REG - STM Group PLC - Offer by Jambo SRC Limited
10/10/2023 07:00
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RNS Number : 4877P STM Group PLC 10 October 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
10 October 2023
RECOMMENDED ACQUISITION
for
STM Group PLC ("STM" or the "Company")
by
Jambo SRC Limited ("Bidco")
to be effected by means of a Court-sanctioned scheme of arrangement under Part
X of the Isle of Man Companies Act 2006
Summary
· The board of Bidco and the Independent STM Directors of STM
are pleased to announce that they have reached agreement on the terms of a
recommended offer pursuant to which Bidco will acquire the entire issued and
to be issued ordinary share capital of STM (the "Acquisition").
· The Acquisition is intended to be effected by means of a
Court-sanctioned scheme of arrangement between STM and the Scheme Shareholders
under Part X of the Companies Act.
· Under the terms of the Acquisition, which shall be subject to
the further conditions and terms set out in Appendix I to this Announcement
and to be set out in the Scheme Document, Scheme Shareholders will be entitled
to receive:
o 60 pence per share in cash ("Cash Consideration"); and
o In addition to the Cash Consideration, under the terms of the Acquisition,
Scheme Shareholders will be entitled to receive a Deferred Consideration Unit
which may deliver up to 7 pence per share in cash (and, together with the Cash
Consideration, the "Maximum Acquisition Value").
· The Cash Consideration values the entire issued and to be issued
ordinary share capital of STM at approximately £35.6 million and delivers 60
pence in cash per share, which represents a premium of approximately:
o 118.2 per cent. to the closing price of 27.5 pence per STM Share on 10
July 2023 (being the last Business Day prior to the commencement of the Offer
Period);
o 130.9 per cent. to the volume weighted average price of 25.9 pence per STM
Share for the one-month period ended on 10 July 2023 (being the last Business
Day prior to the commencement of the Offer Period); and
o 130.5 per cent. to the volume weighted average price of 26 pence per STM
Share for the three-month period ended on 10 July 2023 (being the last
Business Day prior to the commencement of the Offer Period).
· The Maximum Acquisition Value, which assumes full value
is delivered by the Deferred Consideration Units, values the entire issued and
to be issued ordinary share capital of STM at approximately £39.8 million and
delivers up to 67 pence in cash per share, which represents a premium of
approximately:
o 144 per cent. to the closing price of 27.5 pence per STM Share on 10 July
2023 (being the last Business Day prior to the commencement of the Offer
Period);
o 158 per cent. to the volume weighted average price of 25.9 pence per STM
Share for the one-month period ended on 10 July 2023 (being the last Business
Day prior to the commencement of the Offer Period); and
o 157 per cent. to the volume weighted average price of 26 pence per STM
Share for the three-month period ended on 10 July 2023 (being the last
Business Day prior to the commencement of the Offer Period).
· If, on or after the date of this Announcement, any
dividend and/or other distribution and/or other return of capital is declared,
made or paid or becomes payable in respect of the STM Shares (in each case
with a record date prior to the Effective Date), Bidco has the right to reduce
the amount of the consideration payable under the Acquisition by an amount
equal to the amount of such dividend and/or distribution and/or return of
capital. Where the consideration is so reduced, any reference in this
Announcement to the consideration will automatically be deemed to be a
reference to the consideration as so reduced by the amount of such dividend
and/or distribution and/or return of capital. In such circumstances, STM
Shareholders would be entitled to receive and retain any such dividend or
other distribution and/or return of capital. Any reduction of the
consideration shall be the subject of an announcement and, for the avoidance
of doubt, not be regarded as constituting any revision or variation of the
terms of the Acquisition or the Scheme.
· The STM Board is also pleased to announce the entry into
an agreement to sell the SIPPs Companies to Pathlines Holdings Limited (a
company controlled by Alan Kentish, the STM CEO) for a total cash
consideration of £4.5 million (the "MBO Sale"). Completion of the MBO Sale is
conditional on, amongst other things, the sanction of the Scheme by the
Court.
Information on STM
· STM was admitted to trading on AIM in 2007.
· STM was originally formed to consolidate corporate and
trustee service providers operating in international jurisdictions, and the
STM Group subsequently expanded into the international pensions arena. The
growth in the STM Group pensions division has been accompanied by an increase
in demand for the range of STM's life assurance bonds, some of these available
as complementary products to the STM Group pension and trust products. As
such, the Company has become recognised as a leading player in administration
of client assets in relation to retirement, estate and succession planning and
wealth structuring, to a global market.
· Today, the STM Group has operations in the UK,
Gibraltar, Malta, Spain and Australia and employs some 290 staff, with offices
in the UK, Malta, Gibraltar and Spain. STM has developed a range of pension
products for UK nationals and internationally domiciled clients; and has two
Gibraltar life assurance companies which provide life insurance bonds and
pension annuities.
· STM currently trades under the names 'STM' (including 'STM
Fidecs', 'STM Life' and 'STM Malta'); 'Options'; and 'London & Colonial'
across the following products and services:
o Life Assurance: With two Gibraltar-based life assurance companies, the STM
Group offers a broad range of pension and investment solutions.
o Qualifying Recognised Overseas Pension Schemes ('QROPS'): pensions exported
by UK expatriates, administered via Malta and Gibraltar.
o UK Workplace pensions: the provision of Defined Contribution ('DC')
pensions for UK employers and members, auto-enrolled via the Master Trust.
o Self-Invested Personal Pension schemes ('SIPPs') & Small
Self-Administered Schemes ('SSAS'): SIPPs are products regulated in the UK by
the Financial Conduct Authority, whereas SSAS fall under the purview of the UK
Pension Regulator. STM has products specifically tailored to serve both the UK
and international market.
o Group Pension Plans ('GPP').
o Pension Consultancy: administration and pension consultancy services to
defined benefit pension funds as well as DC funds.
o An Australian pension administration company.
· On 28 September 2023, STM reported its interim results for the
period ended 30 June 2023. Against a challenging macro-economic backdrop, STM
Group delivered total revenue in the six months to 30 June 2023 of £13.2
million (2022: £11.3 million), which included £0.9 million of interest
income. Profit before other items was £1.5 million (six months ended 30 June
2022: £1.4 million) and profit before tax was approximately £0.1 million
(six months ended 30 June 2022: £0.5 million). The core business remained
stable with recurring operating revenue remaining resilient when compared to
the first half of 2022, with overall revenue for the business up from the
prior year. For the twelve months ended 31 December 2022, STM reported
revenues of £24.1 million, profit before other items of £3.3 million and
profit before tax of £1.6 million.
· Further information on STM is available on its
website at www.stmgroupplc.com.
STM recommendation, irrevocable undertakings and letters of Intent
· The Independent STM Directors, who have been so advised by
Cavendish Capital Markets Limited ("Cavendish") as to the financial terms of
the Acquisition, consider the terms of the Acquisition to be fair and
reasonable. In providing its financial advice to the Independent STM
Directors, Cavendish has taken into account the commercial assessments of the
Independent STM Directors. Cavendish is providing independent financial advice
to the Independent STM Directors for the purposes of Rule 3 of the Takeover
Code.
· As required by, and solely for the purposes of, Rule 16.1 of
the Takeover Code, Cavendish has (in its capacity as independent adviser to
the Independent STM Directors for the purposes of Rule 3 of the Takeover Code)
advised the Independent STM Directors that the terms of the MBO Sale are fair
and reasonable. In providing its advice to the Independent STM Directors,
Cavendish has taken into account the commercial assessments of the Independent
STM Directors.
· Accordingly, the Independent STM Directors intend to
recommend unanimously that the Independent STM Shareholders vote in favour of
(i) the Scheme at the Court Meeting (the "Scheme Resolution"); (ii) the
resolution to be proposed at the General Meeting to approve the MBO Sale for
the purposes of Rule 16 of the Takeover Code (the "Rule 16 Resolution"); and
(iii) the other resolutions to be proposed at the General Meeting in
connection with the Scheme and MBO Sale (the "Other GM Resolutions" and
together with the Rule 16 Resolution, the "GM Resolutions"), as Therese Neish
(being the only Independent STM Director holding STM Shares, directly or
indirectly) has irrevocably undertaken to do in respect of her own entire
beneficial holdings of 492,756 STM Shares representing, in aggregate,
approximately 0.83 per cent. of the STM Shares in issue on the Latest
Practicable Date and approximately 0.94 per cent. of STM Shares (excluding STM
Shares held by the MBO Shareholders) in issue on the Latest Practicable Date.
· In addition to the irrevocable undertaking from Therese
Neish (being the only Independent STM Director holding STM Shares, directly or
indirectly), Bidco has also received irrevocable undertakings from Alan
Kentish and Clifton Participations Limited (the "MBO Shareholders") to vote or
procure votes in favour of the Other GM Resolutions only, in respect of, in
aggregate, 7,078,900 STM Shares representing approximately 11.92 per cent. of
the STM Shares in issue on the Latest Practicable Date. At the same time,
the MBO Shareholders have each agreed to support the Acquisition and to be
bound by the terms of the Scheme.
· In addition, Bidco has received irrevocable undertakings to
vote in favour of the Scheme Resolution and the GM Resolutions from certain
Independent STM Shareholders in respect of, in aggregate, 13,889,810 STM
Shares representing approximately 23.38 per cent. of the STM Shares in issue
on the Latest Practicable Date and approximately 26.54 per cent. of STM Shares
(excluding STM Shares held by the MBO Shareholders) in issue on the Latest
Practicable Date.
· In total, therefore, Bidco has procured:
o irrevocable undertakings from Therese Neish (being the only Independent STM
Director holding STM Shares, directly or indirectly) and certain Independent
STM Shareholders to vote in favour of the Scheme Resolution and the Rule 16
Resolution in respect of, in aggregate, 14,382,566 STM Shares, representing
approximately 24.21 per cent. of STM Shares in issue on the Latest Practicable
Date and approximately 27.48 per cent. of STM Shares (excluding STM Shares
held by the MBO Shareholders) in issue on the Latest Practicable Date; and
o irrevocable undertakings from Therese Neish (being the only Independent STM
Director holding STM Shares, directly or indirectly), the MBO Shareholders and
certain Independent STM Shareholders to vote in favour of the Other GM
Resolutions in respect of, in aggregate, 21,461,466 STM Shares representing
approximately 36.13 per cent. of the STM Shares in issue on the Latest
Practicable Date.
Information on Pension SuperFund Capital and Bidco
· Bidco is an English private company limited by guarantee
that was established on 4 July 2023. Bidco was formed for the purposes of the
Acquisition and is funded by Pension SuperFund Capital. It has not traded
since its date of incorporation, nor has it entered into any obligations other
than in connection with the Acquisition.
· The mission of Pension SuperFund Capital
(https://www.thepensionsuperfund.com/) is to provide a complete solution to
pension savers and ultimately improve member outcomes. With an unparalleled
team track record in creating and overseeing pension businesses and solutions,
Pension SuperFund Capital has access to significant lines of capital and
assets with which to help provide a safe and secure home to both pensioners
and pension savers. Pension SuperFund Capital has in place substantial capital
to safely support further pension risk transfers. Pension SuperFund
Capital is creating a new strategic opportunity for the global US$61 trillion
pension market. Pension SuperFund Capital's pension solutions include:
o Go 'on risk' for the liability and investment risks inherent in pensions,
to underpin the certainty of pension outcomes for employers, members and
pension trustees;
o Pioneering Pension SuperHaven to provide defined contribution pension
savers with a chance to transfer into a decent 'defined benefit' pension for
life; and subsequently a share of the investment upside; and
o Pension SuperFund Capital is the controlling shareholder of Long Term
Assets, a vehicle intended to give pension savers access to private market
investments in line with the Mansion House Reforms.
§ Long Term Assets' biggest asset, Global InterConnection Group Limited
(https://live.euronext.com/en/ipo-showcase/global-interconnection-group-limited)
, listed its shares on the Euronext Amsterdam on 7 July 2023.
· Pension SuperFund Capital has a world-class management team
with an unparalleled track record in pension consolidation and fostering
pension solutions.
o The Bidco and PSF Capital teams include: former CEOs of Pension Insurance
Corporation, Hannover Re; CIO Greater London Authority; former Chairman and
CFRO at London Pension Fund Authority; CRO and chair Risk and Audit Committee
Pension Insurance Corporation; Head of Risk at Insight and LGIM; CIO Hermes;
SG Hambros Private Banking
o Private and public pension consolidation; architects of the £260 billion
Local Government Pension Schemes' SuperPools and Pension Protection Fund;
pioneers of the longevity risk transfer market and medical annuity
underwriting; eminent pension trustees
o Completed £8 billion of 'capital backed funding arrangements', pension
sponsor acquisitions and PPF+ deals, improving pension benefits for over
100,000 individuals;
o Best-in-class partners to provide insurance solutions, fiduciary
management, member experience, asset and liability management.
Acquisition Structure, Timetable and Conditions
· The Cash Consideration of 60 pence per share will be
paid, conditional on the Scheme becoming Effective, within 14 days of the
Scheme becoming Effective.
· Under the terms of the Scheme, each Scheme Shareholder
will receive one Deferred Consideration Unit for each Scheme Share. Under
the terms of the DCU Deed Poll, subject to the DCU Conditions having been
satisfied, each Deferred Consideration Unit shall entitle its holder to one
Loan Note. The principal value of each Loan Note that the DCU Holder may be
entitled to ("Loan Note Principal Value"), and therefore the amount of cash
ultimately payable to a Loan Note holder upon redemption of their Loan Notes
on the Loan Note Payment Date, shall be determined by way of an Assessment
Process in accordance with the terms of the DCU Deed Poll.
· The Deferred Consideration Units are complex
instruments and a number of factors will determine whether any amount will
actually be paid to Scheme Shareholders by way of the Loan Notes. The Loan
Note Principal Value is capped at a maximum of 7 pence and the minimum payment
under the Loan Notes is zero.
· The Loan Note Principal Value will be determined by
an Assessment Process set out in the DCU Deed Poll and summarised in paragraph
12 of this Announcement, following which, each DCU Holder will receive one
Loan Note for each Deferred Consideration Unit held by such DCU Holder. If the
results of the assessment process are such that the Loan Note Principal Value
is agreed or determined to be zero, no Loan Notes will be issued, and in these
circumstances the DCU Holders will not receive any additional consideration
under the terms of the DCU Deed Poll. In these circumstances, the value of
each Deferred Consideration Unit would be zero.
· No interest shall be payable on the Loan Note, other
than in circumstances where Bidco is in default of its payment obligations
under the terms of the Loan Note Instrument. Each Loan Note shall have a term
which ends on the date falling one year after the Effective Date. On
redemption the Loan Note Principal Value will be repaid to the holders of the
Loan Notes and the Loan Notes will be automatically cancelled. Further details
in respect of the Deferred Consideration Units and Loan Notes will be
contained in the Scheme Document. STM Shareholders are strongly advised to
read paragraph 12 of this Announcement in full.
· The Acquisition shall be put to the STM 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 Independent STM
Shareholders voting at the Court Meeting, either in person or by proxy,
representing at least 75 per cent. in value of the STM Shares voted. In
addition, the GM Resolutions must be passed by the requisite majority or
majorities at the General Meeting. The Scheme will also need to be sanctioned
by the Court. Finally, a certified copy of the Court Order must be delivered
to the Companies Registry for registration, and the Companies Registry must
register a certified copy of the Court Order, together with a copy of the
Scheme Document and all documents required to be annexed thereto (if any),
upon which the Scheme will become effective in accordance with its own terms
(including the satisfaction or waiver of the Conditions).
· The Acquisition is subject to the Conditions and
certain conditions and further terms set out in Appendix I to this
Announcement and the full terms and conditions of the Acquisition which will
be set out in the Scheme Document. In particular, the Acquisition will be
conditional upon regulatory approvals in Malta and Gibraltar and the tPR
Condition being satisfied. In addition, the Acquisition is conditional on
approval of the Rule 16 Resolution at the General Meeting and completion of
the MBO Sale (which is conditional on regulatory approval in the UK). Bidco
considers each of the Regulatory Conditions and the MBO Condition to each be
of material significance to it in the context of the Acquisition. If any of
the Regulatory Conditions or the MBO Condition are not satisfied, Bidco may
seek to invoke the relevant condition in accordance with its terms as at the
relevant date. It is expected that, subject to the satisfaction of all such
relevant conditions, the Scheme will become Effective during the first half of
2024.
· The Scheme Document will contain further information about
the Acquisition, together with notices of the Court Meeting and the General
Meeting, and the expected timetable and will specify the action to be taken by
STM Shareholders. The Scheme Document will be published and sent to STM
Shareholders as soon as practicable and, in any event, within 28 days of this
Announcement (unless STM and Bidco otherwise agree, and the Panel consents, to
a later date).
