REG - Vector Capital PLC - Proposed Tender Offer & Shares Cancellation

Vector CapitalAnnouncement

02/08/2024 07:15

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RNS Number : 8885Y  Vector Capital PLC  02 August 2024

VECTOR CAPITAL PLC

 

("Vector Capital" or the "Company")

 

Proposed return of up to £3.71 million to Shareholders by way of a tender
offer,

Cancellation of admission of Ordinary Shares to trading on AIM

and

Notice of General Meeting

 

Vector Capital is today announcing that a circular (the "Circular") will be
sent to Shareholders later today detailing the following Resolutions to be
considered at a General Meeting scheduled for 2.00 p.m. on 20 August 2024:

·        a Tender Offer for up to 11,244,385 Ordinary Shares at the
Tender Price of 33 pence per Ordinary Share, representing up to £3.71 million
to Shareholders; and

·        the proposed cancellation of the admission to trading of the
Ordinary Shares on AIM.

A General Meeting has been convened for 2.00 p.m. on 20 August 2024, at which
Shareholders will be asked to consider and if thought fit, to approve the
Resolutions. The Notice of General Meeting convening the General Meeting at
which the Resolutions will be proposed is set out at the end of the Circular.
Pursuant to Rule 41 of the AIM Rules, the Directors have notified the London
Stock Exchange of the date of the proposed De-Listing.

The Tender Price of 33 pence per Ordinary Share represents:

·        a premium of 22.2 per cent. to the closing price of 27 pence
per Ordinary Share on 31 July 2024, being Latest Practicable Date; and

·        a premium of 18.7 per cent. to the volume weighted average
price of 27.8 pence per Ordinary Share over one month prior to the Latest
Practicable Date.

As described below, an Irrevocable Undertaking to vote in favour of the
Resolutions to be proposed at the General Meeting, and not to tender any of
its Ordinary Shares, has been received from a Shareholder holding 75.15 per
cent. of the issued share capital of the Company which means that both the
Resolutions are expected to be passed. The Tender Offer is expected to become
effective on 2 August 2024 and for those Eligible Shareholders that wish to
sell their Ordinary Shares held in certificated form, cheques will be
despatched on or around 10 September 2024 or, for those Eligible Shareholders
that wish to sell their Ordinary Shares held in CREST, CREST accounts will be
credited on or around 10 September 2024.

Shareholders should note that, if the Resolutions are approved at the General
Meeting, it is possible that Vector Holdings might hold 100 per cent. of the
Ordinary Shares following completion of the Tender Offer.

In the context of the Tender Offer, with the agreement of the Independent
Directors of the Company, the Panel has granted certain dispensations such
that the Circular does not need to comply with all of the requirements of an
offer document and the Company is not in an offer period as defined in the
Takeover Code.

The Company will currently remain subject to the Takeover Code for a period of
at least ten years following the Delisting. It should be noted that the future
scope of the application of the Takeover Code is currently under review by the
Panel and is the subject matter of a public consultation paper (PCP 2024/1)
which proposes a refocusing and significant narrowing of the types of
companies that are subject to the Takeover Code. This public consultation
closed on 31 July 2024. If these rule changes are adopted in the form and
broadly in the timescale proposed, the Company would cease to be subject to
the Takeover Code three years after the date of implementation of such
changes.

Information on Vector Capital plc

Financial profile of the Group

 

The Group provides secured, business-to-business loans to small and
medium-sized enterprises based in England and Wales. Loans are typically
secured by a first legal charge against real estate. Customers typically
borrow for general working capital purposes, bridging ahead of refinancing,
land development and property acquisition. The loans provided by the Group are
typically for renewable 12-month terms with fixed interest rates. The Company
joined the AIM market in December 2020 and raised £2.6 million (net) and then
returned to the market for a secondary fundraise of £1.4 million (net) in
June 2021. The Company has been unable to raise additional capital on
acceptable terms from the AIM market in the last three years.

Group revenue and earnings continued to grow throughout 2021 and 2022 in line
with the rise in the loan book but, as a result of a combination of the
adverse effects on borrowers of high interest rates, increases in inflation,
particularly the costs of building materials, and a soft residential property
market, revenue fell slightly in the year ended 31 December 2023 to £5.7
million and profit before tax fell from £2.8 million to £2.1 million. This
was considered by the Board to be a good result for the year given the
circumstances as the Group maintained a focus on responsible and cautious
lending supported by a strong capital base. Shareholders' equity continued to
grow, and the Board announced a final dividend of 1.53 pence per share, in
line with 2022. The loan book stood at £47.9 million as at 31 December 2023,
a reduction of £5.3 million over the year, reflecting a cautious approach to
new lending in light of market conditions, and external funding lines from
long terms wholesale bank providers stood at £45 million. The Group increased
its provisions for doubtful debts by £704,000 during the year.

