TIDMALFA
RNS Number : 3710D
EQT Fund Management S.à r.l.
21 June 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH
JURISDICTION.
THIS IS AN ANNOUNCEMENT FALLING UNDER RULE 2.4 OF THE CITY CODE
ON TAKEOVERS AND MERGERS (THE "CODE") AND DOES NOT CONSTITUTE AN
ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF
THE CODE. THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE
MADE NOR AS TO THE TERMS ON WHICH ANY FIRM OFFER MIGHT BE MADE.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
21 June 2023
Statement regarding possible offer for Alfa Financial Software
Holdings plc ("Alfa" or "the Company")
CHP Software and Consulting Limited enters into irrevocable
undertaking
Irrevocable Commitment
Further to the announcement made by the Company on 9 June 2023
in response to press speculation (the "Possible Offer
Announcement") in respect of the possible offer for the Company by
EQT X EUR SCSp and EQT X USD SCSp each represented by its manager
(gérant), EQT Fund Management S.à r.l. (collectively referred to as
"EQT"), EQT announces that it has entered into an irrevocable
undertaking with CHP Software and Consulting Limited ("CHP") (which
is ultimately controlled by Andrew Page, the Chairman and founder
of the Company) in respect of a possible offer by EQT for the
entire issued and to be issued share capital of the Company at a
price of 208 pence per ordinary share of the Company, to be
implemented by means of a recommended scheme of arrangement under
Part 26 of the Companies Act 2006 and including a customary right
to switch from the Scheme to a takeover offer and the proposed
Share Alternative, as further described below (the "Possible
Offer").
The irrevocable undertaking is in respect of CHP's entire
current holding of 175,905,649 ordinary shares in the capital of
the Company representing approximately 59.5 per cent. of the
Company's total issued ordinary share capital.
The irrevocable undertaking provides that CHP will, if a firm
offer is made, vote in favour of all resolutions to approve any
scheme of arrangement under Part 26 of the Companies Act 2006 in
respect of the Possible Offer (the "Scheme") (or, to accept a
takeover offer in the event that EQT were to exercise its right to
switch from the Scheme to a takeover offer provided that the
acceptance condition for such offer is set at not less than 75 per
cent. of the fully diluted share capital of the Company).
CHP has also undertaken to vote against any competing proposal,
so long as the irrevocable undertaking continues to be binding.
Prior to the release by EQT of an announcement of a firm
intention to make an offer for the Company for the purposes of Rule
2.7 of the Code, the irrevocable undertaking will terminate and
cease to be binding if:
a. EQT releases an announcement that it does not intend to
proceed with the Possible Offer (for the purposes of Rule 2.8 of
the Code); or
b. EQT has otherwise not released announcement of a firm
intention to make an offer for the Company, for the purposes Rule
2.7 of the Code, by 31 August 2023; or
c. a third party announces a firm intention to make an offer for
the Company for the purposes of Rule 2.7 of the Code at a price per
ordinary share of the Company equal to or greater than 239 pence (a
"Competing Offer") and EQT does not announce a firm intention to
make an offer for the Company under Rule 2.7 of the Code at a price
per share of the Company equal to or greater than the price of such
Competing Offer within ten business days of the announcement of
such Competing Offer.
Following the release by EQT of an announcement of a firm
intention announcement to make an offer for the Company for the
purposes of Rule 2.7 of the Code, the irrevocable undertaking will
remain binding in the event of a Competing Offer and will only
terminate and cease to be binding in certain limited circumstances,
specified in the irrevocable undertaking, including if: the Scheme
lapses or is withdrawn for the purposes of the Code, and the
relevant bid vehicle formed for the purposes of the offer and
ultimately controlled by EQT publicly confirms that it does not
intend to to implement the offer by way of a takeover offer, or has
otherwise not become effective by 6.00 p.m. on the long stop date
specified in the relevant announcement of a firm intention to make
an offer for the Company, if and when made by EQT.
Further details regarding the irrevocable undertaking are set
out in Appendix 1.