Commenting on the Acquisition, Nigel Birrell, the Chair of STM, said:
"The STM Board is pleased to be recommending Bidco's offer for the Company,
which represents a significant premium in cash to the STM share price prior to
the commencement of discussion with Bidco and offers certain value for our
shareholders, and potential future benefit through the Deferred Consideration
Units. Whilst we believe that there are significant growth and value
realisation opportunities for STM in the short to medium term, we recognise
that there are uncertainties and risks which may impact STM's ability to both
optimise growth as a stand-alone quoted entity, and to execute a realisation
strategy of certain parts of the business. We acknowledge the additional
commercial benefits which could be obtained as part of a larger group such as
Pension SuperFund Capital, whose management team has a clear vision to deliver
a complete solution to pension savers and members."
Commenting on the Acquisition, Edmund Truell, the Co-Founder of Pension
SuperFund Capital, said:
"We are delighted to back Bidco to acquire STM Group plc after a period of
extensive diligence and strategic planning. This exciting investment aligns
with our wider market aim to provide a complete solution, worldwide, to
pension savers and sponsors and improve pensioner outcomes in an aligned way.
We strongly believe our track record and stewardship will enable us to provide
increased security and value-for-money benefits to members, while also helping
to deliver the upside that the Mansion House reforms intend."
This summary should be read in conjunction with, and is subject to, the full
text of this Announcement including its Appendices.
The Acquisition is subject to the Conditions and certain 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 summary and this Announcement, Appendix III
contains a summary of the irrevocable undertakings and letters of intent
referred to in this Announcement and Appendix IV contains definitions of
certain terms and expressions used in this summary and in this Announcement.
Enquiries:
Pension SuperFund Capital edmund.truell@psf.capital
Edmund Truell
Davy Capital Markets UK (Financial Adviser to Pension SuperFund Capital and +44 20 7448 8870
Bidco)
Will Smith / Graham Hertrich / Andrew Beswick
(Corporate Finance)
EQ Corp (PR Adviser to Pension SuperFund Capital and Bidco) +44 (0) 20 7223 1100
James Culverhouse +44 (0) 7912 508 322
James.culverhouse@eqcorp.com
STM via Walbrook PR
Nigel Birrell
Cavendish Capital Markets Limited (Financial Adviser, Nominated Adviser and +44 20 7220 0500
Broker to STM)
Matt Goode / Emily Watts / Henrik Persson / Abigail Kelly / Trisyia Jamaludin
(Corporate Finance)
Tim Redfern (ECM)
Walbrook PR (PR Adviser to STM) +44 (0) 20 7933 8780
Tom Cooper +44 (0) 797 122 1972
STM@walbrookpr.com
Simpson Thacher & Bartlett LLP is retained as legal adviser to Pension
Superfund Capital and Bidco.
Pinsent Masons LLP is retained as legal adviser to STM.
Important Notice
Davy Capital Markets UK is a trading name of J & E Davy (UK) Limited. J
& E Davy (UK) Limited is authorised and regulated by the Financial Conduct
Authority. J & E Davy (UK) Limited is a Davy Group company and also a
member of the Bank of Ireland Group. J & E Davy (UK) Limited is acting for
Pension SuperFund Capital and Bidco in relation to the matters described in
this Announcement and is not advising any other person, and accordingly will
not be responsible to anyone other than Pension SuperFund Capital and Bidco
for providing the protections afforded to its clients or for providing advice
in relation to the matters described in this Announcement
Cavendish Capital Markets Limited ("Cavendish"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for STM and for no one else in connection with the Acquisition
and/or any other matter referred to in this Announcement and will not be
responsible to anyone other than STM for providing the protections afforded to
its clients or for providing advice in relation to the Acquisition, the
contents of this Announcement, or another other matters referred to in this
Announcement. Neither Cavendish nor any of its subsidiaries, affiliates or
branches owes or accepts any duty, liability or responsibility whatsoever
(whether direct, indirect, consequential, 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 or other matter or
arrangement referred to herein or otherwise.
This Announcement is for information purposes only and does not constitute an
offer to sell or an invitation to purchase any securities or the solicitation
of an offer to buy any securities, or the solicitation of any vote or approval
in any jurisdiction, pursuant to the Acquisition or otherwise. The Acquisition
shall be made solely by means of the Scheme Document (or in the event that the
Acquisition is to be implemented by means of a Takeover Offer, the takeover
offer document) which will contain the full terms and conditions of the
Acquisition, including details of how to vote in respect of the Acquisition.
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 (or in the event that the Acquisition is to be implemented
by means of a Takeover Offer, the takeover offer document).
This Announcement has been prepared in connection with proposals in relation
to a scheme of arrangement pursuant to and for the purpose of complying with
English law and Isle of Man law, the Takeover Code, the Aim Rules and MAR 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 the United Kingdom or the Isle of Man. Nothing in
this Announcement should be relied on for any other purpose.
STM will prepare the Scheme Document to be distributed to STM Shareholders.
STM and Bidco urge STM Shareholders to read the Scheme Document when it
becomes available because it will contain important information relating to
the Acquisition.
This Announcement does not constitute a prospectus or prospectus equivalent
document.
Overseas Shareholders
The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom or the Isle of Man may be restricted by law
and/or regulations. Persons who are not resident in the United Kingdom or the
Isle of Man or who are subject to the laws and regulations of other
jurisdictions should inform themselves of, and observe, any applicable
requirements. Unless otherwise determined by Bidco or required by the Takeover
Code, and permitted by applicable law and regulation, the Acquisition shall
not be made available, in whole or in part, 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 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 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 forward,
distribute or send them in, into or from such jurisdictions where to do so
would violate the laws in those jurisdictions. If the Acquisition is
implemented by way of a Takeover Offer (unless otherwise permitted by
applicable law and regulation), such Takeover Offer may not be made available
directly or indirectly, into or from 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 Takeover Offer may not be capable of
acceptance by any such use, means, instrumentality or facilities.
The availability of the Acquisition to STM Shareholders who are not resident
in the United Kingdom or the Isle of Man (and, in particular, their ability to
vote their Scheme Shares with respect to the Scheme at the Court Meeting, or
to appoint another person as proxy to vote at the Court Meeting on their
behalf) may be affected by the laws of the relevant jurisdictions in which
they are resident. Persons who are not resident in the United Kingdom or the
Isle of Man should inform themselves of, and observe, any applicable
requirements, as 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
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. The Acquisition shall be subject to the applicable
requirements of the Companies Act, the Court, 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
Scheme Document.
Additional Information for US Investors
The Acquisition is being made to acquire the securities of an Isle of Man
company by means of a scheme of arrangement provided for under Part X of the
Companies Act. A transaction effected by means of a scheme of arrangement is
not subject to the proxy solicitation or tender offer rules under the US
Exchange Act. Accordingly, the Scheme will be subject to disclosure
requirements and practices applicable to schemes of arrangement involving a
target company incorporated in the Isle of Man admitted to trading on AIM,
which are different from the disclosure requirements of the US under the US
proxy solicitation and tender offer rules. The financial information included
in this Announcement and the Scheme documentation has been or will have been
prepared in accordance with accounting standards applicable in the Isle of Man
and the UK 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.
Neither the US Securities and Exchange Commission nor any US state securities
commission has approved or disproved or passed judgment upon the fairness or
the merits of the Acquisition or determined if this Announcement is adequate,
accurate or complete.
If Bidco were to elect to implement the Acquisition by means of a Takeover
Offer, such Takeover Offer would be made in compliance with applicable US laws
and regulations, including to the extent applicable Section 14(e) of the US
Exchange Act and Regulation 14E thereunder, and in accordance with the
Takeover Code. Such a takeover would be made in the United States by Bidco and
no one else.
The receipt of cash pursuant to the Acquisition by a US holder as
consideration for the transfer of its Scheme Shares pursuant to the Scheme may
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. Each STM Shareholder is urged to consult his independent
professional adviser immediately regarding the tax consequences of the
Acquisition applicable to him.
It may be difficult for US holders to enforce their rights and any claims
arising out of the US federal securities laws, since STM is located in a
country other than the US, and all of its officers and directors are residents
of countries other than the US. US holders 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 judgement.
In accordance with normal UK practice and consistent with Rule 14e-5 under the
US Exchange Act, Bidco, certain affiliated companies and the nominees or
brokers (acting as agents) may from time to time make certain purchases of, or
arrangements to purchase, shares in STM 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. If such purchases or
arrangements to purchase were to be made they would occur either in the open
market at prevailing prices or in private transactions at negotiated prices
and will comply with applicable law, including to the extent applicable the US
Exchange Act. 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.londonstockexchange.com) . This information will also be publicly
disclosed in the US to the extent that such information is made public in the
UK.
Forward Looking Statements
This Announcement (including information incorporated by reference in the
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and STM contain certain statements, beliefs or
opinions, with respect to the financial condition, results of operations and
business of Bidco and STM which are or may be deemed to be "forward looking
statements". These forward-looking statements can be identified by the fact
that they do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "target", "expect",
"envisage", "estimate", "intend", "plan", "goal", "believe", "hope", "aims",
"continue", "will", "may", "should", "would", "could", or other words of
similar meaning. These statements are based on assumptions and assessments
made by STM and/or Bidco, in light of their experience and their perception of
historical trends, current conditions, future developments and other factors
they believe appropriate. 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 and the factors described in the
context of such forward-looking statements in this Announcement could cause
actual results and developments to differ materially from those expressed in
or implied by such forward-looking statements. Although it is believed that
the expectations reflected in such forward-looking statements are reasonable,
no assurance can be given by STM and Bidco that such expectations will prove
to have been correct and you are therefore cautioned not to place undue
reliance on these forward-looking statements which speak only as at the date
of this Announcement. The forward-looking statements speak only at the date of
this Announcement. All subsequent oral or written forward-looking statements
attributable to any member of the Wider Bidco Group or STM Group, or any of
their respective associates, directors, officers, employees or advisers, are
expressly qualified in their entirety by the cautionary statement above.
Neither STM nor Bidco nor Pension SuperFund Capital assumes any obligation and
STM and Bidco and Pension SuperFund Capital disclaim any intention or
obligation, to update or correct the information contained in this
Announcement (whether as a result of new information, future events or
otherwise), except as required by applicable law or regulation (including
under the AIM Rules).
EXCEPT AS EXPRESSLY PROVIDED IN THE ANNOUNCEMENT, THE FORWARD-LOOKING
STATEMENTS HAVE NOT BEEN REVIEWED BY THE AUDITORS OF STM, PENSION SUPERFUND
CAPITAL OR BIDCO OR THEIR RESPECTIVE FINANCIAL ADVISERS. SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD
SIGNIFICANTLY AFFECT EXPECTED RESULTS AND ARE BASED ON CERTAIN KEY
ASSUMPTIONS. THERE ARE SEVERAL FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN FORWARD-LOOKING
STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS IS THE
SATISFACTION OF THE CONDITIONS, AS WELL AS ADDITIONAL FACTORS SUCH AS CHANGES
IN GLOBAL, POLITICAL, ECONOMIC, BUSINESS, COMPETITIVE, MARKET AND REGULATORY
FORCES, FUTURE EXCHANGE AND INTEREST RATES, CHANGES IN TAX RATES AND FUTURE
BUSINESS COMBINATIONS OR DISPOSITIONS. SUCH FORWARD LOOKING STATEMENTS SHOULD
THEREFORE BE CONSTRUED IN THE LIGHT OF SUCH FACTORS. NEITHER BIDCO NOR STM,
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.
No Profit Forecasts, Estimates or Quantified Benefits Statements
No statement in this Announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
share for STM for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per share for
STM.
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.
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
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 STM Shareholders and other relevant persons for the receipt of
communications from STM may be provided to Bidco during the Offer Period as
requested 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 STM'S
website at https://www.stmgroupplc.com/possible-offer-for-stm-group-plc by no
later than 12 noon (London time) on the Business Day following this
Announcement. For the avoidance of doubt, the contents of this website are not
incorporated into and do not form part of this Announcement.
STM Shareholders may request hard copies of this Announcement by contacting
Computershare Investor Services (Jersey) Limited at 13 Castle Street, St.
Helier, Jersey CI, JE1 1ES or on +44 (0370) 707 4040 between 9:00 a.m. and
5:00 p.m. (London time) Monday to Friday (public holidays excepted). Calls to
this number from persons who are not resident in Jersey are charged at the
applicable international rate. Calls from a mobile device may incur network
extras.
STM Shareholders may also request that all future documents, announcements and
information to be sent to them in relation to the Acquisition should be in
hard copy form. If an STM Shareholder has received this Announcement in
electronic form, copies of this Announcement and any document or information
incorporated by reference into this Announcement 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.
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 the Financial Services
and Markets Act 2000 (as amended) if you are a resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
10 October 2023
RECOMMENDED ACQUISITION
for
STM Group PLC ("STM" or the "Company")
by
Jambo SRC Limited ("Bidco")
to be effected by means of a Court-sanctioned scheme of arrangement under Part
X of the Isle of Man Companies Act 2006, as amended
1. Introduction
The board of Bidco and the Independent STM Directors of STM are pleased to
announce that they have agreed the terms of a recommended acquisition of the
entire issued and to be issued ordinary share capital of STM by Bidco.
The Acquisition is intended to be effected by means of a Court-sanctioned
scheme of arrangement under Part X of the Companies Act.
2. The Acquisition
Under the terms of the Acquisition, which shall be subject to the further
conditions and terms set out in Appendix I to this Announcement and to be set
out in the Scheme Document, Scheme Shareholders who are on the register of
members of STM at the Scheme Record Time will be entitled to receive:
· 60 pence per share in cash ("Cash Consideration");
and
· In addition to the Cash Consideration, under the terms of the
Acquisition, Scheme Shareholders will be entitled to receive a Deferred
Consideration Unit which may deliver up to 7 pence per share in cash (and,
together with the Cash Consideration, the "Maximum Acquisition Value").
In certain circumstances, the Deferred Consideration Unit will have zero
value.
The Cash Consideration values the entire issued and to be issued ordinary
share capital of STM at approximately £35.6 million and delivers 60 pence in
cash per share, which represents a premium of approximately:
· 118.2 per cent. to the closing price of 27.5 pence
per STM Share on 10 July 2023 (being the last Business Day prior to the
commencement of the Offer Period);
· 130.9 per cent. to the volume weighted average price of
25.9 pence per STM Share for the one-month period ended on 10 July 2023 (being
the last Business Day prior to the commencement of the Offer Period); and
· 130.5 per cent. to the volume weighted average price of
26 pence per STM Share for the three-month period ended on 10 July 2023 (being
the last Business Day prior to the commencement of the Offer Period).
The Maximum Acquisition Value, which assumes full value is delivered by the
Deferred Consideration Units, values the entire issued and to be issued
ordinary share capital of STM at approximately £39.8 million and delivers up
to 67 pence per share, which represents a premium of approximately:
· 144 per cent. to the closing price of 27.5 pence per
STM Share on 10 July 2023 (being the last Business Day prior to the
commencement of the Offer Period);
· 158 per cent. to the volume weighted average price of
25.9 pence per STM Share for the one-month period ended on 10 July 2023 (being
the last Business Day prior to the commencement of the Offer Period); and
· 157 per cent. to the volume weighted average price of
26 pence per STM Share for the three-month period ended on 10 July 2023 (being
the last Business Day prior to the commencement of the Offer Period).
If, on or after the date of this Announcement, any dividend and/or other
distribution and/or other return of capital is declared, made or paid or
becomes payable in respect of the STM Shares (in each case with a record date
prior to the Effective Date), Bidco has the right to reduce the amount of the
consideration payable under the Acquisition by an amount equal to the amount
of such dividend and/or distribution and/or return of capital. Where the
consideration is so reduced, any reference in this Announcement to the
consideration will automatically be deemed to be a reference to the
consideration as so reduced by the amount of such dividend and/or distribution
and/or return of capital. In such circumstances, STM Shareholders would be
entitled to receive and retain any such dividend or other distribution and/or
return of capital. Any reduction of the consideration shall be the subject of
an announcement and, for the avoidance of doubt, not be regarded as
constituting any revision or variation of the terms of the Acquisition or the
Scheme.
It is expected that the Scheme Document will be published as soon as
reasonably practicable and, in any event, within 28 days of the date of this
Announcement (unless STM and Bidco otherwise agree, and the Panel consents).
The Court Meeting and the General Meeting are expected to be held during the
fourth quarter of 2023. It is expected that, subject to the satisfaction of
all relevant conditions, the Scheme will become effective during the first
half of 2024.