The Company announced on 2 August 202comp4 its unaudited consolidated interim
results for the six months ended 30 June 2024 recording income of £2.54
million (2023: £2.85 million) and profit before tax of £707,000 (2023:
£1.27 million). During the period, the Group incurred a bad debt charge of
£363,000 arising from redemption shortfalls and is carrying forward a
provision of £928,000 against further bad debts. Although general inflation
has fallen significantly, interest rates and market uncertainly remain high
and property disposals remain slow for certain properties. A number of
borrowers continue to be adversely impacted by these conditions with the
result that, in these instances, the Group cannot redeem and recycle funds as
quickly as we would wish. This impacts the Company's ability to generate
income from the stressed loans and an acceptable return on capital.

Despite the current challenges within the lending market, the Board believes
Vector retains a sound capital base and that eventually interest rates will
fall and an expansion in bank lending will improve market conditions. However,
the Board believes that the medium term growth potential is likely to be
limited and the ability to redeem and recycle will continue to be impacted by
customers liquidity constraints. Rather than continue to hold shareholders'
funds during an indeterminate period while we wait for market conditions to
improve, the Board is of the view that the right decision is to provide
shareholders with the opportunity for a return of capital through the Tender
Offer described below.

The Board believes that the decision to join the AIM market was correct at the
time of admission in December 2020. However, for the reasons described in more
detail below, the Board believes that the potential benefits arising from its
continued admission on the AIM market are outweighed by the costs and
disadvantages. As a consequence, the Board feels that no further purpose is
served by remaining on the market and that a withdrawal from AIM is in the
best interests of shareholders.

 

The Tender Offer

Introduction

The Company intends to proceed with the Tender Offer in order to distribute to
Shareholders approximately £3.71 million.

The Tender Offer is designed to enable those Shareholders (other than certain
Overseas Shareholders) who wish to realise Ordinary Shares to do so.
Shareholders who successfully tender their Ordinary Shares will receive 33
pence per Ordinary Share. Further details of the Tender Offer are set out in
the Circular.

Eligible Shareholders on the Register on the Record Date are being invited to
tender all, some or none of their Ordinary Shares for purchase by Zeus, on the
terms and subject to the conditions set out in the Circular and, in respect of
Eligible Shareholders holding Ordinary Shares in certificated form, the
accompanying Tender Form. Eligible Shareholders are not obliged to tender any
Ordinary Shares under the Tender Offer.

Vector Holdings, a Shareholder representing 75.15 per cent. of the current
issued share capital of the Company has given an Irrevocable Undertaking in
connection with the Tender Offer not to tender any of the 34,000,000 Ordinary
Shares held by it pursuant to the Tender Offer. Accordingly following
completion of the Tender Offer, Vector Holdings will hold between 75.15 per
cent. and 100 per cent. of the Ordinary Shares.

Upon the Tender Offer becoming unconditional and unless the Tender Offer has
been terminated in accordance with the provisions set out in the Circular,
Zeus will accept the applications of Eligible Shareholders validly made in
accordance with these terms and conditions.

Subject to these terms and conditions, Zeus (acting as principal) will
purchase all Ordinary Shares tendered by Eligible Shareholders under the
Tender Offer at the Tender Price on or about 10 September 2024.

In accordance with the terms and subject to the conditions of the Repurchase
Agreement, the Company has agreed to purchase at the Tender Price the Ordinary
Shares purchased by Zeus (acting as principal) pursuant to the Tender Offer.
All of the Ordinary Shares purchased by the Company will be cancelled.

 

Considerations as to whether or not to accept the Tender Offer

Shareholders should note that if they vote in favour of the Resolutions at the
General Meeting, they are not obligated to accept the Tender Offer for their
Ordinary Shares.

The Independent Directors are not making any recommendation to Eligible
Shareholders as to whether or not they should tender their Ordinary Shares in
the Tender Offer. Eligible Shareholders should consider whether the Ordinary
Shares remain a suitable investment in light of their own personal
circumstances and investment objectives, noting the future prospects of the
Group as outlined in the Circular and the advantages and disadvantages of the
Tender Offer outlined below.

In the opinion of the Independent Directors, in the absence of any immediate
prospect to sell their Ordinary Shares once the Tender Offer closes,
Shareholders should balance their desire for a cash realisation now or in the
immediate foreseeable future, against the prospect of remaining Shareholders
in the Company with changed financial prospects, a changed ownership structure
and the De-Listing and the consequent impact on future marketability. The
Independent Directors believe that the points below should be taken into
account by Shareholders when considering whether to retain their Ordinary
Shares or to tender their Ordinary Shares under the Tender Offer.

