Smart Metering Sys - SWITCH TO TAKEOVER OFFER AND FINAL CASH OFFER
18/01/2024 07:00
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RNS Number : 0768A Smart Metering Systems PLC 18 January 2024
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OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. PLEASE
SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. ANY FAILURE TO
COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
18 January 2024
RECOMMENDED FINAL CASH OFFER
for
Smart Metering Systems plc ("SMS")
by
Sienna Bidco Limited ("Bidco")
a newly formed company wholly-owned by funds advised by Kohlberg Kravis
Roberts & Co. L.P. and its affiliates
SWITCH FROM SCHEME OF ARRANGEMENT TO TAKEOVER OFFER AND RECOMMENDED FINAL CASH
OFFER
ADJOURNMENT OF COURT AND GENERAL MEETINGS
SMS TRADING UPDATE
On 7 December 2023, the boards of directors of SMS and Sienna Bidco Limited
("Bidco"), a newly formed company wholly-owned by funds advised by Kohlberg
Kravis Roberts & Co. L.P. and its affiliates, announced that they had
reached agreement on the terms and conditions of a recommended cash
acquisition by Bidco of the entire issued and to be issued ordinary share
capital of SMS (the "Acquisition"), to be effected by means of a
Court-sanctioned scheme of arrangement (the "Scheme") under Part 26 of the
Companies Act 2006 (the "Companies Act").
The scheme document in relation to the Scheme (the "Scheme Document") was
posted to SMS Shareholders on 15 December 2023. Capitalised terms used in this
announcement shall, unless otherwise defined, have the same meanings as set
out in the Scheme Document.
Switch to Takeover Offer
SMS, KKR and Bidco are of the view that the terms of the Acquisition are in
the best interests of SMS shareholders as a whole and therefore, in order to
increase the certainty of its execution, Bidco has determined, with the
consent of SMS and the Takeover Panel, to implement the Acquisition by way of
a recommended takeover offer (as defined in section 974 of the Companies Act)
(a "Takeover Offer") rather than by way of the Scheme.
The SMS Directors believe that Bidco's decision to switch to a Takeover Offer
(with the consent of SMS) will allow SMS Shareholders to benefit from the
Acquisition (subject to the Acceptance Condition (as defined below) and all
other conditions being satisfied or (if capable of waiver) waived).
Court Meeting and General Meeting
As the Acquisition is to be implemented by way of a Takeover Offer, the only
business that will be dealt with at the Court Meeting and the General Meeting
which are convened for 22 January 2024 will be in connection with the
discontinuation of the Scheme. Accordingly the SMS Board recommends that SMS
Shareholders do not attend the Court Meeting and the General Meeting on 22
January 2024.
Conditions
Save where set out in this announcement, the terms and conditions of the
Acquisition remain unchanged from those set out in the Scheme Document
(subject to appropriate amendments to reflect the change in structure by which
the Acquisition is to be implemented, being by Takeover Offer rather than the
Scheme). The amended conditions will be set out in full in the Offer Document.
The Acquisition is conditional on, among other things, valid
acceptances being received (and not validly withdrawn) by not later than
1:00 p.m. (London time) on the unconditional date of the Takeover Offer (or
such later time(s) and/or date(s) as Bidco may, subject to the rules of the
Takeover Code and with the consent of the Panel, decide) in respect of such
number of SMS Shares which, together with the SMS Shares acquired or
unconditionally agreed to be acquired during the Offer Period (whether
pursuant to the Takeover Offer or otherwise), will result in Bidco or another
member of the Bidco Group holding SMS Shares carrying in aggregate more than
50 per cent. of the voting rights normally exercisable at general meetings of
SMS including (to the extent, if any, required by the Panel for this purpose)
any such voting rights attaching to any SMS Shares that are unconditionally
allotted but not issued before the Takeover Offer becomes unconditional as to
acceptances (the "Acceptance Condition"). Unless the Panel agrees otherwise,
the Acceptance Condition shall only be capable of being satisfied when all
other Conditions have been satisfied or waived.