3. Background to and reasons for the Acquisition
The mission of Pension SuperFund Capital is to provide a complete solution to
pension savers and members. The board of Pension SuperFund Capital has stated
that it intends for Pension SuperFund Capital to be at the heart of
consolidation and pension risk transfer, building on its leadership team's
success inter alia at Pension Insurance Corporation, Hannover Re, and the
London Pension Fund Authority.
Worldwide, pension savers and sponsoring employers face intractable issues
managing pensions to provide for an adequately funded retirement. In the UK,
Chancellor Jeremy Hunt's Mansion House Speech on 10 July 2023 laid out a new
paradigm for pensions and long-term investing in the UK. Defined contribution
funds are not generating the returns required for savers to support them in
retirement and defined benefit schemes are in accounting surplus, but not
generating sufficient returns, thus requiring cash injections from industry,
as opposed to investing in growth to top them up.
The reforms (the "Mansion House Reforms") are focused on providing good value
outcomes for investors and to combat the long drift into Liability Driven
Investing which has seen pension allocation to UK equity and private companies
decline to very low levels.
Personal pensioners and small funds have high administrative costs relative to
assets under management and are particularly susceptible to the problems of
low liquidity investments, so the reforms are also aimed at driving pension
fund consolidation and encouraging collective funds. This is designed to bring
down costs, but also enable portfolio balancing with higher growth
investments, especially accessing private markets such as infrastructure.
The key elements of the Mansion House Reforms are:
· shift in regulatory emphasis towards value for money,
long-term investment returns as opposed to simply focusing on costs;
· pension funds to consolidate (both defined
contribution and defined benefit) and establish superfunds and collective
investment funds in order to bring down costs while enabling investments in
higher growth investments, including illiquid investments without creating
liquidity traps for smaller funds; and
· pension funds to allocate at least 5% of funds to
unlisted growth companies (£50bn of new capital allocation to growth
companies in the UK, supported by 2/3rds of defined contribution mastertrust
funds already).
Pension Superfund Capital intends to be at the forefront of driving this
change in the UK pension market, aiming to create better outcomes for
pensioners; and freeing employers from the burden of pension liabilities.
With deep and wide-ranging experience in pensions, Pension SuperFund Capital
has access to significant lines of capital and assets, with which to help
provide a safe and secure home to pensioners and pension savers.
The STM Group business lines are complementary to Pension SuperFund Capital's
businesses. However, Bidco and Pension SuperFund Capital believes that STM
businesses lack sufficient scale to enable investors to access the broadest
range of portfolios, including less liquid growth assets. In addition, they
are running on legacy technology systems which, if optimised, have the
potential to increase cost efficiency and improve investor outcomes.
STM's operations in the UK, Malta, Gibraltar, Spain and Australia provide
Pension SuperFund Capital with a broad platform for providing customers with
products and services. Pension SuperFund Capital brings strong regulatory
relationships and the capital required to make the required investments to
maintain and improve those regulatory relationships as the business grows in
breadth of product and scale of operations.
It is the belief of Bidco and Pension SuperFund Capital that a combined
business with STM's current customers and assets and Pension SuperFund
Capital's technology and access to capital, would create a strong platform to
consolidate defined contribution and defined benefit pensions to provide
better outcomes for investors.
4. Background to and reasons for the recommendation
STM was admitted to trading on AIM in 2007. The business was originally a
strategic investment company operating in the corporate and trustee service
provider sector, and has since grown and evolved into a multi-jurisdictional
financial services group, both organically and by acquisition.
Since its inception, STM has taken steps to diversify its revenue from its
origins as a corporate and trustee service provider and has successfully
acquired and integrated a number of businesses and assets over the last
decade, including London and Colonial Holdings Ltd, Carey Administration
Holdings Limited, certain businesses providing SSAS administration and
consultancy services from Berkeley Burke and most recently the portfolio, net
assets and trustee companies of the SIPP and SSAS businesses from Mercer Ltd.
These businesses have allowed STM to enhance its customer proposition into
international pensions and life assurance. Alongside these acquisitions, STM
has launched organic initiatives, such as the development of international
retirement solutions for the expatriate market and continuing development of
its in-house administration.
However, the STM Directors recognise that opportunities exist to improve the
operating performance of the business, in particular through:
· A review of technology in the context of the
business's current capabilities;
· A review of the areas of the business that are not
likely to materially grow in revenue and profitability in the short to medium
term, with a view to conducting a staged realisation programme where
appropriate; and
· A general reduction of non-recurring costs across the
business.
This following was stated in the Company's final results announcement dated 27
June 2023:
"STM is at a cross-roads in its evolution, and whilst it is fortunate to have
a wide range of products and services it is important that we focus on those
areas that have the potential to deliver a step-change in profitability. As
part of this assessment of our next steps, the Group board initiated a
strategic review in the first quarter of 2023, with the aid of external
consultants. As announced in May 2023, the external advisor engagement is
complete, and the Board have assessed the conclusions from it and have begun
to refine the Group's strategy. In particular, the review has identified areas
of the business where we are likely to struggle to materially grow in revenue
and profitability, but also areas with the potential for future growth
following further investment. The Board is therefore considering whether we
crystallise some of that embedded shareholder value from those areas of the
businesses which may struggle to materially grow under the Group's ownership."
The strategic review demonstrates some of our competitors are significantly
more profitable than ourselves in certain areas, and this in turn has
initiated the natural next step of our strategic review into our use of
technology and our current capabilities. There has been significant M&A
activity in the UK pensions sector driven by technology and trading platform
capabilities. The outcome of this technology review will inform our decisions
of the areas to focus on to drive the Group's future growth."
It is the view of the STM Directors that there are cost, timing and execution
risks attached to pursuing the above stated strategy, and the Company will
need additional financial flexibility in order to unlock its full potential.
Further, the STM Directors believe that the financial and strategic support of
Pension SuperFund Capital, with its focus on creating a market leading
pensions offering, could assist in delivering longer-term value creation for
stakeholders.
Ahead of receiving an approach by Bidco, the STM Board was in the process of
negotiating terms in respect of the sale of the Master Trust, in line with its
ongoing strategy review. Following this Announcement, the STM Board intends to
approach the proposed purchaser, with the consent of Bidco, working in
collaboration with the trustees of the Master Trust and the UK Pension
Regulator, to continue discussions around a proposed sale of the Master Trust.
The STM Directors believe the Cash Consideration reflects an attractive
valuation for STM and provides a potential future benefit through the Deferred
Consideration Units. The STM Directors believe that the Acquisition will
provide all STM Shareholders with the opportunity to obtain liquidity for
their investment in STM's shares and to crystallise the value of all of their
holdings, which the STM Directors consider may not otherwise be achievable in
the near-term or in a tax efficient way. The STM Directors believe that the
Acquisition will provide STM with enhanced operational flexibility and
financial resilience, enabling it to offer a more attractive proposition to
its customers and potential opportunities for employees through pursuing its
growth strategy.
Having taken into account all relevant factors, the STM Directors believe that
the terms of the Acquisition are compelling and deliver attractive value for
STM Shareholders for their STM shares in cash.
As such, the Independent STM Directors intend to recommend unanimously that
the Independent STM Shareholders vote in favour of the Scheme at the Court
Meeting and the Scheme Resolution to be proposed at the General Meeting.
5. Recommendation
The Independent STM 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 Independent STM
Directors, Cavendish has taken into account the commercial assessments of the
Independent STM Directors. Cavendish is providing independent financial advice
to the Independent STM Directors for the purposes of Rule 3 of the Takeover
Code.
Accordingly, the Independent STM Directors intend to recommend unanimously
that the Independent STM Shareholders vote in favour of the Scheme at the
Court Meeting (by voting in favour of the Scheme Resolution) and the GM
Resolutions to be proposed at the General Meeting. Therese Neish (being the
only Independent STM Director holding STM Shares, directly or indirectly) has
irrevocably undertaken to do the same in respect of her own entire beneficial
holdings of 492,756 STM Shares representing, in aggregate, approximately 0.83
per cent. of the STM Shares in issue on the Latest Practicable Date and
approximately 0.94 per cent. of STM Shares (excluding STM Shares held by the
MBO Shareholders) in issue on the Latest Practicable Date.
6. MBO Sale
Bidco has confirmed to the Independent STM Directors that its offer for STM
would be conditional upon the completion of a disposal of certain parts of
STM, being the SIPPs Business. For the avoidance of doubt, the MBO Sale no
longer includes the entities connected with the 'funder' of the Master Trust,
as originally referenced in the Company's announcement dated 8 September 2023.
As noted above, STM has entered into an agreement for the sale of the SIPPs
Companies to Pathlines Holdings Limited, a company which is controlled by the
STM CEO, Alan Kentish, for a total cash consideration of £4.5 million.
Pathlines Holdings Limited has agreed to procure and guarantee the redemption
and repayment in full of the existing £1 million redeemable preference shares
issued by London & Colonial Services Limited (one of the SIPPs Companies)
to London & Colonial Holdings Limited (an entity in the Wider STM Group
that is not a SIPPs Company) by 1 March 2025.
Alan Kentish has personally guaranteed £4.1 million of the £4.5 million
consideration payment obligations of Pathlines Holdings Limited pursuant to
the agreement for sale of the SIPPs Companies. Completion of the MBO Sale is
conditional on, amongst other things, the Rule 16 Resolution being passed at
the General Meeting and the sanction of the Scheme by the Court. The
consideration payable under the Acquisition takes into account the proceeds of
the MBO Sale, which will be retained by STM.
The MBO SPA details, inter alia, an intention between Pathlines Holdings
Limited and STM to agree a transitional services agreement and collaboration
agreement to be entered into on completion of the MBO Sale in order to ensure
the STM businesses and the SIPPs Businesses continue to operate in the
ordinary course. In addition, if, in the future, Pathlines Holdings Limited
wishes to dispose of, directly or indirectly, all or any parts of the SIPPs
Business, STM will be afforded a right of first refusal to repurchase the
SIPPs Businesses, subject to certain terms. For the year ended 31 December
2022, the SIPPs Companies had revenue of £3.8 million (unaudited) and profit
after tax of £0.1 million (unaudited). The net assets attributable to the
SIPPs Companies were £3.3 million (unaudited).
In connection with the MBO Sale, Clifton Participations Limited has
irrevocably and unconditionally directed the Receiving Agent to pay £2.5
million of the consideration receivable by it under the Acquisition directly
to STM so as to partially satisfy Pathlines Holdings Limited's obligation to
pay the purchase price to STM in connection with the MBO Sale.
Alan Kentish is a director of STM and both he and his concert parties are
interested in STM Shares. As a consequence of this and the provisions of Rule
16 of the Takeover Code, the MBO Sale will be conditional on, amongst other
things, the approval of the Rule 16 Resolution at the General Meeting. Alan
Kentish and his concert parties will be excluded from voting on the Rule 16
Resolution. Alan Kentish along with his close relatives and through his
indirect holding in Clifton Participations Limited holds 7,078,900 STM Shares,
representing 11.92 per cent per cent of STM's existing issued share capital.
STM has received binding irrevocable undertakings to vote in favour of the
Rule 16 Resolution in respect of, in aggregate, a total of 14,382,566 STM
Shares, representing approximately 24.21 per cent. of the STM Shares in issue
on the Latest Practicable Date and approximately 27.48 per cent. of STM Shares
(excluding STM Shares held by the MBO Shareholders) in issue on the Latest
Practicable Date.
As required by, and solely for the purposes of, Rule 16.1 of the Takeover
Code, Cavendish has (in its capacity as independent adviser to the Independent
STM Directors for the purposes of Rule 3 of the Takeover Code) advised the
Independent STM Directors that the terms of the MBO Sale are fair and
reasonable. In providing its advice to the Independent STM Directors,
Cavendish has taken into account the commercial assessments of the Independent
STM Directors.
As Alan Kentish is a director of STM, the MBO Sale is also classified as a
related party transaction for the purposes of the AIM Rules. The Independent
STM Directors consider, having consulted with Cavendish, the Company's
nominated adviser, that the terms of the MBO Sale are fair and reasonable in
so far as the STM Shareholders are concerned.
7. Irrevocable Undertakings and Letters of Intent
Bidco has received an irrevocable undertaking from Therese Neish (being the
only Independent STM Director holding STM Shares, directly or indirectly) to
vote in favour of the Scheme at the Court Meeting and the GM Resolutions at
the General Meeting in respect of her own entire beneficial holdings of
492,756 STM Shares, representing approximately 0.83 per cent. of the STM
Shares in issue on the Latest Practicable Date and approximately 0.94 per
cent. of STM Shares (excluding STM Shares held by the MBO Shareholders) in
issue on the Latest Practicable Date.
In addition to the irrevocable undertaking from Therese Neish (being the only
Independent STM Director holding STM Shares, directly or indirectly), Bidco
has also received irrevocable undertakings from the MBO Shareholders to vote
or procure votes in favour of the Other GM Resolutions only, in respect of, in
aggregate, 7,078,900 STM Shares representing approximately 11.92 per cent. of
the STM Shares in issue on the Latest Practicable Date. At the same time, the
MBO Shareholders have each agreed to support the Acquisition and to be bound
by the terms of the Scheme.
In addition, Bidco has received irrevocable undertakings to vote in favour of
the Scheme Resolution and the GM Resolutions from certain Independent STM
Shareholders in respect of, in aggregate, 13,889,810 STM Shares representing
approximately 23.38 per cent. of the STM Shares in issue on the Latest
Practicable Date and approximately 26.54 per cent. of STM Shares (excluding
STM Shares held by the MBO Shareholders) in issue on the Latest Practicable
Date.
In total, therefore, Bidco has procured:
· irrevocable undertakings from Therese Neish (being the
only Independent STM Director holding STM Shares, directly or indirectly) and
certain Independent STM Shareholders to vote in favour of the Scheme
Resolution and the Rule 16 Resolution in respect of, in aggregate, 14,382,566
STM Shares, representing approximately 24.21 per cent. of STM Shares in issue
on the Latest Practicable Date and approximately 27.48 per cent. of STM Shares
(excluding STM Shares held by the MBO Shareholders) in issue on the Latest
Practicable Date; and
· irrevocable undertakings from Independent STM
Directors, the MBO Shareholders and certain Independent STM Shareholders to
vote in favour of the Other GM Resolutions in respect of, in aggregate,
21,461,466 STM Shares representing approximately 36.13 per cent. of the STM
Shares in issue on the Latest Practicable Date.
Further details of the irrevocable undertakings and letters of intent are set
out in Appendix III.
8. Information on Pension SuperFund Capital and Bidco
Bidco is an English private company limited by guarantee that was established
on 4 July 2023. Bidco was formed for the purposes of the Acquisition, is
funded by Pension SuperFund Capital, and has not traded since its date of
incorporation, nor has it entered into any obligations other than in
connection with the Acquisition.
The mission of Pension SuperFund Capital
(https://www.thepensionsuperfund.com/) is to provide a complete solution to
pension savers and ultimately improve member outcomes. With an unparalleled
team track record in creating and overseeing pension businesses and solutions,
Pension SuperFund Capital has access to significant lines of capital and
assets with which to help provide a safe and secure home to both pensioners
and pension savers. Pension SuperFund Capital has in place substantial capital
to safely support further pension risk transfers. Pension SuperFund
Capital is creating a new strategic opportunity for the global US$61 trillion
pension market. Pension SuperFund Capital's pension solutions include:
· Going 'on risk' for the liability and investment risks
inherent in pensions, to underpin the certainty of pension outcomes for
employers, members and pension trustees;
· Pioneering Pension SuperHaven to provide defined
contribution pension savers with a chance to transfer into a decent 'defined
benefit' pension for life; and subsequently a share of the investment upside;
and
· Pension SuperFund Capital is the controlling shareholder of
Long Term Assets, a vehicle intended to give pension savers access to private
market investments in line with the Mansion House Reforms.
o Long Term Assets' biggest asset, Global InterConnection Group Limited
(https://live.euronext.com/en/ipo-showcase/global-interconnection-group-limited)
, listed its shares on the Euronext Amsterdam on 7 July 2023.
Pension SuperFund Capital has a world-class management team with an
unparalleled track record in pension consolidation and fostering pension
solutions.
· The Bidco and PSF Capital teams include: former CEOs of
Pension Insurance Corporation, Hannover Re; CIO Greater London Authority;
former Chairman and CFRO at London Pension Fund Authority; CRO and chair Risk
and Audit Committee Pension Insurance Corporation; Head of Risk at Insight and
LGIM; CIO Hermes; SG Hambros Private Banking
· Private and public pension consolidation; architects
of the £260 billion Local Government Pension Schemes' SuperPools and Pension
Protection Fund; pioneers of the longevity risk transfer market and medical
annuity underwriting; eminent pension trustees
· Completed £8 billion of 'capital backed funding
arrangements', pension sponsor acquisitions and PPF+ deals, improving pension
benefits for over 100,000 individuals;
· Best-in-class partners to provide insurance solutions,
fiduciary management, member experience, asset and liability management.
