RNS Number:4320H
Lowe(Robert H.) PLC
13 February 2003
Embargoed until 7.30 a.m.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, JAPAN OR AUSTRALIA
13 February 2003
Robert H Lowe Public Limited Company
Proposed acquisition of Smart Approach Limited
Proposed Placing of 79,812,000 new Ordinary Shares at 2.5 pence per share
Proposed Open Offer of 18,720,876 new Ordinary Shares at 2.5 pence per share
Change of name to Smart Approach Group plc
Admission to trading on AIM
INTRODUCTION
On 9 October 2002, the Company announced that it had entered into exclusive
negotiations regarding a possible acquisition. The Board is pleased to announce
today that it has conditionally agreed to acquire the entire issued share
capital of Smart Approach for a maximum aggregate consideration of up to #13.15
million. The principal activity of the Smart Approach Group is the design,
development, sale and support of computer based training software and associated
courseware and services to the aviation security market and other security
markets.
The aggregate consideration for Smart Approach will comprise initial
consideration of #3.55 million to be satisfied by the issue to the Vendors of
142,000,000 new Ordinary Shares at a price of 2.5 pence per share. Deferred
consideration of #1.6 million will become payable upon aggregate net revenues
(arising out of contracts entered into after 10 March 2003) of at least US$5
million being received by the Enlarged Group prior to 31 March 2005, and
Earn-Out Consideration of up to a maximum of #9.6 million (or a maximum of #8
million if the Deferred Consideration of #1.6 million has been paid) will become
payable on the achievement by the Enlarged Group of certain profit targets
during an Earn-Out Period which will run from 1 April 2003 to 31 March 2005. Any
Deferred Consideration or Earn-Out Consideration which may become payable is
expected to be satisfied by the allotment of further new Ordinary Shares.
The Initial Consideration Shares, when issued, will represent approximately
38.22 per cent. of the Company's ordinary share capital as enlarged by the
allotment of the Initial Consideration Shares, the Placing Shares and the Open
Offer Shares. If the maximum possible numbers of new Ordinary Shares are issued
to the Vendors pursuant to the Acquisition Agreement, the Ordinary Shares held
by the Vendors will represent approximately 70.42 per cent. of the Company's
ordinary share capital as enlarged by the allotment of the Consideration Shares,
the Placing Shares and the Open Offer Shares.
In order to provide additional funding for the ongoing working capital
requirements of the Enlarged Group and to repay #150,000 of existing debt in
Smart Approach, the Company also proposes to raise approximately #2.46 million
gross (#1.86 million net of expenses) by way of a placing of 79,812,000 new
Ordinary Shares with institutional and other investors and an open offer of
18,720,876 new Ordinary Shares to Qualifying Shareholders, in each case at the
Issue Price. All of the Placing Shares have been placed firm. Of the
18,720,876 Open Offer Shares to be issued pursuant to the Open Offer, 1,123,428
Open Offer Shares, which are the subject of irrevocable undertakings from
certain Qualifying Shareholders not to take up entitlements, have been placed
firm. A further 5,124,695 of the Open Offer Shares are the subject of
irrevocable undertakings from certain Qualifying Shareholders to take up
entitlements. The remaining 12,472,753 Open Offer Shares have been
conditionally placed subject to clawback to satisfy valid applications under the
Open Offer. The Open Offer has been underwritten by Strand Associates and is
conditional, inter alia, on Admission.
Dealings in the Existing Ordinary Shares were suspended, at the Board's request
on 8 October 2002 at a mid-market price of 2 pence per share. This suspension is
expected to be lifted today, on publication of a Prospectus setting out further
details of the Proposals.
In view of the fact that completion of the Acquisition would result in a change
of Board control, and in view of the size of the shareholdings of the Vendors in
the Company following implementation of the Proposals, the Acquisition will
constitute a reverse takeover of Robert H Lowe under the AIM Rules and therefore
requires the prior approval of Shareholders at an Extraordinary General Meeting.