Share Alternative
As stated above and referred to in the Possible Offer
Announcement, it is currently expected as an alternative (the
"Share Alternative") to the cash offer of 208 pence per ordinary
share of the Company (the "Cash Offer"), that an eligible Alfa
shareholder would be entitled to elect to receive rollover ordinary
and preference shares in a holding company ("Holdco") ultimately
controlled by EQT (the "Rollover Securities") in exchange for their
holding of Company shares in respect of up to 33 per cent. of their
shareholding in the Company (with the remaining percentage of such
Alfa shareholder's shareholding being settled by way of the Cash
Offer) and at a ratio to be specified in the relevant offer
documentation.
CHP has further undertaken to elect for the proposed Share
Alternative, up to the maximum amount of 33 per cent. of its
holding in the Company; provided that if CHP, acting in good faith,
determines that the detailed terms of the Share Alternative do not
accurately reflect the term sheet appended to the irrevocable
undertaking, CHP may elect to receive cash at a price of 208 pence
per ordinary share in respect of all of its holding in the
Company.
The maximum number of Rollover Securities available to Alfa
shareholders under the Share Alternative would be limited to 20 per
cent. of the issued ordinary share capital of Holdco as at
completion of the Possible Offer (the "Alternative Offer
Maximum").
If valid elections were to be made from eligible Alfa
shareholders that would require the issue of Rollover Securities
exceeding the Alternative Offer Maximum, the number of Rollover
Securities to be issued in respect of each Alfa share would be
rounded down on a pro rata basis, and the balance of the
consideration for each Alfa Share would be paid in cash in
accordance with the terms of the Cash Offer.
The availability of the Share Alternative would also be
conditional upon valid elections being made for such number of
Rollover Securities as represent at least 7.5 per cent. of the
issued ordinary share capital of Holdco at completion of the
Possible Offer, failing which the Share Alternative would lapse and
no Rollover Securities would be issued.
Unless otherwise determined by EQT and permitted by applicable
law and regulation, the Share Alternative would not be offered,
sold or delivered, directly or indirectly, in or into any
jurisdiction where local laws or regulations may result in a
significant risk of civil, regulatory or criminal exposure if
information concerning the Possible Offer is sent or made available
to Alfa shareholders in that jurisdiction or where to do so would
result in compliance requirements or formalities which EQT regards
as unduly onerous. In addition, individual acceptances of the Share
Alternative would only be valid if all regulatory approvals (if
any) required by the relevant Alfa shareholder to acquire the
Rollover Securities had been obtained.
If a firm offer were to be made, for the purposes of Rule 24.11
of the Code, Goldman Sachs, as financial adviser to EQT would
provide an estimate of the value of a Rollover Security, together
with the assumptions, qualifications and caveats forming the basis
of its estimate of value, in a letter to be included in the
relevant offer documentation.
Further details on the terms of the Share Alternative are set
out in Appendix 2.
Further information
Discussions between the parties remain ongoing. There can be no
certainty that any offer will be made for the Company by EQT.
Further announcements may be made as and when appropriate.
In accordance with Rule 2.6(a) of the Code, EQT is required, by
no later than 5.00pm (London time) on 7 July 2023 either to
announce a firm intention to make an offer for the Company in
accordance with Rule 2.7 of the Code or to announce that it does
not intend to make an offer, in which case the announcement will be
treated as a statement to which Rule 2.8 of the Code applies. This
deadline can be extended with the consent of the Panel in
accordance with Rule 2.6(c) of the Code.
In accordance with Rule 2.5 of the Code, EQT reserves the right
to vary the form and/or mix of the consideration described in this
announcement or implement the transaction by means of a takeover
offer as opposed to a scheme of arrangement. EQT also reserves the
right to make an offer for the Company on less favourable terms
than those described in this announcement: (i) with the agreement
or recommendation of the board of the Company; (ii) if a third
party announces a firm intention to make an offer for Company
which, at that date, is of a value less than the value of the
Possible Offer; or (iii) following the announcement by the Company
of a Rule 9 waiver transaction. If Alfa announces, declares or pays
any new dividend or any other distribution or return of value to
shareholders after the date of this announcement (other than the
final dividend of 1.2 pence per share payable on 26 June 2023), EQT
reserves the right to make an equivalent reduction to the Possible
Offer.
