to lead to a Third
Party instituting an environment audit which would be reasonably likely to
result in such material obligation, liability or requirement, to improve,
install new plant or equipment, or make good, remediate, repair, reinstate, or
clean up any property, asset or any controlled waters currently or previously
owned, occupied, operated, or made use of or controlled by any past or present
member of the Wider Marlowe Group (or on its behalf), or in which any such
member may have or previously have had or be deemed to have had an interest,
or order of any Third Party in any jurisdiction or to contribute to the cost
thereof or associated therewith or indemnify any person in relation thereto;
Anti-corruption
(vi) save to the extent Disclosed, Mitie not having discovered
that:
(i) any member of the Wider Marlowe Group or any person that
performs or has performed services for or on behalf of any such company 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;
(ii) any member of the Wider Marlowe Group is ineligible to be
awarded any contract or business under regulation 57 of the Public Contracts
Regulations 2015 or regulation 80 of the Utilities Contracts Regulations 2015
(each as amended);
(iii) any member of the Wider Marlowe Group has engaged in any
transaction which would cause any member of the Wider Mitie Group to be in
breach of applicable law or regulation upon completion of the Acquisition,
including the economic sanctions of the United States Office of Foreign Assets
Control or HM Treasury & Customs, or any government, entity or individual
targeted by any of the economic sanctions of the United Nations, United States
or the European Union or any of its member states, save that this will not
apply if and to the extent that it is or would be unenforceable by reason of
breach of any applicable Blocking Law; or
No criminal property
(iv) any asset of any member of the Wider Marlowe 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 Acquisition
1 Subject to the requirements of the Panel, Mitie and Bidco
reserve the right, in their sole discretion, to waive, in whole or in part,
all or any of the Conditions set out in Part A of Appendix I above, except
Conditions 2.1(i), 2.2(i), and 2.3(i), which cannot be waived. The deadlines
in any of Conditions 2.1(ii), 2.2(ii), and 2.3(ii) may be extended to such
later date as may be agreed: (a) in writing by Mitie, Bidco and Marlowe; or
(b) (in a competitive situation) specified by Mitie and Bidco with the consent
of the Panel, and in either case with the approval of the Court, if such
approval is required. If any of Conditions 2.1(ii), 2.2(ii), and 2.3(ii) is
not satisfied by the relevant deadline specified in the relevant Condition,
Mitie will make an announcement by 8.00 a.m. (London time) on the Business Day
following such deadline confirming whether it has invoked the relevant
Condition, waived the relevant deadlines, or agreed with Marlowe to extend the
relevant deadline.
2 If Mitie and Bidco are required by the Panel to make an offer
for Marlowe Shares under the provisions of Rule 9 of the Takeover Code, Mitie
and Bidco may make such alterations to any of the above Conditions and terms
of the Acquisition as are necessary to comply with the provisions of that
Rule.
3 Mitie and Bidco will be under no obligation to waive (if
capable of waiver), to determine to be or remain satisfied or to treat as
fulfilled any of the Conditions in Part A of Appendix I above by a date
earlier than the latest date for the fulfilment of that Condition
notwithstanding that the other Conditions of the Acquisition may at such
earlier date have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any of such Conditions may not be
capable of fulfilment.
4 Under Rule 13.5(a) of the Takeover Code and subject to
paragraph 5 below, Mitie and Bidco may only invoke a Condition so as to cause
the Acquisition not to proceed, to lapse, or to be withdrawn with the consent
of the Panel. The Panel will normally only give its consent if the
circumstances which give rise to the right to invoke the Condition are of
material significance to Mitie and Bidco in the context of the Acquisition.
This will be judged by reference to the facts of each case at the time that
the relevant circumstances arise.
5 Condition 1, Conditions 2.1, 2.2, 2.3 and 3(a) (inclusive) in
Part A of Appendix I above and, if applicable, any acceptance condition if the
Acquisition is implemented by means of a Takeover Offer, are not subject to
Rule 13.5(a) of the Takeover Code.
6 Any Condition that is subject to Rule 13.5(a) of the Takeover
Code may be waived by Mitie and Bidco.
7 The Marlowe Shares acquired under the Acquisition will be
acquired fully paid and free from all liens, equities, charges, encumbrances,
options, rights of pre-emption and any other third party rights and interests
of any nature and together with all rights now or hereafter attaching or
accruing to them, including, without limitation, voting rights and the right
to receive and retain in full all dividends and other distributions (if any)
declared, made or paid, or any other return of capital (whether by reduction
of share capital or share premium account or otherwise) made on or after the
Effective Date (other than any dividend in respect of which a corresponding
reduction in the consideration payable in respect of each Marlowe Share has
been made as described in paragraph 8 below).
