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Synnovia PLC Camelot Cap Partners - Offer by BPF1 Limited

Tue 3rd September, 2019 7:01am
RNS Number : 9773K
Synnovia PLC
03 September 2019
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. IN PARTICULAR, THIS ANNOUNCEMENT SHOULD NOT BE RELEASED, PUBLISHED, DISTRIBUTED, FORWARDED OR TRANSMITTED, IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTION, INCLUDING THE UNITED STATES.

THIS ANNOUNCEMENT CONSTITUTES INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO.596/2014.

 

3 September 2019

 

RECOMMENDED CASH OFFER

 

FOR

 

SYNNOVIA PLC

 

by

 

BPF1 LIMITED, A WHOLLY-OWNED SUBSIDIARY OF FUNDS ADVISED BY CAMELOT CAPITAL PARTNERS LLC

 

Summary

 

·   The Bidco Director and the Independent Synnovia Directors are pleased to announce the terms of a recommended offer to be made by Bidco for the entire issued and to be issued share capital of Synnovia.

·     As at the date of this announcement, Barker Partnership L.P. (via Camelot, the 100 per cent. owner of Bidco) holds approximately 29.9 per cent. of Synnovia's existing issued shares.

·     Under the terms of the Offer, which will be subject to the Conditions and further terms to be set out in the Offer Document, Synnovia Shareholders (other than Management Shareholders but including Faisal Rahmatallah in relation to the FR SIPP Shares only) will be entitled to receive:

for each Synnovia Share:         125 pence in cash

·     The Offer values the entire issued ordinary share capital of Synnovia at approximately £48.8 million on a fully-diluted basis and represents a premium of approximately 42.9 per cent. to the mid-market closing price of 87.5 pence per Synnovia Share on the Last Practicable Date.

·   Bidco's parent entity Barker Partnership L.P. (via Camelot, the 100 per cent. owner of Bidco) has been a committed and supportive investor in Synnovia for a number of years and has worked closely with the business during this period. In order to maximise its future growth potential, Barker Partnership L.P. and its investment manager, Camelot Capital Partners LLC, believe that Synnovia will be better suited to a private company environment, where both acquisitions and initiatives relating to the performance and development of its businesses can be implemented effectively without the costs, constraints and distractions associated with being an AIM-traded company.

·    An acquisition by Bidco, based on a long-term investment timeframe, will provide the financial flexibility and operational backing that Barker Partnership L.P. and its investment manager, Camelot Capital Partners LLC, believes will be in the interests of all stakeholders. Bidco believes that an acquisition of Synnovia will allow Synnovia to have a more fluid approach to capital allocation without the costs and frictions associated with raising capital on the public markets and to make operational decisions based on long-term strategic goals without the constraint of short-term factors such as share price or investor sentiment.   

·     The Independent Synnovia Directors, who have been so advised by Cenkos as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable. In providing advice to the Independent Synnovia Directors, Cenkos has taken into account the commercial assessments of the Independent Synnovia Directors. Cenkos is providing independent financial advice to the Independent Synnovia Directors for the purposes of Rule 3 of the Code.

·  Accordingly, the Independent Synnovia Directors intend unanimously to recommend that Synnovia Shareholders accept the Offer, as they have irrevocably undertaken to do so in respect of their entire beneficial holdings of Synnovia Shares.

·      Certain key members of the management of Synnovia (and NAHL) have, pursuant to the Management Share Exchange Agreement, conditionally agreed to accept Consideration Shares pro rata to their existing shareholdings in Synnovia (save for the FR SIPP Shares) which will result, on completion of the Offer, in the Management Shareholders holding, in aggregate, approximately 11.8 per cent. of the Enlarged Bidco Capital, as follows:

·    NAHL - Consideration Shares representing approximately 4.5 per cent. of the Enlarged Bidco Share Capital;

·    Richard Vessey - Consideration Shares representing approximately 6.7 per cent. of the Enlarged Bidco Share Capital; and

·    Nicholas Ball - Consideration Shares representing approximately 0.7 per cent. of the Enlarged Bidco Share Capital.

·      In addition, Faisal Rahmatallah is interested in 202,434 Bidco Shares held by Lawshare Nominees Limited, as nominee of his SIPP provider.  Mr Rahmatallah's existing SIPP provider is unable to hold shares in private companies such as Bidco. Mr Rahmatallah's has accordingly executed the irrevocable undertaking described below in respect of these Synnovia Shares. He has also been granted an option, conditional on Completion, to subscribe for 202,434 Bidco Shares at £1.25 per Bidco Share for an aggregate subscription price of £253,042.50 and it is his intention to apply the proceeds of the Offer arising from his acceptance in paying this sum up, with the resulting Bidco Shares being held by a suitable SIPP provider.  This will in effect replicate the effect of the Synnovia Shares held by Mr Rahmatallah's SIPP provider being ultimately treated in the same way as the Synnovia Shares held by the other Management Shareholders.

·     The Management Shareholder Consideration, the Management Option, the Management Shareholder Service Arrangement and the Management Share Exchange Agreement are a form of management incentivisation pursuant to Rule 16.2 of the Code and as such will require the approval of the Management Shareholder Resolution by Independent Synnovia Shareholders at the Synnovia General Meeting. For the purposes of Rule 16.2 of the Code, Cenkos has confirmed that, in its opinion, the terms upon which the Consideration Shares are to be issued and the terms of the Management Option, the Management Shareholder Service Arrangement and the Management Share Exchange Agreement are fair and reasonable.

·      The consideration payable under the Offer will be funded through the existing cash balances of Bidco.

·    It is intended that the Offer be effected by means of a takeover offer within the meaning of Part 28 of the Companies Act.

·      Bidco has received irrevocable undertakings from:

·     each of the Independent Synnovia Directors to accept (or procure the acceptance of) the Offer in respect of their own beneficial holdings of a total of 695,883 Synnovia Shares (representing approximately 1.8 per cent. of the Synnovia Shares in issue as at the Last Practicable Date);

·    Faisal Rahmatallah to accept (or procure the acceptance of) the Offer in respect of a total of 202,434 Synnovia Shares (representing approximately 0.5 per cent. of the Synnovia Shares in issue as at the Last Practicable Date) held by Lawshare Nominees Limited, as nominee of Faisal Rahmatallah's SIPP provider; and

·     certain other Synnovia Shareholders to accept (or procure the acceptance of) the Offer in respect of a total of 5,315,183 Synnovia Shares (representing approximately 13.6 per cent. of the Synnovia Shares in issue as at the Last Practicable Date).

·   In addition, irrevocable undertakings to vote in favour of the Management Shareholder Resolution to be proposed at the General Meeting have been received in respect of a total of 6,011,066 Synnovia Shares, representing approximately 26.7 per cent. of the Synnovia Shares in issue held by the Independent Synnovia Shareholders as at the Last Practicable Date.

·    In total Bidco has received irrevocable undertakings to accept (or procure the acceptance of) the Offer in respect of approximately 15.9 per cent. of the Synnovia Shares in issue as at the Last Practicable Date. Together with the 11,659,513 Synnovia Shares which Camelot already owns and the additional 4,609,887 Synnovia Shares which the Management Shareholders have agreed to transfer to Bidco pursuant to the Management Share Exchange Agreement (prior to the determination of the beneficial ownership of the Undetermined Shares), Bidco therefore owns or has received irrevocable undertakings to accept the Offer in respect of or other commitments to transfer, in aggregate, 22,482,900 Synnovia Shares representing approximately 57.7 per cent. of the Synnovia Shares in issue as at the Last Practicable Date.

·      Further details of the irrevocable undertakings are set out in Appendix III to this announcement, including the circumstances in which the irrevocable undertakings cease to be binding.

·      If, after the date of this announcement, any dividend and/or other distribution and/or other return of capital is announced, declared or paid in respect of the Synnovia Shares, Bidco reserves the right to reduce the Offer by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid, in which case any reference in this announcement or the Offer Document to the Offer for the Synnovia Shares will be deemed to be a reference to the Offer as so reduced.

·      The Offer can only become effective if all Conditions of the Offer have been satisfied or (if capable of waiver) waived. The Conditions to which the Offer will be subject will be set out in the Offer Document and, in respect of those Synnovia Shares held in certificated form, the Form of Acceptance and will include valid acceptances being received in respect of not less than 90 per cent. of the Synnovia Shares to which the Offer relates by nominal value and voting rights (or such lower percentage as Bidco may decide) provided that this condition will not be satisfied unless Bidco shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, Synnovia Shares carrying in aggregate more than 50 per cent. of the voting rights normally exercisable at a general meeting of Synnovia.

·      It is expected that the Offer Document, containing the full terms and conditions of, and further information about, the Offer, and the Form of Acceptance (for Synnovia Shareholders that hold their Synnovia Shares in certificated form only) will be published within 28 days of this announcement (or such later date as may be agreed with the Takeover Panel) and as soon as practicable.

·      Cenkos Securities plc is acting as exclusive Rule 3 financial adviser to Synnovia in relation to the Offer and is also providing independent financial advice to the Independent Synnovia Directors for the purposes of Rule 3 of the Takeover Code.

·      Numis Securities Limited is acting as exclusive financial adviser to Bidco in relation to the Offer.

 

Commenting on the Offer, William Barker, sole director of Bidco, said:

"I am very pleased that we have agreed this recommended cash offer to acquire Synnovia as Camelot has been a committed shareholder for several years and has come to know the Company well. We believe the reasons for Synnovia to grow under private ownership are compelling, particularly the ability to adopt a more fluid and dynamic approach to capital allocation and invest in sustainable growth going forward. We are excited by the opportunities to develop the group and are looking forward to working closely with management and employees who will play a critical part."

 

Commenting on the Offer, Keith Butler Wheelhouse, Non-Executive Director of Synnovia, said:

"The Independent Synnovia Directors believe that the Synnovia Group has made sound investments in product development, geographic reach, production capacity and management capability in order to deliver long-term profitable growth. However, we recognise that this Business Growth strategy requires considerable patience and a long term orientation which many investors find challenging particularly in the current economic environment.   Therefore, we believe that the value presented by the Offer is an attractive opportunity that may not be otherwise achievable in the near term." 

 

The full terms of the Offer will be set out in the Offer Document and, for holders of Synnovia Shares in certificated form, the Form of Acceptance. Relevant documentation is expected to be sent (or made available on the Synnovia website) to Synnovia Shareholders and, for information purposes, to persons with information rights in due course. In deciding whether or not to accept the Offer in respect of their Synnovia Shares, Synnovia Shareholders should consider the information contained in, and the procedures described in, such documentation.

This summary should be read in conjunction with, and is subject to, the full text of this announcement (including the appendices to this announcement). The Offer will be subject to the Conditions and certain further terms set out in Appendix I and to the full terms and conditions which shall be set out in the Offer Document and the Form of Acceptance. Appendix II contains the sources and bases of calculation of certain information contained in this announcement, Appendix III contains details of the irrevocable undertakings received by Bidco in relation to the Offer and Appendix IV contains definitions of certain expressions used in this announcement.

 

Enquiries:

 

Synnovia

 

Nick Ball (Group Finance Director) 

Tel: 020 7978 0574

 

 

Cenkos Securities plc (financial adviser and nominated adviser to Synnovia)

 

Stephen Keys

Tel: 020 7397 8900

Callum Davidson

 

 

 

Numis Securities Limited (financial adviser to Bidco)

 

Stuart Ord

Tel: 020 7260 1000

George Fry

 

Jono Mawson

 

 

 

Further information

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Bidco and no one else in connection with the matters referred to in this announcement. In connection with these matters, Numis, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Bidco for providing the protections afforded to the clients of Numis nor for providing advice in relation to the matters referred to in this announcement.

