TIDMSAG TIDMFST
RNS Number : 9319D
Science Group PLC
01 July 2019
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
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
FOR IMMEDIATE RELEASE
1 July 2019
CASH OFFER
for
FRONTIER SMART TECHNOLOGIES GROUP LIMITED
("FRONTIER")
By
SCIENCE GROUP PLC
("SCIENCE GROUP")
1. Introduction
Science Group announces a firm intention to make a cash offer at
35 pence per share for the entire issued and to be issued ordinary
share capital of Frontier which Science Group and its Affiliates do
not already own.
-- The offer price of 35 pence per Frontier Share represents a
substantial premium of 137.3 per cent. to the closing mid-market
Frontier share price at 17 May 2019, being the last trading day
prior to the announcement of Science Group's approach to
Frontier.
-- The Offer, which will have an acceptance condition of 50 per
cent. plus one share, gives Frontier Shareholders a deliverable
path to realise the value in their Frontier Shares in cash and at a
premium.
-- In addition, Science Group has today instructed Panmure
Gordon to buy up to 10 million Frontier shares in the market at a
price per share equal to the Acquisition Consideration, giving
Frontier Shareholders immediate trading liquidity should they wish
to sell their Frontier Shares before completion of the Offer.
-- As at close of business on 28 June 2019, Science Group was
interested in 11,510,521 Frontier Shares representing 28.3 per
cent. of the voting rights in Frontier. Science Group does not
anticipate supporting any proposals made in respect of Frontier by
any alternative bidder.
-- Science Group considers that there are potential benefits for
both companies to be derived from Frontier becoming part of Science
Group and believes that Frontier's management and employees would
benefit from the greater opportunities that Science Group can
offer.
2. The Offer
Under the terms of the Offer, Frontier Shareholders will be
entitled to receive:
in respect of each Frontier Share 35 pence in cash
The Offer represents:
(a) a premium of 137.3 per cent. to the closing mid-market share
price of Frontier on 17 May 2019 of 14.75 pence per share, being
the last trading day prior to the announcement of Science Group's
approach to Frontier; and
(b) a premium of 161.6 per cent. to the closing mid-market share
price of Frontier on 9 May 2019 of 13.4 pence per share, being the
date of the trading update issued by the board of directors of
Frontier.
Science Group encourages all Frontier Shareholders to accept the
Offer, which it considers to be at an attractive premium,
particularly in view of the financial situation and operating
performance of Frontier as set out in the trading update made by
Frontier on 9 May 2019.
Unless extended at the sole discretion of Science Group, the
Offer will be available for acceptance for 14 calendar days from
the date of posting of the Offer Document to Frontier Shareholders
or, if applicable, the making of the Offer by any alternative
method (the "Offer Period"). There is no certainty that Science
Group will extend the Offer beyond the First Closing Date and
Frontier Shareholders are encouraged to accept the Offer in a
timely manner or, if they wish to sell their shares and receive
payment more quickly, to use the Panmure Gordon Trading Facility
described in Section 3 below.
The Offer will be conditional on, among other things, Science
Group securing valid acceptances of the Offer in respect of
Frontier Shares which, taken together with all other Frontier
Shares which Science Group and its Affiliates (and/or their
respective nominee(s)) have acquired or agreed to acquire (whether
under the Offer or otherwise) carry in aggregate more than 50 per
cent. of the voting rights exercisable at a general meeting of
Frontier. As at close of business on 28 June 2019 (being the latest
practicable date before publication of this Announcement), Science
Group was interested in 11,510,521 Frontier Shares representing
28.3 per cent. of the voting rights in Frontier. Shares acquired by
Science Group through the Panmure Gordon Trading Facility will,
therefore, count towards reaching the acceptance condition.
3. Acquisition of Frontier Shares
Science Group recognises that:
-- many Frontier Shareholders hold Frontier Shares as Depositary
Interests and/or in nominee accounts;
-- the process of accepting any offer (such as the Offer) and
completing the related administration can be burdensome; and
-- there may be a significant delay between accepting any offer
(such as the Offer) and receiving payment.
To simplify the process and accelerate payment for Frontier
Shareholders, Science Group has instructed Panmure Gordon to buy up
to 10 million Frontier shares in the market at a price per share
equal to the Acquisition Consideration at any time from today up to
the end of the Offer Period. The sale of such Frontier Shares
through the Panmure Gordon Trading Facility will be the simplest
and quickest method to receive sale proceeds and to ensure
certainty.
Frontier Shareholders who are institutional investors interested
in selling their Frontier Shares to Science Group should contact
Panmure Gordon at +44 (0) 20 7886 2500 or
erik.anderson@panmure.com.
Science Group reserves the right to terminate or amend the
Panmure Gordon Trading Facility at any time and without notice.
4. Background to and Reasons for the Offer
Science Group is an international consultancy providing
science-based product development, advisory and regulatory
services. Frontier is a pioneer in technologies for Digital Radio
and Smart IoT Devices. Science Group considers that there are
potential benefits for both organisations to be derived from
Frontier becoming part of Science Group and initiated discussions
with Frontier in December 2018. These discussions included the
possibility of Science Group making an offer for the entire issued
and to be issued share capital of Frontier.
Following the informal discussions, on 8 May 2019, Science Group
made a formal proposal to Frontier including an indicative offer.