 

Advantages of the Tender Offer

 

The Independent Directors believe that making the Tender Offer on the terms
set in the Circular is in the interests of Shareholders as a whole because:

·         a tender offer provides an opportunity for an exit for
those Shareholders who wish to receive cash;

·         a tender offer conducted at 33 pence represents a premium
to the prevailing share price of 27 pence as at close of trading on 31 July
2024 (being the latest practicable date prior to the publication of this
announcement);

·         there can be no guarantee as to the level of dividends or
other distributions which would be paid by the Company to Shareholders in
future or if any such dividends or distributions would be made.

Disadvantages of the Tender Offer

In considering the Tender Offer, the Independent Directors believe
Shareholders should have regard to the following disadvantages that they may
experience if they opt to accept the Tender Offer and if they opt to retain
their Ordinary Shares and not accept the Tender Offer (as applicable):

·         In order to pay the consideration to which Shareholders are
entitled pursuant to valid tenders of Ordinary Shares accepted by Zeus (and
which the Company will then be obliged to repurchase from Zeus), the Company
will use a significant amount of its available cash and other liquid funds
which will then be unavailable for deployment in achieving the Company's aims;

·         As a result of the Tender Offer, the number of Ordinary
Shares in issue will be reduced and the value of the assets of the Company
will reduce in size. As a result, the fixed costs of the Company will be
spread over fewer Ordinary Shares;

·         Shareholders tendering Ordinary Shares for sale under the
Tender Offer will receive the Tender Price, which may be less than the price
at which they bought their Ordinary Shares; and

·         Tender Forms and TTE Instructions, once submitted, are
irrevocable. The price of the Ordinary Shares and the Company's net asset
value may rise or fall following submission of a Tender Form or TTE
Instruction. After settlement of a TTE Instruction, the Shareholder will not
be able to access the Ordinary Shares concerned in CREST for any transaction
or for charging purposes.

If Eligible Shareholders are in any doubt as to what action they should take,
they should seek their own independent professional advice from their
stockbroker, bank manager, solicitor, accountant or other independent
financial adviser authorised under the Financial Services and Markets Act
2000, as amended, if they are resident in the United Kingdom or, if not, from
another appropriately authorised independent financial adviser. Eligible
Shareholders are also strongly advised to consult their professional advisers
regarding their own tax position.

 

The De-Listing

Reasons for the De-Listing

The Board is very much focused on strengthening the Company's financial
performance and has carefully considered over an extensive period of time the
benefits and drawbacks to the Company retaining its quotation on AIM. The
Board has now concluded that the De-Listing, linked to the Tender Offer
referred to above is in the best interests of the Company and its Shareholders
as a whole. In reaching this conclusion, the Board has considered the
following key factors:

·         the scale and structure of the UK Small Cap market has
changed for the foreseeable future and Vector Capital is too small to be of
interest to the vast majority of a reducing number of investors in UK
publicly-quoted companies;

·         following its admission to AIM in December 2020 and a
further fundraise in June 2021, the Company has been unable to access new
equity capital on acceptable terms;

·         trading in the Ordinary Shares is highly illiquid resulting
in share price volatility. In the opinion of the Board, the Tender Offer
represents a near term opportunity for Eligible Shareholders to realise their
entire investment in the Company for cash;

·         in the opinion of the Board, the level of free float in the
shares of the Company is not of a scale to attract sufficient interest from
institutional and other investors and therefore it is difficult to create a
more liquid market for its Ordinary Shares to effectively or economically
utilise its AIM quotation;

·         in light of the limited trading in the Ordinary Shares,
with an average daily volume over the past 12 months of approximately 33,439
Ordinary Shares representing 0.07 per cent. of the current issued share
capital, the costs associated with maintaining the AIM quotation are
considered by the Directors to be disproportionately high when compared to the
benefits, and the Board believes that these funds could be better utilised;
and

·         the management time and the legal and regulatory burden
associated with maintaining the Company's admission to trading on AIM is, in
the Directors' opinion, disproportionate to the benefits to the Company.

If the De-Listing Resolution is not approved by Shareholders the Company will
remain liable for the ongoing professional and associated costs associated
with maintaining its admission to AIM, which amounted to approximately
£220,000 during FY2023.