The Acquisition is also conditional upon the Panel agreeing to waive any
requirement on the Concert Party to make a mandatory offer to all Shareholders
under Rule 9 of the Code in the event that the Proposals are implemented.
Shareholders should note that the Proposals are interconditional. If the
Proposals are approved at the EGM, application will be made to the London Stock
Exchange for the admission of the New Ordinary Shares to trading on AIM.
Admission is expected to become effective and dealings are expected to commence,
in the case of the Initial Consideration Shares on 11 March 2003 and in the case
of the Placing Shares and the Open Offer Shares on 12 March 2003.
BACKGROUND TO AND REASONS FOR THE ACQUISITION
As a result of the disposal of all of the Company's businesses, as detailed in
the annual report and accounts of the Company for the year ended 31 October
2001, Robert H Lowe has become a cash shell.
As at 31 October 2002, Robert H Lowe had cash balances of approximately #2.69
million and no remaining trading activities, although since that date (and
following the signing of heads of agreement with the major shareholders of Smart
Approach) loans have been made to Smart Approach to provide interim working
capital.
Since the disposal of its remaining businesses, the Board has focused on
conserving the cash reserves of the Company while it has been examining a number
of proposals with a view to identifying a business appropriate to be reversed
into the Company. Having considered a number of such opportunities and after due
and careful investigation and consideration, the Board believes that the
proposed Acquisition represents the best currently available opportunity to
deliver long term enhancement of Shareholder value.
Chris Goulden and the senior management of the Smart Approach Group bring with
them considerable knowledge of the aviation security sector and the Directors
and Proposed Directors believe that the Smart Approach Group holds a strong
position in its market that will enable it to exploit the opportunities provided
by the increased focus on security in the US.
INFORMATION ON SMART APPROACH
Principal Activity
The principal activity of the Smart Approach Group is the design, development,
sale and support of computer based training software and associated courseware
and services to the aviation security market and other security markets. Sales
revenue is principally derived from the sale of licences to use the training
software and associated courseware. Additional sales revenue is earned by
providing customers with associated consultancy, training and support services.
History
Smart Approach is a privately owned, UK based software company founded in 1997.
Smart Approach is a recognised company in the aviation security sector, as
evidenced by the US Federal Aviation Administration's approval of the current
Smart Approach computer based training programme. The Directors and Proposed
Directors believe that Smart Approach's computer based training programme is one
of only three such programmes to hold this approval worldwide. The Directors and
the Proposed Directors are of the opinion that this approval has increased
significance since the events of 11 September 2001.
In order to exploit its opportunities Smart Approach formed a US subsidiary,
Smart Approach Inc. in July 2001. The Smart Approach Group presently employs 28
staff and has an office in Grimsby and the US.
The Market
Smart Approach's principal market is currently the provision of computer based
training software and associated courseware for use in the training, testing and
certification (to customer standards) of airport security personnel engaged in
the operation of checkpoint X-ray screening of baggage.
The Directors and Proposed Directors believe that the introduction of computer
based training and particularly simulation of security X-ray inspection
equipment has been given a substantial impetus by the United States Aviation
Security Act 2001 which has increased the regulation of airport security in the
US.
In addition to use in airport security, checkpoint X-ray screening is also
widely used worldwide in prisons, by police and armed forces and by security
forces in government and other buildings where security is a sensitive issue.
The Directors and Proposed Directors believe that the security procedures and
policies adopted in the aviation sector are often seen as a "best practice"
model and therefore the reputation of Smart Approach in the aviation sector is
likely to give it an advantage when it seeks to market its products in
non-aviation security markets.
The Customers
Smart Approach has achieved success in North America. In the United States,
Smart Approach Inc. was a key member of the team lead by Lockheed Martin Mission
Systems Inc to provide software and associated courseware for the initial
training of over 44,000 new security personnel in threat identification and
X-ray screen training. Smart Approach has also recently delivered software and
associated courseware to the Canadian Air Transport Security Authority which has
responsibility for 89 designated airports in Canada. The Group has also supplied
software and associated courseware for use in training personnel employed at
Chep Lap Kok Airport in Hong Kong and Heathrow Airport. Smart Approach's
products have also been sold for use by the HM Prison Service and by the United
Nations in their building in the Hague.