Final Cash Offer
Under the terms of the recommended Takeover Offer, Bidco continues to offer
SMS Shareholders 955 pence in cash for each SMS Share (the "Final Offer"),
representing an attractive premium of approximately:
· 40.4 per cent. to the Closing Price of 680 pence per SMS Share on 6
December 2023 (being the last Business Day prior to the commencement of the
Offer Period);
· 50.7 per cent. to the three-month Volume Weighted Average Price of 634
pence per SMS Share on 6 December 2023 (being the last Business Day prior to
the commencement of the Offer Period); and
· 43.8 per cent. to the six-month Volume Weighted Average Price of 664
pence per SMS Share on 6 December 2023 (being the last Business Day prior to
the commencement of the Offer Period).
The Final Offer of 955 pence in cash per SMS Share is final and will not be
increased, except that Bidco reserves the right to increase the offer price
and/or otherwise improve the terms of the Acquisition (i) if there is an
announcement on or after the date of this announcement of a possible offer or
a firm intention to make an offer for SMS by any third party, or (ii) if the
Takeover Panel otherwise provides its consent.
Dividends
SMS Shareholders will be entitled to receive and retain the Second FY 2023
Dividend Instalment of 8.31875 pence per SMS Share as announced by SMS on 12
September 2023, which is expected to be paid on 25 January 2024 to those SMS
Shareholders who appeared on the register of members of the Company on 5
January 2024.
For the avoidance of doubt, and subject to the Takeover Offer not having
lapsed or been withdrawn in accordance with its terms and Bidco having not
publicly confirmed by such time that it does not intend to proceed with the
Acquisition, SMS confirms that it does not intend to pay the Third and Fourth
FY 2023 Dividend Instalments which were expected to be paid on 25 April 2024
and 25 July 2024 respectively.
If any other dividend or distribution is announced, declared, made or paid in
respect of SMS Shares on or after the date of this announcement, Bidco will
reduce the Acquisition Price by the amount of such dividend or other
distribution. If Bidco made such a reduction in respect of a dividend or other
distribution, SMS Shareholders would be entitled to retain that dividend or
other distribution.
No third-party proposal or indication of interest
The SMS Board confirms that, from the date of KKR's initial approach in
respect of the Acquisition to the date of this announcement, it has not
received any formal proposals or indications of interest in respect of an
offer to acquire the entire issued, and to be issued, ordinary share capital
of SMS from any third parties.
Timetable
It is a requirement of the Takeover Code that an offer document containing,
amongst other things, the Conditions of the Acquisition (an "Offer Document")
is published. The Offer Document will specify the actions to be taken by SMS
Shareholders in respect of the Takeover Offer and it is anticipated that Bidco
will publish and post the Offer Document (together with a form of acceptance)
(where applicable) to SMS Shareholders (other than SMS Shareholders located in
any Restricted Jurisdictions, in each case, where to do so would violate the
laws of that jurisdiction) as soon as reasonably practicable after the date of
this announcement (currently anticipated to be on or around 24 January 2024).
The Offer Document will also be made available by SMS on its website at
https://www.sms-plc.com/documents/. The Panel has agreed with Bidco and SMS
that "Day 60" of the Takeover Code timetable will be the day
falling 60 days after publication of the Offer Document (or such other later
date as may be determined by Bidco with the agreement of the Panel to be the
last date for fulfilment of the Acceptance Condition).
Further details of the expected timetable will be set out in the Offer
Document.
Recommendation
The SMS Directors, who have been so advised by RBC and Investec as to the
financial terms of the Acquisition, continue to consider the terms of the
Acquisition to be fair and reasonable. In providing their advice to the SMS
Directors, RBC and Investec have taken into account the commercial assessments
of the SMS Directors. Investec is providing independent financial advice to
the SMS Directors for the purposes of Rule 3 of the Takeover Code.
The SMS Directors continue to consider that the terms of the Acquisition are
in the best interests of SMS Shareholders as a whole. Accordingly, the SMS
Directors intend to unanimously recommend that the SMS Shareholders accept, or
procure the acceptance of, the Takeover Offer as the SMS Directors who hold
interests in SMS Shares have irrevocably undertaken to do in respect of their
own legal and/or beneficial holdings over which they have control, being in
aggregate 141,341 SMS Shares (representing approximately 0.1 per cent. of the
existing issued ordinary share capital of SMS) as at 17 January 2024 (being
the last Business Day before the date of this announcement).
All of the irrevocable undertakings of the SMS Directors as described in the
Scheme Document continue to remain valid in relation to the Takeover Offer.
These commitments comprise irrevocable undertakings in respect of 141,341 SMS
Shares, in aggregate, representing approximately 0.1 per cent. of SMS's issued
ordinary share capital as at 17 January 2024 (being the last Business Day
before the date of this announcement).