8 If, on or after the date of this announcement and prior to or
on the Effective Date, any dividend, distribution or other return of capital
is announced, declared, paid or made, or becomes payable by Marlowe, Mitie and
Bidco reserve the right (without prejudice to any right Mitie and Bidco may
have, with the consent of the Panel, to invoke Condition 3(h)(ii) in Part A of
Appendix I above) to reduce the Offer Consideration by an aggregate amount up
to the amount of such dividend, distribution, or other return of capital. In
such circumstances, Marlowe Shareholders will be entitled to retain any such
dividend, distribution, or other return of capital announced, declared, made,
or paid.
If on or after the date of this announcement, and to the extent that any such
dividend, distribution, or other return of capital has been declared, paid, or
made or becomes payable by Marlowe prior to or on the Effective Date and Mitie
and Bidco exercise their rights under this paragraph 8 to reduce the Offer
Consideration payable under the terms of the Acquisition, any reference in
this announcement to the Offer Consideration payable under the terms of the
Acquisition will be deemed to be a reference to the Offer Consideration as so
reduced.
If and to the extent that such a dividend, distribution, or other return of
capital has been declared or announced, but not paid or made, or is not
payable by reference to a record date on or prior to the Effective Date and is
or will be: (i) transferred pursuant to the Acquisition on a basis which
entitles Bidco to receive the dividend, distribution or other return of
capital and to retain it; or (ii) cancelled, the Offer Consideration will not
be subject to change in accordance with this paragraph 8.
Any exercise by Mitie and Bidco of their rights referred to in this paragraph
8 will be the subject of an announcement and, for the avoidance of doubt, will
not be regarded as constituting any revision or variation of the Acquisition.
9 Mitie reserves the right to elect (subject to the consent of
Marlowe and the Panel) to implement the Acquisition by way of a Takeover Offer
for the Marlowe Shares as an alternative to the Scheme.
10 The availability of the Acquisition to persons not resident in
the United Kingdom may be affected by the laws of the relevant jurisdictions.
Persons who are not resident in the United Kingdom should inform themselves
about and observe any applicable requirements. The New Mitie Shares to be
issued pursuant to the Acquisition have not been and will not be registered
under the US Securities Act nor under any of the relevant securities laws of
any state or territory or other jurisdiction of the United States or any other
Restricted Jurisdiction and will not be listed on any stock exchange in the
United States. Accordingly, the New Mitie Shares may not be offered, sold or
delivered, directly or indirectly, in the United States or any other
Restricted Jurisdiction, absent registration or an applicable exemption from,
or a transaction not subject to, the registration requirements under the US
Securities Act.
11 The Acquisition is not being made, directly or indirectly, in,
into or from, or by use of the mails of, or by any means of instrumentality
(including, but not limited to, facsimile, e-mail or other electronic
transmission, telex or telephone) of interstate or foreign commerce of, or of
any facility of a national, state or other securities exchange of, any
jurisdiction where to do so would violate the laws of that jurisdiction.
12 The Acquisition is governed by the law of England and Wales and
is subject to the 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 Scheme
Document. The Acquisition is subject to the applicable requirements of the
Takeover Code, the AIM Rules, the Panel, the London Stock Exchange and the
Financial Conduct Authority.
13 The New Mitie Shares will be issued credited as fully paid and
will rank pari passu in all aspects with the existing Mitie Shares in issue at
the time including the right to receive and retain in full all dividends and
other distributions (if any) announced, declared, made or paid, or any other
return of capital (whether by reduction of share capital or share premium
account or otherwise) made, in each case by reference to a record date falling
on or after the Effective Date.
14 Each of the Conditions will be regarded as a separate Condition
and will not be limited by reference to any other Condition.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
(i) As of 4 June 2025 (being the latest practicable date prior to
this announcement), there were 78,522,547 Marlowe Shares in issue and there
were no Marlowe Shares held in treasury. The International Securities
Identification Number for Marlowe Shares is GB00BD8SLV43.
(ii) Any references to the issued and to be issued share capital of
Marlowe are based on:
· the 78,552,547 Marlowe Shares referred to in paragraph (i) above;
and
· 172,985 Marlowe Shares, being the maximum number that it is
estimated may be issued on or after the date of this announcement to satisfy
the exercise of options or vesting of awards pursuant to the Marlowe Share
Plans.
(iii) The value placed by the Acquisition on the existing issued share
capital of Marlowe is based on the issued and to be issued share capital of
Marlowe (as set out in paragraph (ii) above).
(iv) The aggregate value of the cash component of the Consideration of
approximately £228 million is calculated by multiplying the offered amount of
290 pence in cash per Marlowe Share by Marlowe's issued and to be issued share
capital (as referred to in paragraph (ii) above).
(v) The aggregate value of the share component of the Consideration
of approximately £138 million is calculated by multiplying the number of
Mitie Shares to be issued under the terms of the Acquisition (as referred to
in (viii) below) by the price per Mitie Share of 160 pence (being the Closing
Price on 4 June 2025, the last practicable date prior to the date of this
Announcement).
(vi) The value attributed to the entire existing issued share capital
of Marlowe of approximately £366 million is the sum of the aggregate value of
the cash component and the aggregate value of the share component of the
Consideration (as referred to in paragraphs (iv) and (v) above respectively).