9. Information on STM
STM was admitted to trading on AIM in 2007.
STM was originally formed to consolidate corporate and trustee service
providers operating in international jurisdictions, and the STM Group
subsequently expanded into the international pensions arena. The growth in the
STM Group pensions division has been accompanied by an increase in demand for
the range of STM's life assurance bonds, some of these available as
complementary products to the STM Group pension and trust products. As such,
the STM Group has become recognised as a leading player in administration of
client assets in relation to retirement, estate and succession planning and
wealth structuring, to a global market.
Today, the STM Group has operations in the UK, Gibraltar, Malta, Spain and
Australia and employs some 290 staff, with offices in the UK, Malta, Gibraltar
and Spain. STM has developed a range of pension products for UK nationals and
internationally domiciled clients and has two Gibraltar life assurance
companies which provide life insurance bonds and annuities - wrappers in which
a variety of investments, including investment funds, can be held.
STM currently trades under the names 'STM' (including 'STM Fidecs', 'STM Life'
and 'STM Malta'), 'Options' and 'London & Colonial', across the following
products and services:
· Life Assurance: With two Gibraltar-based life assurance
companies, the STM Group offers a broad range of pension and investment
solutions.
· Qualifying Recognised Overseas Pension Schemes ('QROPS'):
pensions exported by UK expatriates, administered via Malta and Gibraltar.
· UK Workplace pensions: the provision of Defined
Contribution ('DC') pensions for UK employers and members, auto-enrolled via
the Master Trust.
· Self-Invested Personal Pension schemes ('SIPPs') & Small
Self-Administered Schemes ('SSAS'): SIPPs are products regulated in the UK by
the Financial Conduct Authority, whereas SSAS fall under the purview of the UK
Pension Regulator. STM has products specifically tailored to serve both the UK
and international market.
· Group Pension Plans ('GPP').
· Pension Consultancy: administration and pension
consultancy services to defined benefit pension funds as well as DC funds.
· An Australian pension administration company.
Current trading
On 28 September 2023, STM reported its interim results for the period ended 30
June 2023. Against a challenging macro-economic backdrop, STM Group delivered
total revenue in the six months to 30 June 2023 of £13.2 million (2022:
£11.3 million), which included £0.9 million of interest income. Profit
before other items was £1.5 million (six months ended 30 June 2022: £1.4
million) and profit before tax was approximately £0.1 million (six months
ended 30 June 2022: £0.5 million). The core business remained stable with
recurring operating revenue remaining resilient when compared to the first
half of 2022, with overall revenue for the business up from the prior year.
For the twelve months ended 31 December 2022, STM reported revenues of £24.1
million, profit before other items of £3.3 million and profit before tax of
£1.6 million.
Since 30 June 2023 (being the date to which STM's interim results were drawn
up), STM has continued to demonstrate resilience in its underlying business
through its recurring revenue, supplemented with strengthening interest income
from its interest sharing model. As a result, STM expects to be in line with
management's internal expectations for the year ending 31 December 2023.
10. Directors, management, employees, pensions, research and
development and locations
Bidco's strategic plans for STM
As noted in paragraph 6 (MBO Sale) above, Bidco has confirmed to the STM
Directors that its offer for STM would be conditional upon the completion of a
disposal of certain parts of STM, being the SIPPs Business. For the avoidance
of doubt, the statements included in this section do not include any
intentions around the SIPPs Business.
As set out in paragraph 3 (Background to and reasons for the Acquisition)
above, Bidco believes that the combination of Bidco and STM will create a more
scalable platform from which to grow and consolidate pension funds to provide
better outcomes for underlying savers in line with the aims of the
Chancellor's Mansion House Speech on 10 July 2023.
Bidco has not yet fully formulated its specific plans and detailed strategy
for STM. Following the Acquisition, Bidco intends to complete a full
evaluation of STM and its operations in order to determine how its short- and
long-term objectives can be best delivered both on a standalone basis and
ultimately as part of the Enlarged Group, in order to maximise value to the
stakeholders of the Enlarged Group (the "Review").
The Review will include:
· further analysis of STM's key products, regulatory
relationships and initiatives;
· engaging with the key stakeholders of the STM
business, including relevant regulatory bodies;
· identifying and assessing the growth opportunities of
the Enlarged Group;
· continuing STM management's technology review,
including investigation into the potential benefits of using technology-based
third party solutions to provide administration services;
· improvements of systems and processes in line with
regulatory standards and requirements;
· subject to the outcome of STM's discussions regarding
any proposed sale of the Master Trust as referenced in paragraph 4 of this
Announcement, changes to the management, structure and/or ownership of the
Master Trust to ensure long term benefits to members; and
· considering how best to position STM's business to compete
more strongly, including evaluation of the optimum corporate, organisational
and office portfolio setup for the Enlarged Group.
Bidco expects that the Review will be completed within approximately three
months of the Effective Date.
Employees and management
Bidco attaches importance to the skills and experience of STM's management and
employees and recognises that the employees and management of STM will be key
to the success of the Enlarged Group. Bidco is looking forward to working with
STM's management and employees to support the future development of STM within
the Enlarged Group.
It was announced on 25 September 2023 that Therese Neish would be departing as
Interim Chief Financial Officer and board member on 31 December 2023. It is
also intended that Alan Kentish will depart as Chief Executive Officer from
the Effective Date, as a result of his involvement in the MBO Sale.
As at the date of this Announcement, other than in respect of these senior
management roles, Bidco has not identified significant duplication of roles
within the two businesses and does not expect a significant number of
headcount reductions from the creation of the Enlarged Group. However, Bidco
is appointing expert executive leadership consultants to assist in their
desire to create a unified executive management team, blending the best skills
within both Bidco and STM, to be complemented by external hires. The exact
composition of this team will be finalised following completion of the Review,
following which Bidco will have had the opportunity to identify the best
talent in both organisations.
Bidco is not intending to change the terms and conditions of employment of the
management and employees of the Enlarged Group. However, as a result of the
Review, Bidco cannot be certain as to what impact there will be on the
employment of, and the balance of skills and functions of, the management and
employees of the Enlarged Group.
Once the Review is complete, Bidco's expert executive leadership consultants
will provide assistance with the integration process, with the intention of
motivating and retaining the best talent within the Enlarged Group.
Once STM ceases to be a listed company, public company-related functions will
be reduced in scope or become unnecessary, and as such Bidco expects headcount
in relation to these functions to be reduced or eliminated (with staff
effected reallocated internally to the extent possible). It is intended that,
with effect from the Effective Date, each of the Non-Executive Directors of
STM shall resign from their office as a director of STM.
Existing rights and pensions
Bidco confirms that, following completion of the Acquisition, the existing
contractual and statutory rights, including pension rights, of all management
and employees of STM and its subsidiaries will be fully safeguarded in
accordance with applicable law. In addition, the Review and any headcount
reduction will be subject to applicable informing and consulting requirements
and conducted in accordance with applicable law.
Bidco (together with Pension SuperFund Capital) will review the existing
pension arrangements, which as pension experts, it may be able to improve
upon. STM operates defined contribution pension arrangements for its
management and employees and has no exposure under any form of defined benefit
pension scheme. Bidco does not intend to make any adverse changes to the
employer contributions in the STM defined contribution pension plans, the
accrual of benefits to existing members or the admission of new members into
such pension plans following the completion of the Acquisition.
Headquarters, locations, fixed assets and research and development
Bidco intends to retain the Enlarged Group's headquarters in the City of
London.
Bidco does not intend to make any immediate changes to the operations, places
of business or headquarters of STM, pending the outcome of the Review.
Bidco does not intend there to be any material redeployment of the fixed
assets of STM, pending the outcome of the Review.
STM has no dedicated research and development function.
Management incentive arrangements
Other than set out below, Bidco has not entered into and has not discussed any
form of incentivisation arrangements with members of STM's management. Bidco
does not intend to discuss any form of incentivisation agreement with members
of STM's management team before completion of the Acquisition. Following the
Effective Date, Bidco may have discussions and enter into appropriate
arrangements for certain members of the Enlarged Group's management team.
Additional Remuneration Arrangements
The Remuneration Committee of the STM Board has, with the consent of Bidco,
approved additional remuneration payments for Therese Neish (Chief Financial
Officer), Nigel Birrell (Non-Executive Chair) and Peter Smith (Non-Executive
Director) of £70,000, £50,000 and £50,000 respectively, and certain other
senior employees, in consideration and recognition of the additional work
carried out in connection with the Acquisition (above and beyond their normal
duties and responsibilities). These bonuses are subject to the Acquisition
becoming Effective. Further details of these arrangements will be contained in
the Scheme Document.
As required by, and solely for the purposes of, Rule 16.2 of the Takeover
Code, Cavendish has (in its capacity as independent adviser to the Independent
STM Directors for the purposes of Rule 3 of the Takeover Code) reviewed the
terms of the transaction bonuses and has confirmed that, in its opinion, the
transaction bonuses set out above are fair and reasonable. In providing this
advice to the STM Directors, Cavendish has taken into account the commercial
assessments of the STM Directors.
The proposed additional remuneration payments in respect of Therese Neish,
Nigel Birrell and Peter Smith are related party transactions under the AIM
Rules. Alan Kentish (being the only independent Director for the purpose of
such assessment) having consulted with Cavendish, considers the terms of the
bonus arrangements noted above to be fair and reasonable insofar as STM
Shareholders are concerned.
Trading Facilities
STM Shares are currently admitted to trading on AIM. Subject to the Scheme
becoming effective, an application will be made to the London Stock Exchange
for the cancellation of admission to trading of the STM Shares on AIM.
The statements in this paragraph 10 are not "post-offer undertakings" for the
purposes of Rule 19.5 of the Takeover Code.
Views of the STM Board
In considering the recommendation of the Acquisition to Independent STM
Shareholders, the Independent STM Directors have given due consideration to
Bidco's intentions for the business, management, employees and locations of
business of STM.
11. Financing
The Cash Consideration payable by Bidco under the terms of the Acquisition
will be funded from a loan from PSF Capital Reserve L.P. (acting by its
general partner Pension SuperFund Capital GP II Limited) to Bidco. The source
of funding of such loan advanced by PSF Capital Reserve L.P. (acting by its
general partner Pension SuperFund Capital GP II Limited) to Bidco will be the
proceeds of a loan provided to PSF Capital Reserve L.P. (acting by its general
partner Pension SuperFund Capital GP II Limited) by NatWest under the
Facilities Agreement.
In accordance with Rule 2.7(d) of the Takeover Code, Davy, as sole financial
adviser to Bidco, is satisfied that sufficient resources are available to
Bidco to satisfy in full the Cash Consideration payable to STM Shareholders
under the terms of the Acquisition.
Bidco has not been required to confirm, and has not confirmed, that resources
are available to satisfy payments under the Deferred Consideration Units. It
is anticipated that any payments under the Deferred Consideration Units will
be funded directly from the ongoing cash flow and cash resources of STM (which
will be wholly-owned by Bidco following the Effective Date). Scheme
Shareholders will be at risk if, for any reason, these payment obligations
were unable to be satisfied by Bidco.
12. Details of the Deferred Consideration Units and Loan Notes
General
Under the terms of the Scheme, each Scheme Shareholder will receive one
Deferred Consideration Unit for each Scheme Share. The Deferred Consideration
Units have been constituted by a deed poll entered into by Bidco on the date
of this Announcement. Under the terms of the DCU Deed Poll, subject to the DCU
Conditions having been satisfied, each Deferred Consideration Unit shall
entitle its holder to one Loan Note. The principal value of each Loan Note
that the DCU Holder may be entitled to ("Loan Note Principal Value"), and
therefore the amount of cash ultimately payable to a Loan Note holder upon
redemption of their Loan Notes on the Loan Note Payment Date, shall be
determined by way of an Assessment Process in accordance with the terms of the
DCU Deed Poll.
The Deferred Consideration Units will not represent any equity or ownership
interest in Bidco, and accordingly will not confer on the DCU Holder any right
to attend, speak at or vote at any meeting of the shareholders of Bidco or
right to any dividends or right to any return of capital by Bidco.
The Deferred Consideration Units will be non-transferable. No application will
be made for the Deferred Consideration Units to be listed or dealt in on any
stock exchange. The Deferred Consideration Units will be governed by English
law and will be issued in certificated form.
If the laws of any jurisdiction make it illegal for Scheme Shareholders to
hold or be issued Deferred Consideration Units or would require any
qualification of the Deferred Consideration Units under any applicable laws or
regulations, they may not be entitled to the Deferred Consideration Units or
the amounts which may be payable thereon. In such circumstances, Bidco intends
under the terms of the Scheme to pay such Restricted Overseas Shareholders an
amount equal to the amount that such Scheme Shareholder would have received
(if any) under the Deferred Consideration Units and the Loan Notes (subject to
the terms and conditions of the DCU Deed Poll as if they applied for
determining and paying such amount).
The Deferred Consideration Units are complex instruments and a number of
factors will determine whether any amount will actually be paid to Scheme
Shareholders by way of the Loan Notes. The Loan Note Principal Value is capped
at a maximum of 7 pence and the minimum value under the Loan Notes is zero.
Subject to the satisfaction of the DCU Conditions and agreement on, or
determination of, the Loan Note Principal Value, Bidco shall enter into the
Loan Note Instrument. The Loan Note Principal Value will be determined by the
Assessment Process set out in the DCU Deed Poll and summarised below,
following which, each DCU Holder will either receive one Loan Note for each
Deferred Consideration Unit held by such DCU Holder or, if the results of the
Assessment Process are such that the Loan Note Principal Value is agreed or
determined to be zero, no Loan Notes will be issued, and in these
circumstances the DCU Holders will not receive any additional consideration
under the terms of the DCU Deed Poll. In these circumstances, the value of
each Deferred Consideration Unit would be zero.
No Interest shall be payable on the Loan Note, other than in circumstances
where Bidco is in default of its payment obligations under the terms of the
Loan Note Instrument. Each Loan Note shall have a term which ends on the date
falling one year after the Effective Date. On redemption (being the Loan Note
Payment Date) the Loan Note Principal Value will be paid to the holders of the
Loan Notes and the Loan Notes will be automatically cancelled.
DCU Conditions
The Loan Notes shall only become capable of being issued providing the
following conditions have been satisfied in full (the "DCU Conditions"),
following which an assessment process (as referenced below) will begin in
order to determine the Loan Note Principal Value:
1 the UK Pensions Regulator not having taken any action or
required a third party to take any action that would result in or has resulted
in (i) the winding up of the Master Trust; or (ii) the Wider STM Group ceasing
to operate the Master Trust, in either case, prior to the Effective Date;
2 satisfaction in full of Conditions 2(b) and 2(c) (as set
out in Appendix I to this Announcement) by the Effective Date;
3 as at the Effective Date, no Regulator having given
notice, following the date of the DCU Deed Poll, of a decision to take,
institute or implement 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 which would result
in, or has resulted in, in each case, (i) the withdrawal or loss of any
license, authorisation or regulatory approval held by the Wider STM
Acquisition Group as at the date of the DCU Deed Poll and which is or would be
material in the context of the Wider STM Acquisition Group taken as whole; or
(ii) the imposition of any fine or penalty on any member of the Wider STM
Acquisition Group and which is or would be material in the context of the
Wider STM Acquisition Group taken as whole,
provided always that if, prior to the Effective Date, it is agreed that the
Master Trust and/or its associated Wider STM Group funding entity is, with the
agreement of the Master Trust trustees, to be sold, novated or otherwise
transferred ("MT Sale"), then, DCU Condition 1 above and, solely in respect of
the UK Pension Regulator with regard to DCU Condition 3 above, shall be
treated as having been satisfied in full as at the date of public announcement
of such MT Sale, provided that the agreement to any MT Sale is not thereafter
rescinded prior to the Effective Date.
Assessment process (the "Assessment Process")
Subject to the DCU Conditions being met, the calculation of the Loan Note
Principal Value shall be based on an assessment of change in the net attrition
rate of customer numbers, which means, the netting off of new customer wins
against customer losses on an annualised basis across, in each case, the STM
Group business during the period from 30 September 2023 until the last day of
the month prior to the Effective Date. The net attrition calculation shall
not take into account: (i) any customer losses caused by deaths; (ii) any
customer wins and customer losses of the SIPPs Companies; and (iii) any
customer wins and customer losses of the Master Trust in the event it is no
longer owned by the STM Group as at the Effective Date. Bidco shall prepare
and deliver to a representative appointed by STM the calculation of the Loan
Note Principal Value for review no later than 15 Business Days after the
Effective Date.