Cenkos Securities plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser and nominated adviser to Synnovia and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Synnovia for providing the protections afforded to clients of Cenkos nor for providing advice in connection with the Offer or any other matter referred to in this announcement.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation, inducement or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of or exercise rights in respect of any securities, or the solicitation of any vote or approval of an offer to buy securities in any jurisdiction, pursuant to the offer or otherwise nor shall there be any sale, issuance or transfer of any securities pursuant to the Offer in any jurisdiction in contravention of any applicable laws. Any response or decision in respect of the Offer should be made only on the basis of information contained in the Offer Document and, in the case of certificated Synnovia Shares, the accompanying Form of Acceptance, which will contain the full terms and conditions of the Offer, including how the Offer may be accepted. Synnovia Shareholders are advised to read the formal documentation in relation to the Offer carefully once it has been dispatched.

Bidco will prepare the Offer Document to be distributed to Synnovia Shareholders. Bidco urges Synnovia Shareholders to read the Offer Document and Form of Acceptance when they become available because they will contain important information relating to the Offer.

This announcement does not constitute a prospectus or prospectus-equivalent document.

No person has been authorised to make any representations on behalf of Bidco or Synnovia or their respective associates concerning the Offer which are inconsistent with the statements contained herein, and any such representations, if made, may not be relied upon as having been so authorised.

No person should construe the contents of this announcement as legal, financial or tax advice and any interested person should consult its own advisers in connection with such matters.

Overseas jurisdictions

The release, publication or distribution of this announcement in, and the availability of the Offer to persons who are residents, citizens or nationals of, jurisdictions other than the United Kingdom may be restricted by laws and/or regulations of those jurisdictions. Accordingly, any persons who are subject to the laws and regulations of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements in their jurisdiction. Any failure to comply with the applicable requirements may constitute a violation of the laws and/or regulations of any such jurisdiction.

This announcement has been prepared for the purpose of complying with English law and the 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.

In particular, copies of this announcement and any formal documentation relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send it in or into or from any Restricted Jurisdiction. Unless otherwise permitted by applicable law and regulation, the Offer may not be made, directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities.

The availability of the Offer to Synnovia Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable legal or regulatory requirements.

The receipt of cash pursuant to the Offer by Synnovia Shareholders in overseas jurisdictions may be a taxable transaction under applicable national, state and local, as well as foreign and other tax laws. Each such Synnovia Shareholder is urged to consult their independent professional adviser regarding the tax consequences of accepting the Offer.

Further details in relation to Synnovia Shareholders in overseas jurisdictions will be contained in the Offer Document.

Forward-looking statements

This announcement (including information incorporated by reference in this announcement) may contain certain statements that are or may be deemed to be forward-looking with respect to the financial condition, results of operation(s) and business of Synnovia or Bidco and certain plans and objectives of the Bidco Director with respect thereto. These forward-looking statements can be identified by the fact that they are prospective in nature and do not relate to historical or current facts. Forward-looking statements often, but not always, use words such as "anticipate", "target", "expect", "estimate", "budget", "scheduled", "forecasts", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of a similar meaning. These estimates are based on assumptions and assessments made by the relevant party in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe appropriate.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and publication of this announcement shall not give rise to any implication that there has been no change in the facts set forth in this announcement since such date. 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 or developments to differ materially from those expressed or implied by such forward-looking statements. Although Bidco believes that the expectations reflected in such forward-looking statements are reasonable, neither Bidco, nor any of its associates or directors, officers or advisers, or any person acting on the behalf of Bidco 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. Other than in accordance with their legal or regulatory obligations, none of Bidco, any member of the Bidco Group, nor the Bidco Director, nor any of their respective advisers, associates, directors or officers is under any obligation, and such persons expressly disclaim any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. No undue reliance should therefore be placed on these forward-looking statements which speak only as at the date of this announcement.

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.

No profit forecasts or estimates

Nothing in this announcement (including any statement of estimated synergies) is intended or shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco or Synnovia for any period and no statement in this announcement should be interpreted to mean that cash flow from operations, earnings, or earnings per share or income of those persons (where relevant) for the current or future financial years would necessarily match or exceed the historical published cash flow from operations, earnings, earnings per share or income of those persons (as appropriate).

Disclosure requirements of the Code

Under Rule 8.3(a) of the 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 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 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 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

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

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

Rule 2.9 of the Code

For the purposes of Rule 2.9 of the Code, Synnovia confirms that, on the Last Practicable Date, it had in issue 38,995,151 ordinary shares of 1 penny each. The ISIN for the shares is GB00B289KK20.

Information relating to Synnovia Shareholders

Please be aware that addresses, electronic addresses and certain information provided by Synnovia Shareholders, persons with information rights and other relevant persons for the receipt of communications from Synnovia may be provided to Bidco during the Offer Period as requested under Section 4 of Appendix 4 of the Code.

Publication on website and availability of hard copies

A copy of this announcement and the display documents required to be published pursuant to Rules 26.1 and 26.2 of the Code will be made available, free of charge and subject to certain restrictions relating to persons in Restricted Jurisdictions, on Synnovia's website at www.synnovia.com/investors by no later than 12 noon (London time) on the Business Day following the date of this announcement. For the avoidance of doubt, the contents of such website are not incorporated into, and do not form part of, this announcement.

A hard copy of this announcement will not be sent to Synnovia Shareholders unless so requested. Synnovia Shareholders may request a copy of this announcement in hard copy form by writing to Numis Securities Limited at 10 Paternoster Square, London EC4M 7LT or by contacting them on 020 7260 1000. Calls outside the United Kingdom will be charged at the applicable international rate.

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 or independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriate authorised independent financial adviser.

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. IN PARTICULAR, THIS ANNOUNCEMENT SHOULD NOT BE RELEASED, PUBLISHED, DISTRIBUTED, FORWARDED OR TRANSMITTED, IN WHOLE OR IN PART, IN, INTO OR FROM ANY RESTRICTED JURISDICTION, INCLUDING THE UNITED STATES.

THIS ANNOUNCEMENT CONSTITUTES INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO.596/2014.

 

 

3 September 2019

 

RECOMMENDED CASH OFFER

FOR

Synnovia plc

by

BPF1 LIMITED, A WHOLLY-OWNED SUBSIDIARY OF FUNDS ADVISED BY CAMELOT CAPITAL PARTNERS LLC

 

1.         Introduction

The Bidco Director and the Independent Synnovia Directors are pleased to announce the terms of a recommended offer to be made by Bidco for the entire issued and to be issued share capital of Synnovia.

As at the date of this announcement, Barker Partnership L.P. (via Camelot, the 100 per cent. owner of Bidco) holds approximately 29.9 per cent. of Synnovia's existing issued shares.

Bidco is a special purpose vehicle that was incorporated on 18 June 2019 for the purpose of acquiring Synnovia. Bidco is 100 per cent. owned by Camelot.

It is intended that the Offer be effected by means of a takeover offer within the meaning of Part 28 of the Companies Act.

2.         The Offer

Under the terms of the Offer, which will be subject to the satisfaction (or waiver, if permitted) of the Conditions set out in Appendix I, to the certain further terms set out in Appendix I, and to the full terms and conditions which will be set out in the Offer Document, Synnovia Shareholders (other than Management Shareholders but including Faisal Rahmatallah in respect of the FR SIPP Shares only) will be entitled to receive:

for each Synnovia Share:         125 pence in cash

The Offer values the entire issued ordinary share capital of Synnovia at approximately £48.8 million on a fully-diluted basis and represents a premium of approximately 42.9 per cent. to the mid-market closing price of 87.5 pence per Synnovia Share on the Last Practicable Date.

Certain key members of the management of Synnovia (and NAHL) have, pursuant to the Management Share Exchange Agreement, conditionally agreed to accept Consideration Shares pro rata to their existing shareholdings in Synnovia (save for the FR SIPP Shares) which will result, on completion of the Offer, in the Management Shareholders holding, in aggregate, approximately 11.8 per cent. of the Enlarged Bidco Capital, as follows:

·           NAHL - Consideration Shares representing approximately 4.5 per cent. of the Enlarged Bidco Share Capital;

·           Richard Vessey - Consideration Shares representing approximately 6.7 per cent. of the Enlarged Bidco Share Capital; and

·           Nicholas Ball - Consideration Shares representing approximately 0.7 per cent. of the Enlarged Bidco Share Capital.

In addition to those Synnovia Shares which are held by NAHL and which are subject to the Management Share Exchange Agreement as set out above, there are an additional 194,968 Synnovia Shares registered in the name of NAHL which Faisal Rahmatallah may have a beneficial interest in, although this is currently undetermined. Pursuant to the Management Share Exchange Agreement Mr Rahmatallah has undertaken to use his reasonable endeavours to determine the beneficial owner of the Undetermined Shares within 15 Business Days of the date of the agreement.  If Mr Rahmatallah does have a beneficial interest in the Undetermined Shares then NAHL will exchange them for the issue of 194,968 additional Bidco Shares as part of the Management Shareholder Consideration.  If Mr Rahmatallah does not have a beneficial interest in the Undetermined Shares then NAHL will not receive any additional Bidco Shares and Camelot will subscribe for an additional 194,968 Bidco Shares for an aggregate subscription price of £243,710.

In addition, Faisal Rahmatallah is interested in 202,434 Bidco Shares held by Lawshare Nominees Limited, as a nominee of his SIPP provider.  Mr Rahmatallah's existing SIPP provider is unable to hold shares in private companies such as Bidco.  Mr Rahmatallah's has accordingly executed the irrevocable undertaking described below in respect of these Synnovia Shares. He has also been granted an option, conditional on Completion, to subscribe for 202,434 Bidco Shares at £1.25 per Bidco Share for an aggregate subscription price of £253,042.50 and it is his intention to apply the proceeds of the Offer arising from his acceptance in paying this sum up, with the resulting Bidco Shares being held by a suitable SIPP provider.  This will in effect replicate the effect of the Synnovia Shares held by Mr Rahmatallah's SIPP provider being ultimately treated in the same way as the Synnovia Shares held by the other Management Shareholders.

      The Management Shareholder Consideration and the Management Option require, amongst other things, the approval of the Management Shareholder Resolution by Independent Synnovia Shareholders at the Synnovia General Meeting. The Management Shareholder Resolution is an ordinary resolution requiring votes in favour representing more than 50 per cent. of the votes attached to Synnovia Shares voted at the General Meeting. The Management Shareholder Resolution will be taken on a poll.

If, after the date of this announcement, any dividend and/or other distribution and/or other return of capital is announced, declared or paid in respect of the Synnovia Shares, Bidco reserves the right to reduce the Offer by an amount up to the amount of such dividend and/or distribution and/or return of capital so announced, declared or paid, in which case any reference in this announcement or the Offer Document to the Offer for the Synnovia Shares will be deemed to be a reference to the Offer as so reduced.

3.         Recommendation

The Independent Synnovia Directors, who have been so advised by Cenkos as to the financial terms of the Offer, consider the terms of the Offer to be fair and reasonable and in the best interests of Synnovia and Synnovia Shareholders as a whole. In providing advice to the Independent Synnovia Directors, Cenkos has taken into account the commercial assessments of the Independent Synnovia Directors. Cenkos is providing independent financial advice to the Independent Synnovia Directors for the purposes of Rule 3 of the Code.

Accordingly, the Independent Synnovia Directors intend unanimously to recommend that Synnovia Shareholders accept the Offer, as each of the Independent Synnovia Directors has irrevocably committed to do in respect of their own beneficial holdings of a total of 695,883 Synnovia Shares, representing approximately 1.8 per cent. of the Synnovia Shares in issue as at the Last Practicable Date.

4.         Irrevocable Undertakings

Bidco has received irrevocable undertakings to accept (or procure the acceptance of) the Offer from each of the Independent Synnovia Directors in respect of their own beneficial holdings of a total of 695,883 Synnovia Shares (representing approximately 1.8 per cent. of the Synnovia Shares in issue as at the Last Practicable Date).

 

Faisal Rahmatallah has also irrevocably agreed to accept (or procure the acceptance of) the Offer in respect of a total of 202,434 Synnovia Shares (representing approximately 0.5 per cent. of the Synnovia Shares in issue as at the Last Practicable Date) held by Lawshare Nominees Limited, as a nominee of Faisal Rahmatallah's SIPP provider.