(vii) The percentage of the share capital of the Combined Group that
will be owned by Marlowe Shareholders of approximately 6.4 per cent. is
calculated by dividing the number of New Mitie Shares to be issued under the
terms of the Acquisition referred to in paragraph (viii) below by the issued
share capital of the Enlarged Group (as set out in paragraph (viii) below) and
multiplying the resulting sum by 100 to produce a percentage.
(viii) The share capital of the Enlarged Group (being 1,342,881,253
Mitie Shares) has been calculated as the sum of:
· A total number of 1,256,316,168 Mitie shares, being the number of
Mitie shares in issue (excluding 5,224,772 Mitie Shares held in treasury) as
at the close of business on 4 June 2025, the last practicable date prior to
the date of this announcement; and
· 86,565,085 New Mitie Shares which would be issued under the terms
of the Acquisition (being 1.1 Mitie shares multiplied by the issued and to be
issued ordinary share capital of Marlowe as referred to in paragraph (ii)
above).
(ix) The volume weighed average prices of a Marlowe Share are derived
from data provided by Bloomberg and refer to trading on London Stock Exchange
only.
(x) For the purposes of the financial comparisons contained in this
Announcement, no account has been taken of any liability to taxation or the
treatment of fractions under the Acquisition.
(xi) The leverage ratio is calculated as average daily net debt
divided by EBITDA before other items, as defined in the Mitie Annual Report
and Accounts 2024.
(xii) Earnings per share figures are stated before other items, as
defined in the Mitie Annual Report and Accounts 2024.
(xiii) Return on invested capital is calculated as operating profit
before other items and after tax divided by invested capital, as defined in
the Mitie Annual Report and Accounts 2024.
(xiv) The synergy numbers are unaudited and are based on Mitie's and
Marlowe's internal financial and non-financial information and records.
Further information underlying the Mitie Quantified Financial Benefits
Statement contained in this Announcement is provided in Appendix III.
(xv) Unless otherwise stated all prices and closing prices for Marlowe
Shares and Mitie Shares are closing middle market quotations derived from the
AIM appendix to the Daily Official List and Daily Official List, respectively.
(xvi) Unless otherwise stated, the financial information relating to
Marlowe is extracted from the unaudited Marlowe FY25 Trading Update.
(xvii) Unless otherwise stated, the financial information relating to
Mitie is extracted from the Mitie FY25 Results.
(xviii) Certain figures included in this Announcement have been subject to
rounding adjustments.
APPENDIX III
STATEMENT ON QUANTIFIED FINANCIAL BENEFITS
PART A - QUANTIFIED FINANCIAL BENEFITS STATEMENT
Mitie has made the following quantified financial benefits statement in
paragraph 4 of the announcement (the "Quantified Financial Benefits
Statement"):
"The Mitie Directors, having reviewed and analysed the potential cost
synergies of the Acquisition, based on their knowledge of Marlowe's business
and the UK TIC market, and taking into account the factors they can influence,
believe that the Enlarged Group can deliver £30 million of pre-tax recurring
operating cost synergies in the second full financial year following
Completion (being FY28).
Mitie intends to approach integration of the two businesses with the aim of
retaining and motivating talent from across the Enlarged Group and combining
the strengths of both teams to create a best-in-class organisation. The
integration of the businesses will involve combining the Marlowe business and
group functions into the Mitie Business Services division.
The quantified operating cost synergies are expected to be realised primarily
from:
(i) Support Functions: approximately 55 per cent. of the total
annual recurring pre-tax cost synergies are expected to arise primarily from
the removal of duplicative corporate, head office, administrative, support and
other central management functions;
(ii) Procurement: approximately 20 per cent. of the total annual
recurring pre-tax cost synergies are expected to be generated through
leveraging enhanced economies of scale and spend across key materials,
consumables and other third-party costs;
(iii) Operational effectiveness: approximately 15 per cent. of the
total annual recurring pre-tax cost synergies are expected to be generated
through the adoption of Mitie's operating model and service delivery
effectiveness to Marlowe's operations as well as improved route density within
the enlarged operations; and
(iv) Property: approximately 10 per cent. of the total annual
recurring pre-tax cost synergies are expected to be generated through the
rationalisation of property.
The Mitie Directors expect that approximately 50 per cent. of the annual
pre-tax operating cost synergies will be realised in the first full financial
year following Completion (being FY27). All actions required to deliver the
synergies are expected to be completed at the end of FY27, such that £30m of
synergies will be achieved in the second full financial year following
Completion (being FY28).
The Mitie Directors estimate that the realisation of the quantified cost
synergies will result in one-off costs of approximately £27 million. Aside
from these one-off integration costs, no material dis-synergies are expected
in connection with the Acquisition.
The identified cost synergies will accrue as a direct result of the
Acquisition and would not be achieved on a standalone basis."
Further information on the bases of belief supporting the Quantified Financial
Benefits Statement, including the principal assumptions and sources of
information, is set out below.