The principal value of each Loan Note to be issued pursuant to the Loan Note
Instrument will be calculated as follows:
LNPV = 7 - X
where:
LNPV = the "Loan Note Principal Value" in pence
X = a number between 7 and 0 and calculated on a straight-line basis dependent
upon the extent to which annualised net attrition during the calculation
period falls between 5% and 10% and where, for the avoidance of doubt:
annualised net attrition during the calculation period is 5% or less, X shall
equal 0; and
annualised net attrition during the calculation period is 10% or more, X shall
equal 7.
annualised net attrition is calculated as the net attrition during the
calculation period multiplied by 12 and divided by the number of months in the
calculation period.
Within 14 days of determination of the Loan Note Principal Value referred to
above, Bidco shall issue the Loan Notes, each Loan Note being in a principal
amount equal to the Loan Note Principal Value
Loan Notes
The Loan Notes will be governed by English law, will be issued, credited as
fully paid and will be issued in certificated form. The Loan Notes will not be
transferable and no application will be made for them to be listed or dealt in
on any stock exchange.
The Loan Notes will not bear interest other than in circumstances where Bidco
is in default of its payment obligations under the terms of the Loan Note
Instrument.
The Loan Notes will be issued in accordance with the terms of the DCU Deed
Poll and Loan Note Instrument. On the expiry of the term, Bidco will redeem
the outstanding Loan Notes for cash. A holder of the Loan Notes may not opt
to redeem any of his notes prior to the expiry of the term.
Full details of the Loan Notes will be contained in the Scheme Document.
The Panel has determined that an estimate of the value of the Deferred
Consideration Units and Loan Note in accordance with Rule 24.11 of the Code is
not required to be included in the Scheme Document.
13. Offer-related Arrangements
Pension SuperFund Capital and STM entered into a confidentiality agreement on
14 July 2023 (the "Confidentiality Agreement") pursuant to which Pension
SuperFund Capital has undertaken to keep confidential certain information
related to the Acquisition and to STM and not to disclose it to third parties
(other than to authorised recipients) unless required by law or regulation.
These confidentiality obligations shall remain in force until the first to
occur of (a) the completion of the Acquisition by Bidco or (b) two years from
the date of the Confidentiality Agreement.
Under the terms of the Confidentiality Agreement, Pension SuperFund Capital
has also agreed to customary standstill provisions pursuant to which it has
agreed that it will not (other than in limited circumstances) acquire any STM
Shares. This restriction ceases immediately following the making of this
Announcement.
14. Structure of and Conditions to the Acquisition
It is intended that the Acquisition shall be effected by means of a
Court-sanctioned scheme of arrangement between STM and the Scheme Shareholders
under Part X of the Companies Act. Bidco reserves the right to elect, however,
with the consent of the Panel (where necessary), to implement the Acquisition
by way of a Takeover Offer.
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 STM. This is to be
achieved by the transfer of the Scheme Shares to Bidco, in consideration for
which the Scheme Shareholders who are on the register of members of STM at the
Scheme Record Time, shall receive Cash Consideration on the basis set out in
paragraph 2 of this Announcement and the Deferred Consideration Units.
The Scheme is subject to the Conditions and certain further terms set out in
Appendix I to this Announcement and to be set out in the Scheme Document and
the Forms of Proxy and will only become effective if, among other things, the
following events occur on or before the Long Stop Date or such later date as
may be agreed in writing by Bidco and STM (with the Panel's consent and as the
Court may approve (if such approval(s) are required)):
(i) the approval of the Scheme by a majority in number of the
Independent STM Shareholders who are present and vote, whether in person or by
proxy, at the Court Meeting (or, if applicable any separate class meeting
which may be required by the Court or at any adjournment of any such meeting)
and who represent 75 per cent. or more in value of the Scheme Shares voted;
(ii) the resolutions required to implement the Scheme as set out
in the Notice of General Meeting as will be included in the Scheme Document,
being duly passed by the requisite majority at the General Meeting (or at any
adjournment thereof);
(iii) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to STM
and Bidco) and the delivery of a certified copy of the Court Order to the
Companies Registry and registration of such Court Order together with a copy
of the Scheme Document and all documents required to be annexed thereto, by
the Companies Registry;
(iv) completion of the MBO Sale;
(v) satisfaction of the Regulatory Conditions; and
(vi) the Scheme becoming effective by the Long Stop Date.
The Scheme shall lapse if:
· the Court Meeting and the General Meeting (and any
adjournment thereof) are not held by the 22(nd) day after the expected date of
such meetings as will be set out in the Scheme Document (or such later date as
may be agreed between Bidco and STM, with the Panel's consent);
· the Court Hearing to approve the Scheme is not held
by the 22(nd) day after the expected date of such hearing as will be set out
in the Scheme Document (or such later date as may be agreed between Bidco and
STM, with the Panel's consent); or
· the Scheme does not become effective by the Long Stop
Date,
provided however that the deadlines for the timing of the Court Meeting, the
General Meeting and the Court Hearing to approve the Scheme as set out above
may be waived by Bidco, and the deadline for the Scheme to become effective
may be extended by agreement between STM and Bidco (with the Panel's consent
and as the Court may approve (if such consent and/or approval is required)).
If any Condition in paragraph 2 of Appendix I to this Announcement is not
capable of being satisfied by the date specified therein, Bidco shall make an
announcement through a Regulatory Information Service as soon as practicable
and, in any event, by not later than 8.00 a.m. on the Business Day following
the date so specified, stating whether Bidco has invoked that Condition (where
applicable), waived that Condition or, with the agreement of STM, specified a
new date by which that Condition must be satisfied.
The Acquisition will be conditional upon (as well as the other Conditions set
out in Appendix I) regulatory approvals in Malta and Gibraltar by the relevant
regulator and the tPR Condition being satisfied. The MBO Sale is conditional
on approval by the FCA in the UK and the Acquisition will therefore not
complete until such condition has been satisfied (or, if legally permissible,
waived) in accordance with the terms of the MBO Sale.
Bidco considers each of the Regulatory Conditions and the MBO Condition to
each be of material significance to it in the context of the Acquisition. If
any of the Regulatory Conditions or the MBO Condition are not satisfied, Bidco
may seek to invoke the relevant condition in accordance with its terms as at
the relevant date.
Upon the Scheme becoming effective, it shall be binding on all STM
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, shall be set out in the Scheme Document, which will specify
the necessary actions to be taken by STM Shareholders. It is expected that the
Scheme Document and the Forms of Proxy accompanying the Scheme Document will
be published as soon as reasonably practicable and, in any event, within 28
days of this Announcement (unless STM and Bidco otherwise agree, and the Panel
consents) and the Court Meeting and the General Meeting are expected to be
held in the fourth quarter of 2023. The Scheme Document and Forms of Proxy
will be posted to all STM Shareholders as soon as practicable, at no charge to
them.
Any STM Shares issued before the Scheme Record Time will be subject to the
terms of the Scheme. The Other GM Resolutions will, amongst other matters,
provide that the Articles be amended to incorporate provisions requiring any
STM Shares issued after the Scheme Record Time (other than to Bidco and/or its
nominees) to be automatically transferred to Bidco on the same terms as the
Acquisition (other than terms as to timings and formalities). The provisions
of the Articles (as amended) will prevent any person (other than Bidco and its
nominees) holding shares in the capital of STM after the Effective Date.
15. De-listing and re-registration
Prior to the Scheme becoming effective, STM shall make an application for the
cancellation of admission to trading of the STM Shares on AIM, to take effect
from or shortly after the Effective Date.
The last day of dealings in STM Shares on AIM is expected to be the Business
Day immediately prior to the Effective Date and no transfers shall be
registered after 6.00 p.m. on that date.
16. Disclosure of interests in STM
Save in respect of the irrevocable undertakings referred to in paragraph 7
above and the interests of Alan Kentish and Clifton Participations Limited
referred to in paragraph 7 above, as at the close of business on the Latest
Practicable Date, neither Bidco, nor any of its directors nor, so far as Bidco
is aware, any person acting in concert (within the meaning of the Takeover
Code) with it has: (i) any interest in or right to subscribe for any relevant
securities of STM; (ii) any short positions in respect of relevant securities
of STM (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; (iii) any dealing arrangement of the kind referred to in
Note 11 on the definition of 'acting in concert' in the Takeover Code, in
relation to the relevant securities of STM; nor (iv) borrowed or lent any
relevant securities of STM (including, for these purposes, any financial
collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the
Takeover Code), save for any borrowed shares which had been either on-lent or
sold.
"relevant securities of STM" means STM Shares or securities convertible or
exchangeable into STM Shares.
"Interests in securities" for these purposes and within the meaning of the
Takeover Code 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.
17. General
Switching to a Takeover Offer
Bidco reserves the right to elect, with the consent of the Panel (where
necessary), to implement the Acquisition by way of a Takeover Offer.
If the Acquisition is effected by way of a Takeover Offer and such Takeover
Offer becomes or is declared unconditional and sufficient acceptances are
received, Bidco intends to apply the provisions of section 160 of the
Companies Act to compulsorily acquire any outstanding STM Shares to which such
Takeover Offer relates, and for the admission to trading of the STM Shares on
AIM to be cancelled.
Miscellaneous
The Acquisition is subject to the Conditions and certain 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 a summary of
the irrevocable undertakings and letters of intent referred to in this
Announcement, and Appendix IV contains definitions of certain terms and
expressions used in this Announcement. The Scheme will be governed by the laws
of the Isle of Man and be subject to the jurisdiction of the Court and to the
Conditions and certain further conditions and terms set out in Appendix I to
this Announcement and to be set out in the Scheme Document. The Acquisition
will also be subject to the applicable requirements of the Companies Act, the
Court, the Financial Conduct Authority, the London Stock Exchange, the Panel,
the Takeover Code and the AIM Rules. This Announcement does not constitute, or
form part of, an offer or invitation to purchase STM Shares or any other
securities.
Davy 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.
18. Documents available on website
Copies of the following documents shall be made available, subject to certain
restrictions relating to persons residing in Restricted Jurisdictions, on
STM's website at https://www.stmgroupplc.com/possible-offer-for-stm-group-plc
by no later than noon (London time) on the Business Day following this
Announcement until the end of the Acquisition:
· this Announcement;
· the agreement for the sale of the SIPP Companies between
STM and Pathlines Holdings Limited referred to in paragraph 6 above;
· the direction letter from Clifton Participations Limited in
favour of Bidco, STM and the Receiving Agent referred to in paragraph 6 above;
· the irrevocable undertakings and letters of intent referred to
in paragraph 7 above and summarised in Appendix III to this Announcement;
· the Confidentiality Agreement;
· the documents relating to the financing of the
Acquisition referred to in paragraph 11 above;
· the DCU Deed Poll and Loan Note Instrument; and
· the consents from Cavendish and Davy to being named
in this Announcement.
Neither the contents of the websites referred to in this Announcement nor the
contents of any website accessible from hyperlinks is incorporated in, or
forms part of, this Announcement.
Enquiries:
Pension SuperFund Capital edmund.truell@psf.capital
Edmund Truell
Davy Capital Markets UK (Financial Adviser to Pension SuperFund Capital and +44 20 7448 8870
Bidco)
Will Smith / Graham Hertrich / Andrew Beswick
(Corporate Finance)
EQ Corp (PR Adviser to Pension SuperFund Capital and Bidco) +44 (0) 20 7223 1100
James Culverhouse +44 (0) 7912 508 322
James.culverhouse@eqcorp.com
STM via Walbrook PR
Nigel Birrell
Cavendish Capital Markets Limited (Financial Adviser, Nominated Adviser and +44 20 7220 0500
Broker to STM)
Matt Goode / Emily Watts / Henrik Persson / Abigail Kelly / Trisyia Jamaludin
(Corporate Finance)
Tim Redfern (ECM)
Walbrook PR (PR Adviser to STM) +44 (0) 20 7933 8780
Tom Cooper +44 (0) 797 122 1972
STM@walbrookpr.com
Simpson Thacher & Bartlett LLP is retained as legal adviser to Pension
Superfund Capital and Bidco.
Pinsent Masons LLP is retained as legal adviser to STM.
Important Notice
Davy Capital Markets UK is a trading name of J & E Davy (UK) Limited. J
& E Davy (UK) Limited which is authorised and regulated by the Financial
Conduct Authority. J & E Davy (UK) Limited is a Davy Group company and
also a member of the Bank of Ireland Group. J & E Davy (UK) Limited is
acting for Pension SuperFund Capital and Bidco in relation to the matter
described in this Announcement and is not advising any other person, and
accordingly will not be responsible to anyone other than Pension SuperFund
Capital and Bidco for providing the protections afforded to its clients or for
providing advice in relation to the matters described in this Announcement.
Cavendish Capital Markets Limited ("Cavendish"), which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom, is acting
exclusively for STM and for no one else in connection with the Acquisition
and/or any other matter referred to in this Announcement and will not be
responsible to anyone other than STM for providing the protections afforded to
its clients or for providing advice in relation to the Acquisition, the
contents of this Announcement, or another other matters referred to in this
Announcement. Neither Cavendish nor any of its subsidiaries, affiliates or
branches owes or accepts any duty, liability or responsibility whatsoever
(whether direct, indirect, consequential, 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 or other matter or
arrangement referred to herein or otherwise.
This Announcement is for information purposes only and does not constitute an
offer to sell or an invitation to purchase any securities or the solicitation
of an offer to buy any securities, or the solicitation of any vote or approval
in any jurisdiction, pursuant to the Acquisition or otherwise. The Acquisition
shall be made solely by means of the Scheme Document which shall contain the
full terms and conditions of the Acquisition, including details of how to vote
in respect of the Acquisition. 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 has been prepared for the purpose of complying with English
law and Isle of Man 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 the United Kingdom or the Isle of Man.
STM shall prepare the Scheme Document to be distributed to STM Shareholders.
STM and Bidco urge STM Shareholders to read the Scheme Document when it
becomes available because it will contain important information relating to
the Acquisition.
This Announcement does not constitute a prospectus or prospectus equivalent
document.
Overseas Shareholders
The release, publication or distribution of this Announcement in jurisdictions
other than the United Kingdom or the Isle of Man may be restricted by law
and/or regulations. Persons who are not resident in the United Kingdom or the
Isle of Man or who are subject to the laws and regulations of other
jurisdictions should inform themselves of, and observe, any applicable
requirements.
Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition shall not be made
available, in whole or in part, 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
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 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 forward, distribute or send them in, into or from such
jurisdictions where to do so would violate the laws in those jurisdictions. If
the Acquisition is implemented by way of a Takeover Offer (unless otherwise
permitted by applicable law and regulation), such Takeover Offer may not be
made available directly or indirectly, into or from 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 Takeover Offer may not be
capable of acceptance by any such use, means, instrumentality or facilities.
The availability of the Acquisition to STM Shareholders who are not resident
in the United Kingdom or the Isle of Man (and, in particular, their ability to
vote their Scheme Shares with respect to the Scheme at the Court Meeting, or
to appoint another person as proxy to vote at the Court Meeting on their
behalf) may be affected by the laws of the relevant jurisdictions in which
they are resident. Persons who are not resident in the United Kingdom or the
Isle of Man should inform themselves of, and observe, any applicable
requirements, as 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
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. The Acquisition shall be subject to the applicable
requirements of the Companies Act, the Court, 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
Scheme Document.
Additional Information for US Investors
The Acquisition is being made to acquire the securities of an Isle of Man
company by means of a scheme of arrangement provided for under Part X of the
Companies Act. A transaction effected by means of a scheme of arrangement is
not subject to the proxy solicitation or tender offer rules under the US
Exchange Act. Accordingly, the Scheme will be subject to disclosure
requirements and practices applicable to schemes of arrangement involving a
target company in the Isle of Man admitted to trading on AIM, which are
different from the disclosure requirements of the US under the US proxy
solicitation and tender offer rules. The financial information included in
this Announcement and the Scheme documentation has been or will have been
prepared in accordance with accounting standards applicable in the Isle of Man
and the UK 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.
Neither the US Securities and Exchange Commission nor any US state securities
commission has approved or disproved or passed judgment upon the fairness or
the merits of the Acquisition or determined if this Announcement is adequate,
accurate or complete.
If Bidco were to elect to implement the Acquisition by means of a Takeover
Offer, such Takeover Offer would be made in compliance with applicable US laws
and regulations, including to the extent applicable Section 14I of the US
Exchange Act and Regulation 14E thereunder, and in accordance with the
Takeover Code. Such a takeover would be made in the United States by Bidco and
no one else.