Enquiries:
EQT
Finn McLaughlan +44 77 1534 1608
Goldman Sachs, Financial Advisor to EQT
Nicholas van den Arend
Owain Evans
Cara Pazdon +44 20 7774 1000
Greenbrook Advisory, PR Advisor to EQT +44 20 7952 2000
eqt@greenbrookadvisory.com
James Madsen
Matthew Goodman
Kirkland & Ellis International LLP is acting
as legal adviser to EQT
About EQT
EQT is a purpose-driven global investment organization with EUR
119 billion in assets under management within two business segments
- Private Capital and Real Assets.
Funds managed by EQT own portfolio companies and assets in
Europe, Asia-Pacific and the Americas and supports them in
achieving sustainable growth, operational excellence and market
leadership.
More information is available at www.eqtgroup.com
Important Notices
Goldman Sachs International ("Goldman Sachs"), which is
authorised by the Prudential Regulation Authority and regulated in
the United Kingdom by the Financial Conduct Authority and the
Prudential Regulation Authority, is acting exclusively for EQT and
no one else in connection with the Possible Offer or any other
matter referred to in this announcement and will not be responsible
to anyone other than EQT for providing the protections offered to
clients of Goldman Sachs or for providing advice in relation to the
contents of this announcement or any matters referred to herein
This announcement is not intended to, and does not, constitute
or form part of any 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, whether pursuant to this
announcement or otherwise. Any offer, if made, will be made solely
by certain offer documentation which will contain the full terms
and conditions of any offer, including details of how it may be
accepted.
The release, distribution or publication of this announcement in
whole or in part, directly or indirectly in, into or from
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe, such restrictions. Any
failure to comply with the restrictions may constitute a violation
of the securities law of any such jurisdiction.
EQT is not aware of any dealings in Alfa ordinary shares that
would require a minimum level, or particular form, of consideration
that it would be obliged to offer under Rule 6 or Rule 11 of the
Code (as appropriate). However, it has not been practicable to make
such enquiries of all persons presumed to be acting in concert with
EQT. Enquiries of such parties will be made as soon as practicable
following the date of this announcement and, to the extent that any
further disclosure is required, EQT will make an announcement as
soon as practicable, and in any event by the time it is required to
make its Opening Position Disclosure pursuant to Rule 8.1 of the
Code.
Rule 26.1 Disclosure
In accordance with Rule 26.1 of the Code, a copy of this
announcement and the irrevocable referred to in it will be
available at www.alfasystems.com and www.
publication-documents.co.uk , by no later than 12 noon (London
time) on 22 June 2023. The content of the website referred to in
this announcement is not incorporated into and does not form part
of this announcement.
Note to US Shareholders
In accordance with normal UK practice and pursuant to Rule
14e-5(b) of the US Exchange Act, EQT or its nominees or brokers
(acting as agents), may from time to time make certain purchases
of, or arrangements to purchase, Alfa ordinary shares outside the
United States, other than pursuant to the possible offer, before or
during the period in which the possible offer, if made, remains
open for acceptance. Also, in accordance with Rule 14e-5(b) of the
US Exchange Act, Goldman Sachs International will continue to act
as exempt principal traders in Alfa ordinary 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 .
MAR
The information contained within this announcement is deemed by
EQT to constitute inside information as stipulated under the Market
Abuse Regulations (EU) No.596/2014 (as applicable in the UK and as
amended from time to time). Upon the publication of this
announcement via a Regulatory Information Service, such information
is now considered to be in the public domain.
Disclosure requirements of the Code
Under Rule 8.3(a) of the 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) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% 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 https://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 Takeover 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.
Bases and Sources
In this announcement, unless otherwise stated or the context
otherwise requires, the following bases and sources have been
used:
-- References to percentage ownership of the Company have been
based on Company's total voting rights last publicly announced
before at the date of this announcement, being: 295,469,376.