Bases of calculation of the Quantified Financial Benefits Statement
Following initial discussions regarding the Acquisition in May 2025, a synergy
development team was established to evaluate and assess the potential
synergies available from the Acquisition and the integration and to undertake
a preliminary planning exercise.
The team, which comprises senior Mitie commercial and financial personnel, has
worked to identify, challenge and quantify potential synergies as well as
estimate any associated costs to achieve such synergies. The team has engaged
with the relevant functional heads and other personnel within the Mitie Group
to provide input into the development process and to test synergy assumptions
and to agree on the nature and quantum of the identified synergy initiatives.
In preparing the Quantified Financial Benefits Statement, Marlowe has provided
Mitie with certain operating and financial information to facilitate a
detailed analysis in support of evaluating the potential synergies available
from the Acquisition. As is typical of these exercises, confidentiality
considerations have limited the extent of the sharing of data and information.
Cost saving assumptions were based on a combination of: (i) top-down
consideration of operating models and key performance indicators; and (ii) a
detailed, bottom-up evaluation of the benefits available from elimination of
duplicate activities, the leverage of combined scale economics, increased
operational efficiencies and savings arising from the consolidation of
properties, procurement and other operational activities. In determining the
estimate of costs savings achievable through the combination of Mitie and
Marlowe, no savings relating to operations have been included where no overlap
exists.
Where appropriate, assumptions were used to estimate the costs of implementing
the new structures, systems and processes required to realise the synergies.
In general, the synergy assumptions have been risk adjusted, exercising a
degree of prudence in the calculation of the estimated synergy benefits set
out above.
In arriving at the estimate of synergies and their timing set out in this
announcement, the Mitie Board has assumed:
· the Effective Date falling within the third quarter
of 2025 and that there will be no outstanding Initial Enforcement Order issued
by the CMA requiring the Mitie and the Marlowe businesses to continue to
operate independently pending the conclusion of any engagement with the CMA
with respect to the Acquisition;
· regarding headcount-related savings, no
restrictions or delays will arise as a result of industrial relations or
employment agreements that significantly impact the realisation of savings;
· that there will be no significant impact on the
underlying operations of either Mitie's or Marlowe's business as a result of
the Acquisition;
· there will be no material adverse changes to
existing relationships with third parties such as customers, suppliers, and
other key stakeholders;
· no material acquisitions or disposals will be made
by either Mitie or Marlowe;
· no material changes on either Mitie or Marlowe's
respective businesses as a result of legislative, regulatory or taxation
matters;
· no material change to macroeconomic, political or
legal conditions in the markets or regions in which Mitie and Marlowe operate
that will materially impact on the implementation of the proposed cost
savings; and
· no material change in accounting standards applied
by either business.
The baselines used for the quantified cost synergies were:
· For Mitie: Mitie's Business Services division
operating expenses for the financial year ended 31 March 2025 based on the
Mitie FY25 Results; and
· For Marlowe: Marlowe's operating expenses for
continuing operations for the financial year ended 31 March 2025 based on the
Marlowe FY25 Trading Update.
Important Notes
1. The statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, or those achieved could be materially
different from those estimated. No statement in the Quantified Financial
Benefits Statement, or this announcement generally, should be construed as a
profit forecast or interpreted to mean that Mitie's earnings in the full first
full year following the Acquisition, or in any subsequent period, would
necessarily match or be greater than or be less than those of Mitie and/or
Marlowe for the relevant preceding financial period or any other period.
2. Due to the scale of the Enlarged Group, there may be additional
changes to the Enlarged Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost savings may be
materially greater or less than those estimated.
Reports
As required by Rule 28.1(a) of the Takeover Code, PwC, as reporting
accountants to Mitie, has provided a report stating that, in its opinion, the
Quantified Financial Benefits Statement has been properly compiled on the
basis stated. In addition, Lazard as financial adviser to Mitie, has provided
a report stating that, in their view, the Quantified Financial Benefits
Statement has been prepared with due care and consideration.
Copies of these reports are included in this Appendix III. Each of PwC and
Lazard has given and not withdrawn its consent to the publication of its
report in this announcement in the form and context in which it is included
pursuant to Rule 23.2 of the Takeover Code.
PART B
REPORT FROM PRICEWATERHOUSECOOPERS ON QUANTIFIED FINANCIAL BENEFITS STATEMENTS
The Directors (the "Directors")
Mitie Group plc
35 Duchess Road
Rutherglen
Glasgow
G73 1AU
Lazard & Co. Limited (solely in its capacity as a "Financial Adviser")
20 Manchester Square
London
England
W1U 3PZ
5 June 2025
Dear Ladies and Gentlemen,
Report on the Quantified Financial Benefits Statement by Mitie Group plc (the
"Company")
We report on the quantified financial benefits statement (the "Statement") by
the Directors included in Part A of Appendix III of the announcement dated 5
June 2025 (the "Announcement") to the effect that:
"The Mitie Directors, having reviewed and analysed the potential cost
synergies of the Acquisition, based on their knowledge of Marlowe's business
and the UK TIC market, and taking into account the factors they can influence,
believe that the Enlarged Group can deliver £30 million of pre-tax recurring
operating cost synergies in the second full financial year following
Completion (being FY28).