Strategy
Smart Approach has spent the past few years developing its products and
credentials in the aviation security market. Following on from its initial
commercial success in the North American market its key strategies for future
growth are as follows:
* to consolidate its position in the US aviation security market;
* to broaden the range of training courseware offered by Smart Approach;
* to enter relevant non-aviation market sectors;
* to deliver courseware on third party learning management systems; and
* to increase recurring revenues.
BOARD OF DIRECTORS AND EMPLOYEES
On completion of the Proposals, Christopher Roots will step down from the Robert
H Lowe board without compensation for loss of office and the Proposed Directors
will be appointed. Following completion of the Proposals, the directors of the
Company will be as follows:
Name Position
Rodney Potts Non-Executive Chairman
Chris Goulden Deputy Chairman and Business Development Director
Mike Ormesher Managing Director
Glenn Bartholomew Sales & Marketing Director
Pete Brosnan Technical Director
David Hurst-Brown Non-Executive
David Sebire Non-Executive
Martin Canty Non-Executive
The Smart Approach Group currently has 28 employees. The directors of Robert H
Lowe have confirmed to the board of Smart Approach that the existing employment
rights, including pension rights, of all the management and employees of Smart
Approach Group will be fully safeguarded.
PRINCIPAL TERMS OF THE ACQUISITION
Pursuant to the Acquisition Agreement, the Company has agreed to acquire the
entire issued share capital of Smart Approach from the Vendors for a maximum
aggregate consideration of up to #13.15 million. Initial consideration of #3.55
million is to be satisfied by the issue of 142,000,000 new Ordinary Shares to
the Vendors at a price of 2.5 pence per share. Deferred consideration of #1.6
million will become payable if the net revenues in respect of contracts entered
into after 10 March 2003 and received by the Enlarged Group prior to 31 March
2005 equal or exceed US$5 million. The Deferred Consideration will be satisfied
by the issue and allotment of a further 64,000,000 new Ordinary Shares to the
Vendors at a price of 2.5 pence per share. Earn-Out Consideration of up to a
maximum of #9.6 million (or #8 million if the Deferred Consideration has been
paid), will become payable on the achievement of certain targets, and is to be
satisfied by either the issue and allotment of new Ordinary Shares to certain of
the Vendors, in agreed proportions, at the greater of 2.5 pence per share and
the average market price of an Ordinary Share for the 10 dealing days
immediately preceding the last day of the Earn-Out Period or, at the option of
the Company, by the issue of bank guaranteed loan notes.
The entitlement to Earn-Out Consideration is dependent on the performance of the
Enlarged Group during the Earn-Out Period. No Earn-Out Consideration will become
payable unless the adjusted earnings before interest and tax of the Enlarged
Group for the Earn-Out Period commencing on 1 April 2003 and ending on 31 March
2005 equals or exceeds #3.21 million. Once this level of adjusted earnings
before interest and tax for the Enlarged Group has been achieved, Earn-Out
Consideration equal to #2 million will be payable to certain of the Vendors and
the level of Earn-Out Consideration will increase by #1.69 for each #1 of
adjusted earnings before interest and tax of the Enlarged Group for the Earn-Out
Period in excess of #3.21 million, up to a maximum of #8 million. If the
Deferred Consideration has not been paid but the adjusted earnings before
interest and tax of the Enlarged Group for the Earn-Out Period is in excess of
#6.76 million, those Vendors who are entitled to receive the Earn-Out
Consideration shall be paid a further #1.6 million, increasing the maximum
Earn-Out Consideration to #9.6 million, in aggregate.