Cancellation of admission to trading on AIM, compulsory acquisition and
re-registration
Assuming the Takeover Offer becomes or is declared unconditional and that
Bidco has, by virtue of acceptances of the Takeover Offer or otherwise,
acquired, or agreed to acquire, SMS Shares carrying not less than 75 per cent.
of the voting rights then exercisable at a general meeting of SMS
Shareholders, it is intended that the admission to trading of the SMS Shares
on AIM will be cancelled.
If Bidco receives acceptances of the Takeover Offer in respect of, and/or
otherwise acquires or unconditionally contracts to acquire, 90 per cent. or
more of the SMS Shares by nominal value and voting rights attaching to such
shares to which the Takeover Offer relates and the Takeover Offer has become
or been declared unconditional, Bidco intends to exercise its rights pursuant
to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire
compulsorily the remaining SMS Shares in respect of which the Takeover Offer
has not been accepted on the same terms as the Takeover Offer.
It is also intended that, following the Takeover Offer becoming or being
declared unconditional and Bidco, by virtue of acceptances of the Takeover
Offer or otherwise, having acquired, or having agreed to acquire, SMS Shares
carrying not less than 75 per cent. of the voting rights then exercisable at a
general meeting of SMS Shareholders, SMS will be re-registered as a private
limited company.
Such cancellation of admission to trading on AIM of SMS Shares and
re-registration of SMS as a private limited company would significantly reduce
the liquidity and marketability of any SMS Shares in respect of which the
Takeover Offer has not been accepted at that time and their value may be
affected as a consequence.
Any remaining SMS Shareholders (unless their SMS Shares are acquired by Bidco
pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act) would
become minority shareholders in a majority controlled private limited company
and may therefore be unable to sell their SMS Shares. There can be no
certainty that SMS would pay any further dividends or other distributions or
that such minority SMS Shareholders would again be offered an opportunity to
sell their SMS Shares on terms which are equivalent to or no less advantageous
than those under the Takeover Offer.
Other consequences of the Takeover Offer
If Bidco receives acceptances of the Takeover Offer in respect of, and/or
otherwise acquires or unconditionally contracts to acquire, more than 50 per
cent. of the SMS Shares by nominal value and voting rights attaching to such
shares to which the Takeover Offer relates and the Takeover Offer has become
or been declared unconditional, then Bidco will have significant control over
SMS. Bidco will be in a position to determine, for example, the composition of
the SMS Board and management team, the overall strategy of the SMS Group, and
the declaration or cessation of any dividends. Bidco could also increase its
aggregate shareholding in SMS without restriction and may in due course
acquire 75 per cent. or more of the voting rights of SMS. In the meantime, SMS
Shares in respect of which the Takeover Offer has not been accepted at that
time are likely to be affected by reduced trading volume and reduced liquidity
as a consequence.
SMS Trading Update
Smart Metering Systems plc (AIM: "SMS", the "Group"), the integrated energy
infrastructure company owning and managing smart meters, energy data,
grid-scale battery storage and other carbon reduction (CaRe) assets, provides
a trading update for the year ended 31 December 2023 ("FY 2023").
Index-linked annualised recurring revenue
The total meter and data assets ILARR was £113.4m at 31 December 2023, which
includes the annual RPI adjustment. This represents a 16.8% increase since the
prior year end (31 December 2022: £97.1m).
Category % change ILARR Portfolio
Smart meters + 24.4% £76.0m 2.5 million
Data assets - 0.6% £15.9m 0.5 million
Industrial & Commercial meters + 18.9% £6.3m 0.1 million
Traditional domestic meters + 4.5% £11.7m 0.2 million
Third party assets flat £3.5m 1.3 million
Total + 16.8% £113.4m 4.6 million
Smart meters
During the year, the Group installed c.450,000 smart meters (FY 2022:
c.480,000), increasing the total smart meter portfolio to c.2.5m (31 December
2022: c.2.1m).
Further to the announcement made on 1 December 2023 by Octopus Energy Group
("Octopus") on the completion of its acquisition of Shell Energy Retail
Limited ("SERL") and the migration of SERL's energy customers to Octopus's
systems, SMS has received a preliminary indication at an operational level
from SERL that it proposes to migrate certain gas and electric meter
installations under its contract with SMS to Octopus. SMS is considering this
information and will continue to engage with SERL and Octopus in the coming
months.
