REG - Velocys PLC - Court sanction of the Scheme of Arrangement

VelocysAnnouncement

12/01/2024 13:30

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RNS Number : 5812Z  Velocys PLC  12 January 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

 

( )

12 January 2024

 

RECOMMENDED CASH ACQUISITION

 

of

 

Velocys plc

 

by

 

Madison Bidco Limited

 

(a newly formed company indirectly owned by (i) a fund advised by Lightrock,
(ii) a fund advised by Carbon Direct Capital, (iii) GenZero and (iv) Kibo
Investments, as members of the Consortium)

 

to be implemented by means of a scheme of arrangement

under Part 26 of the Companies Act 2006

 

Court sanction of the Scheme of Arrangement

 

On 5 December 2023, the boards of directors of Madison Bidco Limited ("Bidco")
and Velocys plc ("Velocys" or the "Company") announced that they had reached
agreement on the terms and conditions of a recommended cash acquisition by
Bidco of the entire issued, and to be issued, ordinary share capital of
Velocys (the "Acquisition"). The Acquisition is being implemented by way of a
court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006
(the "Scheme").

 

Unless otherwise defined, all capitalised terms in this announcement shall
have the meanings given to them in the scheme document published by Velocys on
13 December 2023 in connection with the Scheme (the "Scheme Document").

 

Scheme sanctioned by Court

 

Further to the announcement made by Velocys on 8 January 2024 in relation to
the passing of the resolutions required to approve and implement the Scheme at
the Court Meeting and the General Meeting, Velocys is pleased to announce that
at the Sanction Hearing held earlier today, the Court issued the Court Order
sanctioning the Scheme.

 

The Scheme is conditional only upon the delivery of a copy of the Court Order
to the Registrar of Companies, which is expected to occur on [17 January]
2024, such date being the Effective Date.

 

Next steps and timetable

 

There has been no change to the expected timetable of principal events for the
implementation of the Scheme set out on page 5 of the Scheme Document.

 

Velocys confirms that the last day of dealings in, and for registration of
transfers of, and disablement in CREST of, Velocys Shares is expected to
be 16 January 2024 and the Scheme Record Time is expected to be at 6.00
p.m. on 16 January 2024. Scheme Shareholders whose names appear on Velocys'
register of members at the Scheme Record Time will, upon the Scheme becoming
effective in accordance with its terms, be entitled to receive consideration
as provided for in the Scheme Document. It is intended that, as a result of
the Scheme becoming Effective, share certificates in respect of Velocys Shares
(other than any Scheme Restricted Shares, if applicable) will cease to be
valid evidence of title and entitlements to Velocys Shares held in
uncertificated form within the CREST system will be cancelled.

Dealings in Velocys Shares on AIM will be suspended at or around 7.30
a.m. on 17 January 2024. The suspension is made pursuant to Velocys'
application to the London Stock Exchange and is being effected as part of
the Scheme. It is expected that, subject to the Scheme becoming Effective
on 17 January 2024, the cancellation of the admission to trading of the
Velocys Shares on AIM will take effect at or around 7.00 a.m. on 18 January
2024.

 

Any updates to the expected timetable will be announced through a Regulatory
Information Service.

 

A further announcement will be made when the Scheme has become Effective.

 

 

Enquiries:

 

 Velocys plc                                                                +44 20 7379 5151

 Henrik Wareborn

 Philip Sanderson

 Panmure Gordon (UK) Limited (Rule 3 Adviser, Financial Adviser, Nomad and  +44 20 7886 2500
 Joint Broker to Velocys)

 Emma Earl (Corporate Finance)

 Will Goode (Corporate Finance)

 Mark Rogers (Corporate Finance)

 Hugh Rich (Corporate Broking)

 Shore Capital Stockbrokers Limited (Joint Broker)                          +44 20 7408 4090

 Henry Willcocks (Corporate Broking)

 Toby Gibbs (Corporate Advisory)

 James Thomas (Corporate Advisory)

 Radnor Capital (Investor Relations)                                        +44 20 3897 1830

 Joshua Cryer

 Iain Daly

 Buchanan (Financial PR)                                                    +44 20 7466 5000

 Helen Tarbet

 Simon Compton

 Cavendish (Financial Adviser to Bidco and the Consortium)                  +44 20 7220 0500

 Marc Milmo

 Henrik Persson

 Seamus Fricker

 

Cooley (UK) LLP is acting as legal adviser to Bidco.

 

Mayer Brown International LLP is acting as legal adviser to Velocys.