 

Effect of De-Listing

The principal effects of the De-Listing will be that:

·         there will not be a formal market mechanism enabling the
Shareholders to trade Ordinary Shares;

·         while the Ordinary Shares will remain freely transferrable,
it is possible that the liquidity and marketability of the Ordinary Shares
will, in the future, be more constrained than at present and the value of such
shares may be adversely affected as a consequence;

·         Vector Holdings currently holds 75.15 per cent. of the
Company's voting rights and, following completion of the Tender Offer, will
hold between 75.15 per cent. and 100 per cent. As a result, the free float and
liquidity of the Ordinary Shares is limited and will be further reduced
following the completion of the Tender Offer;

·         in the absence of a formal market and quote, it may be more
difficult for Shareholders to determine the market value of their investment
in the Company at any given time;

·         the regulatory and financial reporting regime applicable to
companies whose shares are admitted to trading on AIM will no longer apply and
the Company will no longer be subject to UK MAR or the Disclosure Guidance and
Transparency Rules and so will therefore no longer be required to disclose
significant shareholdings in the Company;

·         shareholders will no longer be afforded the protections
given by the AIM Rules and the requirement that the Company seek Shareholder
approval for certain corporate actions, where applicable, including
substantial transactions, reverse takeovers, related party transactions and
fundamental changes in the Company's business;

·         the levels of transparency and corporate governance within
the Company may not be as stringent as for a company quoted on AIM;

·         Zeus will cease to be the Company's nominated adviser and
the Company will cease to have a broker;

·         stamp duty will be payable on transfers of Ordinary Shares
as the Ordinary Shares will no longer be traded on AIM; and

·         the De-Listing may have personal taxation consequences for
Shareholders. Shareholders who are in any doubt about their tax position
should consult their own professional independent tax adviser.

Shareholders should also note that the Takeover Code may continue to apply to
the Company following the De-Listing for a period of ten years, provided the
Company continues to have its place of central management and control in the
UK, Channel Islands or Isle of Man. However, in the event that, subsequent to
the De-Listing further Board changes result in the Company's place of central
management and control being outside the UK, Channel Islands or Isle of Man,
then the Company may not be subject to the Takeover Code. Shareholders should
also note that the Panel has recently issued a public consultation regarding
possible changes to the Takeover Code which, if adopted, would amongst other
things shorten the period during which the Takeover Code potentially continues
to apply to a company following its delisting. If these rule changes are
adopted in the form and broadly in the timescale proposed, the Company would
cease to be subject to the Takeover Code three years after the date of
implementation of such changes.

The Company will also continue to be bound by the Companies Act (which
requires shareholder approval for certain matters) following the De-Listing.

The above considerations are not exhaustive, and Shareholders should seek
their own independent advice when assessing the likely impact of the
De-Listing on them.

Process for De-Listing

Under the AIM Rules, the De-Listing can only be effected by the Company after
securing a special resolution of Shareholders in a general meeting and the
expiry of a period of 20 clear Business Days from the date on which notice of
the De-Listing is given to the London Stock Exchange. In addition, a period of
at least five clear Business Days following Shareholders' approval of the
De-Listing is required before the De-Listing may become effective. The Notice
of General Meeting contains a special resolution which seeks the approval of
Shareholders for the De-Listing. Assuming that the De-Listing Resolution is
approved, the earliest date that the De-Listing could take place is 7.00 a.m.
on 16 September 2024.

Ordinary Share dealing following De-Listing

If a Shareholder retains their Ordinary Shares following the De-Listing,
although the Ordinary Shares will remain freely tradeable, they will no longer
be tradeable on AIM. The Board is aware that following the De-Listing (should
the De-Listing Resolution be approved by Shareholders at the General Meeting)
liquidity in, and marketability of, the Ordinary Shares will be very limited
and holdings of Ordinary Shares will be difficult to value and to trade.
Therefore, whilst there will be no formal dealing facility, Shareholders
seeking to buy or sell Ordinary Shares can email the Company Secretary at
mail@vectorcapital.co.uk (mailto:mail@vectorcapital.co.uk) , who will seek to
facilitate contact between potential buyers and sellers of Ordinary Shares.
Shareholders should also be aware that the arrangements set out above could be
withdrawn at a later date.

Board intentions following execution of the Tender Offer and De-Listing

The total cost to the Company of the Tender Offer will depend on the level of
tenders by Shareholders. However, if the Tender Offer were to be fully taken
up then the total cost of the Tender Offer would be approximately £3.71
million. This will be funded from the cash balances of the Company.

Following the Tender Offer, remaining cash resources will be deployed for
working capital purposes. Following completion of the Tender Offer, the Board
has no current intention to return further capital to Shareholders in the
foreseeable future.

If the Tender Offer proceeds, Vector Holding's percentage holding in the
Company will increase to between 75.15 per cent. of the issued share capital
(assuming that no Shareholder tenders any Ordinary Shares and 100 per cent. of
the issued share capital (assuming that the Tender Offer is taken up in full).

The composition of the Board, and the extent to which (if at all) the Company
will continue to comply with the QCA Corporate Governance Code will be
considered following completion of the De-Listing.