We continue to see wider opportunities to support energy suppliers to deliver
on their smart meter obligations (for example in more complex installations).
Grid-scale battery storage
The Group's portfolio of grid-scale battery storage assets stood at 860MW, of
which 240MW (1MW/hour) was operational by 31 December 2023, an increase of
100MW since 31 December 2022. The operational portfolio generated an
annualised equivalent EBITDA of c.£46,000/MW (FY 2022: c.£123,000/MW),
broadly in line with the wider market. Notwithstanding the recent volatility
in battery revenues, we continue to expect the long-term EBITDA contribution
to be c.£57,000 - £65,000/MW.
A 50MW (1MW/hour) site, which was expected to be operational in Q4 2023, has
been delayed to Q2 2024 due to upstream protection works impacting the
energisation of the site. In addition, the Group expects three 2MW/hour
sites((1)), totalling 90MW, to become operational in Q4
2024.
Developing CaRe((2)) assets
The Group continued to make strong progress in building its delivery
capability, commercial models and pipelines for the provision of other
developing CaRe assets and data services.
FY 2023 and outlook
The FY 2023 pre-exceptional EBITDA and underlying PBT are expected to be in
line with the Board's expectations. Net debt as at 31 December 2023 was
£171.9m.
The Group remains confident in FY 2024 and its medium-term outlook.
SMS will confirm the expected timing for release of its FY 2023 results in due
course.
(1) The capex and long-term EBITDA from a 2MW/hour site is expected to be
50-60% more than a 1MW/hour site.
(2) Includes behind-the-meter solutions, such as solar and storage,
domestic EV chargers and air-sourced heat pumps, and public EV charging
infrastructure.
Enquiries:
Morgan Stanley (Joint Financial Adviser to KKR) +44 (0) 20 7425 8000
Shirav Patel / Francesco Puletti / Andrew Foster / George Chalaris / Nagib
Ahmad
Macquarie Capital (Joint Financial Adviser to KKR) +44 (0) 20 3037 2000
Adam Hain / Ashish Mehta
FGS Global (PR Adviser to KKR) KKR-LON@fgsglobal.com (mailto:KKR-LON@fgsglobal.com)
Faeth Birch / Alastair Elwen / Sophia Johnston +44 (0) 20 725 13801
Smart Metering Systems plc +44 (0) 141 249 3850
Miriam Greenwood, Chairman / Tim Mortlock, Chief Executive Officer / Gail
Blain, Chief Financial Officer / Dilip Kejriwal, Head of Investor Relations
RBC Capital Markets (Joint Financial Adviser and Joint Broker to SMS) +44 (0) 20 7653 4000
Mark Preston / Evgeni Jordanov / Matthew Coakes / Sam Jackson
Investec Bank plc (Joint Financial Adviser and Joint Broker to SMS) +44 (0) 20 7597 5970
Chris Baird / Henry Reast / James Rudd / Shalin Bhamra
Cavendish Securities plc (Nomad and Joint Broker to SMS) +44 (0) 131 220 6939
Neil McDonald / Peter Lynch / Adam Rae
Instinctif Partners (Public Relations Adviser to SMS) sms@instinctif.com (mailto:sms@instinctif.com)
Tim Linacre / Guy Scarborough +44 (0) 7949 939 237
+44 (0) 7917 178 920
Simpson Thacher & Bartlett LLP is acting as legal adviser to KKR and
Bidco.
Hogan Lovells International LLP is acting as legal adviser to SMS. Burness
Paull LLP are providing legal advice to SMS as to Scots law.
Important Notices
RBC Europe Limited (trading as RBC Capital Markets), which is authorised by
the Prudential Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority in the United Kingdom, is
acting for SMS and no one else in connection with the matters referred to in
this announcement and will not be responsible to anyone other than SMS for
providing the protections afforded to clients of RBC Capital Markets, or for
providing advice in connection with matters referred to in this announcement.
Investec, which is authorised by the Prudential Regulation Authority (the
"PRA") and regulated by the Financial Conduct Authority and PRA in the United
Kingdom, is acting exclusively as financial adviser to SMS and for no one else
in connection with the Takeover Offer and will not be responsible to any
person other than SMS for providing the protections afforded to clients of
Investec, nor for providing advice in relation to the Takeover Offer, the
content of this announcement or any matter referred to in this announcement.