 

Important Notices

 

Panmure Gordon (UK) Limited ("Panmure Gordon"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
as financial adviser and Rule 3 adviser to Velocys and no one else in
connection with the matters described in this announcement and will not be
responsible to anyone other than Velocys for providing the protections offered
to clients of Panmure Gordon or for providing advice in connection with any
matter referred to in this announcement. Neither Panmure Gordon nor any of its
affiliates (nor their respective directors, officers, employees or agents)
owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Panmure Gordon in connection with this
announcement, any statement contained herein, the Acquisition or otherwise. No
representation or warranty, express or implied, is made by Panmure Gordon as
to the contents of this announcement.

 

Shore Capital and Corporate Limited ("Shore Capital"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
as adviser to Velocys and no one else in connection with the matters described
in this announcement and will not be responsible to anyone other than Velocys
for providing the protections offered to clients of Shore Capital or for
providing advice in connection with any matter referred to in this
announcement. Neither Shore Capital nor any of its affiliates (nor their
respective directors, officers, employees or agents) owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether in
contract, in tort, under statute or otherwise) to any person who is not a
client of Shore Capital in connection with this announcement, any statement
contained herein, the Acquisition or otherwise. No representation or warranty,
express or implied, is made by Shore Capital as to the contents of this
announcement.

 

Cavendish Capital Markets Limited ("Cavendish"), which is authorised and
regulated in the United Kingdom by the Financial Conduct Authority, is acting
as financial adviser to the Consortium and Bidco and no one else in connection
with the matters described in this announcement and will not be responsible to
anyone other than the Consortium and Bidco for providing the protections
offered to clients of Cavendish or for providing advice in connection with any
matter referred to in this announcement. Neither Cavendish nor any of its
affiliates (nor their respective directors, officers, employees or agents)
owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Cavendish in connection with this
announcement, any statement contained herein, the Acquisition or otherwise. No
representation or warranty, express or implied, is made by Cavendish as to the
contents of this announcement.

 

This announcement is for information purposes only and is not intended to, and
does not, constitute, or form part of, an offer, invitation or the
solicitation of an offer to purchase, otherwise acquire, subscribe for, sell
or otherwise dispose of, any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Acquisition or otherwise, nor
shall there be any sale, issuance or transfer of securities of Velocys in any
jurisdiction in contravention of applicable law. The Acquisition will be
implemented solely pursuant to the terms of the Scheme Document (or, if the
Acquisition is implemented by way of a Takeover Offer, the offer document),
which will contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Acquisition. Any vote in respect of
the Scheme or other response in relation to the Acquisition should be made
only on the basis of the information contained in the Scheme Document (or, if
the Acquisition is implemented by way of a Takeover Offer, the offer
document).

 

This announcement does not constitute a prospectus, prospectus equivalent
document or exempted document.

 

If you are in any doubt about the contents of this announcement or the action
you should take, you are recommended to seek your own independent financial
advice immediately from your stockbroker, bank manager, solicitor, accountant
or independent financial adviser duly authorised under the Financial Services
and Markets Act 2000 (as amended) if you are resident in the United Kingdom
or, if not, from another appropriately authorised independent financial
adviser.

 

Overseas Shareholders

 

The release, publication or distribution of this announcement in or into
jurisdictions other than the UK may be restricted by law and therefore any
persons who are subject to the law of any jurisdiction other than the UK
should inform themselves of, and observe, any applicable legal or regulatory
requirements. Any failure to comply with such requirements may constitute a
violation of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons involved in the
Acquisition disclaim any responsibility or liability for the violation of such
restrictions by any person. This announcement has been prepared in accordance
with and for the purpose of complying with English law, the Takeover Code and
the Market Abuse Regulation and information disclosed may not be the same as
that which would have been prepared in accordance with the laws of
jurisdictions outside England.

 

The availability of the Acquisition to Velocys Shareholders who are not
resident in and citizens of the UK may be affected by the laws of the relevant
jurisdictions in which they are located or of which they are citizens. Persons
who are not resident in the UK should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdictions. In
particular, the ability of persons who are not resident in the United Kingdom
to vote their Velocys Shares with respect to the Scheme at the Court Meeting,
or to appoint another person as proxy to vote at the Court Meeting on their
behalf, may be affected by the laws of the relevant jurisdictions in which
they are located. Any failure to comply with the applicable restrictions may
constitute a violation of the securities laws of any such jurisdiction. To the
fullest extent permitted by applicable law, the companies and persons involved
in the Acquisition disclaim any responsibility or liability for the violation
of such restrictions by any person. Further details in relation to Overseas
Shareholders will be contained in the Scheme Document (or, if the Acquisition
is implemented by way of a Takeover Offer, the offer document).