Mitie intends to approach integration of the two businesses with the aim of
retaining and motivating talent from across the Enlarged Group and combining
the strengths of both teams to create a best-in-class organisation. The
integration of the businesses will involve combining the Marlowe business and
group functions into the Mitie Business Services division.
The quantified operating cost synergies are expected to be realised primarily
from:
(i) Support Functions: approximately 55 per cent. of the total
annual recurring pre-tax cost synergies are expected to arise primarily from
the removal of duplicative corporate, head office, administrative, support and
other central management functions;
(ii) Procurement: approximately 20 per cent. of the total annual
recurring pre-tax cost synergies are expected to be generated through
leveraging enhanced economies of scale and spend across key materials,
consumables and other third-party costs;
(iii) Operational effectiveness: approximately 15 per cent. of the
total annual recurring pre-tax cost synergies are expected to be generated
through the adoption of Mitie's operating model and service delivery
effectiveness to Marlowe's operations as well as improved route density within
the enlarged operations; and
(iv) Property: approximately 10 per cent. of the total annual
recurring pre-tax cost synergies are expected to be generated through the
rationalisation of property.
The Mitie Directors expect that approximately 50 per cent. of the annual
pre-tax operating cost synergies will be realised in the first full financial
year following Completion (being FY27). All actions required to deliver the
synergies are expected to be completed at the end of FY27, such that £30m of
synergies will be achieved in the second full financial year following
Completion (being FY28).
The Mitie Directors estimate that the realisation of the quantified cost
synergies will result in one-off costs of approximately £27 million. Aside
from these one-off integration costs, no material dis-synergies are expected
in connection with the Acquisition.
The identified cost synergies will accrue as a direct result of the
Acquisition and would not be achieved on a standalone basis."
This report is required by Rule 28.1(a)(i) of the City Code on Takeovers and
Mergers (the "Takeover Code") and is given for the purpose of complying with
that requirement and for no other purpose.
Opinion
In our opinion, the Statement has been properly compiled on the basis stated.
The Statement has been made in the context of the disclosures in Part A of
Appendix III to the Announcement setting out the basis of the Directors'
belief (including the principal assumptions and sources of information)
supporting the Statement and their analysis and explanation of the underlying
constituent elements.
Responsibilities
It is the responsibility of the Directors to prepare the Statement in
accordance with the requirements of Rule 28 of the Takeover Code.
It is our responsibility to form our opinion, as required by Rule 28.1(a)(i)
of the Takeover Code, as to whether the Statement has been properly compiled
on the basis stated and to report that opinion to you.
Save for any responsibility which we may have to those persons to whom this
report is expressly addressed or to the shareholders of the Company as a
result of the inclusion of this report in the Announcement, and for any
responsibility arising under Rule 28.1(a)(i) of the Takeover Code to any
person as and to the extent therein provided, to the fullest extent permitted
by law we do not assume any responsibility and will not accept any liability
to any other person for any loss suffered by any such other person as a result
of, arising out of, or in connection with this report or our statement,
required by and given solely for the purposes of complying with Rule 23.2 of
the Takeover Code, consenting to its inclusion in the Announcement.
Basis of preparation of the Statement
The Statement has been prepared on the basis stated in Part A of Appendix III
to the Announcement.
Basis of opinion
We conducted our work in accordance with the Standards for Investment
Reporting issued by the Financial Reporting Council ("FRC") in the United
Kingdom. We are independent in accordance with the Revised Ethical Standard
2024 issued by the FRC as applied to Investment Circular Reporting
Engagements, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
We have discussed the Statement, together with the underlying plans (relevant
bases of belief/including sources of information and assumptions), with the
Directors and the Financial Adviser. Our work did not involve any independent
examination of any of the financial or other information underlying the
Statement.
We planned and performed our work so as to obtain the information and
explanations we considered necessary in order to provide us with reasonable
assurance that the Statement has been properly compiled on the basis stated.
We do not express any opinion as to the achievability of the benefits
identified by the Directors in the Statement.
Since the Statement and the assumptions on which it is based relate to the
future and may therefore be affected by unforeseen events, we express no
opinion as to whether the actual benefits achieved will correspond to those
anticipated in the Statement and the differences may be material.
Yours faithfully
PRICEWATERHOUSECOOPERS LLP
Chartered Accountants
PricewaterhouseCoopers LLP is a limited liability partnership registered in
England with registered number OC303525. The registered office of
PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH.
PricewaterhouseCoopers LLP is authorised and regulated by the Financial
Conduct Authority for designated investment businesses.