Neither Investec nor any of its subsidiaries, branches or 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 Investec in connection with this announcement,
any statement contained herein or otherwise.
Cavendish Securities, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for SMS and no one
else in connection with the subject matter of this announcement and will not
be responsible to anyone other than SMS for providing the protections afforded
to clients of Cavendish Securities or for providing advice in relation to the
subject matter of this announcement, the contents of this announcement and any
other matters referred to in this announcement.
Morgan Stanley & Co. International plc ("Morgan Stanley") which is
authorised by the Prudential Regulation Authority and regulated by the
Financial Conduct Authority and the Prudential Regulation Authority in the UK
is acting as financial adviser exclusively for KKR and no one else in
connection with the matters set out in this announcement. In connection with
such matters, Morgan Stanley, its affiliates and their respective directors,
officers, employees and agents will not regard any other person as their
client, nor will they be responsible to any other person for providing the
protections afforded to their clients or for providing advice in connection
with the contents of this announcement or any other matter referred to herein.
Macquarie Capital (Europe) Limited ("Macquarie Capital") which is regulated by
the Financial Conduct Authority in the UK is acting as financial adviser
exclusively for KKR and no one else in connection with the matters set out in
this announcement. In connection with such matters, Macquarie Capital, its
affiliates and their respective directors, officers, employees and agents will
not regard any other person as their client, nor will they be responsible to
any other person for providing the protections afforded to their clients or
for providing advice in connection with the contents of this announcement or
any other matter referred to herein. Macquarie Capital (Europe) Limited is not
an authorised deposit-taking institution for the purposes of the Banking Act
1959 (Commonwealth of Australia), and its obligations do not represent
deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.
Any investments are subject to investment risk including possible delays in
repayment and loss of income and principal invested. Macquarie Bank Limited
does not guarantee or otherwise provide assurance in respect of the
obligations of Macquarie Capital (Europe) Limited.
Further Information
This announcement is for information purposes only and does not constitute or
form any part of an offer to sell or subscribe for or an invitation to
purchase or subscribe for any securities or the solicitation of an offer to
buy any securities, pursuant to the Acquisition or otherwise. The Acquisition
shall be made solely by means of the Offer Document which, together with the
form of acceptance, shall contain the full terms and Conditions of the
Acquisition, including details of how to accept the Takeover Offer. SMS
Shareholders are strongly advised to read the formal documentation in relation
to the Takeover Offer once it has been dispatched. Each SMS Shareholder is
urged to consult its independent professional adviser immediately regarding
the tax consequences to it (or its beneficial owners) of the Acquisition.
The statements contained in this announcement are made as at the date of this
announcement, unless some other time is specified in relation to them, and
publication of this announcement shall not give rise to any implication that
there has been no change in the facts set forth in this announcement since
such date.
This announcement has been prepared for the purpose of complying with English
and Scots 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 of jurisdictions outside of England and
Scotland.
Each of Cavendish (as nominated adviser and joint broker to SMS), Investec (as
joint financial adviser to and joint broker to SMS and Rule 3 Adviser to SMS)
and RBC (as joint financial adviser and joint broker to SMS) have 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.
This announcement does not constitute a prospectus or prospectus equivalent
document.
Overseas Shareholders
The release, publication or distribution of this announcement in or into
certain jurisdictions other than the United Kingdom may be restricted by law.
Persons who are not resident in the United Kingdom should inform themselves
of, and observe, any applicable requirements.
The availability of the Takeover Offer to SMS Shareholders who are not
resident in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens and
therefore persons who are not resident in the UK should inform themselves of,
and observe, any applicable legal or regulatory requirements of their
jurisdictions. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Offer disclaim any responsibility or liability for the violation of such
restrictions by any person.
Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Takeover Offer may not be made
directly or indirectly, in or into, or by the use of mails or any means or
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 Restricted Jurisdiction and the Offer may not be capable of acceptance by
any such use, means, instrumentality or facilities. Copies of this
announcement and any formal documentation relating to the Takeover Offer are
not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in or into or from any Restricted Jurisdiction
and persons receiving such documents (including, without limitation, agents,
custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send them in or into or from any Restricted Jurisdiction. Doing
so may render invalid any related purported acceptance of the Takeover Offer.
This announcement does not constitute an offer or invitation to purchase or
subscribe for any securities or a solicitation of an offer to buy any
securities pursuant to this announcement or otherwise in any jurisdiction in
which such offer or solicitation is unlawful.