-- Certain figures included in this announcement have been subject to rounding adjustments.
Disclaimer
The information contained herein does not constitute an offer to
sell, nor a solicitation of an offer to buy, any security, and may
not be used or relied upon in connection with any offer or
solicitation. Any offer or solicitation in respect of EQT X will be
made only through a confidential private placement memorandum and
related documents which will be furnished to qualified investors on
a confidential basis in accordance with applicable laws and
regulations. The information contained herein is not for
publication or distribution to persons in the United States of
America. Any securities referred to herein have not been and will
not be registered under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), and may not be offered or sold without
registration thereunder or pursuant to an available exemption
therefrom. Any offering of securities to be made in the United
States would have to be made by means of an offering document that
would be obtainable from the issuer or its agents and would contain
detailed information about the issuer of the securities and its
management, as well as financial information. The securities may
not be offered or sold in the United States absent registration or
an exemption from registration.
Appendix 1
Irrevocable Undertaking
CHP has given an irrevocable undertaking to vote in favour of
all resolutions to approve the Scheme (or, to accept a takeover
offer in the event that EQT were to exercise its right to switch
from the Scheme to a takeover offer provided that the acceptance
condition for such takeover offer is set at not less than 75 per
cent. of the fully diluted share capital), as summarised in the
text of this announcement..
Name Total number of shares Percentage of existing
of the Company issued share capital
CHP 175,905,649 59.5
Appendix 2 - Indicative terms of Rollover Securities
Set out below are the indicative terms of the Rollover
Securities, subject to tax structuring
1. Voting Rights
Each ordinary share comprising a Rollover Security will carry
one vote, while each preference share comprising a Rollover
Security would not carry any general voting rights at general
meetings of Holdco.
2. Significant Shareholder
Any holder of Rollover Securities who at Completion holds more
than 8 per cent. of the total number of ordinary shares in Holdco
(a "Significant Shareholder") would be entitled to appoint (and
remove/replace), in good faith consultation with EQT X EUR SCSp and
EQT X USD SCSp, each represented by its manager (gérant), EQT Fund
Management S.à r.l. ("EQT"), a director to the board of Holdco (the
"Board") and also appoint (and remove/replace) an observer to
attend, by teleconference or videoconference only, (but not vote
at) meetings of the Board.
A Significant Shareholder would also have a consent right over
certain matters, including certain amendments to Holdco's
organisations or constitutional documents, reorganisations,
reductions in capital or distributions of Holdco (other than on a
pro rata basis), any material change to the nature of the business,
and any transactions between Holdco or its subsidiaries and EQT or
its affiliates.
In the event that the Significant Shareholder ceases to hold 8
per cent. of the issued ordinary share capital of Holdco (other
than as a result of any issuance by Holdco of new equity
securities), such appointment rights and consent rights shall no
longer apply.
A Significant Shareholder would have the right to receive annual
audited accounts, business plan and budget, monthly management
accounts and all information packs provided to the Board. In the
event that the Significant Shareholder ceases to hold 5 per cent.
of the issued ordinary share capital of Holdco at completion, or
makes an investment in any business considered by the Board (acting
reasonably and in good faith) to be a competitor, in any material
respect, of the business of the Holdco group, such information
rights shall no longer apply.
Such Board appointment, consent and information rights are
personal to the relevant Significant Shareholder and will not
transfer along with any transfer of Rollover Securities.
EQT and any Significant Shareholder would each agree to a
non-solicitation covenant (subject to customary carve-outs) such
that, each party, for up to one year from the date on which such
party ceases to hold any Holdco securities and for as long as the
other party continues to hold securities in Holdco, will not
solicit any member of senior management of Alfa Financial Software
Holdings plc.
3. Unlisted
The Rollover Securities would be unlisted.
4. Transfers of the Rollover Securities
Rollover Securities would not be transferable (directly or
indirectly) during an initial five-year lock-up period (the
"Lock-up Period") without the prior written consent of EQT except
to its affiliates or pursuant to the drag and tag rights described
below.