 

Irrevocable Undertaking of major Shareholder

 

Vector Holdings, a Shareholder representing 75.15 per cent. of the current
issued share capital has given an Irrevocable Undertaking in connection with
the Tender Offer as described below.

The Irrevocable Undertaking given by Vector Holdings contains undertakings to:

·        exercise the voting rights attaching to such Ordinary Shares
in favour of the Resolutions. Accordingly, the Resolutions are expected to be
passed at the General Meeting. Shareholders should note that the Relationship
Agreement includes, amongst other undertakings, an undertaking from Vector
Holdings not to exercise its voting rights in respect of any resolution to
cancel Vector Capital's admission to trading on AIM except where one of
certain exceptions including the giving of the written consent of the majority
of the independent directors applies. The independent directors have
unanimously given the required consent; and

·        not to tender any of the 34,000,000 Ordinary Shares held by
it pursuant to the Tender Offer. Accordingly following completion of the
Tender Offer Vector Holdings will hold between 75.15 per cent. and 100 per
cent. of the Ordinary Shares.

Further details of the Irrevocable Undertaking are set out in the Circular.

General Meeting and Resolutions

The Notice of General Meeting convening the General Meeting is set out at the
end of the Circular. The General Meeting has been convened for 2.00 p.m. on 20
August 2024, at 6th Floor, First Central 200, 2 Lakeside Drive, London, NW10
7FQ.

The Tender Offer Resolution will be proposed as an ordinary resolution
requiring the approval of more than 50 per cent. of the votes cast at the
General Meeting. The De-Listing Resolution will be proposed as a special
resolution requiring the approval of 75 per cent. or more of the votes cast at
the General Meeting. The votes will be carried out by way of a poll. All
Shareholders are eligible to vote on the Resolutions.

The attention of Shareholders is drawn to the undertakings to vote in favour
of the Resolutions contained in the Irrevocable Undertaking given by Vector
Holdings as set out in the Circular.

The De-Listing will enable the Company to further reduce its cost base and
reduce the management time and the regulatory burden associated with
maintaining the Company's admission to trading on AIM. The Board believes the
Company is not of a scale to attract sufficient interest from institutional
and other investors and therefore it is difficult to create a more liquid
market for its shares to effectively or economically utilise its quotation.
Furthermore, the Company has not utilised its admission to AIM to raise fresh
capital or issue paper consideration to fund acquisitions since June 2021.

As such, the Independent Directors believe that, in the context of the
Proposals, the De-Listing is in the best interests of the Company and
accordingly that Shareholders should vote in favour of the De-Listing
Resolution.

Recommendation

The Independent Directors unanimously recommend that: (a) Shareholders vote in
favour of the Resolutions as the Independent Directors intend to do in respect
of their own Ordinary Shares (where they are held); and (b) all Eligible
Shareholders consider tendering their Ordinary Shares in the Tender Offer.
However, as described in more detail above, the Independent Directors are not
making any recommendation to Eligible Shareholders as to whether or not they
should tender their Ordinary Shares in the Tender Offer. Shareholders should
consider whether the Ordinary Shares remain a suitable investment in light of
their own personal circumstances and investment objectives, noting the
non-exhaustive list of risks that Vector Capital is subject to, and the
advantages and disadvantages of tendering Ordinary Shares under the Tender
Offer outlined above.

 

Ross Andrews (being the only Independent Director who is a Shareholder),
intends to tender his Entitlement amounting to 263,158 Ordinary Shares,
representing 0.58 per cent. of the Company's issued share capital as at the
Latest Practicable Date.

 

Taxation

Shareholders should be aware that there will be tax considerations that they
should take into account when deciding whether or not to participate in the
Tender Offer. Summary details of certain UK taxation considerations are set
out in the Circular.

Shareholders are strongly advised to obtain independent tax advice regarding
their own tax position.

Shareholders who are in any doubt as to their tax position or who are subject
to tax in a jurisdiction other than the United Kingdom should consult an
appropriate professional adviser.

The De-Listing may also have certain tax consequences for Shareholders and
those Shareholders who are in any doubt about their tax position should
consult their professional advisers as to their tax position before taking any
action relating to the De-Listing.

Overseas Shareholders

The attention of Shareholders who are resident in, or a citizen of, a
jurisdiction outside of the United Kingdom ("Overseas Shareholders") is drawn
to the Circular.

Action to be taken

Set out at the end of the Circular you will find a notice convening a General
Meeting to be held at 6th Floor, First Central 200, 2 Lakeside Drive, London,
NW10 7FQ at 2.00 p.m. on 20 August 2024 to consider and, if thought fit,
approve the Resolutions.