 

Certain other Synnovia Shareholders have also given irrevocable undertakings to accept (or procure the acceptance of) the Offer in respect of a total of 5,315,183 Synnovia Shares (representing approximately 13.6 per cent. of the Synnovia Shares in issue as at the Last Practicable Date).

 

In addition, irrevocable undertakings to vote in favour of the Management Shareholder Resolution to be proposed at the General Meeting have been received in respect of a total of 6,011,066 Synnovia Shares, representing approximately 26.7 per cent. of the Synnovia Shares in issue held by the Independent Synnovia Shareholders as at the Last Practicable Date.

 

In total Bidco has received irrevocable undertakings to accept (or procure the acceptance of) the Offer in respect of approximately 15.9 per cent. of the Synnovia Shares in issue at the Last Practicable Date. Together with the 11,659,513 Synnovia Shares which Camelot already owns and the additional 4,609,887 Synnovia Shares which the Management Shareholders have agreed to transfer to Bidco pursuant to the Management Share Exchange Agreement (prior to the determination of the beneficial ownership of the Undetermined Shares), Bidco therefore owns or has received irrevocable undertakings to accept the Offer in respect of or other commitments to transfer, in aggregate, 22,482,900 Synnovia Shares representing approximately 57.7 per cent. of the Synnovia Shares in issue as at the Last Practicable Date.

 

Further details of the irrevocable undertakings are set out in Appendix III to this announcement, including the circumstances in which the irrevocable undertakings cease to be binding.

 

5.         Information on Synnovia

The Synnovia Group is a developer and manufacturer of specialised high strength film, sacks and pouches as well as industrial components. Applications for the Synnovia Group's products vary across diverse end markets including:

·      Packaging for food manufacturing and distribution (films, sacks and pouches);

·      Steering columns and instrument control knobs in the automotive industry (plastic bearings;

·      Hydraulic and industrial rubber hose manufacture; and

·      Cardboard box manufacture.

The business operates through two divisions, Films and Industrial, and has six UK based factories, with a further two factories in Asia and one factory in the USA. The Synnovia Group's UK development and manufacture take place across six businesses:

·      Bell Plastics Limited, a designer and manufacturer of hose mandrels;

·      BNL (UK) Limited, a designer and manufacturer of plastic ball bearings, assemblies and technical mouldings;

·      C&T Matrix, a manufacturer of creasing matrix and ejection rubber for the print and packaging industries;

·      Flexipol Packaging Limited, a designer and manufacturer of packaging for films and bags;

·      Palagan Limited, a manufacturer of high performance films for industrial packaging applications; and

·      Synpac Limited, a manufacturer of flexible barrier packaging solutions.

The Synnovia Group's business has traded since December 2002 and in October 2007 Synnovia was incorporated as Plastics Capital Trading plc to act as the holding company of the business prior to its Admission, which completed in December 2007.

Since its Admission, the Synnovia Group has grown organically as well as through four acquisitions, increasing sales and adjusted EBITDA from £15 million and £2.6 million respectively in 2007, to £82m and £7.5m respectively in 2019. This growth has been supported through the completion of three equity raises, including the fundraise at the time of the IPO.  The company was renamed Synnovia plc in December 2018.

On 9 July 2019, Synnovia published its audited consolidated financial statements for the year ended 31 March 2019 stating that, as at 31 March 2019, Synnovia had cash resources of £4.1 million, net debt of £16.4 million, total assets of £71.4 million and total liabilities of £40.7 million.

6.         Information on Bidco and the Bidco Group

Bidco is a private company limited by shares, incorporated on 18 June 2019 under the laws of England and Wales, for the purpose of implementing the Offer. Bidco's registered office is Riverbank House, 2 Swan Lane, London EC4R 3TT. Bidco has not traded since the date of its incorporation, has no employees and has not entered into any obligations other than in connection with the Offer. The sole director of Bidco is William Barker.  Bidco's only asset is the cash consideration needed in order to effect the Offer together with the payment of the associated advisory fees and its only liabilities are in connection with the Offer.

As at the date of this document, and prior to acquiring the Synnovia Shares held by Management Shareholders, Bidco has 22,328,349 ordinary shares in issue, all of which are held by Camelot Capital Partners (Cayman) Limited as general partner of Barker Partnership L.P.

Barker Partnership L.P is an exempted limited partnership established in the Cayman Islands and operating as a mutual fund, managed by Camelot Capital Partners LLC.  Its investment objective is to maximise risk-adjusted returns over the long term through the pursuit of a 'long' equities-focused investment strategy.  The net asset value of Barker Partnership L.P. at 31 May 2019 (its last valuation point) was US$546.5 million.

7.         Background to and reasons for the Offer

Bidco's parent entity Barker Partnership L.P. (via Camelot, the 100 per cent. owner of Bidco) has been a committed and supportive investor in Synnovia for a number of years and more recently has become the largest shareholder of Synnovia, owning approximately 29.9 per cent. of its issued share capital. Throughout this shareholding period, Barker Partnership L.P. and its investment manager, Camelot Capital Partners LLC, have worked closely with the business, carrying out factory site visits and advising on a number of matters.

 

Barker Partnership L.P. and its investment manager, Camelot Capital Partners LLC believe that during the current period of Synnovia's lifecycle, it is better suited away from the public markets. In order to maximise its future growth potential, Synnovia will be better suited to a private company environment, where both acquisitions and initiatives relating to the performance and development of its businesses can be implemented effectively, with appropriate support, capital and assistance from Bidco and without the costs, regulatory constraints and distractions associated with being an AIM-traded company.

 

An acquisition by Bidco would offer Synnovia the financial flexibility and operational backing that Bidco believes would be in the best interest of all stakeholders. Bidco has a very long-term investment timeframe and believes that this outlook is more aligned with what is required for Synnovia to flourish than its current public market ownership which could limit Synnovia's ability to make longer term decisions that might cause volatility in earnings. In addition Bidco believes the Company requires a more flexible approach to raising additional capital for acquisitions, an area in which Barker Partnership L.P. and its investment manager, Camelot Capital Partners LLC have very strong capabilities.

 

Bidco believes that an acquisition of Synnovia would allow Synnovia to have a more fluid approach to capital allocation and remove the significant costs and frictions associated with raising capital on the public markets; it would also allow Synnovia to make operational decisions based on long-term strategic goals without undue consideration for constraining short-term factors such as share price or investor sentiment.  Camelot Capital Partners LLC could also act as a decision maker and advisor on capital allocation, strategy and operational decisions

 

8.             BACKGROUND TO AND REASONS FOR THE RECOMMENDATION

 

Synnovia plc (formerly Plastics Capital plc) was admitted to trading on AIM on 3 December 2007. Since Admission, the Group's strategy has focused on building shareholder value through new product development and geographic expansion.

 

The Synnovia Group is a manufacturer of industrial components and consumables, with manufacturing facilities in the UK and Asia, exporting to more than 80 countries worldwide. The Group has grown revenue from £16.7 million for the year ended 31 March 2007 to £81.6 million for the year ended 31 March 2019.

 

As stated at the time of Admission, the Group has continued to seek to acquire complementary businesses. Since Admission, the Group has acquired four businesses, most notably the acquisitions of Flexipol Packaging Limited and Synpac Limited, and has raised equity capital on three separate occasions. The Offer Price represents a premium to all historical equity raises.

 

Synnovia has seen its share price vary significantly from 100 pence at IPO, falling to 25.5 pence around the time of the financial crisis and achieving a maximum of 142.5 pence in January 2014. Over the past three years, the share price has generally traded in a range of between 79.5 to 130 pence. The Independent Synnovia Directors believe the varied share price performance can be attributed to the underlying performance of the Company as well as the liquidity challenges faced by small publicly quoted companies.

 

The Offer Price represents a premium of 42.9 per cent. to the prevailing share price on the Last Practicable Date.

 

The Independent Synnovia Directors believe that the Group has made sound investments in product development, geographic reach, production capacity and management capability in order to deliver long-term profitable growth. However, we recognise that this Business Growth strategy requires considerable patience and a long term orientation which many investors find challenging particularly in the current economic environment.  Therefore, the Independent Synnovia Directors believe that the value presented by the Offer is an attractive opportunity that may not be otherwise achievable in the near term.

 

Having received an unsolicited proposal from Barker Partnership L.P. and its investment manager, Camelot Capital Partners LLC, the Independent Synnovia Directors engaged in a process with Camelot and Camelot Capital Partners LLC and, following this, believe that the premium represented by the Offer of 125 pence in cash does represent an acceptable valuation for the Group. As such, both the Independent Synnovia Directors intend to recommend the Offer, believing it to be in the best interests of Synnovia's Shareholders as a whole. In coming to this conclusion, the Independent Synnovia Directors took the following factors into consideration:

 

·      it represents an opportunity for Shareholders to realise their investment in Synnovia for cash at a fair and reasonable value;

·      it represents a premium of approximately 42.9 per cent. to the closing share price of 87.5 pence on the Last Practicable Date; and

·      the certainty of the Offer should be weighed against the inherent uncertainty of the delivery of the future value that exists in the business, including generally uncertain economic conditions and Brexit related risks.

 

9.         Intentions of Bidco 

Bidco is confident of the overall prospects of Synnovia's business and the sectors for which it manufactures and develops specialised high strength film, sacks and pouches and industrial components. It is excited to support Synnovia's management team to continue to enhance the specialised quality of its product offering and to grow the value of the business in the longer term.

The objective of Bidco's strategy for Synnovia is to enhance long-term value for all stakeholders by supporting management in continuing to build Synnovia through acquisitions, while also focusing on long-term profitable organic growth and capital allocation.

As set out in paragraph 7 above (Background to and reasons for the Offer), Bidco believes that, under private ownership and supported by Bidco's expertise and access to capital, Synnovia would be better able to capitalise on additional growth and investment opportunities available in its core markets. Bidco will actively monitor these additional opportunities and pursue them with Synnovia where appropriate.

Bidco recognises the contribution made by Synnovia's management team in developing Synnovia since its admission to AIM in 2007 and attaches great importance to their skills and experience. Bidco intends to support Synnovia's executive management team in the execution of their medium term strategy.

Bidco does not intend to initiate any material headcount reductions within the Synnovia Group as a result of the Offer and expects that existing employees of the Synnovia Group will continue to contribute to Synnovia's ongoing success. Bidco confirms that, following the Offer becoming wholly unconditional in accordance with its terms, the existing contractual and statutory employment rights, including in relation to pensions, of the Synnovia Group's management and employees will be fully safeguarded in accordance with applicable law. Bidco does not intend to make any material changes to the conditions of employment or in the balance of skills and functions of the management and employees of the Synnovia Group. Bidco does not intend to make any changes with regards to the Synnovia Group's existing pension schemes, the accrual of benefits to existing members or the admission of new members to such pension schemes. The Synnovia Group does not have any defined benefit pension schemes.

Other than in respect of the Management Shareholder Consideration, the Management Option and a potential replacement long term incentive plan, Bidco has not entered into, and has not had discussions on proposals to enter into, any form of incentivisation or any other arrangements with the management and employees of the Synnovia Group.

It is intended that each of the Independent Synnovia Directors will resign upon or shortly following the Offer becoming or being declared wholly unconditional.

Following the Offer becoming wholly unconditional in accordance with its terms, Bidco does not intend to make any restructurings or changes in location of the Synnovia Group's headquarters and headquarter functions, operations and places of business. In addition, no changes are expected with respect to the deployment of the Synnovia Group's fixed asset base or the research and development functions of the Synnovia Group.

Synnovia Shares are currently traded on AIM and, as set out in paragraph 17, a request will be made to the London Stock Exchange to effect the cancellation of trading on AIM of the Synnovia Shares.