The Earn-Out Consideration targets referred to above are subject to adjustment
in certain circumstances to reflect any changes in the structure of the Enlarged
Group or the nature of the business of the Enlarged Group during the Earn-Out
Period. In addition, entitlements to Deferred Consideration and Earn-Out
Consideration may be accelerated if an offer for the Company becomes
unconditional in all respects or the Enlarged Group disposes of a significant
part of the business and assets of the Smart Approach Group.
Under the Acquisition Agreement, certain of the Vendors have given to the
Company warranties and indemnities (subject to certain limitations) relating to
the business and assets of Smart Approach. In return, the Company has given to
the Vendors certain warranties and indemnities (subject to certain limitations)
relating to the business and assets of Robert H Lowe.
Completion of the Acquisition Agreement is conditional, inter alia, on the
passing of the Resolutions at the EGM, on the Placing and Open Offer Agreement
having become unconditional in accordance with its terms (save only for the any
condition relating to completion of the Acquisition Agreement) and on Admission.
DETAILS OF THE PLACING AND THE OPEN OFFER
So as to provide additional working capital for the Enlarged Group and to repay
certain debt in Smart Approach, the Company is proposing to raise approximately
#2.46 million, before expenses (#1.86 million net of expenses), by the issue of
98,532,876 new Ordinary Shares pursuant to the Placing and the Open Offer at the
Issue Price. The Placing will raise #1.99 million, before expenses, with a
further #0.47 million before expenses, being raised through the Open Offer. The
Open Offer has been underwritten by Strand Associates.
Qualifying Shareholders who wish to subscribe for Open Offer Shares are invited
to apply at the Issue Price, free of expenses, pro rata to their existing
shareholdings on the basis of:
1 Open Offer Share for every 7 Existing Ordinary Shares
held at the close of business on the Record Date (and so in proportion to any
number of Existing Ordinary Shares then held). Entitlements of Qualifying
Shareholders to Open Offer Shares will be scaled down to the nearest whole
number. Fractional entitlements to the Open Offer Shares will be aggregated and
allotted to placees pursuant to the Placing and Open Offer Agreement for the
benefit of the Company. The Open Offer Shares are to be paid for in full on
application.
Irrevocable undertakings have been given by certain Directors and other
Shareholders not to take up their entitlement under the Open Offer in respect of
a total of 1,123,428 Open Offer Shares and to take up entitlements in respect of
a total of 5,124,695 Open Offer Shares as follows:
Entitlement of No. of Open No. of Open
Open Offer Offer Shares Offer Shares
Shareholder Shares Taken up not taken up
Strand Associates Limited (Guernsey) 3,374,695 3,374,695 -
The Granite Trust 1,750,000 1,750,000 -
D Sebire and members of his family 1,123,428 - 1,123,428
Strand Partners and Teather & Greenwood, as joint agents for the Company, have
conditionally agreed to place firm the Placing Shares with institutional and
other investors at the Issue Price. Those of the Open Offer Shares which are
the subject of undertakings not to take up entitlements have also been
conditionally placed firm at the Issue Price with institutional and other
investors. In respect of the remaining Open Offer Shares which are not the
subject of irrevocable undertakings, Strand Partners and Teather & Greenwood, as
joint agents for the Company, have conditionally agreed to use their reasonable
endeavours to place such Open Offer Shares with institutional and other
investors, subject to recall to the extent required to satisfy valid
applications under the Open Offer. To the extent that Strand Partners and
Teather & Greenwood are unable to procure placees for those Open Offer Shares at
the Issue Price, Strand Associates has agreed to subscribe at the Issue Price
for any such Open Offer Shares for which valid applications under the Open Offer
are not received. These underwriting arrangements will not result in Strand
Associates together with its concert parties holding 30 per cent. or more of the
issued share capital of the Company.
The Placing and the Open Offer are conditional, inter alia, upon the passing of
the Resolutions to be proposed at the EGM and upon Admission. It is expected
that dealings in the Placing Shares and the Open Offer Shares will commence on
AIM at 8.00 a.m. on 12 March 2003 (or such later time and date as shall be
determined by Strand Partners, Strand Associates, Teather & Greenwood and the
Company, being not later than 31 March 2003). If Admission has not so occurred,
application monies will be returned to applicants without interest and at the
applicant's risk as soon thereafter as is practicable.