Shareholders will find enclosed with the Circular, a Form of Proxy for use in
connection with the General Meeting. Whether or not Shareholders intend to be
present at the General Meeting, they are requested to complete and return the
Form of Proxy in accordance with the instructions printed thereon as soon as
possible and, in any event, so as to be received by the Company's registrars,
Neville Registrars Limited, not later than 48 hours (excluding non-working
days) before the General Meeting is scheduled to begin, meaning it should be
returned by 2.00 p.m. on 16 August 2024. The completion and return of the Form
of Proxy will not preclude the Shareholders from attending the General Meeting
and voting in person should they so wish.

If you hold Shares in CREST you may appoint a proxy by completing and
transmitting a CREST Proxy Instruction to Neville Registrars Limited (CREST
Participant ID: 7RA11) so it is received by CREST no later than 2.00 p.m. on
16 August 2024 or, if the meeting is adjourned, no later than 48 hours
(excluding non-working days) before the time for holding the adjourned
meeting. The completion and return of a CREST Proxy Instruction will not
preclude Shareholders who hold their Shares in CREST from attending and voting
in person at the General Meeting, or any adjournment thereof, should you wish
to do so.

If you have any questions relating to the Circular or the completion and
return of the Form of Proxy or CREST Proxy Instruction, please call Neville
Registrars Limited on telephone number 0121 585 1131 or, if telephoning from
outside the United Kingdom, on +44 (0) 121 585 1131. Please note that no
advice on the contents of the Circular nor on the matters to be voted upon at
the General Meeting nor any financial, legal or tax advice can be given by
Neville Registrars Limited and accordingly for such advice you should consult
your stockbroker, solicitor, accountant, bank manager or other independent
professional adviser

If you wish to participate in the Tender Offer

If you hold your Ordinary Shares in certificated form and you wish to
participate in the Tender Offer, you should complete the Tender Form in
accordance with the instructions printed on it and in the Circular and return
it by post in the accompanying reply-paid envelope (for use in the UK only) to
Neville Registrars Limited, together with your share certificate(s) in respect
of the Ordinary Shares tendered.

If you hold your Ordinary Shares in uncertificated form and you wish to tender
some or all of your Ordinary Shares, you should send a TTE Instruction and
follow the procedures set out in the Circular in respect of tendering
uncertificated Ordinary Shares.

If you have any questions about the procedure for tendering Ordinary Shares or
making a TTE Instruction, you require extra copies of the Circular or the
Tender Form or you want help filling in the Tender Form, please telephone the
Shareholder Helpline on +44 (0) 121 585 1131. Lines are open from 9.00 a.m. to
5.00 p.m. (London time) Monday to Friday (except public holidays in England
and Wales). Please note that calls to these numbers may be monitored or
recorded for security and training purposes.

Please note that for legal reasons the Shareholder Helpline will only be able
to provide information contained in the Circular and the accompanying Tender
Form and will be unable to give advice on the merits of the Tender Offer or to
provide financial, investment or taxation advice.

You are advised to read all of the information contained in the Circular
before deciding on the course of action you will take in respect of the
General Meeting and the Tender Offer.

The results of the General Meeting will be announced through a Regulatory
Information Service and the Company's website as soon as possible once known.
It is expected that this will be on 6 September 2024.

Expected Timetable for Principal Events

                                                                                                                                                                                                                         2​0​24

Announcement of Tender Offer and
De-Listing
2 August

Publication and posting of Circular, Form of Proxy and Tender
Form
2 August

Tender Offer
opens
2 August

Latest time and date for receipt of Forms of Proxy for the General
Meeting                            2.00 p.m. on 16
August

General
Meeting
2.00 p.m. on 20 August

Latest time and date for receipt of Tender Forms and settlement
of
1.00 p.m. on 3 September

TTE Instructions (i.e. Closing Date of the Tender Offer)(3)

Record Date for the Tender
Offer
6.00 p.m. on 3 September

Announcement of the result of the Tender
Offer
6 September

Expected purchase of Ordinary Shares under the Tender Offer
and
10 September

completion of the repurchase from Zeus

CREST accounts credited with Tender Offer
proceeds
10 September

Despatch of cheques for Tender Offer proceeds in respect of
successfully
10 September

tendered certificated Ordinary Shares and despatch of balance share

certificates in respect of unsold certificated Ordinary Shares

Last day of dealings in the Ordinary Shares on
AIM
13 September

Cancellation of admission of the Ordinary Shares to trading on
AIM
16 September

Notes

1.        All references to times throughout this document are to
London time.

2.        If any of the above times and/or dates change, the revised
times and/or dates will be notified by the Company by an announcement through
a Regulatory Information Service.

3.        This date may be extended in accordance with the terms and
conditions of the Tender Offer set out in Part V of the Circular.