 

Unless otherwise determined by Bidco or required by the Takeover Code, and
permitted by applicable law and regulation, the Acquisition will not be made
available, directly or indirectly, in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction and no person may
vote in favour of the Scheme by any such use, means, instrumentality or from
within a Restricted Jurisdiction or any other jurisdiction if to do so would
constitute a violation of the laws of that jurisdiction. Copies of this
announcement and any formal documentation relating to the Acquisition 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 agents, custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send it in or into or from
any Restricted Jurisdiction. Doing so may render invalid any related purported
vote in respect of the Acquisition. If the Acquisition is implemented by way
of a Takeover Offer (unless otherwise permitted by applicable law and
regulation), the Takeover Offer may not be made directly or indirectly, in or
into, or by the use of mails or any means or instrumentality (including, but
not limited to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility of a
national, state or other securities exchange of any Restricted Jurisdiction
and the Takeover Offer may not be capable of acceptance by any such use,
means, instrumentality or facilities.

 

Further details in relation to Overseas Shareholders will be included in the
Scheme Document (or, if the Acquisition is implemented by way of a Takeover
Offer, the offer document).

 

Notice to US or United States Velocys Shareholders

 

The Acquisition relates to the shares of an English company and is being made
by means of a scheme of arrangement provided for under the laws of England and
Wales. A transaction effected by means of a scheme of arrangement is not
subject to the tender offer or proxy solicitation rules under the US
Securities Exchange Act of 1934 (the "U.S. Exchange Act"). Accordingly, this
announcement, the Scheme and certain other documents relating to the
Acquisition are subject to the disclosure requirements and practices
applicable in the UK to schemes of arrangement which differ from the
disclosure requirements of the US tender offer and proxy solicitation rules.
The financial information included in this announcement and the Scheme
documentation has been prepared in accordance with generally accepted
accounting principles of the United Kingdom and thus may not be comparable to
financial information of US companies or companies whose financial statements
are prepared in accordance with generally accepted accounting principles in
the United States.

 

If, in the future, Bidco exercises its right to implement the Acquisition by
way of a Takeover Offer, which is to be made into the United States, such
Takeover Offer will be made in compliance with the applicable US laws and
regulations.

 

It may be difficult for US holders of Velocys Shares to enforce their rights
and any claim arising out of the US federal laws, since Bidco and Velocys are
located in a non-US jurisdiction, and some or all of their officers and
directors may be residents of a non-US jurisdiction. US holders of Velocys
Shares may not be able to sue a non-US company or its officers or directors in
a non-US court for violations of the US securities laws. Further, it may be
difficult to compel a non-US company and its affiliates to subject themselves
to a US court's judgement.

 

In accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US
Exchange Act, the Consortium, certain affiliated companies or their nominees
and brokers (acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, Velocys Shares outside of the US, other than
pursuant to the Acquisition, until the date on which the Acquisition becomes
Effective, lapses or is otherwise withdrawn. Also, in accordance with Rule
14e-5(b) of the U.S. Exchange Act, Cavendish will continue to act as exempt
principal traders in Velocys shares on the London Stock Exchange. These
purchases may occur either in the open market at prevailing prices or in
private transactions at negotiated prices. Any information about such
purchases will be disclosed as required in the United Kingdom, will be
reported to a Regulatory Information Service and will be available on the
London Stock Exchange website, www.londonstockexchange.com
(http://www.londonstockexchange.com) .

 

US Velocys Shareholders also should be aware that the transaction contemplated
herein may have tax consequences in the US and, that such consequences, if
any, are not described herein. US Velocys Shareholders are urged to consult
with legal, tax and financial advisers in connection with making a decision
regarding this transaction.

 

Forward Looking Statements

 

This announcement (including information incorporated by reference in this
announcement), oral statements made regarding the Acquisition, and other
information published by Bidco and Velocys contain statements which are, or
may be deemed to be, "forward-looking statements". Forward-looking statements
are prospective in nature and are not based on historical facts, but rather on
current expectations and projections of the management of Bidco and Velocys
about future events, and are therefore subject to risks and uncertainties
which could cause actual results to differ materially from the future results
expressed or implied by the forward-looking statements.