Qualifying Shareholders will shortly receive a Prospectus setting out further
details of the Proposals, together with an Application Form containing details
of their entitlement to subscribe for Open Offer Shares. To be valid,
Application Forms must be received by Capita IRG Plc by post or (during normal
business hours only) by hand at Bourne House, 34 Beckenham Road, Beckenham,
Kent, BR3 4TH not later than 3.00 p.m. on 6 March 2003.
Subject to the fulfilment of the conditions of the Placing and the Open Offer,
the Placing Shares will be registered in the names of the relevant placees and
the Open Offer Shares will be registered in the names of the Qualifying
Shareholders validly applying for them (or relevant placees) and it is expected
that certificates in respect of the Placing Shares and the Open Offer Shares
will be despatched to relevant shareholders by first class post at their own
risk by 19 March 2003 or, if appropriate, delivery will be made to their CREST
accounts by 12 March 2003. No temporary documents of title will be issued.
Pending the receipt of definitive share certificates in respect of the Placing
Shares and the Open Offer Shares (other than in respect of those shares settled
through CREST), transfers will be certified against the register.
Qualifying Shareholders whose subscription meets the minimum qualifying amount
of #500 may specify when making their application that they wish to claim EIS
relief in respect thereof. Failure to specify on the Application Form that EIS
relief is wanted will mean that the Company will not process an application for
EIS relief from that shareholder and such relief will not be available. A
Shareholder who wishes to receive an EIS 3 form must write to the Company making
a specific request.
The Placing Shares, the Open Offer Shares and the Initial Consideration Shares
will, when issued and fully paid, rank pari passu in all respects with the
Existing Ordinary Shares, including the right to receive all dividends and other
distributions thereafter declared, made or paid.
VCT STATUS
The Company has received provisional confirmation from the Inland Revenue that
an investment in the Placing Shares and the Open Offer Shares will be regarded
as a qualifying holding for the purposes of investment by a Venture Capital
Trust. This is dependent, amongst other things, upon the funds raised by the
issue of the Placing Shares and the Open Offer Shares, for which VCT qualifying
status is sought, being used by the Group, as to eighty per cent. within twelve
months and the balance during the following twelve months, for the purposes of a
qualifying activity carried on wholly or mainly in the UK.
EIS STATUS
The Company has received provisional confirmation from the Inland Revenue that
the present activities and organisation of the Company (with regard to its
status as a company quoted on AIM) and its current interest in its trading
subsidiary company will enable it to count as a qualifying company for the
purposes of the EIS rules, and the Placing Shares and the Open Offer Shares
should be eligible shares, for the purposes of Enterprise Investment Scheme
Relief. This is subject, inter alia, to the employment of these funds within the
requisite period as described above under "VCT Status".
However, an investor must be a "qualifying investor", as defined in the EIS
Rules, in order to be entitled to EIS relief. An investor must mark his
Application Form as specified therein if he wishes to seek to obtain EIS relief.
The Directors have undertaken to use reasonable efforts to maintain the status
of the Company as a qualifying company under the relevant legislation for VCT
and EIS reliefs. In the event, however, that circumstances arise or an
opportunity arises that would benefit the Company but would jeopardise its
status with respect to VCT and EIS tax reliefs, the Directors will consider the
circumstances or the merits of the opportunity and act in the best interest of
the Company and the shareholders as a whole. The Company, if its business is
more successful than is currently envisaged by the Directors, may be unable to
use all VCT and EIS qualifying funds subscribed so as to ensure that full EIS
and VCT reliefs are obtained. In this circumstance the Inland Revenue may
disallow all of the EIS relief granted or disallow all or part of the investment
by a VCT as a qualifying holding.
PROPOSED CHANGE OF NAME AND CHANGE OF FINANCIAL YEAR END
In order to reflect the change of business activity following the acquisition of
Smart Approach, a resolution is being proposed at the EGM to change the
Company's name, conditional upon completion of the Acquisition, to Smart
Approach Group Plc.