PART C
REPORT FROM LAZARD & CO. LIMITED ON QUANTIFIED FINANCIAL BENEFITS
STATEMENT
The Directors (the "Directors")
Mitie Group plc
35 Duchess Road
Rutherglen
Glasgow
G73 1AU
5 June 2025
To whom it may concern
Recommended Cash and Share Offer for Marlowe by Mitie - Quantified Financial
Benefits Statement made by Mitie
We refer to the Quantified Financial Benefits Statement, the bases of belief
thereof and the notes thereto (together, the "Statement") made by Mitie as set
out in Part A of Appendix III to this announcement, for which the Directors
are solely responsible under Rule 28 of the City Code on Takeovers and Mergers
(the "Takeover Code").
We have discussed the Statement (including the assumptions and sources of
information referred to therein) with the Directors and those officers and
employees of Mitie who developed the underlying plans, as well as with
PricewaterhouseCoopers LLP. The Statement is subject to uncertainty as
described in this announcement and our work did not involve an independent
examination of any of the financial or other information underlying the
Statement.
We have relied upon the accuracy and completeness of all the financial and
other information provided to us by, or on behalf of, Mitie, or otherwise
discussed with or reviewed by us, and we have assumed such accuracy and
completeness for the purposes of providing this letter.
We do not express any opinion as to the achievability of the quantified
financial benefits identified by the Directors.
We have also reviewed the work carried out by PricewaterhouseCoopers LLP and
have discussed with them the opinion set out in Part B of Appendix III to this
announcement addressed to yourselves and ourselves on this matter.
This letter is provided to you solely in connection with Rule 28.1(a)(ii) of
the Takeover Code and for no other purpose. We accept no responsibility to
Mitie or its shareholders or any person other than the Directors in respect of
the contents of this letter. We are acting as financial adviser to Mitie and
no one else in connection with the transaction referred to in this
announcement and it was solely for the purpose of complying with Rule
28.1(a)(ii) of the Takeover Code that Mitie requested us to prepare this
report on the Statement. No person other than the Directors can rely on the
contents of this letter, and to the fullest extent permitted by law, we
exclude all liability (whether in contract, tort or otherwise) to any other
person, in respect of this letter, its contents, or the work undertaken in
connection with this letter, or any of the results or conclusions that can be
derived from this letter or any written or oral information provided in
connection with this letter, and any such liability is expressly disclaimed
except to the extent that such liability cannot be excluded by law.
On the basis of the foregoing, we consider that the Statement, for which you
as the Directors are solely responsible, has been prepared with due care and
consideration.
Yours faithfully
Lazard & Co. Limited
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the
context requires otherwise:
Acquisition the recommended acquisition by Bidco, a wholly owned subsidiary of Mitie, of
the entire issued and to be issued ordinary share capital of Marlowe on the
terms and subject to the conditions set out in this announcement intended to
be effected by means of the Scheme and, where the context admits, any
subsequent revision, variation, extension or renewal thereof
Admission admission of the New Mitie Shares to the Equity Shares (Commercial Companies)
category of the Official List and to trading on the Main Market
AIM AIM market, a market operated by the London Stock Exchange
AIM Rules AIM Rules for Companies as published by the London Stock Exchange
Authorisations regulatory authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions, determinations, exemptions
or approvals
Bidco Mitie Treasury Management Limited
Blocking Law means: (i) any provision of Council Regulation (EC) No 2271/1996 of 22
November 1996 (or any law or regulation implementing such Regulation in any
member state of the European Union); or (ii) any provision of Council
Regulation (EC) No 2271/1996 of 22 November 1996, as it forms part of domestic
law of the United Kingdom by virtue of the European Union (Withdrawal) Act
2018
Bridge Facility Agreement the pound sterling bridge facility agreement dated 5 June 2025 between, among
others, Bidco as company and original borrower, Mitie as guarantor, and Lloyds
Bank PLC and National Westminster Bank PLC as mandated lead arrangers and
original lenders, to provide, among other things, the funding for the cash
consideration in respect of the Acquisition
Business Day a day (other than Saturdays, Sundays and public holidays in the UK) on which
banks are open for business in London
Cavendish Cavendish Capital Markets Limited
Clean Team Agreement the clean team agreement dated 19 May 2025 between Mitie and Marlowe, as
described in paragraph 14 of this announcement
CMA the UK Competition and Markets Authority
Companies Act the Companies Act 2006, as amended
Conditions the conditions to the implementation of the Acquisition, as set out in
Appendix I to this announcement and to be set out in the Scheme Document
Confidentiality Agreement the confidentiality agreement dated 8 May 2025 between Mitie and Marlowe, as
described in paragraph 14 of this announcement
Confidentiality and Joint Defense Agreement the confidentiality and joint defense agreement dated 20 May 2025 between
Mitie, Marlowe and their respective legal advisers, as described in paragraph
14 of this announcement
Co-operation Agreement the agreement dated 5 June 2025 between Mitie, Bidco and Marlowe relating to,