10.        Synnovia response to statements of intention

In considering the recommendation of the Offer to Synnovia Shareholders, the Independent Synnovia Directors have given due consideration to the assurances given to employees within the Synnovia Group. The Independent Synnovia Directors welcome Bidco's intentions with respect to the future operations of the business and its employees, noting in particular, the intentions to safeguard the existing contractual and statutory employment rights of Synnovia employees and pension obligations, to make no changes to the balance of skills and functions of employees across the Group and to work with Synnovia's management going forward with no change to the location of Synnovia's headquarters or to any places of business.

11.        Financing the offer

The cash consideration payable under the Offer will be financed from Bidco's existing cash resources.

 

Numis, as financial adviser to Bidco, is satisfied that sufficient cash resources are available to Bidco to enable it to satisfy, in full, the cash consideration payable to Synnovia Shareholders in connection with the Offer.

12.        Conditions and further terms of the OFFER

The Offer is subject to the Conditions and certain further terms set out in Appendix I to this announcement and which will be set out in the Offer Document. The Offer can only become effective if all Conditions of the Offer have been satisfied or (if capable of waiver) waived. The Conditions to which the Offer will be subject will be set out in the Offer Document and, in respect of those Synnovia Shares held in certificated form, the Form of Acceptance and will include valid acceptances being received in respect of not less than 90 per cent. of the Synnovia Shares to which the Offer relates by nominal value and voting rights (or such lower percentage as Bidco may decide) provided that this condition will not be satisfied unless Bidco shall have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, Synnovia Shares carrying in aggregate more than 50 per cent. of the voting rights normally exercisable at a general meeting of Synnovia.

Under Rule 31.7 of the Code, except with the consent of the Panel, all the Conditions must be satisfied or the Offer will lapse within 21 days of the first closing date (which shall be specified in the Offer Document) or the date the Offer becomes or is declared unconditional as to acceptances, whichever is the later. Rule 31.7 also provides that the Panel's consent to an extension will normally only be granted, broadly, if the outstanding condition involves a material official authorisation or regulatory clearance relating to the transaction.

Synnovia Shareholders who have accepted the Offer will not be able to withdraw their acceptances from the date on which the Offer becomes or is declared unconditional as to acceptances until the date on which the Offer becomes or is declared unconditional in all respects or lapses. Accordingly, if the 21 day period in Rule 31.7 is extended by the Panel in the manner described above, Synnovia Shareholders will not be able to withdraw acceptances for the duration of this extended period.

Bidco will keep the Offer open for acceptances for at least 14 days following the date on which the Offer becomes or is declared unconditional in all respects in accordance with the requirements of the Code.

13.        Structure of the Offer and Offer Document

It is intended that the Offer will be implemented by way of a takeover offer within the meaning of the Companies Act. However, Bidco reserves the right to elect, with the consent of the Panel (where necessary), to implement the Offer by way of a court-sanctioned scheme of arrangement in accordance with Part 26 of the Companies Act.

The Synnovia Shares shall be acquired under the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement.

The Offer Document and, in respect of Synnovia Shares held in certificated form, the Form of Acceptance accompanying the Offer Document will be published within 28 days of this announcement (or such later date as may be agreed with the Takeover Panel), and as soon as practicable. The Offer Document and in respect of Synnovia Shares held in certificated form, accompanying Form of Acceptance will be made available to all Synnovia Shareholders at no charge to them. Synnovia Shareholders are urged to read the Offer Document and the accompanying Form of Acceptance when they are sent to them because they will contain important information.

14.        Summary of the Management Shareholder Consideration, The Management Option and Management Shareholder Service Arrangement

Bidco wishes to retain and continue to incentivise certain key members of Synnovia's management team. Bidco has therefore entered into the Management Share Exchange Agreement with the Management Shareholders, pursuant to which, the Management Shareholders will become shareholders in Bidco in proportion to their current shareholdings in Synnovia (save for the FR SIPP Shares).

Accordingly, and subject to the Conditions being satisfied including, in particular, the passing of the Management Shareholder Resolution by the Independent Synnovia Shareholders at the Synnovia General Meeting, it is proposed that the Management Shareholders will receive Consideration Shares in exchange for the Synnovia Shares they currently hold (save for any shares held by Lawshare Nominees Limited, as nominee of Faisal Rahmatallah's SIPP provider) representing, in aggregate, approximately 11.8 per cent. of the Enlarged Bidco Share Capital, as follows:

Name

Title

Number of Synnovia Shares

Percentage of Synnovia current voting share capital

Number of Consideration Shares

Percentage of Enlarged Bidco Share Capital

Number of options to subscribe for Bidco Shares

Percentage of Enlarged Bidco Share Capital***

Faisal Rahmatallah

Chairman

1,953,636*

5.0%

1,751,202**

4.5%

202,434

5.0%

Richard Vessey

Non-executive director

2,591,865

6.6%

2,591,865

6.6%

-

6.6%

Nicholas Ball

Group Finance Director

266,820

0.7%

266,820

0.7%

-

0.7%

Total

 

4,812,321

12.3%

4,609,887

11.8%

202,434

12.3%

Notes:

* 1,751,202 Synnovia Shares are held by NAHL. The remaining 202,434 Synnovia Shares are held by Lawshare Nominees Limited, as the nominee of Faisal Rahmatallah's SIPP provider.

** These Consideration Shares will be held by NAHL.

*** Assuming the options over Bidco Shares are exercised in full.

 

In addition to those Synnovia Shares held by NAHL set out in the table above, there are an additional 194,968  Synnovia Shares registered in the name of NAHL which Faisal Rahmatallah may have a beneficial interest in, although this is currently undetermined. Pursuant to the Management Share Exchange Agreement Mr Rahmatallah has undertaken to use his reasonable endeavours to determine the beneficial owner of the Undetermined Shares within 15 Business Days of the date of the agreement. If Mr Rahmatallah does have a beneficial interest in the Undetermined Shares then NAHL will exchange them for the issue of 194,968  additional Bidco Shares as part of the Management Shareholder Consideration. If Mr Rahmatallah does not have a beneficial interest in the Undetermined Shares then NAHL will not receive any additional Bidco Shares and Camelot will subscribe for an additional 194,968  Bidco Shares for an aggregate subscription price of £243,710.

Faisal Rahmatallah has irrevocably undertaken to accept (or procure the acceptance of) the Offer in respect of a total of 202,434 Synnovia Shares (representing approximately 0.5 per cent. of the Synnovia Shares in issue as at the Last Practicable Date) held by Lawshare Nominees Limited, as nominee of Faisal Rahmatallah's SIPP provider.  Pursuant to the Shareholders Agreement, Faisal Rahmatallah has an option for a period of six months from completion of the Management Share Exchange Agreement to subscribe for 202,434 Bidco Shares at £1.25 per Bidco Share for an aggregate subscription price of £253,042.50.

In addition, following Completion, Faisal Rahmatallah's service arrangement and consultancy agreement are to be amended so that if his services are terminated by Synnovia or on Camelot's instructions at any time in the five years from Completion and such termination occurs at a time when he holds not less than the FR Threshold then, provided the termination was not on grounds entitling Synnovia to summarily dismiss Faisal Rahmatallah or otherwise due to negligence as determined by a court of competent jurisdiction, then Faisal Rahmatallah shall be entitled to a payment equal to the amount of salary or fees that he would otherwise have received from the date of termination until the date that is five years from the date of Completion, in quarterly instalments. 

It should be noted that the Management Shareholder Consideration has been requested by Bidco, as opposed to any of the Management Shareholders.

The Management Shareholder Consideration, the Management Option, the Management Shareholder Service Arrangement and the Management Share Exchange Agreement are regarded by the Panel as a form of incentivisation arrangement with certain members of management of Synnovia who are also, directly and indirectly, Synnovia Shareholders, under which they will become direct or indirect shareholders of Bidco on a basis that is not being made available to all Synnovia Shareholders.

As a consequence, under Rule 16.2 of the Code, the Management Shareholder Consideration, the Management Option, the Management Shareholder Service Arrangement, and the Management Share Exchange Agreement must be approved at a general meeting of Synnovia and such approval must be given by a separate vote, taken on a poll, of Synnovia Shareholders who are both:

(a)  independent of Bidco and its shareholders (that is, they are neither a shareholder of Bidco nor acting in concert or deemed to be acting in concert with Bidco or any shareholder of Bidco); and

(b)  independent of the Management Shareholders and Lawshare Nominees Limited (to the extent only that it is the nominee holder of the FR SIPP Shares) (that is, they are neither one of the Management Shareholders nor Lawshare Nominees Limited (in its capacity as nominee of the FR SIPP Shares) nor acting in concert with or deemed to be acting in concert with any such member of the Management Shareholders or Lawshare Nominees Limited (in its capacity as nominee of the FR SIPP Shares)).

Accordingly, none of the Management Shareholders nor Lawshare Nominees Limited (to the extent only that it is the nominee of the FR SIPP Shares) are eligible to vote on the Management Shareholder Resolution.

For the purposes of Rule 16.2 of the Code, Cenkos has confirmed that, in its opinion, the terms of the Management Shareholder Consideration, the Management Option, the Management Shareholder Service Arrangement and the Management Share Exchange Agreement are fair and reasonable.

Independent Synnovia Shareholders should be aware that the Offer is conditional upon the Management Shareholder Resolution being approved at the Synnovia General Meeting. Accordingly, as this is a non-waivable condition, should it not be approved then the Offer will lapse.

15.        Options

Keith Butler-Wheelhouse holds an option over 50,000 new Synnovia Shares with an exercise price of £0.725 per Synnovia Share. Conditional on the Offer being declared unconditional in all respects Bidco will make (or procure that Synnovia will make) a one-off cash payment of £26,250 (representing the difference between the exercise price of the option shares and the value of such new Synnovia Shares at the Offer Price) to Keith Butler-Wheelhouse in consideration of the cancellation of his option.

A subsidiary of Synnovia, Plastics Capital Trading Limited, operates a long-term incentive plan pursuant to which it has issued approximately 5 percent of its share capital to certain shareholders. The shares in Plastics Capital Trading Limited held by the minority shareholders form part of an incentive arrangement under which employees may benefit from the growth in value of the shares in Plastics Capital Trading Limited over a hurdle amount. Bidco intends to allow the scheme to run its course to the end of its five year period in 2020 to see if the relevant value has exceeded the hurdle by that date.

16.        Synnovia General Meeting

The Management Shareholder Consideration and the Management Option require, amongst other things, the approval of the Management Shareholder Resolution by the Independent Synnovia Shareholders at the Synnovia General Meeting. The Management Shareholder Resolution is an ordinary resolution requiring votes in favour representing more than 50 per cent. of the votes attached to Synnovia Shares voted at the General Meeting. The Management Shareholder Resolution will be taken on a poll.

17.        Compulsory acquisition and cancellation of admission to trading

If Bidco receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Synnovia Shares to which the Offer relates by nominal value and voting rights attaching to such shares and assuming that all of the other conditions of the Offer have been satisfied or waived (if capable of being waived), Bidco would have rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Synnovia Shares in respect of which the Offer has not been accepted on the same terms as the Offer.

If Bidco receives acceptances under the Offer in respect of, and/or otherwise acquires, not less than 75 per cent. of the then issued voting ordinary shares of Synnovia, Bidco intends to seek to cancel the admission of Synnovia Shares to trading on AIM ("Cancellation"). In such a case, Bidco would anticipate that such cancellation would take effect no earlier than 20 business days after the Offer becomes or is declared unconditional in all respects. If cancellation of the admission of the Synnovia Shares to trading on AIM occurs, it would significantly reduce the liquidity and marketability of any Synnovia Shares in respect of which the Offer has not been accepted at that time and the value of any such Synnovia Shares may be adversely affected as a consequence.

18.        Offer-related arrangements

In connection with the Offer, Bidco has entered into the Confidentiality Agreement, Management Share Exchange Agreement and the Shareholders Agreement with the Management Shareholders.