Following completion of the Acquisition, the Company's accounting reference date
will be changed from 31 October to 31 March in each year. Accordingly, the next
published annual report for the Enlarged Group is expected to be for the five
month period ending 31 March 2003.
USE OF PROCEEDS
On becoming unconditional, the Placing and the Open Offer are expected to raise
approximately #2.46 million (#1.86 million net of expenses). The net proceeds
will be utilised by the Company to repay existing indebtedness of #150,000 in
Smart Approach and to provide additional working capital for product development
within Smart Approach and to enable the Enlarged Group to exploit the
opportunities provided by the increased focus on security in the US.
CURRENT TRADING AND PROSPECTS
Robert H Lowe
The results of Robert H Lowe for the year ended 31 October 2002 are being
announced today. Since all of the businesses of Robert H. Lowe have been
disposed of, the Company has been a cash shell. As at 31 October 2002, the
Company had net funds of #2,614,000 (2001: #2,674,000).
Smart Approach
For the year ended 30 June 2002, Smart Approach made a loss on ordinary
activities after taxation of approximately #395,000. Since 30 June 2002, Smart
Approach has continued to invest significantly in developing new customer
opportunities and although this investment is expected to produce new revenue
streams in due course, trading results are expected to be affected by this
investment in the short term.
ADMISSION TO AIM AND DEALINGS
Application will be made for the Existing Ordinary Shares to be re-admitted and
for the New Ordinary Shares to be admitted to trading on AIM and dealings are
expected to commence in the Existing Ordinary Shares and the Initial
Consideration Shares on 11 March 2003 and in the Placing Shares and the Open
Offer Shares on 12 March 2003.
PROSPECTUS
The Prospectus, accompanied by an Application Form for use in connection with
the Open Offer, setting out details of the Proposals and including a notice of
the EGM, will be posted to shareholders today. The Placing and the Open Offer
are not being made in or into the United States, Canada, Australia, Japan or the
Republic of Ireland or any other jurisdiction in which such Placing and Open
Offer or solicitation is unlawful. The attention of shareholders who have
registered addresses outside of the United Kingdom, or who are citizens or
residents of countries other than the United Kingdom, is drawn to the further
information in this regard to be set out in the Prospectus.
A copy of the prospectus is available from today at the offices of Jones Day
Gouldens, 10 Old Bailey, London, EC4M 7NG.
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
2003
Record Date for the Open Offer Close of business on 10 February 2003
Latest time and date for splitting of Application Forms (to
satisfy bona fide market claims only) 3.00 p.m. on 4 March 2003
Latest time and date for receipt of completed Application Forms
and payment in full under the Open Offer
3.00 p.m. on 6 March 2003
Latest time and date for receipt of Forms of Proxy 11.00 a.m. on 8 March 2003
Annual General Meeting 11.00 a.m. on 10 March 2003
Extraordinary General Meeting 11.05 a.m. on 10 March 2003
Admission and dealings expected to commence and re-commence
respectively in the Consideration Shares and Existing Ordinary
Shares on AIM 8.00 a.m. on 11 March 2003
Admission and dealings expected to commence in the Placing
Shares and Open Offer Shares on AIM 8.00 a.m. on 12 March 2003
CREST member accounts expected to be credited 12 March 2003
Despatch of definitive share certificates in respect of New
Ordinary Shares 19 March 2003
Enquiries:
David Sebire
Chairman
Robert H Lowe PLC Tel: (01454) 310 066
Rory Murphy
Director
Strand Partners Limited Tel: (020) 7409 3494
Angela Peace
Manager
Strand Partners Limited Tel: (020) 7409 3494
Jeff Keating
Director
Teather & Greenwood Limited Tel: (020) 7426 9000
David Galan
Manager
Teather & Greenwood Limited Tel: (020) 7426 9000
Strand Partners, which is regulated in the United Kingdom by the Financial
Services Authority, is acting as nominated adviser for Robert H Lowe and for no
one else in connection with the Proposals and will not be responsible to any
person other than Robert H Lowe for providing the protections afforded to
customers of Strand Partners, or for providing advice in relation to the
Proposals.