among other things, the implementation of the Acquisition, as described in
paragraph 14 of this announcement
Court the High Court of Justice in England and Wales
Court Hearing the hearing by the Court of the application to sanction the Scheme under Part
26 of the Companies Act
Court Meeting the meeting of Marlowe Shareholders to be convened pursuant to an order of the
Court under the Companies Act for the purpose of considering and, if thought
fit, approving the Scheme (with or without amendment approved or imposed by
the Court and to be agreed between Mitie, Bidco and Marlowe), including any
adjournment, postponement or reconvening of any such meeting, notice of which
is to be contained in the Scheme Document
Court Order the order of the Court sanctioning the Scheme
CREST the system for the paperless settlement of trades in securities and the
holding of uncertificated securities operated by Euroclear
Daily Official List the Daily Official List published by the London Stock Exchange
Dealing Arrangement an arrangement of the kind referred to in Note 11(a) on the definition of
acting in concert in the Takeover Code
Dealing Disclosure has the same meaning as in Rule 8 of the Takeover Code
Disclosed the information disclosed by, or on behalf of Marlowe: (i) in the annual or
half-year report and accounts of the Marlowe Group for the relevant financial
period or periods referred to in the relevant Condition and published prior to
the date of this announcement; (ii) the interim results of the Marlowe Group
for the period or periods referred to in the relevant Condition and published
prior to the date of this announcement; (iii) in this announcement; (iv) in
any other announcement to a Regulatory Information Service by, or on behalf of
Marlowe prior to the publication of this announcement; or (v) as otherwise
fairly disclosed to Mitie (or its respective officers, employees, agents or
advisers) prior to the date of this announcement (including without limitation
via the virtual data room operated by or on behalf of Marlowe in connection
with the Acquisition, in due diligence sessions with Marlowe Directors or
employees of the Wider Marlowe Group and any written replies and
correspondence in connection therewith)
Effective the Scheme having become effective pursuant to its terms;
Effective Date or Completion the date on which the Scheme becomes effective in accordance with its terms
Enlarged Group the Mitie Group as enlarged by the Marlowe Group following completion of the
Acquisition
EPS earnings per share
Euroclear Euroclear UK & Ireland International Limited
FCA or Financial Conduct Authority the Financial Conduct Authority acting in its capacity as the competent
authority for the purposes of Part VI of FSMA
FM facilities management
Fire Division LTIP the contractual arrangements comprising the Fire Division LTIP Awards
Fire Division LTIP Awards the right to a cash bonus granted under the Fire Division LTIP
Forms of Election the form or forms of election for use in connection with the Mix and Match
Facility
Forms of Proxy the forms of proxy in connection with each of the Court Meeting and the
General Meeting, which will accompany the Scheme Document
FSMA the Financial Services and Markets Act 2000 (as amended from time to time)
FY25 Mitie's financial year ending 31 March 2025
FY26 Mitie's financial year ending 31 March 2026
FY27 Mitie's financial year ending 31 March 2027
FY28 Mitie's financial year ending 31 March 2028
General Meeting the general meeting of Marlowe Shareholders (including any adjournment
thereof) to be convened in connection with the Scheme
GRC governance, risk and compliance
IFRS International Financial Reporting Standards as adopted by the UK
Irish Foreign Direct Investment Condition has the meaning given in Condition 3(c)
London Stock Exchange London Stock Exchange plc
Long-stop Date 31 December 2025, or such later date as may be agreed in writing by Mitie,
Bidco and Marlowe (with the Panel's consent and as the Court may approve (if
such approval(s) are required))
Main Market the Main Market of the London Stock Exchange
Marlowe Marlowe plc
Marlowe Directors the directors of Marlowe at the time of this announcement or, where the
context so requires, the directors of Marlowe from time to time
Marlowe FY25 Trading Update has the meaning given in paragraph 10.2
Marlowe Group Marlowe and its subsidiary undertakings and, where the context permits, each
of them
Marlowe Incentive Plan the Marlowe incentive plan adopted on 17 October 2024 under which RSP awards,
bonus awards or deferred bonus awards can be made to certain eligible
employees
Marlowe Incentive Plans the Marlowe Share Plans, the Fire Division LTIP and the Phantom Award Scheme
Marlowe Shareholders the holders of Marlowe Shares
Marlowe Shares the existing unconditionally allotted or issued and fully paid ordinary shares
of 50 pence each in the capital of Marlowe and any further such ordinary
shares which are unconditionally allotted or issued before the Scheme becomes
Effective
Marlowe Share Plans the Marlowe Incentive Plan and the Save As You Earn Plan
Minister the Minister for Enterprise, Trade and Employment (including any successor in
relation to its trade responsibilities)
Mitie Mitie Group plc
Mitie Directors the directors of Mitie at the time of this announcement or, where the context
so requires, the directors of Mitie from time to time
Mitie Dividend Policy the dividend policy set out in Mitie's annual reports and accounts for the
year ended 31 March 2024
Mitie's Financial Adviser Lazard & Co. Limited
Mitie FY25 Results has the meaning given in paragraph 10.1
Mitie FY26 Interim Dividend the interim dividend to be paid by Mitie in respect of its financial half-year