4.        All events in the above timetable following the General
Meeting that relate to: (i) the Tender Offer are conditional, inter alia, upon
the approval of the Tender Offer Resolution; and (ii) the De-Listing are
conditional upon the approval of the De-Listing Resolution. The Tender Offer
Resolution requires the approval of more than 50 per cent. of the votes cast
by Shareholders in person or by proxy at the General Meeting and the
De-Listing Resolution requires the approval of not less than 75 per cent. of
the votes cast by Shareholders in person or by proxy at the General Meeting.
It should be noted that an Irrevocable Undertaking to vote in favour of the
Resolutions has been received from a Shareholder holding 75.15 per cent. of
the issued share capital of the Company meaning that both the Resolutions are
expected to be passed. See paragraph 6 of Part IV and paragraph 4 of Part X of
the Circular for further details.

5.        Subject to and following the Tender Offer becoming
unconditional, settlement of the consideration to which any Eligible
Shareholder is entitled pursuant to valid tenders accepted by Zeus will be
made within 14 days of the Closing Date.

 

For further information please contact:

 

Vector Capital plc

Robin Stevens

Agam Jain

c/o IFC Advisory Limited

 

Zeus Capital Limited

Hugh Morgan, Chris Hardie and Darshan Patel

+44 (0) 20 3829 5000

 

IFC Advisory Limited

Graham Herring, Florence Chandler, Zach Cohen

+44 (0) 20 3934 6630

 

 

About Vector Capital:

Vector Capital provides secured, business-to-business loans to SMEs based
principally in England and Wales. Loans are typically secured by a first
legal charge against real estate. The Group's customers typically borrow for
general working capital purposes, bridging ahead of refinancing, land
development and property acquisition. The loans provided by the Group are
typically for renewable 12-month terms with fixed interest rates.

The information contained within this announcement is deemed to constitute
inside information as stipulated under Article 7 of the Market Abuse
Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018.

 

SCHEDULE - DEFINITIONS

 

The following definitions apply in the Circular unless the context otherwise
requires:

AIM
the AIM market operated by the London Stock Exchange;

AIM
Rules
the AIM Rules for Companies published by the London Stock Exchange from time
to time;

Business
Day
a day not being a Saturday, Sunday or public holiday on which banks are
generally open for business in the City of London;

certificated or in certificated
the description of a share or other security which is not in

form
uncertificated form (that is not in CREST);

Circular
this document;

Closing
Date
the latest time and date for receipt of Tender Forms and settlement of TTE
Instructions being 1.00 p.m. on 3 September 2024 or such other date as may be
notified through a Regulatory Information Service in accordance with the terms
of the Tender Offer;

Company or Vector Capital
Vector Capital Plc;

CREST
the relevant system (as defined in the CREST Regulations) in respect of which
Euroclear UK & International Limited is the Operator (as defined in the
CREST Regulations);

CREST
Manual
the rules governing the operation of CREST as published by Euroclear and as
amended from time to time;

CREST
Regulations
the Uncertificated Securities Regulations 2001, as amended;

De-Listing
the cancellation of admission of the Ordinary Shares to trading on AIM;

De-Listing
Resolution
Resolution 2, which is proposed as a special resolution, to approve the
De-Listing, as set out in the Notice of General Meeting;

Directors or
Board
the directors of the Company whose names are set out in Part I of the
Circular, or any duly authorised committee thereof, and "Director" means any
one of them;

Eligible
Shareholder
Shareholders who are entitled to participate in the Tender Offer, being those
who are on the Register on the Record Date and excluding those with registered
addresses in a Restricted Jurisdiction and Vector Holdings Limited (which has
undertaken not to participate in the Tender Offer);

Entitlement
the entitlement of each Shareholder to tender for purchase by Zeus up to 100
per cent. of the Ordinary Shares registered in such Shareholder's name on the
Record Date;

Escrow
Agent
the Receiving Agent, Neville Registrars Limited, in its capacity as escrow
agent;

Euroclear
Euroclear UK & International Limited, a company incorporated in England
and Wales with registered number 02878738, whose registered office is at 33
Cannon Street, London EC4M 5SB, the operator of CREST;

Form of
Proxy
the form of proxy accompanying the Circular for use in connection with the
General Meeting;

FY2023
the twelve-month period ending on 31 December 2023;

General
Meeting
the general meeting (or any adjournment thereof) of the Shareholders of the
Company to be convened for 2.00 p.m. on 20 August 2024 pursuant to the Notice
of General Meeting;

Group
the Company and its subsidiaries (construed in accordance with section 1162 of
the Companies Act 2006) at the date of the Circular;

Independent
Directors                                the
Directors other than Agam Jain (who is not regarded as independent by virtue
of his indirect shareholding in Vector Capital);