Teather & Greenwood, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Robert H Lowe and for no one else in
connection with the Proposals and will not be responsible to any person other
than Robert H Lowe for providing the protections afforded to customers of
Teather & Greenwood, or for providing advice in relation to the Proposals.
DEFINITIONS
The following definitions apply throughout this announcement.
"Acquisition" the proposed acquisition by Robert H Lowe of Smart Approach pursuant to
the Acquisition Agreement
"Acquisition Agreement" the conditional agreement dated 12 February 2003 between (1) the Vendors,
(2) Robert H Lowe and (3) Rodney Potts relating to the Acquisition
"Act" the Companies Act 1985, as amended
"Admission" respectively, the re-admission of the Existing Ordinary Shares and the
admission of New Ordinary Shares to trading on AIM and such re-admission
and admission becoming effective in accordance with the AIM Rules
"AIM" the Alternative Investment Market of the London Stock Exchange
"AIM Rules" the rules relating to the admission of securities to trading on AIM, as
published by the London Stock Exchange from time to time
"Annual General Meeting" the annual general meeting of the Company convened for 11.00 a.m. on 10
March 2003
"Application Form" the application form on which Qualifying Shareholders may apply for Open
Offer Shares under the Open Offer and which forms part of the terms and
conditions of the Open Offer
"Ayston" Ayston Limited, a company wholly owned by the Rodney Potts 1998 Family
Settlement
"Business day" a day (other than a Saturday or Sunday) on which banks are generally open
for business in London
"Capita IRG" Capita IRG plc
"certificated" or a share or other security which is not in uncertificated form (i.e. not
"in certificated form" in CREST)
"Code" or "City Code" the City Code on Takeovers and Mergers
"Concert Party" the Vendors and the Proposed Directors
"Completion" completion of the Proposals
"Consideration Shares" together the Initial Consideration Shares, the Deferred Consideration
Shares and the Earn-Out Consideration Shares
"CREST" the relevant system (as defined in the CREST Regulations) in respect of
which CRESTCo Limited is the operator (as defined in the CREST
Regulations)
"CRESTCo" CRESTCo Limited
"CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
"Deferred Consideration" further consideration of #1.6 million which may become due to certain of
the Vendors pursuant to the Acquisition Agreement
"Deferred Consideration Shares" such further new Ordinary Shares as may be allotted to the Vendors by way
of the Deferred Consideration pursuant to the Acquisition Agreement
"Directors" or "Board" the existing directors of the Company
"Earn-Out Consideration" further consideration which may become due to certain of the Vendors
pursuant to the Acquisition Agreement, depending on the performance of
the Enlarged Group during the Earn-Out Period
"Earn-Out Consideration Shares" such further new Ordinary Shares as may be allotted to certain of the
Vendors by way of Earn-Out Consideration pursuant to the Acquisition
Agreement
"Earn-Out Period" the period commencing on 1 April 2003 and ending on 31 March 2005
"EMI Scheme" the Enterprise Management Incentive Scheme, a tax efficient share option
scheme introduced by the Finance Act 2000, which the Company proposes to
adopt
"Enlarged Group" the Group, as enlarged by the Acquisition
"Executive Scheme" an unapproved share option scheme which the Company proposes to adopt
"Existing Ordinary Shares" the 131,046,137 Ordinary Shares in issue on the Record Date
"Extraordinary General Meeting" or the extraordinary general meeting of the Company convened for 11.05 a.m.