Camelot, Camelot Capital Partners LLC and Synnovia entered into the Confidentiality Agreement on 28 June 2019 pursuant to which Camelot and Camelot Capital Partners LLC have each undertaken to keep confidential information relating to Synnovia or any of its connected persons and not to disclose it to third parties (other than to permitted recipients) unless required by law or regulation. These confidentiality obligations shall remain in force for a period of 18 months from the date of the Confidentiality Agreement.

The Confidentiality Agreement also contains undertakings from Camelot and Camelot Capital Partners LLC that, for a period of 12 months after the discussions over the Offer have ended, Camelot and Camelot Capital Partners LLC shall not induce or employ any of the Synnovia Group's directors or senior employees, nor solicit orders for goods or services similar to those manufactured or provided by the Synnovia Group from any person who is a customer or client of the Synnovia Group within the 12 months from the date of the Confidentiality Agreement.

Camelot and Camelot Capital Partners LLC has also agreed to customary standstill arrangements pursuant to which Camelot and Camelot Capital Partners LLC have agreed that, without the prior consent of the Independent Synnovia Directors, Camelot and Camelot Capital Partners LLC will not acquire Synnovia Shares or any interest in any Synnovia Shares. These restrictions fall away immediately following the making of this Announcement.

On 3 September 2019 Camelot, Bidco and the Management Shareholders entered into the Management Share Exchange Agreement whereby Camelot and the Management Shareholders (other than Faisal Rahmatallah) agreed to exchange their Synnovia Shares for shares in Bidco on a one for one basis, conditional upon the Offer becoming or being declared wholly unconditional and upon the passing of the Management Shareholder Resolution. There are also an additional 194,968  Synnovia Shares registered in the name of NAHL which Faisal Rahmatallah may have a beneficial interest in, although this is currently undetermined. Pursuant to the Management Share Exchange Agreement Mr Rahmatallah has undertaken to use his reasonable endeavours to determine the beneficial owner of the Undetermined Shares within 15 Business Days of the date of the agreement.  If Mr Rahmatallah does have a beneficial interest in the Undetermined Shares then NAHL will exchange them for the issue of 194,968 additional Bidco Shares as part of the Management Shareholder Consideration.  If Mr Rahmatallah does not have a beneficial interest in the Undetermined Shares then NAHL will not receive any additional Bidco Shares and Camelot will subscribe for an additional 194,968 Bidco Shares for an aggregate subscription price of £243,710.

A General Meeting is to be held for the purpose of considering and, if thought fit, passing an ordinary resolution to approve the Management Shareholder Consideration, the Management Option, the Management Shareholder Service Arrangement and the Management Share Exchange Agreement. The Management Shareholders will not vote any shares in which they are beneficially interested at the General Meeting by virtue of their interest in the Management Shareholder Consideration and the Management Option.

On 3 September 2019 Camelot, Bidco and the Management Shareholders entered into the Shareholders Agreement whereby they agreed various matters relating to the management of Bidco and their rights as shareholders or otherwise.

Camelot can appoint up to five Bidco Directors. For so long as he is employed by Bidco's group as chairman or chief executive, Faisal Rahmatallah may be a Bidco Director. For so long as he holds the FR Threshold,  Faisal Rahmatallah may appoint one person to the board of Bidco, which may be himself if he is not otherwise entitled by virtue of his employment.  If Faisal Rahmatallah is both employed by Bidco's group as chairman or chief executive and he holds the FR Threshold, he may appoint one person in addition to himself as a Bidco Director not appointed by Camelot.

The quorum for transaction of business at board meetings is two Bidco Directors, at least one of whom shall be a Bidco Director appointed by Camelot (if any) and at least one of whom shall be Faisal Rahmatallah or if Faisal Rahmatallah is not a Bidco Director, any person appointed as a Bidco Director by him or if no one is appointed as a Bidco Director by Faisal Rahmatallah, any other Bidco Director.

The Bidco Directors shall seek to make decisions on the basis of consensus or otherwise by majority vote but, in the event of disagreement between a Bidco Director appointed by Camelot and Faisal Rahmatallah (if he is a director), decisions on capital allocation (including inter alia: raising bank finance, making acquisitions, disposals, significant capital expenditures, payment of dividends, share issues, share buy-backs, share sales), appointing and dismissing senior management and long term incentive schemes for management will be taken by a Bidco Director appointed by Camelot and all other decisions will be taken by Faisal Rahmatallah whilst he is a Bidco Director.

Following Completion, Faisal Rahmatallah's service arrangement and consultancy agreement are to be amended so that if his services are terminated by Synnovia or on Camelot's instructions at any time in the five years from Completion and such termination occurs at a time when he holds not less than the FR Threshold then, provided the termination was not on grounds entitling Synnovia to summarily dismiss Faisal Rahmatallah or otherwise due to negligence as determined by a court of competent jurisdiction, then Faisal Rahmatallah shall be entitled to a payment equal to the amount of salary or fees that he would otherwise have received from the date of termination until the date that is five years from the date of Completion, in quarterly instalments.

All shareholders of Bidco agree to exercise all voting rights and powers of control available to them in relation to the Group to procure that except with the prior written consent of Camelot, no member of Bidco's group shall effect any of the matters referred to in a schedule of typical reserved matters.

All shareholders of Bidco also agree to exercise all voting rights and powers of control available to them in relation to the Group to procure that except with the prior written consent of Faisal Rahmatallah (provided he holds the FR Threshold), no member of Bidco's group shall effect any of the matters referred to in a schedule of reserved matters (which is separate to and different from Camelot's schedule of reserved matters).  However, if Faisal Rahmatallah withholds his consent then he must serve a request for purchase in respect of all Bidco Shares held by him in accordance with the procedure summarised below and, if no suitable bid is made, then Faisal Rahmatallah will use his reasonable endeavours to seek a third party purchaser for all the Shares in Bidco within six months from the date that consent was sought. On the earlier of the completion of the sale of all his Bidco/the Shares (as applicable) or the expiry of six months from the date that consent was sought Faisal Rahmatallah's schedule of reserved matters will no longer be subject to his prior consent.

Each of Faisal Rahmatallah, Nicholas Ball and Richard Vessey is subject to customary restrictive covenants for the two years following their employment being terminated.  Other employee shareholders will be subject to restrictive covenants for one year.

The Shareholders Agreement includes standard pre-emption rights on new issues of Bidco Shares save that any new Bidco Shares offered to Camelot may be accepted in full or part only by a member of its corporate group or its fund group, being the various investors in Barker Partnership LP.

The Shareholders Agreement includes standard pre-emption rights on transfer save that Camelot has a priority right to purchase any and all Bidco Shares offered for sale before they are taken up by other shareholders pro rata to their holdings.

Camelot undertakes to each other Shareholder that for so long as Faisal Rahmatallah holds not less than the FR Threshold then if Will Barker ceases to be responsible for Camelot's investment in Bidco:

(i)            prior to the fourth anniversary of Completion, then it will not transfer any interest in Bidco Shares to any person except to its permitted transferees or pursuant to Faisal Rahmatallah's drag right as summarised below prior to the later of (i) the date falling two years following the date on which Will Barker ceases to be responsible for Camelot's investment in the Company; or (ii) the third anniversary of Completion; or

(ii)           after the fourth anniversary of Completion, then it will not transfer any interest in Bidco Shares to any person except to its permitted transferees or pursuant to Faisal Rahmatallah's drag right as summarised below prior to the date falling one year following the date on which Will Barker ceases to be responsible for the Camelot's investment in the Company.

The Shareholders Agreement includes standard tag rights so that any minority shareholder has the right to tag along if Camelot sells Bidco Shares representing more than 50 per cent. of its stake in Bidco in any 12 month period.

The Group shall be re-valued by Camelot on a bi-annual basis, with Faisal Rahmatallah, and Richard Vessey being able to require an independent valuation in certain circumstances.

Bidco Employees or Heirs owning less than 2 per cent. of Bidco shall have the right to sell all or any of their Bidco Shares based on this valuation to either Camelot or a member of its fund group, or back to Bidco save that there will be no obligation to acquire more than 5 per cent. of the share capital of Bidco in any 12 month period.

Bidco Employees or Heirs owning more than 2 per cent. of Bidco shall have the right to sell up to 10 per cent. of their shareholding to either Camelot or a member of its fund group, or back to Bidco at the price agreed as part of the bi-annual valuation, save that there shall be no obligation to acquire more than 5 per cent. of the share capital of Bidco in any 12 month period.

Bidco Employees or Heirs owning more than 2 per cent. of Bidco can request a bid for some or all of their Bidco Shares from either Camelot or Bidco at any time. If a bid is not forthcoming or the price is not satisfactory and the shareholder requesting a bid is Faisal Rahmatallah (and he held the FR Threshold when serving the request for purchase) then he can seek a third party purchaser for all the Shares in Bidco. If after six months of seeking a sale Faisal Rahmatallah wishes to accept a bona fide third party offer for any or all of his Bidco Shares, he shall give Camelot a right of first refusal over those Bidco Shares on the same terms, save that Camelot may acquire the Bidco Shares at a 5 per cent discount.  If Camelot does not take up the right of first refusal then Faisal Rahmatallah may sell the relevant Bidco Shares to the third party.  Furthermore, if Faisal Rahmatallah is selling all of his Bidco Shares for a price at least 5 per cent higher than the price originally offered by Camelot (if any) then Faisal Rahmatallah can compel Camelot and each other shareholder to also sell its entire stake in Bidco to the third party purchaser.

Camelot also has standard rights to drag all minority shareholders on a sale of all of Camelot's Bidco Shares save that if Faisal Rahmatallah holds not less than the FR Threshold then the exercise of this right in respect of his Bidco Shares will be subject to his prior written consent.

Following successful completion of the Offer and the expiry of the Synnovia Group's existing long term incentive plan, Bidco will use reasonable endeavours to establish a LTIP on terms to be agreed.

In addition, Bidco has granted Faisal Rahmatallah the right to subscribe for 202,434 Bidco Shares at £1.25 per Bidco Share for an aggregate subscription price of £253,042.50, which is exercisable in its entirety only at any time from Completion for a period of six months, after which date the option shall lapse.

A copy of the Confidentiality Agreement, Management Share Exchange Agreement and the Shareholders Agreement will be made available on Synnovia's website at www.synnovia.com/investors by no later than 12 noon (London time) on the Business Day following the date of this announcement.

19.        interests in Synnovia shares

As at the Last Practicable Date, the following person (being the 100 per cent. owner of Bidco) held an interest in relevant Synnovia securities:

Name

Number of Synnovia Shares

Percentage of Synnovia current voting share capital

Camelot

11,659,513

29.9%

 

Save in respect of the irrevocable undertakings referred to in paragraph 4 above, and as disclosed in this paragraph 19, neither any member of the Bidco Group, nor the Bidco Director nor, so far as the Bidco Director is aware, any party acting in concert with Bidco as at the Last Practicable Date:

·      had any interest in, or right to subscribe for, any Synnovia Shares;

 

·      had any short position (whether conditional or absolute and whether in the money or otherwise) including any short position under a derivative, in Synnovia Shares, nor any arrangement in relation to Synnovia Shares;

 

·      has any other outstanding irrevocable commitment or letter of intention with respect to relevant securities of Synnovia;

 

·      had procured an irrevocable undertaking to accept the Offer; or

 

·      had borrowed or lent (including for these purposes, entering into any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Code) any relevant securities of Synnovia.

 

Furthermore, save for the irrevocable undertakings referred to in paragraph 4 of this announcement, together with the Management Share Exchange Agreement and the Shareholders Agreement referred to in paragraph 18 of this announcement, no arrangement exists with Bidco or Synnovia or an associate of Bidco or Synnovia in relation to Synnovia Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Synnovia Shares which may be an inducement to deal or refrain from dealing in such securities.

 

In this paragraph 19, "relevant securities of Synnovia" means Synnovia Shares and securities convertible into, or rights to subscribe for, options (including trade options) in respect thereof and derivatives referenced thereto.