The Acquisition shall be subject to the applicable requirements of the
Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct
Authority and the AIM Rules. Further details in relation to Overseas
Shareholders will be contained in the Offer Document.
Additional Information for US Investors
The Takeover Offer relates to the shares of a Scottish company and is being
made by means of a contractual takeover offer under the Takeover Code and
under English and Scots law. The Offer is being made in the United States
pursuant to all applicable laws and regulations, including, to the extent
applicable, to holders of SMS Shares resident in the United States ("US SMS
Shareholders") pursuant to Section 14(e) and Regulation 14E under the US
Exchange Act as a "Tier II" tender offer, and otherwise in accordance with the
requirements of the Takeover Code. Accordingly, the Takeover Offer is subject
to the disclosure and other procedural requirements, including with respect to
withdrawal rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic tender
offer procedures and law. The Takeover Offer is being made in the United
States by Bidco and no one else. The Takeover Offer will be made to US SMS
Shareholders on the same terms and conditions as those made to all other SMS
Shareholders to whom an offer is made. Any information documents, including
the Offer Document, will be disseminated to US SMS Shareholders on a basis
comparable to the method that such documents are provided to the other SMS
Shareholders to whom an offer is made.
Certain financial information included in this announcement and the Offer
Document has been or will have been prepared in accordance with generally
accepted accounting standards applicable in the United Kingdom and thus 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 US.
The receipt of cash pursuant to the Takeover Offer by a US SMS Shareholder as
consideration for the transfer of its SMS Shares pursuant to the Takeover
Offer will likely be a taxable transaction for United States federal income
tax purposes and under applicable United States state and local, as well as
foreign and other, tax laws. SMS Shareholders are urged to consult their
independent professional advisers immediately regarding the tax consequences
of the Takeover Offer applicable to them.
It may be difficult for US SMS Shareholders to enforce their rights and claims
arising out of the US federal securities laws in connection with the Takeover
Offer, since Bidco and SMS are located in countries other than the US, and
some or all of their officers and directors may be residents of countries
other than the US.
US SMS Shareholders may not be able to sue a non-US company or its officers or
directors in a non-US court for violations of US securities laws. Further, it
may be difficult to compel a non-US company and its affiliates to subject
themselves to a US court's jurisdiction and judgement.
To the extent permitted by the Takeover Code and applicable law, in accordance
with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act,
Bidco, certain affiliated companies and their nominees or brokers (acting as
agents) may make certain purchases of, or arrangements to purchase, shares in
SMS outside of the US, outside the Takeover Offer, during the Offer Period and
the period in which the Takeover Offer remains open for acceptance. Also, to
the extent permitted by the Takeover Code and applicable law, in accordance
with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act,
each of Morgan Stanley, Macquarie Capital, Cavendish, Investec and RBC will
continue to act as a connected exempt principal trader in SMS Shares on the
London Stock Exchange. If such purchases or arrangements to purchase were to
be made they would be made outside the U.S. and would comply with applicable
law. Any such purchases by Bidco or its affiliates will not be made at prices
higher than the price of the Takeover Offer provided in this announcement
unless the price of the Takeover Offer is increased accordingly. Any
information about such purchases 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, www.londonstockexchange.com/
(http://www.londonstockexchange.com/) .
Neither the U.S. Securities and Exchange Commission (the "SEC") nor any
securities supervisory authority of any state or other jurisdiction in the
United States has approved or disapproved the Takeover Offer or reviewed it
for its fairness, nor have the contents of the Offer Document or any other
documentation relating to the Takeover Offer been reviewed for accuracy,
completeness or fairness by the SEC or any securities supervisory authority in
the United States. Any representation to the contrary is a criminal offence in
the United States.
Forward Looking Statements
This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by KKR, Bidco or SMS may contain statements about Bidco
and SMS that are or may be deemed to be forward looking statements. All
statements other than statements of historical facts included in this
announcement may be forward looking statements. Without limitation, any
statements preceded or followed by or that include the words "targets",
"plans", "believes", "expects", "aims", "intends", "will", "may", "shall",
"should", "anticipates", "estimates", "projects", "is subject to", "budget",
"scheduled", "forecast" or words or terms of similar substance or the negative
thereof, are forward looking statements. Forward looking statements include
statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's or
SMS's operations and potential synergies resulting from the Acquisition; and
(iii) the effects of government regulation on Bidco's or SMS's business.