The receipt of cash pursuant to the Acquisition by a US holder as
consideration for the transfer of its Scheme Shares pursuant to the Scheme may
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. Each STM Shareholder is urged to consult his independent
professional adviser immediately regarding the tax consequences of the
Acquisition applicable to him.
It may be difficult for US holders to enforce their rights and any claims
arising out of the US federal securities laws, since STM is located in a
country other than the US, and all of its officers and directors are residents
of countries other than the US. US holders 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 judgement.
In accordance with normal UK practice and consistent with Rule 14e-5 under the
US Exchange Act, Bidco, certain affiliated companies and the nominees or
brokers (acting as agents) may from time to time make certain purchases of, or
arrangements to purchase, shares in STM 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. If such purchases or
arrangements to purchase were to be made they would occur either in the open
market at prevailing prices or in private transactions at negotiated prices
and will comply with applicable law, including to the extent applicable the US
Exchange Act. 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.londonstockexchange.com) and via SENS. This information will also
be publicly disclosed in the US to the extent that such information is made
public in the UK.
Forward Looking Statements
This Announcement (including information incorporated by reference in the
Announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and STM contain certain forward-looking
statements, beliefs or opinions, with respect to the financial condition,
results of operations and business of Bidco and STM. These forward-looking
statements can be identified by the fact that they do not relate only to
historical or current facts. Forward-looking statements often use words such
as "anticipate", "target", "expect", "envisage", "estimate", "intend", "plan",
"goal", "believe", "hope", "aims", "continue", "will", "may", "should",
"would", "could", or other words of similar meaning. These statements are
based on assumptions and assessments made by STM, and/or Bidco, in light of
their experience and their perception of historical trends, current
conditions, future developments and other factors they believe appropriate. 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 and the factors described in the context of such forward-looking
statements in this Announcement could cause actual results and developments to
differ materially from those expressed in or implied by such forward-looking
statements. Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given by STM
and Bidco that such expectations will prove to have been correct and you are
therefore cautioned not to place undue reliance on these forward-looking
statements which speak only as at the date of this Announcement. Neither STM
nor Bidco nor Pension SuperFund Capital assumes any obligation and STM and
Bidco and Pension SuperFund Capital disclaim any intention or obligation, to
update or correct the information contained in this Announcement (whether as a
result of new information, future events or otherwise), except as required by
applicable law or regulation (including under the AIM Rules).
EXCEPT AS EXPRESSLY PROVIDED IN THE ANNOUNCEMENT, THE FORWARD-LOOKING
STATEMENTS HAVE NOT BEEN REVIEWED BY THE AUDITORS OF STM, PENSION SUPERFUND
CAPITAL OR BIDCO OR THEIR RESPECTIVE FINANCIAL ADVISERS. SUCH FORWARD-LOOKING
STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD
SIGNIFICANTLY AFFECT EXPECTED RESULTS AND ARE BASED ON CERTAIN KEY
ASSUMPTIONS. THERE ARE SEVERAL FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED IN FORWARD-LOOKING
STATEMENTS. AMONG THE FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS IS THE
SATISFACTION OF THE CONDITIONS, AS WELL AS ADDITIONAL FACTORS SUCH AS CHANGES
IN GLOBAL, POLITICAL, ECONOMIC, BUSINESS, COMPETITIVE, MARKET AND REGULATORY
FORCES, FUTURE EXCHANGE AND INTEREST RATES, CHANGES IN TAX RATES AND FUTURE
BUSINESS COMBINATIONS OR DISPOSITIONS. SUCH FORWARD LOOKING STATEMENTS SHOULD
THEREFORE BE CONSTRUED IN THE LIGHT OF SUCH FACTORS. NEITHER BIDCO NOR STM,
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.
No Profit Forecasts, Estimates or Quantified Benefits Statements
No statement in this Announcement is intended as a profit forecast, profit
estimate or quantified benefits statement for any period and no statement in
this Announcement should be interpreted to mean that earnings or earnings per
share for STM for the current or future financial years would necessarily
match or exceed the historical published earnings or earnings per share for
STM.
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 (1)0th Business Day following the
commencement of the offer period and, if appropriate, by no later than 3.30
p.m. (London time) on the (1)0th 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.
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
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 STM Shareholders and other relevant persons for the receipt of
communications from STM may be provided to Bidco during the Offer Period as
requested 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 STM's
website at https://www.stmgroupplc.com/possible-offer-for-stm-group-plc
(https://www.stmgroupplc.com/possible-offer-for-stm-group-plc) by no later
than 12 noon (London time) on 10 October 2023. For the avoidance of doubt, the
contents of this website are not incorporated into and do not form part of
this Announcement.
STM Shareholders may request hard copies of this Announcement by contacting
Computershare Investor Services (Jersey) Limited at 13 Castle Street, St.
Helier, Jersey CI, JE1 1ES or on +44 (0370) 707 4040 between 9:00 a.m. and
5:00 p.m. (London time) Monday to Friday (public holidays excepted). Calls to
this number from persons who are not resident in Jersey are charged at the
applicable international rate. Calls from a mobile device may incur network
extras.
You may also request that all future documents, announcements and information
to be sent to you in relation to the Acquisition should be in hard copy form.
If you have received this Announcement in electronic form, copies of this
Announcement and any document or information incorporated by reference into
this Announcement 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.
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 the Financial Services
and Markets Act 2000 (as amended) if you are a resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.
This Announcement and any rights or liabilities arising hereunder and the
Acquisition will be governed by English law and/or Isle of Man law (as
applicable) and subject to the applicable requirements of the Companies Act,
the Court, the Financial Conduct Authority, the London Stock Exchange, the
Panel, the Takeover Code and the AIM Rules.
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE SCHEME AND THE ACQUISITION
Part A: Conditions to the Scheme and the Acquisition
The Acquisition will be conditional upon the Scheme becoming unconditional and
effective in accordance with its terms, subject to the Takeover Code, by not
later than 11:59 p.m. (London time) on the Long Stop Date or such later date
as Bidco and STM may, with the consent of the Panel, agree and (if required)
the Court may allow.
1. The Scheme shall be subject to the following conditions:
1.1.
(i) its approval by a majority in number of the Independent
STM Shareholders who are on the register of members of STM at the Scheme
Voting Record Time and who are present, entitled to vote and voting, whether
in person or by proxy, at the Court Meeting and, if applicable, at any
separate class meeting which may be required (or any adjournment thereof) and
who represent 75 per cent. or more of the voting rights attaching to the
Scheme Shares voted by those Scheme Shareholders at each such meeting; and
(ii) the Court Meeting (and, if applicable, any separate class
meeting which may be required) being held on or before the 22nd day after the
expected date of such meeting as set out in the Scheme Document (or such later
date as may be agreed by Bidco and STM, with the consent of the Panel and (if
required) the Court may allow);
1.2.
(i) the resolutions required to implement the Scheme as set
out in the notice of the General Meeting being duly passed by Independent STM
Shareholders representing the requisite majority or majorities of the votes
cast at the General Meeting (or any adjournment thereof);
(ii) the resolutions to approve the MBO Sale as set out in the
notice of the General Meeting being duly passed by Independent STM
Shareholders representing more than 50 per cent. of votes cast at the General
Meeting (or any adjournment thereof); and
(iii) such General Meeting being held on or before the 22nd day
after the expected date of such meeting as set out in the Scheme Document (or
such later date as may be agreed by Bidco and STM, with the consent of the
Panel and (if required) the Court may allow);
1.3.
(i) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms acceptable to STM
and Bidco) and the delivery of a certified copy of the Court Order to the
Companies Registry and registration of such Court Order together with a copy
of the Scheme Document and all documents required to be annexed thereto, by
the Companies Registry; and
(ii) the Court Hearing being held on or before the 22nd day
after the expected date of the Court Hearing as set out in the Scheme Document
(or such later date as may be agreed by Bidco and STM and (if required) the
Court may allow).
2. In addition, subject as stated in Part B below and to the
requirements of the Panel, the Acquisition shall 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:
Regulatory
(a) the UK Pensions Regulator not having taken any action or
required a third party to take any action that would result in (i) the
occurrence of a triggering event within items 1, 2 or 3 of the table set out
in section 21(6) of the Pensions Schemes Act 2017; (ii) the winding up of the
Master Trust; or (iii) the STM Group ceasing to operate the Master Trust;
(b) to the extent required in connection with the Acquisition,
in respect of Bidco and each other person required to give a notice under
section 111 of the FSA 2019 in connection with the acquisition of control of
each member of the Wider STM Group pursuant to the Acquisition which is a
regulated firm as authorised under the FSA 2019, the GFSC (i) having
determined to approve such acquisition of control unconditionally having given
notice pursuant to section 122(4)(a) of the FSA 2019; (ii) having determined
to approve such acquisition of control subject to the fulfilment of conditions
having given notice pursuant to section 122(7)(a) of the FSA 2019 (in terms
which do not impose any conditions, obligations or restrictions on the Wider
STM Group or the Wider Bidco Group which would materially and adversely affect
the business, assets, profits or prospects of the Wider STM Group or the Wider
Bidco Group); or (iii) having being treated, at the expiry of the relevant
assessment period by virtue of section 122(6) of the FSA 2019, as having
approved such acquisition of control. For the purposes of this sub-paragraph,
"control" shall be defined and construed in accordance with the FSA 2019;
(c) to the extent required in connection with the Acquisition,
the MFSA having provided regulatory approval in writing of the Acquisition or
its implementation (in terms which do not impose any conditions, obligations
or restrictions on the Wider STM Group or the Wider Bidco Group which would
materially and adversely affect the business, assets, profits or prospects of
the Wider STM Group or the Wider Bidco Group) and all filings required for the
approval of the Acquisition or its implementation by the MFSA having been made
in accordance with the Retirement Pensions Act, Chapter 514 of the laws of
Malta (as amended and in force from time to time) and the legislation and
regulation issued thereunder;
MBO Sale
(d) completion of the MBO Sale pursuant to the terms of the MBO
SPA;
Notifications, Waiting periods and Authorisations
(e) Excluding in relation to the matters referred to in
Condition 2(b) to (c):
(i) all material filings, applications and/or material
notifications which are necessary under applicable legislation or regulation,
in connection with the Acquisition, of any relevant jurisdiction having been
made;
(ii) all necessary waiting periods and other time periods
(including any extensions thereof) under any applicable legislation or
regulation of any relevant jurisdiction having expired, lapsed or been
terminated;
(iii) all applicable statutory or regulatory obligations in any
jurisdiction having been materially complied with in each case in respect of
the Acquisition or other acquisition of any shares or other securities in, or
control or management of, STM or any member of the Wider STM Group by any
member of the Wider Bidco Group;
(iv) all authorisations deemed reasonably necessary in any
jurisdiction by Bidco for or in respect of the Acquisition and any other
acquisition of any shares or other securities in, or control or management of,
STM or any member of the Wider STM Group by any member of the Wider Bidco
Group having been obtained in terms and in a form reasonably satisfactory to
Bidco 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 STM Group or the Wider Bidco Group has entered into contractual
arrangements; and
(v) all such authorisations reasonably necessary or appropriate
to carry on the business of any member of the Wider STM Group in any
jurisdiction having been obtained,
in each case where the consequence of a failure to make such notification or
filing or to wait for the expiry, lapse or termination of any such waiting or
other time period or to comply with such obligation or obtain such
authorisations, orders, grants, recognitions, determinations, confirmations,
consents, licences, clearances, permissions, exemptions and approvals would be
unlawful in any relevant jurisdiction or have an adverse effect on the Wider
STM Group, any member of the Wider Bidco Group or the ability of Bidco to
implement the Acquisition; and
(f) All such authorisations referred to in Conditions 2(e)(iv)
and (v) remaining in full force and effect at the time at which the
Acquisition becomes otherwise unconditional and there being no notice or
intimation of an intention to revoke, suspend, restrict, modify or not to
renew such authorisations at the time at which the Acquisition becomes
otherwise unconditional;
General antitrust and regulatory
(g) excluding in relation to the matters referred to in Condition
2(a) to (c), no antitrust regulator or Third Party having given notice of a
decision to take, institute or implement 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 to enact or make 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, in any case to an extent or in a manner which is or would be
material in the context of the Wider STM Group taken as a whole:
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any member of the
Wider Bidco Group or by any member of the Wider STM Group of all or any part
of its businesses, assets or property or, impose any material 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) require any member of the Wider Bidco Group or the Wider
STM Group to acquire or offer to acquire any shares, other securities (or the
equivalent) or interest in any member of the Wider STM 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 Bidco 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 STM or on the ability of
any member of the Wider STM Group or any member of the Wider Bidco 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 STM
Group;
(iv) otherwise adversely affect any or all of the business, assets,
profits or prospects of any member of the Wider STM Group or any member of the
Wider Bidco Group;
(v) result in any member of the Wider STM Group or any member of
the Wider Bidco 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, STM by any member of the Wider Bidco Group void, unenforceable
and/or illegal under the laws of any relevant jurisdiction, or, otherwise
directly or indirectly materially prevent or prohibit, restrict, restrain,
impede, challenge or delay or otherwise or otherwise 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,
STM by any member of the Wider Bidco Group;
(vii) require, prevent or materially delay a divestiture by any
member of the Wider Bidco Group of any shares or other securities (or the
equivalent) in any member of the Wider STM Group or any member of the Wider
Bidco Group; or
(viii) impose any limitation on the ability of any member of the
Wider Bidco Group or any member of the Wider STM 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 Bidco Group and/or the Wider STM
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, or implement 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 shares or other securities in, or control or management of,
STM or any other member of the Wider STM Group by any member of the Wider
Bidco Group or otherwise intervene having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc.