 

20.        Documents available on Website

Copies of the following documents will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on Synnovia's website at www.synnovia.com/investors by no later than 12 noon (London time) on 4 September 2019 until the end of the Offer Period in accordance with Rules 26.1 and 26.2 of the Code:

·      the irrevocable undertakings referred to in paragraph 4 above;

·      the Confidentiality Agreement;

·      the Management Share Exchange Agreement;

·      the Shareholders Agreement;

·      the consents to be named in this announcement from financial advisers; and

·      a copy of this announcement.

 

The contents of Synnovia's website are neither incorporated into nor form part of this announcement.

 

Enquiries:

 

Synnovia

 

Nick Ball (Group Finance Director)

Tel: 020 7978 0574

 

 

Cenkos Securities plc (financial adviser and nominated adviser to Synnovia)

 

Stephen Keys

Tel: 020 7397 8900

Callum Davidson

 

 

 

Numis Securities Limited (financial adviser to Bidco)

 

Stuart Ord

Tel: 020 7260 1000

George Fry

 

Jono Mawson

 

 

 

Further information

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Bidco and no one else in connection with the matters referred to in this announcement. In connection with these matters, Numis, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to anyone other than Bidco for providing the protections afforded to the clients of Numis nor for providing advice in relation to the matters referred to in this announcement.

Cenkos Securities plc, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser and nominated adviser to Synnovia and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Synnovia for providing the protections afforded to clients of Cenkos nor for providing advice in connection with the Offer or any other matter referred to in this announcement.

 

 

 

Appendix I


Conditions To and Further Terms of the Offer

 

The Offer will be made on the terms and conditions set out in this Appendix I and in the Offer Document and, in the case of certificated Synnovia Shares, the Form of Acceptance.

 

1          Conditions of the Offer

The Offer shall be conditional upon:

Acceptance Condition

(a)        valid acceptances of the Offer having been received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the first closing date of the Offer as specified in the Offer Document (or such later times and/or dates as Bidco may, subject to the rules of the Code or with the consent of the Panel, decide) in respect of not less than 90 per cent. (or such lesser percentage as Bidco may decide) of the Synnovia Shares to which the Offer relates and of the voting rights attached to those shares provided that this Condition will not be satisfied unless Bidco and/or any member of the Bidco Group has acquired or agreed to acquire (whether pursuant to the Offer or otherwise) Synnovia Shares carrying in aggregate more than 50 per cent. of the voting rights then normally exercisable at a general meeting of Synnovia;

For the purposes of this Condition (a):

 

(i)         Synnovia Shares which have been unconditionally allotted but not issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise, shall be deemed to carry the voting rights they will carry upon issue;

(ii)         the expression "Synnovia Shares to which the Offer relates" shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act (and consequently excluding the 11,659,513 Synnovia Shares already owned by Camelot, the additional 4,609,887 Synnovia Shares which the Management Shareholders have agreed to transfer to Bidco pursuant to the Management Share Exchange Agreement and the 194,968  Undetermined Shares if Faisal Rahmatallah determines that he has a beneficial interest in them);

(iii)        for the purposes of this condition, the Synnovia Shares subject to the Management Share Exchange Agreement shall be deemed to be contracted, or agreed, to be acquired to the extent that (aa) in the case of Synnovia Shares in certificated form, one or more block or individual transfers in respect of, or including, such Synnovia Shares and the relevant share certificate(s) therefor (or an indemnity in lieu of such share certificate(s)) has/have been delivered to Bidco or its receiving agent; or, in the case of Synnovia Shares in uncertificated form, TTE Instruction(s) in respect of such Synnovia Shares has been received by the Receiving Agent; (bb) all the conditions to the completion of the Management Share Exchange Agreement have been satisfied, other than the condition that the Offer has become or been declared unconditional in all respects, and (cc) all conditions to the Offer other than this acceptance condition have been satisfied or waived;

(iv)        valid acceptances shall be deemed to have been received in respect of Synnovia Shares which are treated for the purposes of Part 28 of the Companies Act as having been acquired or contracted to be acquired by Bidco, whether by virtue of acceptance of the Offer or otherwise; and

(v)        all percentages of voting rights and share capital are to be calculated by reference to the percentage held and in issue outside treasury;

Management Shareholder Resolution

(b)        the passing of the Management Shareholder Resolution by Independent Synnovia Shareholders at the Synnovia General Meeting;

Other third party clearances

(c)        no government or governmental, quasi-governmental, supranational, statutory, administrative or regulatory body or association, institution or agency (including any trade agency) or any court or tribunal in any jurisdiction (each a "Relevant Authority") having decided to take, taken or instituted or given written notice of any action, proceeding, suit, investigation, enquiry or reference (and, in each case, not having withdrawn the same) or enacted, made or proposed (and, in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, order or decision that would or might reasonably be expected to (in any case to an extent or in a manner which is material in the context of the Offer the Wider Synnovia Group or the Wider Bidco Group, as the case may be):

(i)         make the Offer or other acquisition of Synnovia Shares, or control or management of Synnovia by Bidco or any member of the Wider Bidco Group void, unenforceable or illegal in any jurisdiction or directly or indirectly prohibit or otherwise restrict, delay or interfere with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge or require amendment to the terms of, the Offer or other acquisition of any Synnovia Shares, or control or management of Synnovia by Bidco or any member of the Wider Bidco Group;

(ii)         require, prevent or delay the divestiture (or alter the terms of any proposed divestiture) by the Wider Bidco Group or the Wider Synnovia Group of all or any part of their respective businesses, assets or properties or impose any limitation on their ability to conduct all or any part of their respective businesses and to own, control or manage any of their respective assets or properties;

(iii)        impose any limitation on, or result in any delay in, the ability of any member of the Wider Bidco Group to acquire or hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any member of the Wider Synnovia Group or on the ability of any member of the Wider Synnovia Group to hold or to exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities (or the equivalent) in, or to exercise management control over, any other member of the Wider Synnovia Group;

(iv)        require any member of the Wider Bidco Group or of the Wider Synnovia Group to acquire or offer to acquire any shares or other securities (or the equivalent) or interest in any member of the Wider Synnovia Group or any member of the Wider Bidco Group owned by a third party (other than in the implementation of the Offer or pursuant to Chapter 3 of Part 28 of the Companies Act);

(v)        other than in the implementation of the Offer pursuant to Chapter 3 of Part 28 of the Companies Act require the divestiture by any member of the Wider Bidco Group of any shares, securities or other interests in any member of the Wider Synnovia Group;

(vi)        impose any limitation on, or result in any delay in, the ability of any member of the Wider Bidco Group or the Wider Synnovia Group to integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Wider Bidco Group and/or the Wider Synnovia Group;

(vii)       result in any member of the Wider Bidco Group or Wider Synnovia Group ceasing to be able to carry on business under any name under which it presently does so; or

(viii)      otherwise adversely affect the business, assets, financial or trading position or profits of any member of the Wider Bidco Group or Wider Synnovia Group,

and all applicable waiting and other time periods (including extensions thereof) during which any such Relevant Authority could decide to take, institute or threaten any such action, proceeding, suit, investigation, enquiry or reference having expired, lapsed or been terminated;

(d)        other than in relation to the approvals referred to in paragraphs (b) to (c) above, all filings, applications and/or notifications which are necessary under applicable legislation or regulation of any relevant jurisdiction having been made and all relevant 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 and all applicable statutory or regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer or other acquisition of any shares or other securities in, or control or management of, Synnovia or any member of the Wider Synnovia Group by any member of the Wider Bidco Group or the carrying on by any member of the Wider Synnovia Group of its business;

(e)        other than in relation to the approvals referred to in paragraphs (b) to (c) above, all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals (together "Authorisations") which are necessary in any relevant jurisdiction for or in respect of the Offer and other acquisition of any Synnovia Shares, or control of Synnovia, by Bidco or any member of the Wider Bidco Group being obtained on terms and in a form satisfactory to Bidco, acting reasonably, from appropriate Relevant Authorities, or from any persons or bodies with whom any member of the Wider Bidco Group or the Wider Synnovia Group has entered into contractual arrangements or business relationships, and such Authorisations, together with all authorisations, orders, grants, recognitions, confirmations, licences, consents, clearances, permissions and approvals necessary for any member of the Wider Synnovia Group to carry on its business, remaining in full force and effect at the time when the Offer becomes otherwise wholly unconditional and no written notice of any intention to revoke, suspend, restrict or modify or not to renew any of the same having been given.

Confirmation of absence of adverse circumstances

(f)         except as Disclosed, there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Synnovia Group is a party or by or to which any such member or any of its assets is or may be bound or subject which, as a result of the implementation of the Offer or other acquisition by Bidco or any member of the Wider Bidco Group of any Synnovia Shares, or change in the control or management of Synnovia or otherwise, would or might reasonably be expected to result (in any case to an extent or in a manner which is material in the context of the Offer, the Wider Synnovia Group or the Wider Bidco Group, as the case may be) in:

(i)         any monies borrowed by or any other indebtedness (actual or contingent) of, or any grant available to, any such member of the Wider Synnovia Group becoming repayable, or capable of being declared repayable, immediately or earlier than the stated repayment date or the ability of such member to borrow monies or incur any indebtedness being withdrawn or inhibited;

(ii)         the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any member of the Wider Synnovia Group or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable;

(iii)        any rights, assets or interests of any such member of the Wider Synnovia Group being or falling to be disposed of or ceasing to be available to any member of the Wider Synnovia Group or any right arising under which any such asset or interest could be required to be disposed of or could cease to be available to any member of the Wider Synnovia Group;

(iv)        the interest or business of any such member of the Wider Synnovia Group in or with any other person, firm or company (or any agreements or arrangements relating to such interest or business) being terminated or adversely modified or affected;

(v)        any such member of the Wider Synnovia Group ceasing to be able to carry on business under any name under which it presently does so;

(vi)        the value of any such member of the Wider Synnovia Group or its financial or trading position or prospects being prejudiced or adversely affected;

(vii)       any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation arising or any adverse action being taken or arising thereunder;

(viii)      the creation of any liability (actual or contingent) by any such member of the Wider Synnovia Group; or

(ix)        other than as set out in the Synnovia LTIP Scheme any requirement on any member of the Wider Synnovia Group to acquire, subscribe, pay up or repay any shares or other securities (or the equivalent),

and no event having occurred which, under any provision of any agreement, arrangement, licence or other instrument to which any member of the Wider Synnovia Group is a party or by or to which any such member or any of its assets is or may be bound or subject, would or might result in any events or circumstances as are referred to in this paragraph (f);

No material transactions, claims or changes in the conduct of the business of the Synnovia Group

(g)        except as Disclosed, no member of the Wider Synnovia Group having since 31 March 2019:

(i)         issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities or transferred or sold (or agreed to transfer or sell) any shares out of treasury (except, in each case, where relevant, as between Synnovia and its wholly owned subsidiaries or between its wholly owned subsidiaries and except for the vesting of share awards in the ordinary course under the Synnovia LTIP Scheme);

(ii)         recommended, declared, paid or made or resolved 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 Synnovia to Synnovia or any of its wholly-owned subsidiaries;

(iii)        (other than pursuant to the Offer and except for transactions between Synnovia and its wholly-owned subsidiaries, or between its wholly-owned subsidiaries or transactions in the ordinary course of business) implemented or authorised any merger or demerger acquired or disposed of or transferred, mortgaged or charged, or created any other security interest over, any asset or any right, title or interest in any asset, which is material in the context of the Wider Synnovia Group taken as a whole;

(iv)        entered into, or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of businesses or corporate entities;

(v)        other than pursuant to the Offer and except for transactions between Synnovia and its wholly owned subsidiaries or between wholly owned subsidiaries of Synnovia, implemented or authorised any reconstruction, amalgamation, scheme or other transaction or arrangement with a substantially equivalent effect (other than pursuant to the Offer);

(vi)        purchased, redeemed or repaid any of its own shares or other securities or, other than pursuant to the Synnovia LTIP Scheme, reduced or made or authorised any other change in its share capital (except, in each case, where relevant, as between Synnovia and wholly owned subsidiaries of Synnovia or between the wholly owned subsidiaries of Synnovia);