Following the expiration of the Lock-up Period, a holder of
Rollover Securities (a "Rollover Shareholder") would be entitled to
transfer its Rollover Securities (provided that any such transfer
is for all (but not part) of the Rollover Securities held by such
Rollover Shareholder), subject to a customary right of first offer
on the part of EQT and to certain other restrictions in respect of
the identity of the proposed transferee. Any proposed transferee of
Rollover Securities after the Lock-up Period:
-- would be required to adhere to the relevant shareholders' agreement relating to Holdco;
-- would be required to complete any applicable anti-money
laundering, anti-bribery and corruption, anti-sanctions and "know
your client" checks reasonably required by EQT and/or any antitrust
or regulatory change in control approvals required by any
regulator; and
-- must not be considered by EQT to be a competitor of the
business of the Holdco group or a person whose investment is likely
to result in reputational harm to the Holdco group, EQT or their
respective affiliates.
5. Additional Rollover Security Issues
The Rollover Shareholders would be entitled to participate pro
rata in securities issues after completion (other than debt
financing provided by a third-party lender and subject to customary
exceptions).
6. Exit Arrangements
Any future share sale, asset sale, IPO, winding-up or other form
of liquidity event relating to the group (an "Exit") would occur at
the absolute discretion of EQT (in good faith consultation with the
Board).
Each holder of Rollover Securities will be entitled to pro rata
pre-emption and sell-down rights on any IPO. Each holder of
Rollover Securities will be required to enter into customary
lock-up undertakings and reasonable and customary provisions
designed to result in an orderly disposal of securities, but on no
more onerous or lengthy terms than EQT (and, for the avoidance of
doubt, each holder of Rollover Securities will be offered the same
liquidity opportunities as EQT at the same time and on a pro-rata
basis).
On any sale of all or substantially all of the business of the
Holdco Group, the Board shall seek to distribute the proceeds of
such sale to Holdco shareholders as soon as reasonably practicable
thereafter (subject to Holdco having sufficient distributable
reserves and withholding such amounts as are considered reasonably
necessary by EQT in good faith to meet any current or future
obligations, liabilities or contingencies of the Group).
7. Drag along and tag along
EQT shall have a customary drag right (i.e. force a sale) on the
same terms (including implied price and form of consideration) on
any transfers of direct or indirect shareholdings which would
result in a change of control. EQT will not be able to exercise its
drag along transfer rights such that any drag transfer would
complete within 12 months of completion of the Possible Offer
without prior written consent of the relevant Significant
Shareholder(s).
Rollover Shareholders shall have a customary pro rata tag right
on the same terms (including implied price and form of
consideration) on any transfer of direct or indirect shareholdings
by EQT(other than in respect of certain excluded instances
including, but not limited to, customary permitted transfers to
affiliates, any current or prospective director, officer, employee
or consultant of the group, reorganisation, IPO, where a drag right
has been exercised, and/or any syndication to limited partners
and/or co-investors). A transfer by EQT of its securities to a
continuation fund will constitute an exit event entitling any
Significant Shareholder to tag along all of their Rollover
Securities.
On any drag or tag transfer, any dragged or tagging shareholder
will be required to give the same warranties and indemnities as are
given by EQT.
8. Risk factors
If a firm offer is made, a more detailed set of risk factors
will be set out in any firm intention announcement under Rule 2.7
of the Code but will include, among other things, the
following:
-- the Rollover Securities will comprise securities in a private
and unquoted company, and there is no current expectation that they
will be listed or admitted to trading on any exchange or market for
the trading of securities, and will therefore be illiquid;
-- the value of the Rollover Securities will at all times be
uncertain and there can be no assurance that any such securities
will be capable of being sold in the future or that they will be
capable of being sold at the value to be estimated by Goldman Sachs
in any offer documentation;
-- the holders of Rollover Securities, apart from any
Significant Shareholder, will not enjoy any minority protections or
other rights save for those rights prescribed by applicable law;
and
-- the holders of Rollover Securities, apart from any
Significant Shareholder, will not be afforded the same level of
protections and disclosure of information that they currently
benefit from as shareholders in the Company as a listed
company.
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