(h) except as Disclosed (including in respect of the Additional
Remuneration Arrangements), there being no provision of any arrangement,
agreement, lease, licence, franchise, permit or other instrument to which any
member of the Wider STM 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 the acquisition or
proposed acquisition by any member of the Wider Bidco Group of any shares or
other securities (or the equivalent) in STM, could or might reasonably be
expected to result in, in each case to an extent which is material in the
context of the Wider STM Group taken as a whole:
(i) any monies borrowed by, or any other indebtedness, actual
or contingent, of, or any grant available to, any member of the Wider STM
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) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge, encumbrance or other
security interest over the whole or any material part of the business,
property or assets of any member of the Wider STM Group or any such mortgage,
encumbrance, charge or other security interest (whenever created, arising or
having arisen) becoming enforceable;
(iii) any material arrangement, agreement, lease, licence,
franchise, permit or other instrument being terminated or any material rights,
liabilities, obligations or interests of any member of the Wider STM Group
being adversely modified or 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 STM Group to make
any material severance, termination, bonus or other payment to any of its
directors or other officers other than in the ordinary course of business;
(v) the interest or business of any such member of the Wider STM
Group in or with any other person, firm or company (or any agreements or
arrangements relating to such interest or business) being or becoming capable
of being terminated or adversely modified or affected;
(vi) any member of the Wider STM Group, which is material in the
context of the Wider STM Group taken as a whole, 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 STM Group being prejudiced or adversely
affected;
(viii) any assets or interests of, or any asset the use of which is
enjoyed by, any member of the Wider STM Group being or falling to be disposed
of or charged or any right arising under which any such asset or interest
could be required to be disposed of or charged or could cease to be available
to any member of the Wider STM Group other than in the ordinary course of
business; or
(ix) the creation or acceleration of any material liability
(actual or contingent) of any member of the Wider STM Group (including any
material tax liability or any obligation to obtain or acquire any material
Authorisation, notice, waiver, concession, agreement or exemption from any
Third Party or any person) other than trade creditors or other liabilities
incurred in the ordinary course of business or in connection with the
Acquisition,
and no event having occurred which, under any provision of any arrangement,
agreement, licence, permit, franchise, lease or other instrument to which any
member of the Wider STM Group is a party or by or to which any such member or
any of its assets are bound, entitled or subject, would or might reasonably be
expected to result in any of the events or circumstances as are referred to in
Conditions 2(h)(i) to (ix) above, in each case to the extent material in the
context of the Wider STM Group taken as a whole;
Certain events occurring since 31 December 2022
(i) except as Disclosed, no member of the Wider STM Group
having since 31 December 2022:
(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, STM Shares out of treasury (except, where relevant, as between STM and
wholly owned subsidiaries of STM or between the wholly owned subsidiaries of
STM); and except for any issue or transfer out of the employee benefit trust
of STM Shares, where agreed in advance in writing by Bidco, on the exercise of
employee share options or vesting of employee share awards;
(ii) recommended, declared, paid or made or proposed or agreed
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 wholly owned subsidiary of STM to STM or any of its wholly owned
subsidiaries;
(iii) other than pursuant to the Acquisition and except for
transactions between STM and its wholly owned subsidiaries or between the
wholly owned subsidiaries of STM, 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 in any such case to an extent which is material in
the context of the Wider STM Group taken as a whole;
(iv) other than in the ordinary course of business and except for
transactions between STM and its wholly owned subsidiaries, or between the
wholly owned subsidiaries of STM, disposed of, or transferred, mortgaged,
encumbered or created any security interest over, any material asset or any
right, title or interest in any asset or authorised, proposed or announced any
intention to do so, in each case to the extent which is material in the
context of the Wider STM Group taken as a whole;
(v) other than in the ordinary course of business and except for
transactions between STM and its wholly owned subsidiaries or between the
wholly owned subsidiaries of STM, 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, in each case which is material in the
context of the Wider STM Group as a whole;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise), except in the ordinary course of business which:
(i) is of a long term, unusual or onerous nature or magnitude; or (ii) is
reasonably likely to be materially restrictive on the business of any member
of the Wider STM Group which in any such case is material and adverse in the
context of the Wider STM Group taken as a whole;
(vii) entered into or varied to a material extent the terms of, or
made any offer (which remains open for acceptance) to enter into or vary to a
material extent the terms of any contract, service agreement, commitment or
arrangement with any director or senior executive of any member of the Wider
STM Group, except for (in each case) salary increases, bonuses or variations
of terms in the ordinary course of business or as a result of a promotion;
(viii) entered into any licence or other disposal of intellectual
property rights of any member of the Wider STM Group which are material in the
context of the Wider STM Group taken as a whole and outside the ordinary
course of business;
(ix) proposed, agreed to provide or modified in any material
respect the terms of any incentive scheme or other benefit relating to the
employment or termination of employment of any employee of the Wider STM Group
and which is material in the context of the Wider STM Group when taken as a
whole;
(x) 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 which is material in
the context of the Wider STM Group when takes as a whole;
(xi) except in the ordinary course of business, waived,
compromised or settled any claim which is material in the context of the Wider
STM Group taken as a whole;
(xii) terminated or varied the terms of any agreement or
arrangement between any member of the Wider STM Group and any other person in
a manner which is materially adverse to the Wider STM Group taken as a whole;
(xiii) except in relation to changes made or agreed as a result of,
or arising from, changes to legislation, made or agreed or consented to any
material change to:
(a) the terms of the trust deeds, rules, policy or other governing
documents constituting the pension scheme(s) or other retirement or death
benefit arrangement established by any member of the Wider STM Group for its
directors, former directors, employees, former employees or their dependents;
(b) the contributions payable to any such scheme(s) or
arrangement(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 or arrangements are funded, valued, made, agreed or
consented to,
and which are materially adverse to the Wider STM Group taken as a whole;
(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 which is material in the context of the Wider STM Group taken as a
whole;
(xv) (other than in respect of a member of the Wider STM 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 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 in each case to an extent which
is materially in the context of the Wider STM Group taken as a whole;
(xvi) except for transactions between STM and its wholly owned
subsidiaries or between the wholly owned subsidiaries of STM, made,
authorised, proposed or announced an intention to propose any change in its
loan capital which is material in the context of the Wider STM Group taken as
a whole;
(xvii) other than with the consent of Bidco, taken (or agreed or
proposed to take) any action that requires, or would require, the consent of
the Panel or the approval of STM Shareholders in accordance with, or as
contemplated by, Rule 21.1 of the Takeover Code;
(xviii) other than in the ordinary course of business, entered into,
implemented or authorised the entry into any joint venture, asset or profit
sharing arrangement, partnership, composition, assignment, reconstruction,
amalgamation, commitment, scheme or other transaction or arrangement or merger
of business or corporate entities which is material in the context of the
Wider STM Group taken as a whole;
(xix) entered into any contract, transaction or arrangement which would
be materially restrictive on the business of any member of the Wider STM Group
or the Wider Bidco Group other than of a nature and to an extent which is
normal in the context of the business concerned and which in any case is not
material in the context of the Wider STM Group taken as a whole;
(xx) except pursuant to the implementation of the Acquisition and
with Bidco's prior written consent, made any alterations to its memorandum or
articles of incorporation or other incorporation documents (in each case,
other than in connection with the Acquisition); or
(xxi) 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 proposed to,
effect any of the transactions, matters or events referred to in this
Condition 2(i);
No adverse change, litigation or similar
(j) except as Disclosed, since 31 December 2022 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, prospects or operational
performance of any member of the Wider STM Group which is material in the
context of the Wider STM Group taken as a whole;
(ii) other than pursuant to the Acquisition, no litigation,
arbitration proceedings, prosecution or other legal proceedings having been
threatened, announced or instituted by or against or remaining outstanding
against (and in each case, not having been withdrawn and/or resolved) or in
respect of any member of the Wider STM Group or to which any member of the
Wider STM Group is or may become a party (whether as claimant, defendant or
otherwise), in each case which is or might be expected to have a material
adverse effect on the Wider STM Group taken as a whole;
(iii) no enquiry, review, investigation or enforcement
proceedings by, or complaint or reference to, any Third Party or other
investigative body, having been threatened, announced, instituted or remaining
outstanding by, against (and in each case, not having been withdrawn and/or
resolved) or in respect of any member of the Wider STM Group, in each case
which is material in the context of the Wider STM Group taken as a whole;
(iv) other than in the ordinary course of business, no contingent
or other liability having arisen, materially increased or become apparent
which is reasonably likely to affect adversely the business, assets, financial
or trading position or profits or operational performance of any member of the
Wider STM Group to an extent which is material in the context of the Wider STM
Group taken as a whole;
(v) no member of the Wider STM Group having conducted its
business in material breach of applicable laws and regulations and which is
material in the context of the Wider STM Group as a whole; and
(vi) 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 STM
Group which is necessary for the proper carrying on of its business and the
withdrawal, cancellation, termination or modification of which is material and
reasonably likely to have a material adverse effect on the Wider STM Group
taken as a whole;
No discovery of certain matters regarding information, liabilities and
environmental issues
(k) except as Disclosed, Bidco not having discovered, in each
case to an extent which is material in the context of the Wider STM Group
taken as a whole, that:
(i) any financial, business or other information concerning
the Wider STM Group publicly announced prior to the date of this Announcement
is misleading, contains a misrepresentation of any fact, or omits to state a
fact necessary to make that information not misleading where the relevant
information has not subsequently been corrected prior to the date of this
Announcement by disclosure, either publicly or otherwise to any member of the
Wider Bidco Group;
(ii) that since 31 December 2022, any member of the Wider STM
Group (or partnership, company or other entity in which any member of the
Wider STM Group has a Significant Interest and which is not a subsidiary
undertaking of STM) is subject to any liability, contingent or otherwise; or
(iii) any circumstance has arisen or event has occurred in
relation to any intellectual property owned or used by any member of the Wider
STM Group, including (A) any member of the Wider STM Group losing its title to
any intellectual property material to the Wider STM Group taken as a whole, or
any intellectual property owned by the Wider STM Group and material to the
Wider STM Group taken as a whole being revoked, cancelled or declared invalid;
(B) any claim being asserted in writing or threatened in writing by any person
challenging the ownership of any member of the Wider STM Group to, or the
validity or effectiveness of, any intellectual property of the Wider STM Group
that is material to the Wider STM Group taken as a whole; or (C) any agreement
regarding the use of any intellectual property licensed to or by any member of
the Wider STM Group, that is material to the Wider STM Group taken as a whole,
being terminated or varied;
Anti-corruption
(l) except as Disclosed, Bidco not having discovered, in each
case to an extent which is material in the context of the Wider STM Group
taken as a whole, that:
(i) any member of the Wider STM 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 UK Bribery Act 2010, the United States Foreign Corrupt Practices Act of
1977, as amended, or any other applicable anti-corruption legislation
applicable to the Wider STM Group;
(ii) any member of the Wider STM Group is ineligible to be
awarded any contract or business under section 23 of the UK Public Contracts
Regulations 2006 or section 26 of the UK Utilities Contracts Regulations
(2006) (each as amended);
(iii) any past or present member, director, officer, employee,
agent, consultant or designated representative of the Wider STM Group is or
has engaged in any activity or business with, or made any investments in, or
made any funds or assets available to or received any funds or assets from:
(A) any government, entity or individual targeted by any of the economic
sanctions administered by the United Nations or the European Union (or any of
their respective member states) or the United States; or (B) any government,
entity or individual in respect of which US or European Union persons, or
persons operating in those territories, are prohibited from engaging in
activities or doing business, or from receiving or making available funds or
economic resources, by the United States or European Union laws or
regulations, including the economic sanctions administered by His Majesty's
Treasury;
(iv) a member of the STM Group has engaged in any transaction
which would cause any member of the Wider Bidco Group to be in breach of any
applicable economic sanctions laws upon its acquisition of STM, including the
economic sanctions of the United States Office of Foreign Assets Control or
any government, entity or individual targeted by any of the economic sanctions
of the United Nations, the United States, the European Union or any of its
member states; or
(v) any member, director, officer or employee of the Wider STM
Group, or any other person for who any such person may be liable or
responsible: (A) has engaged in conduct which would violate any relevant
anti-terrorism laws, rules, or regulations, including but not limited to the
U.S. Anti-Terrorism Act; (B) has engaged in conduct which would violate any
relevant anti-boycott law, rule or regulation or any applicable export
controls, including but not limited to the Export Administration Regulations
administered and enforced by the U.S. Department of Commerce or the
International Traffic in Arms Regulations administered and enforced by the
U.S. Department of State; (C) has engaged in conduct which would violate any
relevant laws rules, or regulations concerning human rights, including but not
limited to any law, rule, or regulation concerning false imprisonment, torture
or other cruel and unusual punishment, or child labour; or (D) is debarred or
otherwise rendered ineligible to bid for or to perform contracts for or with
any government, governmental instrumentality, or international organisation or
found to have violated any applicable law, rule, or regulation concerning
government contracting or public procurement; or
No criminal property
(m) except as Disclosed, Bidco not having discovered that any
asset of any member of the Wider STM Group constitutes criminal property as
defined by section 340(3) of the UK Proceeds of Crime Act 2002 (but
disregarding paragraph (b) of that definition) or proceeds of crime under any
applicable law, rule or regulation concerning money laundering or proceeds of
crime or any member of the Wider STM Group is found to have engaged in
activities constituting money laundering under any applicable law, rule or
regulation concerning money laundering.
Part B: Certain further terms of the Acquisition
1. To the extent permitted by law and subject to the
requirements of the Panel in accordance with the Takeover Code, Bidco reserves
the right in its sole discretion to waive:
(i) the deadlines set out in any of the Conditions set out in
Condition 1 of Part A above for the timing of the Court Meeting, General
Meeting and the Court Hearing. If any such deadline is not met, Bidco shall
make an announcement by 8.00 a.m. on the Business Day following such deadline
confirming whether it has invoked or waived the relevant Condition or agreed
with STM to extend the deadline in relation to the relevant Condition; and
(ii) in whole or in part, all or any of Conditions listed in
Part A above, except for Conditions 1.1(i), 1.2(i) and 1.3(i) which cannot be
waived.
2. Conditions 2(e) to (m) (inclusive) must each be fulfilled,
determined by Bidco to be or to remain satisfied or (if capable of waiver) be
waived by Bidco by no later than 11.59 p.m. on the date immediately preceding
the date of the Court Hearing (or any adjournment thereof), (or such later
date as Bidco, STM, the Panel and, if required, the Court may allow) failing
which the Acquisition will lapse. Bidco shall be under no obligation to waive
or treat as satisfied any of the Conditions that it is entitled (with the
consent of the Panel) to invoke, by a date earlier than the latest date
specified above for the fulfilment or waiver thereof, notwithstanding that the
other Conditions 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.
3. Under Rule 13.5(a) of the Takeover Code, Bidco may only
invoke a Condition to the Acquisition that is subject to Rule 13.5(a) of the
Takeover Code 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 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. The Conditions contained in
paragraph 1 of Part A of this Appendix 1 and, if applicable, any acceptance
condition if the Acquisition is implemented by means of a Takeover Offer, are
not subject to this provision of the Takeover Code. Any Condition that is
subject to Rule 13.5(a) of the Takeover Code may be waived by Bidco.
4. Under Rule 13.6 of the Takeover Code, STM may not invoke,
or cause or permit Bidco to invoke, a Condition unless the circumstances which
give rise to the right to invoke the Condition are of material significance to
STM Shareholders in the context of the Acquisition.
5. If Bidco is required by the Panel to make an offer for STM
Shares under the provisions of Rule 9 of the Takeover Code, 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.
6. Bidco shall be under no obligation to waive (if capable of
waiver), to determine to be or remain satisfied or to treat as fulfilled any
of Conditions 2(a) to (m) (inclusive) of Part A above by a date earlier than
the latest date for the fulfilment of that Condition notwithstanding that the
other Conditions 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.
7. The STM Shares to be acquired under the Acquisition shall
be acquired fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third party rights
and interests of any nature and together with all rights attaching or accruing
to them after the Scheme becomes effective in accordance with its terms,
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.
8. Subject to the terms of the Scheme, if, on or after the date of this
Announcement, any dividend and/or other distribution and/or other return of
capital is declared, paid or made or becomes payable by STM in respect of the
STM Shares (in each case with a record date prior to the Effective Date),
(without prejudice to any right of Bidco, with the consent of the Panel, to
invoke Condition 2(i)(ii) in Part A above) Bidco has the right to reduce the
amount of the consideration payable under the Acquisition by an amount equal
to the amount of such dividend and/or distribution and/or return of capital.
Where the consideration is so reduced, the relevant eligible STM Shareholders
will be entitled to receive and retain such dividend and/or distribution
and/or other return of capital declared, paid or made and any reference in
this Announcement to the consideration payable under the terms of the
Acquisition shall be deemed to be a reference to the consideration as so
reduced.
To the extent that such a dividend and/or other distribution and/or other
return of capital has been declared, paid, made or is payable, and is or shall
be: (i) transferred pursuant to the Acquisition on a basis which entitles
Bidco to receive the dividend or distribution and to retain it; or (ii)
cancelled, the consideration payable under the terms of the Acquisition shall
not be subject to change in accordance with this paragraph.
Furthermore, Bidco reserves the right to reduce the consideration payable
under the Acquisition in respect of the STM Shares in such circumstances as
are, and by such amount as is, permitted by the Panel.
Any reduction of the consideration payable under the Acquisition referred to
in this paragraph shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any revision or
variation of the Acquisition.
9. Bidco reserves the right to elect to implement the Acquisition by way
of a Takeover Offer as an alternative to the Scheme (subject to the Panel's
consent). In such event, the Acquisition will be implemented on the same terms
(subject to appropriate amendments including (without limitation) the
inclusion of an acceptance condition set at more than 50 per cent. (or such
other percentage as Bidco may, subject to the rules of the Takeover Code and
with the consent of the Panel, decide) of the shares to which the Acquisition
relates, so far as applicable) as those which would apply to the Scheme.
10. The availability of the Acquisition to persons not resident in
the United Kingdom or the Isle of Man may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in the United Kingdom or
the Isle of Man should inform themselves about and observe any applicable
requirements.
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 Scheme will be governed by the laws of the Isle of Man
and be subject to the jurisdiction of the Court and to the Conditions and
certain further conditions and terms set out in this Appendix I to this
Announcement and to the full terms which will be set out in the Scheme
Document. The Acquisition will also be subject to the applicable requirements
of the Companies Act, the Court, the Financial Conduct Authority, the London
Stock Exchange, the Panel, the Takeover Code and the AIM Rules. This
Announcement does not constitute, or form part of, an offer or invitation to
purchase STM Shares or any other securities.
13. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other Condition.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated or the context otherwise
requires, the following bases and sources have been used:
i. As at the Latest Practicable Date, there were 59,408,088 STM shares
in issue; and no shares held in treasury.
ii. Unless otherwise stated, financial information relating to STM has
been extracted or derived (without adjustment) from the audited consolidated
financial statements for STM for the financial year ended 31 December 2022.
iii. Any references to the issued and to be issued ordinary share capital
of STM or fully diluted share capital will be 59,408,088 in total, which is
based on the number of STM Shares in issue as referred to in paragraph (i)
above.
iv. Certain figures in this Announcement have been subject to rounding
adjustments.
v. The value of the Acquisition is calculated based on the total issued
and to be issued STM Shares as set out in point iii above.
vi. Unless otherwise stated, all prices, closing prices and volume average
weighted share prices for STM Shares are derived from FactSet.