(vii)       made or authorised any change in its loan capital or issued or authorised the issue of any debentures or incurred or increased any indebtedness or contingent liability (except, in each case, where relevant, as between Synnovia and wholly owned subsidiaries of Synnovia or between the wholly owned subsidiaries of Synnovia) other than in the ordinary course of business;

(viii)      entered into, varied or terminated, or authorised the entry into, variation or termination of, any contract, commitment or arrangement (whether in respect of capital expenditure, real estate or otherwise) which is outside the ordinary course of business or which is of a long term, onerous or unusual nature or magnitude or which involves or might involve an obligation of a nature or magnitude which is unusually restrictive on the business of any member of the Wider Synnovia Group, which is material in the context of the Wider Synnovia Group taken as a whole;

(ix)        proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any employee of the Wider Synnovia Group, which is material in the context of the Wider Synnovia Group 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 made any other change to any part of its share capital (except, in each case, where relevant, as between Synnovia and wholly owned subsidiaries of Synnovia or between the wholly owned subsidiaries of Synnovia);

(xi)        been unable or deemed unable, or admitted in writing that it is unable, to pay its debts as they fall due 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 Synnovia Group taken as a whole;

(xii)       commenced negotiations with any of its creditors or taken any step with a view to rescheduling or restructuring any of its indebtedness or entered into a composition, compromise, assignment or arrangement with any of its creditors whether by way of a voluntary arrangement, scheme of arrangement, deed of compromise or otherwise, which is material in the context of the Wider Synnovia Group taken as a whole;

(xiii)      (other than in respect of a member of the Wider Synnovia Group which is dormant and solvent at the relevant time) taken any corporate action or had any legal proceedings started, served or threatened against it or any documents filed or faxed in court for its winding-up (voluntary or otherwise), dissolution or reorganisation (or for any analogous proceedings or steps in any jurisdiction) or for the appointment of a liquidator, provisional liquidator, receiver, administrator, administrative receiver, trustee or similar officer (or for the appointment of any analogous person in any jurisdiction) of all or any of its assets and revenues or had written notice given of the intention to appoint any of the foregoing to it in any case, which is material in the context of the Wider Synnovia Group taken as a whole;

(xiv)      except in the ordinary course of business, waived, compromised, settled, abandoned or admitted any dispute, claim or counter-claim whether made or potential and whether by or against any member of the Wider Synnovia Group, which is material in the context of the Wider Synnovia Group taken as a whole;

(xv)       made any material alteration to its constitutional documents;

(xvi)      entered into, or varied the terms of, or terminated or given notice of termination of, any service agreement or arrangement with any director or senior executive of any member of the Wider Synnovia Group, otherwise than in the ordinary course of business;

(xvii)     made or consented to any change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits or pensions are calculated or determined, or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to, any change to the trustees, other than in accordance with applicable law; or

(xviii)    entered into any contract, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) to effect, or proposed or announced any intention to effect, any of the transactions, matters or events referred to in this paragraph (g);

(h)        except as Disclosed, since 31 March 2019:

(i)         no adverse change having occurred, and no circumstances having arisen which may result in any adverse change, in the business, assets, financial or trading position or profits of any member of the Wider Synnovia Group;

(ii)         no litigation, arbitration proceedings, prosecution or other legal proceedings in any jurisdiction having been threatened, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Synnovia Group or to which any member of the Wider Synnovia Group is a party (whether as claimant or defendant or otherwise) and no investigation by any Relevant Authority or other investigative body against or in respect of any member of the Wider Synnovia Group having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Synnovia Group;

(iii)        no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider Synnovia Group having been threatened in writing, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider Synnovia Group;

(iv)        no contingent or other liability having arisen or increased other than in the ordinary course of business which would adversely affect the business, assets or profits of any member of the Wider Synnovia Group; and

(v)        no steps having been taken and no omissions having been made other than in the ordinary course of business, which would result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Synnovia Group which is necessary for the proper carrying on of its business.

(vi)        in each case, which is material in the context of the Wider Synnovia Group as a whole.

(i)         except as Disclosed, no contingent or other liability having arisen outside the ordinary course of business which would or might adversely affect any member of the Wider Synnovia Group in a manner which is material in the context of the Wider Synnovia Group as a whole; and

(j)         except as Disclosed, Bidco not having discovered that:

(i)         any financial, business or other information concerning the Wider Synnovia Group publicly announced prior to the date of the announcement of the Offer under Rule 2.7 of the Code at any time by any member of the Wider Synnovia Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading;

(ii)         there is any information which affects the import of any information publicly announced prior to the date of the announcement of the Offer under Rule 2.7 of the Code by or on behalf of any member of the Wider Synnovia Group;

(iii)        any member of the Wider Synnovia Group is subject to any liability, contingent or otherwise, other than in the ordinary course of business; or

(iv)        there is or is likely to be any obligation or liability (whether actual or contingent) to make good, repair, re-instate or clean up any property now or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider Synnovia Group under any environmental legislation, regulation, notice, circular or order of any Relevant Authority in any jurisdiction.

in each case which is materially adverse in the context of the Wider Synnovia Group as a whole.

Bidco will use all reasonable efforts to ensure the satisfaction of the Conditions.

2          Certain further terms of the Offer

(a)        Bidco reserves the right (subject to the requirements of the Code and the Takeover Panel) to waive, in whole or in part, the above Conditions (other than the Acceptance Condition and the Condition numbered 1 (b) relating to the Management Shareholder Resolution).

(b)        If Bidco is required by the Takeover Panel to make an offer for Synnovia Shares under the provisions of Rule 9 of the Code, Bidco may make such alterations to any of the above Conditions, including the Acceptance Condition and terms of the Offer as are necessary to comply with the provisions of that Rule.

(c)        The Offer shall lapse unless all the above Conditions have been fulfilled or, where permitted, waived or, where appropriate, have been determined by Bidco to be or remain satisfied, by the date which is 21 days after the later of the first closing date (which shall be specified in the Offer Document) and the date on which the Offer becomes, or is declared, unconditional as to acceptances (or such later date as the Takeover Panel may agree). Such date may not be further extended, other than by Bidco with the consent of the Takeover Panel.

(d)        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 the Conditions in paragraphs (c) to (h) (inclusive) by a date earlier than the latest date for the fulfilment of that condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.

(e)        The Offer shall lapse if:

(i)         in so far as the Offer or any matter arising from or relating to the Offer constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral under Article 9(1) of the Regulation to the CMA and the CMA makes a CMA Phase 2 Reference; or

(ii)         in so far as the Offer or any matter arising from or relating to the Offer becomes subject to a CMA Phase 2 Reference,

in each case before 1.00 p.m. (London time) on the first closing date (which shall be specified in the Offer Document) or the date when the Offer becomes or is declared unconditional as to acceptances (whichever is the later).

(f)         Under Rule 13.5 of the Code, Bidco may not invoke a Condition so as to cause the Offer not to proceed, to lapse or any offer to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Bidco in the context of the Offer. The Acceptance Condition and the Condition numbered 1 (b) relating to the Management Shareholder Resolution are not subject to this provision of the Code.

(g)        The Synnovia Shares shall be acquired under the Offer fully paid and free from all liens, charges, equitable interests, encumbrances, rights of pre-emption and any other rights and interests of any nature whatsoever and together with all rights now and hereafter attaching thereto, including voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid on or after the date of this announcement. Accordingly, insofar as a dividend and/or distribution and/or a return of capital is proposed, declared, made, paid or payable by Synnovia in respect of a Synnovia Share on or after the date of this announcement, Bidco reserves the right to reduce by the amount of the dividend and/or distribution and/or return of capital, the price payable under the Offer in respect of a Synnovia Share, except insofar as the Synnovia Share is or will be transferred pursuant to the Offer on a basis which entitles Bidco alone to receive the dividend and/or distribution and/or return of capital but if that reduction in price has not been effected, the person to whom the Offer Price is paid in respect of that Synnovia Share, will be obliged to account to Bidco for the amount of such dividend and/or distribution and/or return of capital.

(h)        If the Offer lapses, the Offer shall cease to be capable of further acceptance and accepting Synnovia Shareholders and Bidco shall cease to be bound by Forms of Acceptance submitted at or before the time when the Offer so lapses.

(i)         The availability of the Offer to persons not resident in the United Kingdom may be affected by the laws of the Restricted Jurisdictions. Persons who are not resident in the United Kingdom should inform themselves about and observe any applicable requirements.

(j)         The Offer is not being made, directly or indirectly, in, into or from, or by use of the mails of, or by any means of instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of, any jurisdiction where to do so would violate the laws of that jurisdiction and shall not be capable of acceptance by any such use, means, instrumentality or facility or from within such Restricted Jurisdiction (unless otherwise determined by Bidco) and the Offer cannot be accepted by any such use, means or instrumentality or otherwise from any Restricted Jurisdiction.

(k)         Bidco reserves the right, subject to the prior consent of the Takeover Panel, to implement the Offer by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act. In such event, the Offer will be implemented on substantially the same terms as those which would apply to the Offer, subject to appropriate amendments to reflect the change in method (including statutory voting requirements).

(l)         The Offer will be governed by English law and is subject to the jurisdiction of the English courts and to the Conditions and Further Terms of the Offer set out in this Appendix I and the Offer Document (and, in the case of certificated Synnovia Shares, the Form of Acceptance). The Offer shall also be subject to the applicable requirements of the Code, the Takeover Panel, the London Stock Exchange and the Financial Conduct Authority. This announcement does not constitute, or form part of, an offer or invitation to purchase Synnovia Shares or any other securities.

(m)       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:

 

1.         Synnovia had in issue 38,995,151 ordinary shares of 1 penny each as at the Last Practicable Date. The International Securities Identification Number for the Synnovia Shares is GB00B289KK20.
2.         The value attributed to Synnovia's existing issued and to be issued ordinary share capital by the Offer is based on the 38,995,151 Synnovia Shares in issue as set out in Synnovia's audited consolidated financial statements for the twelve month period ended 31 March 2019.
3.         All percentages of Synnovia's issued share capital are stated as at on the Last Practicable Date and are based on the 38,995,151 Synnovia Shares in issue.
4.         Unless otherwise stated, the financial information on Synnovia is extracted from Synnovia's audited consolidated financial statements for the twelve month period ended 31 March 2019.
5.         All prices quoted for Synnovia Shares have been derived from Bloomberg at https://www.bloomberg.com/quote/SYN:LN and unless stated, represent the closing middle market prices of Synnovia Shares on the relevant date(s).
6.         All information relating to Synnovia has been provided by the Synnovia Directors.
7.         All information relating to Bidco has been provided by the Bidco Director.

 

 
Appendix III
DETAILS OF IRREVOCABLE UNDERTAKINGS

 

Part A: Independent Synnovia Directors and their connected persons

 

The following Independent Synnovia Directors have given irrevocable undertakings to accept or procure acceptance of the Offer in respect of their beneficial holdings of issued Synnovia Shares:

 

Name

Number of Synnovia Shares

Percentage of Synnovia issued share capital as at the Last Practicable Date

Andrew Walker

312,085

0.8

Keith Butler - Wheelhouse

383,798

1.0

Total

695,883

1.8%

 

The Independent Synnovia Directors have also irrevocably undertaken to vote in favour of the Management Shareholder Resolution.

 

These irrevocable undertakings will remain binding in the event of a competing offer being made unless the Offer Document is not published within 28 days of the date of this announcement or the Offer lapses or is otherwise withdrawn.

 

Part B: Management Shareholders and their connected persons

 

The following Management Shareholder has given an irrevocable undertaking to accept or procure acceptance of the Offer in respect of the following issued Synnovia Shares:

 

Name

Number of Synnovia Shares

Percentage of Synnovia issued share capital as at the Last Practicable Date

Faisal Rahmatallah

202,434*

0.5

* The Synnovia Shares shown against Faisal Rahmatallah's name are held by Lawshare Nominees Limited, as nominee of his SIPP provider.