Such forward looking statements are prospective in nature and are not based on
historical facts, but rather on current expectations and projections of the
management of Bidco and SMS about future events, and are therefore subject to
risks and uncertainties that could significantly affect expected results and
are based on certain key assumptions. Many factors could cause actual results
to differ materially from those projected or implied in any forward looking
statements, including: increased competition, the loss of or damage to one or
more key customer relationships, changes to customer ordering patterns, delays
in obtaining customer approvals for engineering or price level changes, the
failure of one or more key suppliers, the outcome of business or industry
restructuring, the outcome of any litigation, changes in economic conditions,
currency fluctuations, changes in interest and tax rates, changes in raw
material or energy market prices, changes in laws, regulations or regulatory
policies, developments in legal or public policy doctrines, technological
developments, the failure to retain key management, or the timing and success
of future acquisition opportunities or major investment projects. Other
unknown or unpredictable factors could cause actual results to differ
materially from those in the forward looking statements. Such forward looking
statements should therefore be construed in the light of such factors. Neither
Bidco nor SMS, nor any of their respective associates or directors, officers
or advisers, provides any representation, assurance or guarantee that the
occurrence of the events expressed or implied in any forward looking
statements in this announcement will actually occur. Due to such uncertainties
and risks, readers are cautioned not to place undue reliance on such forward
looking statements, which speak only as of the date hereof. All subsequent
oral or written forward looking statements attributable to any member of the
Bidco Group or the SMS Group, or any of their respective associates,
directors, officers, employees or advisers, are expressly qualified in their
entirety by the cautionary statement above.
Bidco and SMS expressly disclaim any obligation to update any forward looking
or other statements contained herein, except as required by applicable law or
by the rules of any competent regulatory authority, whether as a result of new
information, future events or otherwise.
No Profit Forecasts or Profit Estimates or Quantified Financial Benefit
Statements
No statement in this announcement is intended as, or is to be construed as, a
profit forecast, profit estimate or quantified financial benefits statement
for any period and no statement in this announcement should be interpreted to
mean that earnings or earnings per share for SMS for the current or future
financial years would necessarily match or exceed the historical published
earnings or earnings per share for SMS.
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, 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.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Panel's website at
http://www.thetakeoverpanel.org.uk/, including details of the number of
relevant securities in issue, when the Offer Period commenced and when any
offeror was first identified. If you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing Disclosure, you
should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Electronic Communications
Please be aware that addresses, electronic addresses and certain information
provided by SMS Shareholders, persons with information rights and other
relevant persons for the receipt of communications from SMS may be provided to
Bidco during the Offer Period as required under Section 4 of Appendix 4 of the
Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Publication on Website and Availability of Hard Copies
A copy of this announcement and the documents required to be published by Rule
26 of the Takeover Code shall be made available subject to certain
restrictions relating to persons resident in Restricted Jurisdictions on SMS's
website at www.sms-plc.com by no later than 12 noon (London time) on the
Business Day following the date of this announcement. For the avoidance of
doubt, neither the contents of this website nor the content of any other
website accessible from hyperlinks on such website is incorporated into, or
forms part of, this announcement.
In accordance with Rule 30.3 of the Takeover Code, SMS Shareholders, persons
with information rights and participants in the SMS Share Plans may request a
hard copy of this announcement by contacting Computershare Investor Services
PLC during business hours on 0370 707 4087 or by submitting a request in
writing to Registrar at Computershare Investor Service PLC, The Pavilions,
Bridgwater Road, Bristol BS99 6ZZ. In accordance with Rule 30.3 of the
Takeover Code, a person so entitled may also request that all future
documents, announcements and information in relation to the Acquisition should
be sent to them in hard copy form. If you have received this announcement in
electronic form or via a website notification, hard copies of this
announcement and any document or information incorporated by reference into
this document will not be provided unless such a request is made.
Rounding
Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of the figures that precede them.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Takeover Code, SMS confirms that as at the
date of this announcement, it has in issue and admitted to trading on AIM
133,606,918 ordinary shares of £0.01 each (excluding ordinary shares held in
treasury). The International Securities Identification Number (ISIN) of the
ordinary shares is GB00B4X1RC86.
General
If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under FSMA if you are
resident in the United Kingdom or, if not, from another appropriately
authorised independent financial adviser.
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rns@lseg.com (mailto:rns@lseg.com)
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