APPENDIX III
IRREVOCABLE UNDERTAKINGS AND LETTERS OF INTENT
Therese Neish (being the only Independent STM Director holding STM Shares,
directly or indirectly) has given an irrevocable undertakings to vote (or
procure the voting, as applicable) in favour of the Scheme Resolution at the
Court Meeting and the GM Resolutions at the General Meeting in respect of her
beneficial holdings of STM Shares.
Part A: Independent STM Directors' Irrevocable Undertakings
Name of STM Director Number of STM Shares in respect of which undertaking is given Percentage of STM issued share capital in respect of which undertaking is
given
Therese Neish 492,756 0.83
Part B: Independent STM Shareholder Irrevocable Undertakings
Each of the following Independent STM Shareholders have given irrevocable
undertakings to vote (or procure the voting, as applicable) in favour of the
Scheme Resolution at the Court Meeting and the GM Resolutions at the General
Meeting in respect of their beneficial holdings of STM Shares.
Independent STM Shareholder Number of STM Shares in respect of which undertaking is given Percentage of STM issued share capital in respect of which undertaking is
given
Timothy Revill (held by Septer Limited) 6,450,000 10.86
Peter Gyllenhammar (held by HSBC Global Custody Nominee UK Ltd) 5,900,000 9.93
Elizabeth Plummer (held by JIM Nominees Limited) 1,539,810 2.59
Part C: Alan Kentish and Clifton Participations Limited Irrevocable
Undertakings
Each of Alan Kentish and Clifton Participations Limited have given irrevocable
undertakings to vote (or procure the voting, as applicable) in favour of the
Other GM Resolution at the General Meeting in respect of their beneficial
holdings of STM Shares.
STM Shareholder Number of STM Shares in respect of which undertaking is given Percentage of STM issued share capital in respect of which undertaking is
given
Alan Kentish and close family 1,526,750 2.57%
Clifton Participations Limited 5,552,150 9.35%
*The shares in Clifton Participations Limited form part of the assets of the
Perros Trust, of which the settlor is Alan Kentish, the independent trustee is
Lesley Nuttall and the potential beneficiaries are Alan Kentish, his wife
Louise Kentish and their immediate family.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this Announcement unless the
context requires otherwise:
"Acquisition" the proposed direct or indirect acquisition by Bidco of the entire issued and
to be issued ordinary share capital of STM, to be effected by means of the
Scheme (or by way of the Takeover Offer under certain circumstances described
in this Announcement), and, where the context admits, any subsequent revision,
variation, extension or renewal thereof;
"AIM" AIM, a market operated by the London Stock Exchange;
"AIM Rules" the rules of AIM as set out in the "AIM Rules for Companies" issued by the
London Stock Exchange from time to time relating to AIM traded securities and
the operation of AIM;
"Alan Kentish" Alan Roy Kentish, a director and shareholder of STM
"Announcement" this announcement;
"Articles" the articles of association of STM from time to time;
"Authorisations" regulatory authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions or approvals;
"Bidco" Jambo SRC Limited, registered in the United Kingdom with the registration
number: 14980177;
"Business Day" a day (other than Saturdays, Sundays and public holidays in the United Kingdom
and the Isle of Man) on which banks are open for business in the City of
London or the Isle of Man;
"Cash Consideration" the cash amount of 60 pence payable by Bidco under the Acquisition in respect
of each STM Share, as may be adjusted in accordance with the terms of the
Acquisition as set out in this Announcement;
"Cavendish" Cavendish Capital Markets Limited;
"Companies Act" the Isle of Man Companies Act 2006, as amended;
"Companies Registry" the Registrar General in its capacity as the registrar of companies pursuant
to section 205
of the Companies Act;
"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 and
"Condition" means any one of them;
"Confidentiality Agreement" the confidentiality agreement entered into between Pension SuperFund Capital
and STM dated 14 July 2023, as described in paragraph 13 of this Announcement;
"Court" the High Court of Justice of the Isle of Man;
"Court Hearing" the hearing of the Court to sanction the Scheme;
"Court Meeting" the meeting or meetings of the Scheme Shareholders to be convened pursuant to
an order of the Court pursuant to section 157 of the Companies Act, notice of
which will be set out in the Scheme Document, for the purpose of considering
and, if thought fit, approving the Scheme, including any adjournment or
reconvening thereof;
"Court Order" the order of the Court sanctioning the Scheme;
"Davy" Davy Capital Markets UK;
"DCU Conditions" as defined in paragraph 12 of this Announcement;
"DCU Deed Poll" the deed poll constituting the Deferred Consideration Units;
"DCU Holder" a holder of a Deferred Consideration Unit;
"Dealing Disclosure" has the same meaning as in Rule 8 of the Takeover Code;
"Deferred Consideration Units" means the deferred consideration units to be issued by Bidco;
"Disclosed" the information disclosed by or on behalf of STM: (i) in the annual report of
the STM Group for the year to 31 December 2022; (ii) in this Announcement;
(iii) in any other announcement to a Regulatory Information Service by or on
behalf of STM prior to the publication of this Announcement; or (iv) as
otherwise fairly disclosed to Bidco (or its respective officers, employees,
agents or advisers) prior to the date of this Announcement (including but not
limited to all matters fairly disclosed in the written replies,
correspondence, documentation and information provided in an electronic data
room created by or on behalf of STM or sent to Pension SuperFund Capital or
any of its respective advisers during the due diligence process in connection
with the Acquisition and whether or not in response to any specific request
for information made by any such person);
"Effective Date" the date on which: (i) the Scheme becomes effective in accordance with its
terms; or (ii) if Bidco elects to implement the Acquisition by way of a
Takeover Offer, the date on which such Takeover Offer becomes or is declared
unconditional in accordance with the requirements of the Takeover Code and
"Effective" shall be construed accordingly;
"Enlarged Group" the enlarged group following the Acquisition comprising STM and its
subsidiaries (excluding the SIPPs Companies), and the Wider Bidco Group;
"Euroclear" Euroclear UK and International Limited;
"Excluded Shares" any STM Shares legally or beneficially owned by Bidco, any member of the Wider
Bidco Group or any of their respective members or nominees or any other person
holding shares in Bidco; or (ii) any STM Shares held as treasury shares by STM
(if any); and (iii) any other STM Shares which STM and Bidco agree will not be
subject to the Scheme in each case at any relevant time;
"Facilities Agreement" a facilities agreement originally dated 11 August 2023 (as amended and
restated on or immediately prior to the date of this Announcement) between,
amongst others, PSF Capital Reserve L.P. (as borrower), Pension SuperFund
Capital GP II Limited (as general partner of PSF Capital Reserve L.P.) and
NatWest;
"FCA" or "Financial Conduct Authority" the Financial Conduct Authority acting in its capacity as the competent
authority for the purposes of Part VI of the UK Financial Services and Markets
Act 2000 (as amended) or any successor or regulatory body;
"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;
"FSA 2019" Financial Services Act 2019 (as amended and in force in Gibraltar from time to
time);
"General Meeting" the general meeting of STM Shareholders (including any adjournment thereof) to
be convened in connection with the Scheme, notice of which shall be set out in
the Scheme Document;
"GFSC" Gibraltar Financial Services Commission (or its successor body or bodies from
time to time);
"GM Resolutions" together, the Rule 16 Resolution and the Other GM Resolution;
"Independent STM Directors" the directors of STM, excluding Alan Kentish;
"Independent STM Shareholders" the STM Shareholders, excluding the MBO Shareholders and any person acting in
concert with them (other than any director of the Company) for the purposes of
the Takeover Code;
"Latest Practicable Date" 9 October 2023 (being the latest practicable date prior to the publication of
this Announcement);
"Loan Notes" any Loan Notes issued pursuant to the DCU Deed Poll and Loan Note Instrument;
"Loan Note Instrument" the deed poll constituting the Loan Notes to be made by Bidco in certain
circumstances following determination of the Loan Note Principal Value;
"Loan Note Payment Date" means the date that is 12 months after the Effective Date;
"Loan Note Principal Value" has the meaning given in paragraph 12 of this Announcement;
"London Stock Exchange" London Stock Exchange plc;
"Long Stop Date" 28 May 2024 or such later date as may be agreed in writing by Bidco and STM
(with the Panel's consent and as the Court may approve (to the extent such
approval/consent is required));
"MAR" the UK version of the EU Market Abuse Regulation (596/2014) which forms part
of UK law by virtue of the European Union (Withdrawal) Act 2018;
"Maximum Acquisition Value" means the Cash Consideration and up to 7 pence per share in cash which may be
delivered under the Deferred Consideration Units;
"Master Trust" the Options Workplace Pensions Trust established by a trust deed dated 18
October 2012 and governed by the rules scheduled to that trust deed (as
subsequently amended);
"MBO Condition" Condition 2(d) of Appendix I to this Announcement;
"MBO Shareholders" Alan Kentish and Clifton Participations Limited;
"MBO SPA" a sale and purchase agreement dated 9 October 2023 between the Company,
Pathlines Holdings Limited and Alan Kentish in connection with the sale of the
SIPP Businesses to Pathlines Holdings Limited
"MFSA" Malta Financial Services Authority (or its successor body or bodies from time
to time);
"NatWest" National Westminster Bank Plc;
"Offer Period" the offer period (as defined by the Takeover Code) relating to STM, which
commenced on 11 July 2023;
"Opening Position Disclosure" has the same meaning as in Rule 8 of the Takeover Code;
"Other GM Resolution" the resolution proposed to be passed at the General Meeting in connection with
the alteration of the Articles and such other matters as may be necessary to
implement the Scheme and the MBO Sale;
"Overseas Shareholders" STM Shareholders (or nominees of, or custodians or trustees for STM
Shareholders) not resident in, or nationals or citizens of, the United Kingdom
or the Isle of Man;
"Panel" the Panel on Takeovers and Mergers;
"Pathlines Holdings Limited" a company registered in England & Wales under company number 15156320
which is controlled by Alan Kentish, the STM CEO;
"Pension SuperFund Capital" PSF Capital Reserve L.P.;
"Receiving Agent" means Computershare Investor Services PLC acting as receiving agent to the
Company for the purposes of the Acquisition;
"Regulator" means each of any relevant central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory, environmental,
administrative, fiscal or investigative body, court, trade agency,
association, institution, environmental body, employee representative body or
any other similar body or person whatsoever in any jurisdiction, including
without limitation the UK Pensions Regulator;
"Registrar General" the office constituted by section 4 of the Isle of
Man Central Registry Act 2018 and, so far as is
necessary, includes the person for the time
being holding that office under section 4(2) of
that Act;
"Regulatory Conditions" Conditions 2(a) to (c) of Appendix I to this Announcement;
"Regulatory Information Service" a service approved by the London Stock Exchange for the distribution to the
public of announcements and included within the list maintained on the London
Stock Exchange's website;
"Restricted Jurisdiction" any jurisdiction into which, or from which, making the Acquisition or this
Announcement available would violate the laws of that jurisdiction;
"Restricted Overseas Shareholders" Scheme Shareholders whose registered address is in a jurisdiction in which it
is illegal to issue Deferred Consideration Units to Scheme Shareholders or for
Scheme Shareholders to hold Deferred Consideration Units;
"Rule 16 Resolution" the resolution approving the MBO Sale to be proposed at the General Meeting
(or any adjournment thereof) in accordance with Rule 16 of the Takeover Code
"Scheme" the proposed scheme of arrangement under Part X of the Companies Act between
STM and the Scheme Shareholders in connection with the Acquisition, with or
subject to any modification, addition or condition approved or imposed by the
Court and agreed by STM and Bidco;
"Scheme Document" the document to be sent to STM Shareholders containing, amongst other things,
the full terms and conditions of the Scheme, and the notices convening the
Court Meeting and the General Meeting;
"Scheme Record Time" the time and date specified in the Scheme Document by reference to which the
entitlements of Scheme Shareholders under the Scheme will be determined,
currently expected to be 6.00 p.m. on the Business Day immediately prior to
the Effective Date;
"Scheme Resolution" the resolution to be proposed at the Court Meeting in relation to the Scheme;
"Scheme Shareholders" holders of Scheme Shares from time to time;
"Scheme Shares" STM Shares:
(a) in issue as at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document and
prior to the Scheme Voting Record Time; and
(c) (if any) issued on or after the Scheme Voting Record Time
and at or before the Scheme Record Time, either on terms that the original or
any subsequent holders thereof shall be bound by the Scheme or in respect of
which the holders thereof shall have agreed in writing to be bound by the
Scheme,
but excluding any Excluded Shares and, in the case of references to the
"Scheme Shares" or "Scheme Shareholders" in the context of voting at the Court
Meeting only, any STM Shares held by Alan Kentish and any person acting in
concert with him (other than any director of the Company) for the purposes of
the Takeover Code at the Scheme Voting Record Time. For the avoidance of
doubt, any STM Shares held by the MBO Shareholders and any person acting in
concert with them (other than any director of the Company) for the purposes of
the Takeover Code shall still be subject to the terms of the Scheme;
"Scheme Voting Record Time" the time and date specified in the Scheme Document by reference to which
entitlement to vote on the Scheme will be determined;
"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 of
such undertaking;
"SIPPs Business" the business of (i) establishing, operating and winding up personal pension
schemes, (ii) providing administration and marketing services in relation to
personal pension schemes, and (iii) providing trustee services in relation to
personal pension schemes, in each case as carried on by the STM Group;
"SIPPs Companies" the SIPPs Target Companies and the SIPPs Subsidiaries;
"SIPPs Subsidiaries" means (i) Options Group Services UK Limited, the 70% interest in Options UK
Personal Pensions LLP held by CAH Limited, Options UK Personal Pensions LLP,
MK SIPP Trustees UK Limited, The Fiduciary Corporation (Properties) Limited,
The Fiduciary Corporation (Properties 5) Limited, The Fiduciary Corporate
(Properties 6) Limited, The Fiduciary Corporate (Properties 7) Limited, The
Fiduciary Corporation (Properties 9) Limited, The Fiduciary Corporation
(Properties 10) Limited, The Fiduciary Corporation (Properties 11) Limited,
The Fiduciary Corporation (Properties 16) Limited, and The Fiduciary
Corporation (Properties 8) Limited and (ii) L&C Gaudi Limited, London
& Colonial (Administration Services) Limited and London & Colonial
(Trustee Services) UK Limited to the extent such entities are not liquidated
prior to completion of the MBO Sale;
"SIPPs Target Companies" CAH Limited, London & Colonial Services Limited, Gresham Pension Trustees
Limited, Personal Pension Trustees Limited and the 30% interest in Options UK
Personal Pensions LLP held by STM;
"STM" STM Group PLC, registered in the Isle of Man with the registration number:
005398V and, where the context requires, the STM Group;
"STM Board" or "STM Directors" the board of directors of STM from time to time and "STM Director" shall mean
any one of them;
"STM Group" STM and its subsidiary undertakings and, where the context permits, each of
them, from time to time;
"STM Shareholders" or "Shareholders" the holders of STM Shares from time to time;
"STM Shares" the existing issued and fully paid ordinary shares with a nominal value of
£0.0001 each in the share capital of STM and any further such fully paid
ordinary shares issued before the Scheme becomes Effective, but in both cases
excluding any such shares held or which become held as treasury shares;
"Takeover Code" the City Code on Takeovers and Mergers;
"Takeover Offer" if the Acquisition is implemented by way of a takeover offer, the offer to be
made by or on behalf of Bidco, or an associated undertaking thereof, to
acquire the entire issued and to be issued ordinary share capital of STM
including, where the context admits, any subsequent revision, variation,
extension or renewal of such offer;
"Third Party" each of any relevant central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory, environmental,
administrative, fiscal or investigative body, court, trade agency,
association, institution, environmental body, employee representative body or
any other similar body or person whatsoever in any jurisdiction;
"tPR Condition" Condition 2(a) of Appendix I to this Announcement;
"United Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland;
"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 US Securities Exchange Act of 1934, as amended;
"Wider Bidco Group" Bidco and its subsidiaries, subsidiary undertakings and associated
undertakings, and any other body corporate, person or undertaking (including a
joint venture, partnership, firm or company) in which Bidco and/or such
undertakings (aggregating their interests) have a Significant Interest; and
"Wider STM Group" STM and its associated undertakings and any other body corporate, partnership,
joint venture or person in which STM and such undertakings (aggregating their
interests) have a Significant Interest.
For the purposes of this Announcement, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective meanings given
thereto by the UK Companies Act 2006.
All references to "pounds", "pounds Sterling", "Sterling", "£", "pence",
"penny" and "p" are to the lawful currency of the United Kingdom.
All the times referred to in this Announcement are London (UK) times unless
otherwise stated.
References to the singular include the plural and vice versa.
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