 

This irrevocable undertaking will remain binding in the event of a competing offer being made unless the Offer Document is not published within 28 days of the date of this announcement or the Offer lapses or is otherwise withdrawn.

 

Part C: Other Synnovia Shareholders

 

The following other Synnovia Shareholders have given irrevocable undertakings to accept or procure acceptance of the Offer in respect of their beneficial holdings of issued Synnovia Shares:

 

Name

Number of Synnovia Shares

Percentage of Synnovia issued share capital as at the Last Practicable Date

Arun Nagwaney

275,903

0.7

Isaac Investments Limited

2,046,733

5.3

Octopus Investments Limited

2,992,547

7.7

Total

5,315,183

13.6%

 

These Synnovia Shareholders have also undertaken to vote in favour of the Management Shareholder Resolution.

 

The irrevocable undertakings given by Isaac Investments Limited and Octopus Investments Limited will not be binding and shall lapse in the event that, within five business days following the despatch of the Offer Document, a third party announces a firm intention to make an offer for cash for a consideration per share which represents, in such shareholder's reasonable opinion, at least a 10 per cent. increase in value over the Offer Price.

 

The irrevocable undertaking from Arun Nagwaney will remain binding in the event of a competing offer being made unless the Offer Document is not published within 28 days of the date of this announcement or the Offer lapses or is otherwise withdrawn.

 

 

 

Appendix IV

Definitions

 

"Acceptance Condition"

the condition numbered 1(a) set out in Appendix I to this announcement

 

"Authorisations"

regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals

 

"Bidco"

BPF1 Limited, a company with registered office at Riverbank House  2 Swan Lane  London EC4R 3TT, incorporated in England and Wales with Company Registration Number 12057661

 

"Bidco Director"

William Barker

 

"Bidco Employee"

a director or employee of, or a consultant to, Bidco or any of its subsidiaries or a former director or former employee of, or a former consultant to, Bidco or any of its subsidiaries

 

"Bidco Group"

Barker Partnership L.P., Camelot, as general partner of Barker Partnership L.P. and Barker Partnership Fund

 

"Bidco Shares"

the ordinary shares of 1p each and any other class of shares as may be issued by the Company from time to time

 

"Business Day"

a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are open for business in the City of London

 

"Camelot"

Camelot Capital Partners (Cayman) Limited, acting as general partner of Barker Partnership L.P.

 

"Cenkos"

Cenkos Securities plc

 

"CMA"

the Competition and Markets Authority, a UK statutory body established under the Enterprise and Regulatory Reform Act 2013 or any successor thereto

 

"CMA Phase 2 Reference"

 

a referral to the Chair of the Competition and Markets Authority for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013

 

"Code" or "Takeover Code"

the City Code on Takeovers and Mergers issued from time to time by or on behalf of the Takeover Panel

 

"Companies Act"

the Companies Act 2006, as amended

 

"Completion"

the completion of the Management Share Exchange Agreement in accordance with its terms

 

"Conditions"

the conditions to the Offer, as set out in Appendix I to this announcement and to be set out in the Offer Document and, in the case of certificated Synnovia Shares, the Form of Acceptance

 

"Confidentiality Agreement"

the confidentiality agreement dated 28 June 2019 between Camelot, Camelot Capital Partners LLC and Synnovia further details of which are set out in paragraph 18 of this announcement

 

"Consideration Shares"

the 4,609,887 Bidco Shares to be issued and allotted to the Management Shareholders (other than Faisal Rahmatallah) pursuant to the Management Share Exchange Agreement together with an additional 194,968  Bidco Shares which may be issued to NAHL if Faisal Rahmatallah determines that he has a beneficial interest in the Undetermined Shares

 

"Disclosed"

the information fairly disclosed by, or on behalf of, Synnovia (i) in the annual report and accounts for Synnovia for the financial year ended 31 March 2019; (ii) in the interim report for the six months ended 30 September 2018; (iii) in any announcement to a regulatory information service by, or on behalf of, Synnovia, prior to this announcement; and (iv) in writing by or on behalf of Synnovia to Bidco or its advisers prior to this announcement

 

"Enlarged Bidco Share Capital"

the share capital of Bidco as enlarged by the issue and allotment of the Consideration Shares

 

"Form of Acceptance"

the form of acceptance and authority relating to the Offer which shall be dispatched together with the Offer Document to Synnovia Shareholders who hold their Synnovia Shares in certificated form

 

"FR SIPP Shares"

the 202,434 Synnovia Shares held by Lawshare Nominees Limited on behalf of Faisal Rahmatallah as his SIPP provider

 

"FR Threshold"

the higher of:

(i) 3.5 per cent of the issued Bidco Shares (but not including any Bidco Shares issued pursuant to any LTIP scheme); or

(ii) 60 per cent  of the highest number of issued Bidco Shares held by Faisal Rahmatallah at any time following Completion (but not including any Bidco Shares issued pursuant to any LTIP scheme),

being held by Faisal Rahmatallah and his family members, trustees and companies of which he has control, but excluding any Bidco Shares held by Faisal Rahmatallah's former spouse

 

"FSMA"

the Financial Services and Markets Act 2000 (as amended)

 

"Heir"

an individual  who holds Bidco Shares as a result of receiving them as a beneficiary under a will of Faisal Rahmatallah or Richard Vessey

 

"Independent Synnovia Directors"

Andrew Walker and Keith Butler-Wheelhouse

 

"Independent Synnovia Shareholders"

all Synnovia Shareholders save for (i) the Management Shareholders;  (ii) Lawshare Nominees Limited (to the extent it is the nominee of the FR SIPP Shares); and (ii) any member of the Bidco Group

 

"Last Practicable Date"

the close of business on 2 September 2019, being the last practicable date prior to the publication of this announcement

 

"London Stock Exchange"

London Stock Exchange plc

"Management Option"

Faisal Rahmatallah's right to subscribe for 202,434 new Bidco Shares at £1.25 per Bidco Share pursuant to the Shareholders Agreement

 

 

"Management Share Exchange Agreement"

the agreement dated 3 September 2019 entered into between Bidco, Camelot and the Management Shareholders, regarding the transfer of Synnovia Shares in consideration for the issue of Bidco Shares

 

"Management Shareholders"

Faisal Rahmatallah, Richard Vessey, Nicholas Ball and NAHL

 

"Management Shareholder Consideration"

the Consideration Shares to be issued to the Management Shareholders pro rata to their existing shareholdings in Synnovia (save for the FR SIPP Shares) pursuant to the Management Share Exchange Agreement

 

"Management Shareholder Resolution"

the ordinary resolution to be proposed at the Synnovia General Meeting on which only Independent Synnovia Shareholders can vote to approve the Management Shareholder Consideration, the Management Option, the Management Shareholder Service Arrangement and the Management Share Exchange Agreement pursuant to Rule 16.2 of the Code

 

"Management Shareholder Service Arrangement"

the proposed amendments to Faisal Rahmatallah's service agreement and consultancy agreement with Synnovia so that if his services are terminated by Synnovia or on Camelot's instructions at any time in the five years from Completion and such termination occurs at a time when he holds not less than the FR Threshold then, provided the termination was not on grounds entitling Synnovia to summarily dismiss Faisal Rahmatallah or otherwise due to negligence as determined by a court of competent jurisdiction, then Faisal Rahmatallah shall be entitled to a payment equal to the amount of salary or fees that he would otherwise have received from the date of termination until the date that is five years from the date of Completion, in quarterly instalments

 

"NAHL"

Nicolino Assets Holdings Limited,  a company wholly-owned by the trustees of the FR Discretionary Trust of which Faisal Rahmatallah and his six children are the members of the discretionary beneficial class

 

"Numis"

Numis Securities Limited, the financial adviser to Bidco in relation to the Offer

 

"Offer"

the offer to be made by Bidco at the Offer Price to acquire the entire issued and to be issued ordinary share capital of Synnovia not already acquired or agreed to be acquired by Bidco, on the terms and subject to the conditions set out in the Offer Document and, in the case of Synnovia Shares held in certificated form, the Form of Acceptance including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer

 

"Offer Document"

the offer document to be despatched by or on behalf of Bidco to Synnovia Shareholders setting out the terms and conditions of the Offer

 

"Offer Period"

the offer period (as defined in the Code) relating to Synnovia that commenced on the date of this announcement and ending on the earlier of the date on which the Offer becomes or is declared unconditional as to acceptances and/or the date on which the Offer lapses or is withdrawn (or such other date as the Panel may decide)

 

"Offer Price"

125 pence per Synnovia Share

 

"Opening Position Disclosure"

an opening position disclosure made pursuant to Rule 8 of the Code containing details of interests or short positions in, or rights to subscribe for, any relevant securities of a party to an offer 

 

"Overseas Shareholders"

Synnovia Shareholders who are resident in, located in, ordinarily resident in, or citizens or nationals of, jurisdictions outside the United Kingdom

 

"Relevant Authority"

 

has the meaning given to it in paragraph 1(e) of Appendix I to this announcement

 

"Restricted Jurisdiction"

 

the United States of America, Canada, Australia, Japan, South Africa and any other jurisdiction where the release, publication or distribution in whole or in part, in, into or from or where the extension of the Offer would constitute a violation of the relevant laws of such jurisdiction

 

 

"Shareholders Agreement"

the agreement dated 3 September 2019 between Camelot, Bidco and the Management Shareholders regarding various matters relating to the management of Bidco and the rights of its shareholders

 

"Significant Interest"

in relation to an undertaking, a direct or indirect interest of 20 per cent. or more of (i) the total voting rights conferred by the equity share capital (as defined in section 548 of the Companies Act) of such undertaking or (ii) the relevant partnership interest

 

"Synnovia"

Synnovia  PLC, a company with registered office at Room 1.1, London Heliport, Bridges Court Road, London SW11 3BE incorporated in England and Wales with Company Registration Number 06387173

 

"Synnovia Directors" or "Synnovia Board"

the directors of Synnovia

 

"Synnovia General Meeting" or "General Meeting"

 

the general meeting of Synnovia Shareholders (and any adjournment thereof) to be convened to approve the Management Shareholder Resolution

 

"Synnovia Group" or "Group"

Synnovia and its subsidiaries and subsidiary undertakings and member of the Synnovia Group shall be construed accordingly

 

"Synnovia LTIP Scheme"

the long-term incentive plan operated by Plastics Capital Trading Limited, a subsidiary of Synnovia

 

"Synnovia Shareholders"

the registered holders of Synnovia Shares from time to time

 

"Synnovia Shares" or "Synnovia Ordinary Shares"

the ordinary shares of 1 penny each in the capital of Synnovia

 

"Takeover Panel" or "Panel"

the Panel on Takeovers and Mergers

 

"Third Party"

each of a 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 body or person whatsoever in any jurisdiction

 

"Undetermined Shares"

194,968  Synnovia Shares registered in the name of NAHL which Faisal Rahmatallah may have a beneficial interest in, although this is currently undetermined

 

"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 and the District of Columbia

 

"US Securities Exchange Act"

US Securities Exchange Act of 1934, as amended

 

"Wider Bidco Group"

Bidco and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate partnership, joint venture or person in which Bidco and all such undertakings (aggregating their interests) have a Significant Interest (other than any member of the Wider Synnovia Group)

 

"Wider Synnovia Group"

Synnovia and its subsidiaries, subsidiary undertakings, associated undertakings and any other body corporate, partnership, joint venture or person in which Synnovia and all 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 Companies Act.

All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the United Kingdom.

All the times and/or dates (other than references to Business Days) referred to in this announcement are to those times and/or dates as determined by London time, unless otherwise stated.

References to the singular include the plural and vice versa unless the context otherwise requires and words importing the masculine gender shall include the feminine or neutral gender.

All references to legislation are to English legislation unless the contrary is indicated, and any reference to any provision of any legislation includes any amendment, modification, re-enactment or extension thereof.

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
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