Irrevocable
Undertaking                             the
irrevocable undertaking from: Vector Holdings: (i) not to accept (and to
procure that the relevant registered holder(s) do not accept) the Tender Offer
in respect of its 34,000,000 Ordinary Shares; and (ii) to vote (and to procure
that the relevant registered holder(s) vote) in favour of the Resolutions in
respect of its 34,000,000 Ordinary Shares;

Latest Practicable
Date                                31 July
2024, being 2 Business Days prior to the date of the Circular;

London Stock
Exchange
London Stock Exchange plc;

Notice of General Meeting                         the
notice convening the General Meeting as set out in Part XI of the Circular;

Ordinary
Shares
ordinary shares of 0.5 pence each in the capital of the Company;

Overseas
Shareholders                                a
Shareholder who is a resident in, or a citizen of, a jurisdiction outside the
United Kingdom;

Panel
the Panel on Takeovers and Mergers;

Participant
ID
the identification code or membership number used in CREST to identify a
particular CREST Member or other CREST Participant;

Proposals
the proposed Tender Offer, the buyback of Ordinary Shares pursuant to the
Tender Offer and the Repurchase and the De-Listing, all as described in the
Circular;

Record
Date
6.00 p.m. on 3 September 2024;

Registrar or Receiving Agent
Neville Registrars Limited;

Register
the Company's register of members;

Regulatory Information Service                   has the
meaning given to it in the AIM Rules;

Relationship Agreement
the relationship agreement relating to the Company, made between Vector
Holdings, the Company and Allenby Capital Limited dated 18 December 2020, as
assigned on 26 July 2024 by Allenby Capital Limited to Zeus in accordance with
its terms.

 

Repurchase or Repurchased                       the
purchase by the Company of Ordinary Shares from Zeus pursuant to the
Repurchase Agreement;

Repurchase
Agreement
the agreement dated on or around the date of the Circular entered into between
the Company and Zeus for the repurchase by the Company as a market purchase
(within the meaning of section 693(4) of the Companies Act) of the Ordinary
Shares purchase by Zeus pursuant to the Tender Offer;

Resolutions
the resolutions to be proposed at the General Meeting which are set out in
full in the Notice of General Meeting (and each of which shall be a
"Resolution");

Restricted
Jurisdictions
each of the United States of America, Australia, Canada, Japan, New Zealand
and the Republic of South Africa and any other jurisdiction where the mailing
of the Circular or the accompanying documents into or inside such jurisdiction
would constitute a violation of the laws of such jurisdiction;

Shareholders
holders of Ordinary Shares and "Shareholder" shall be construed accordingly;

Sterling
pounds sterling, being the lawful currency of the UK;

Takeover
Code
the City Code on Takeovers and Mergers;

Tender
Conditions
has the meaning given in Part V of the Circular;

Tender
Form
the form enclosed with the Circular for use by Eligible Shareholders who hold
Ordinary Shares in certificated form in connection with the Tender Offer;

Tender
Offer
the invitation by Zeus to Eligible Shareholders to tender Ordinary Shares to
Zeus on the terms and conditions set out in the Circular and also, in the case
of certificated Ordinary Shares only, the Tender Form (Vector Holdings has
undertaken not to tender its Ordinary Shares under the Tender Offer and any
tender from such Shareholder will be treated as invalid);

Tender Offer
Resolution
Resolution 1, which is proposed as an ordinary resolution, to approve the
market purchases of Ordinary Shares by the Company in connection with the
Tender Offer and the Repurchase, as set out in the Notice of General Meeting;

Tender
Price
33 pence being the price per Ordinary Share at which Ordinary Shares will be
purchased pursuant to the Tender Offer;

TFE
Instruction
a transfer from escrow instruction (as defined by the CREST manual);

TTE
Instruction
a transfer to escrow instruction (as defined by the CREST manual);

UK
MAR
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of English law
by virtue of the European Union (Withdrawal) Act 2018;

Uncertificated or in uncertificated form          recorded on a
register of securities maintained by Euroclear UK & International Limited
in accordance with the CREST Regulations as being in uncertificated form in
CREST and title to which, by virtue of the CREST Regulations, may be
transferred by means of CREST;

Vector
Holdings
Vector Holdings Limited, a company incorporated in England and Wales with
company number 01375226 and having its registered office at 2 Claridge Court,
Lower Kings Road, Berkhamsted, HP4 2AF; and

Zeus
Zeus Capital Limited, a company incorporated in England and Wales with company
number 04417845 and having its registered office at 82 King Street,
Manchester, M2 4WQ, who at the date of this document is appointed as nominated
adviser and broker to the Company.

References to "pounds", "sterling", "pence" and "£" are to the lawful
currency of the United Kingdom.

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