 

The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on Bidco and
Velocys (including their future prospects, developments and strategies), the
expected timing and scope of the Acquisition and other statements other than
historical facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "prepares", "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget",
"projects", "synergy", "strategy", "scheduled", "goal", "estimates",
"forecasts", "cost-saving", "intends", "anticipates" or "does not anticipate",
or "believes", or variations of such words and phrases or statements that
certain actions, events or results "may", "could", "should", "would", "might"
or "will" be taken, occur or be achieved. Forward looking statements may
include statements relating to the following: (i) future capital expenditures,
expenses, revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of Bidco's,
Velocys' or any member of the Velocys Group's operations and potential
synergies resulting from the Acquisition; and (iii) the effects of global
economic conditions and governmental regulation on Bidco's, Velocys' or any
member of the Velocys Group's business.

 

Although Bidco and Velocys believe that the expectations reflected in such
forward-looking statements are reasonable, Bidco and Velocys can give no
assurance that such expectations will prove to be correct. 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. There are a
number of factors that could cause actual results and developments to differ
materially from those expressed or implied by such forward-looking statements.

 

These factors include, but are not limited to: the ability to complete the
Acquisition; the ability to obtain requisite shareholder approvals and the
satisfaction of other Conditions on the proposed terms and schedule; changes
in the global political, economic, business and competitive environments and
in market and regulatory forces; changes in future exchange and interest
rates; changes in tax rates; future business combinations or disposals;
changes in general economic and business conditions; changes in the behaviour
of other market participants; changes in the anticipated benefits from the
proposed transaction not being realised as a result of changes in general
economic and market conditions in the countries in which Bidco and Velocys
operate, weak, volatile or illiquid capital and/or credit markets, changes in
tax rates, interest rate and currency value fluctuations, the degree of
competition in the geographic and business areas in which Bidco and Velocys
operate and changes in laws or in supervisory expectations or requirements.
Other unknown or unpredictable factors could cause actual results to differ
materially from those expected, estimated or projected in the forward-looking
statements. If any one or more of these risks or uncertainties materialises or
if any one or more of the assumptions proves incorrect, actual results may
differ materially from those expected, estimated or projected. Such
forward-looking statements should therefore be construed in the light of such
factors. Neither Bidco nor Velocys, nor any of their respective associates or
directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually occur. You are
cautioned not to place any reliance on these forward-looking statements which
speak only as of the date of this announcement.

 

Specifically, statements of estimated cost savings and synergies related to
future actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. As a result, the cost savings and synergies
referred to may not be achieved, may be achieved later or sooner than
estimated, or those achieved could be materially different from those
estimated. Due to the scale of the Velocys Group, there may be additional
changes to the Velocys Group's operations. As a result, and given the fact
that the changes relate to the future, the resulting cost synergies may be
materially greater or less than those estimated.

 

Other than in accordance with their legal or regulatory obligations, neither
Bidco nor Velocys is under any obligation, and Bidco and Velocys 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.

 

Dealing and Opening Position Disclosure Requirements

 

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% 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) of the Takeover Code
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 Takeover Code, any person who is, or becomes,
interested in 1% 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.

 

Publication on a website

 

In accordance with Rule 26.1 of the Takeover Code, a copy of this announcement
and the documents required to be published under Rule 26 of the Takeover Code
will be made available, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, on Bidco's website at
www.madisonmomentum.com (http://www.madisonmomentum.com) and Velocys' website
at http://offer.velocys.com by no later than 12 noon (London time) on the
Business Day following this announcement. For the avoidance of doubt, neither
the content of this website nor of any website accessible from hyperlinks is
incorporated by reference or forms part of this announcement.

 

Requesting hard copy documents

 

In accordance with Rule 30.3 of the Takeover Code, Velocys Shareholders,
persons with information rights and participants in Velocys Share Plans may
request a hard copy of this announcement by contacting Link Group on 0371 664
0321. Calls are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the applicable
international rate. The helpline is open between 9 am - 5.30 pm, Monday to
Friday excluding public holidays in England and Wales. Please note that Link
Group cannot provide any financial, legal or tax advice and calls may be
recorded and monitored for security and training purposes. For persons who
receive a copy of this announcement in electronic form or via a website
notification, a hard copy of this announcement will not be sent unless so
requested. Such persons may also request that all future documents,
announcements and information (and any information incorporated into them by
reference to another source) in relation to the Acquisition be sent to them in
hard copy form.

 

Electronic communications

 

Please be aware that addresses, electronic addresses and certain other
information provided by Velocys Shareholders, persons with information rights
and other relevant persons for the receipt of communications from Velocys may
be provided to Bidco during the offer period as required under Section 4 of
Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover
Code.

 

 

 

 

 

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