ending 30 September 2025
Mitie FY27 Profit Forecast has the meaning given in paragraph 10.1
Mitie Group Mitie and its subsidiary undertakings and, where the context permits, each of
them
Mitie Shareholders the holders of Mitie Shares
Mitie Shares the allotted and issued ordinary shares of 2.5 pence each in the capital of
Mitie
Mitie Three-Year Plan Mitie's financial outlook for FY25 to FY27 first published by Mitie on 12
October 2023
Mix and Match Facility the facility under which Marlowe Shareholders are entitled to elect to vary
the proportions in which they receive New Mitie Shares and in which they
receive cash in respect of their holdings of Marlowe Shares to the extent that
other such Marlowe Shareholders make off-setting elections
New Mitie Shares the new Mitie Shares proposed to be issued to Marlowe Shareholders in
connection with the Acquisition
NSI Act the National Security and Investment Act 2021
Offer Consideration 290 pence in cash and 1.1 New Mitie Share for each Marlowe Share
Offer Period the offer period (as defined by the Takeover Code) relating to Marlowe, which
commenced on the date of this announcement
Official List the Official List maintained by the FCA pursuant to Part 6 of FSMA
Opening Position Disclosure has the same meaning as in Rule 8 of the Takeover Code
Overseas Shareholders Marlowe Shareholders (or nominees of, or custodians or trustees for Marlowe
Shareholders) not resident in, or nationals or citizens of the United Kingdom
Panel the Panel on Takeovers and Mergers
Phantom Awards cash awards over notional Marlowe Shares under the Phantom Award Scheme
Phantom Award Scheme the contractual arrangements comprising the Phantom Awards
PwC PricewaterhouseCoopers LLP
Quantified Financial Benefits Statement the statement of estimated cost savings and synergies arising out of the
Acquisition set out in Appendix III to this announcement
Registrar of Companies the Registrar of Companies in England and Wales
Regulatory Information Service an information service authorised from time to time by the FCA for the purpose
of disseminating regulatory announcements
Restricted Jurisdiction any jurisdiction where local laws or regulations may result in a significant
risk of civil, regulatory or criminal exposure if information concerning the
Acquisition is sent or made available to Marlowe Shareholders
Restricted Overseas Person Marlowe Shareholders resident in, or nationals or citizens of, Restricted
Jurisdictions or who are nominees or custodians, trustees or guardians for,
citizens, residents or nationals of such Restricted Jurisdictions
ROIC return on invested capital
Save As You Earn Plan the Marlowe Save as You Earn Plan 2022 adopted on 2 August 2022
Scheme or Scheme of Arrangement the proposed scheme of arrangement under Part 26 of the Companies Act between
Marlowe and the Marlowe Shareholders in connection with the Acquisition, with
or subject to any modification, addition or condition approved or imposed by
the Court and agreed by Marlowe, Mitie and Bidco
Scheme Document the document to be sent to Marlowe Shareholders containing, amongst other
things, the Scheme and the notices convening the Court Meeting and the General
Meeting
Screening Act the Screening of Third Country Transactions Act 2023
SEC the US Securities and Exchange Commission
Significant Interest in relation to an undertaking, a direct or indirect interest of 20 per cent.
or more of the total voting rights conferred by the equity share capital (as
defined in section 548 of the Companies Act) of such undertaking
SMEs small and medium-sized enterprises
Takeover Code the City Code on Takeovers and Mergers
Takeover Offer if (subject to the consent of Marlowe and the Panel), Bidco elects to effect
the Acquisition by way of a takeover offer (as defined in Chapter 3 of Part 28
of the Companies Act), the offer to be made by or on behalf of Bidco to
acquire the entire issued and to be issued ordinary share capital of Marlowe
on the terms and subject to the conditions to be set out in the related offer
document (and, where the context admits, any subsequent revision, variation,
extension or renewal of such offer)
TIC testing, inspection and certification
United Kingdom or UK the United Kingdom of Great Britain and Northern Ireland
UK National Security Condition has the meaning given in Condition 3(b)
United States or US the United States of America, its territories and possessions, any state of
the United States of America, the District of Columbia and all other areas
subject to its jurisdiction and any political sub-division thereof
US Exchange Act the United States Securities Exchange Act 1934, as amended
Wider Mitie Group Mitie and associated undertakings and any other body corporate, partnership,
joint venture or person in which Mitie and all such undertakings (aggregating
their interests) have a Significant Interest
Wider Marlowe Group Marlowe and associated undertakings and any other body corporate, partnership,
joint venture or person in which Marlowe and such undertakings (aggregating
their interests) have a Significant Interest
Quantified Financial Benefits Statement has the meaning given in Part A of Appendix III to this Announcement
For the purposes of this announcement:
1. The terms "subsidiary", "subsidiary undertaking", "undertaking" and
"associated undertaking" have the respective meanings given thereto by the
Companies Act.
2. All references to "pounds", "pounds Sterling", "Sterling", "£",
"pence", "penny" and "p" are to the lawful currency of the United Kingdom.
3. All the times referred to in this announcement are London times unless
otherwise stated.
4. References to the singular include the plural and vice versa.
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