"EGM" on 10 March 2003
"Form of Proxy" the forms of proxy for use by Shareholders at the Annual General Meeting
and the Extraordinary General Meeting
"FSMA" Financial Services and Markets Act 2000
"Group" Robert H Lowe and its subsidiary undertakings
"Initial Consideration Shares" the 142,000,000 new Ordinary Shares to be issued by the Company to the
Vendors by way of initial consideration pursuant to the Acquisition
Agreement
"Issue Price" 2.5 pence per New Ordinary Share
"London Stock Exchange" London Stock Exchange plc
"New Ordinary Shares" together the Initial Consideration Shares, the Placing Shares and the
Open Offer Shares
"New Share Option Schemes" the Executive Scheme and the EMI Scheme
"Notice of EGM" the notice of the EGM
"Official List" the official list of the UK Listing Authority
"Open Offer" the conditional offer by Strand Partners and Teather & Greenwood, on
behalf of the Company, to Qualifying Shareholders to subscribe for the
Open Offer Shares at the Issue Price
"Open Offer Shares" the 18,720,876 new Ordinary Shares which are the subject of the Open
Offer
"Ordinary Shares" ordinary shares of one penny each in the share capital of the Company
"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
"Placing" the conditional placing by Teather & Greenwood and Strand Partners of the
Placing Shares subject to the terms of the Placing and Open Offer
Agreement
"Placing and Open Offer Agreement" the conditional agreement dated 12 February 2003 between, (1) the Company
(2) Strand Partners, (3) Strand Associates and (4) Teather & Greenwood
relating to the Open Offer
"Placing Shares" the 79,812,000 new Ordinary Shares which are the subject of the Placing
"POS Regulations" the Public Offers of Securities Regulations 1995, as amended
"Preference Shares" the existing 60,000 6.5 per cent. cumulative first preference shares of
#1 each in the Company
"Proposals" the Acquisition, the Placing, the Open Offer, the proposed change of
name, the Waiver, re-admission and admission respectively of the Existing
Ordinary Shares and the New Ordinary Shares to trading on AIM, and the
adoption of the New Share Option Schemes
"Proposed Directors" Rodney Potts, Chris Goulden, Mike Ormesher, Glenn Bartholomew, Pete
Brosnan and David Hurst-Brown, being the proposed new directors of Robert
H Lowe following Completion
"Qualifying Shareholders" holders of Existing Ordinary Shares on the register of members of the
Company at the Record Date and others with bona fide market claims, other
than certain overseas Shareholders
"Record Date" the close of business on 10 February 2003
"Resolutions" the resolutions to be proposed at the EGM
"Robert H Lowe" or the "Company" Robert H Lowe Public Limited Company
"Securities Act" United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder
"Shareholders" holders of Existing Ordinary Shares
"Smart Approach" Smart Approach Limited
"Smart Approach Group" Smart Approach and its subsidiary, Smart Approach Inc.
"Strand Associates" Strand Associates Limited (Bahamas)
"Strand Partners" Strand Partners Limited
"subsidiary" or "subsidiary have the meanings given to them by the Act
undertaking"
"Teather & Greenwood" Teather & Greenwood Limited
"UK Listing Authority" the Financial Services Authority acting in its capacity as competent
authority for the purposes of Part VI of the FSMA
"uncertificated" or recorded on the relevant register of the uncertificated share or security
concerned as being held in uncertificated form in CREST and title to
"in uncertificated form" which, by virtue of the CREST Regulations, may be transferred by means of
CREST
"United Kingdom" or "UK" the United Kingdom of Great Britain & 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 and all
other areas subject to its jurisdiction
"US person" a citizen or permanent resident of the United States, as defined in
Regulation S promulgated under the Securities Act 1933
"Vendors" Ayston, David Hurst-Brown, Chris Goulden, Chris Grey, Keith Pitts and
Martin Greenbank
"Waiver" the waiver by the Panel of any obligation on the Concert Party that may
otherwise arise under Rule 9 of the City Code to make a mandatory cash
offer for the issued Ordinary Shares not already owned by the Concert
Party upon completion of the Proposals, on allotment of Deferred
Consideration Shares or Earn-Out Consideration Shares or upon exercise of
options under the New Share Option Schemes
This information is provided by RNS
The company news service from the London Stock Exchange
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