On 9 May 2019, Frontier issued a trading update advising that the
"short-term trading outlook for the Group is challenging" and that
the "Board anticipates an H1 2019 Trading EBITDA loss of US$2.2
million". Furthermore, at 30 April 2019, Frontier's net debt had
increased by US$1.4 million since 31 December 2018. This statement
on 9 May 2019 was in contrast to the guidance provided by Frontier
on 17 January 2019 and 20 March 2019.
This material reduction in Frontier's financial forecast for the
current financial year followed a similar profile to the prior
year. On 8 March 2018, the Frontier Board issued the preliminary
results for 2017 including an outlook statement which declared that
"In FY 2018, the Board expects to see modest growth in revenues and
EBITDA, as the Group continues to invest in Smart Audio". However,
on 23 May 2018, the Frontier Board announced that "Challenging
trading conditions in Q2-2018 are likely to have an adverse impact
on the Group's FY 2018 trading performance."
In summary, Frontier's revenue will have declined from US$53.0
million in 2017 to forecast sales of US$36.6 million in 2019.
Furthermore, Frontier's cash position has deteriorated from net
cash of US$4.0 million at 31 December 2017 to net debt of US$3.9
million at 30 April 2019.
Consistent with the decline in operating performance, between 1
January 2018 and 9 May 2019, the date of the Frontier trading
update, Frontier's share price declined by 92 per cent.
Subsequent to the Frontier trading update, Frontier requested
that Science Group reconfirm the indicative offer given on 8 May
2019, which was done on 10 May 2019. However, on 20 May 2019,
Frontier announced Science Group's interest to the market. Frontier
also announced the proposed price of the indicative offer which, in
Science Group's opinion, was unnecessary and a breach of trust.
Science Group terminated the discussions and announced that it held
9.0 per cent. of the voting shares of Frontier. Subsequent
announcements on 29 May 2019 and 6 June 2019 recorded the
progressive increase in the Science Group shareholding to the
current level of 11,510,521 shares equivalent to 28.3 per cent. of
the voting shares of Frontier.
Frontier is incorporated in the Cayman Islands and is therefore
not within the jurisdiction of the City Code. However, in the
Frontier announcement of 20 May 2019, the Frontier Board declared
that it intended "to adhere to the general principles of the Code".
While Science Group has repeatedly tried to constructively engage
with Frontier, throughout the past 7 weeks, in the opinion of
Science Group, Frontier has taken actions which have had the effect
of frustrating the proposed acquisition, contrary to the principles
of the City Code. These actions have included significant increases
to Executive Director emoluments.
On 14 June 2019, Frontier announced that it had received an
approach from a second potential bidder and that "The Board is
urgently seeking to clarify the pricing, conditionality and
deliverability of this second approach". Science Group acknowledged
the Frontier announcement but, in view of the Science Group
shareholding of 28.3 per cent., questioned the proposed structure
and deliverability of this alternative bid. In contrast to the
Frontier announcement on 20 May 2019 related to Science Group's
interest, Frontier has adopted an inconsistent policy in not naming
the other interested party nor providing any details of the
potential transaction.
On 24 June 2019, Science Group wrote to Frontier and requested
an update on the progress made by Frontier in clarifying the second
approach, whilst also reaffirming Science Group's interest and
emphasising the deliverability of the Science Group proposal
(including by providing a detailed draft merger implementation
agreement to effect a merger of the Cayman Islands entity with a
wholly owned subsidiary of Science Group). Frontier acknowledged
receipt and advised that Frontier was continuing urgently to seek
clarification of the pricing, conditionality and deliverability of
the second approach.
It is now more than seven weeks since Science Group first
formally approached Frontier but no material progress has been
made. It is more than two weeks since Frontier notified the market
that they were "urgently" seeking clarification on the pricing,
conditionality and deliverability of the second approach but no
further clarification has been provided to Science Group or the
market. In view of the significant deterioration in the financial
position of Frontier, as set out in the trading update on 9 May
2019, as a major shareholder in Frontier with 28.3 per cent. of the
voting shares, Science Group has been left with no alternative but
to make this Offer directly to Frontier Shareholders.
Prior to this Announcement, Frontier was again given the
opportunity to engage with Science Group.
5. Conditions of the Offer, De-Listing and Compulsory Purchase
The Offer will be subject to the Conditions and further terms
set out in Appendix 1 of this Announcement and to the full terms
and conditions to be set out in the Offer Document and the Form of
Acceptance in due course. In particular, the Offer will be
conditional on Science Group securing valid acceptances of the
Offer in respect of Frontier Shares which, taken together with all
other Frontier Shares which Science Group and its Affiliates
(and/or their respective nominee(s)) has acquired or agreed to
acquire (whether under the Offer or otherwise) carry in aggregate
more than 50 per cent. of the voting rights exercisable at a
general meeting of Frontier.
As at 28 June 2019 (being the latest practicable date before
publication of this Announcement), Science Group was interested in
11,510,521 Frontier Shares representing 28.3 per cent. of the
voting rights in Frontier.
If the Offer becomes or is declared unconditional in all
respects and Science Group has by virtue of its shareholdings and
acceptances of its Offer acquired, or agreed to acquire, issued
share capital carrying at least 75 per cent. of the voting rights
of Frontier, Science Group intends to procure the making of an
application by Frontier for cancellation of the admission to
trading of Frontier Shares on AIM. A notice period of not less than
20 Business Days prior to the cancellation will commence on the
date on which the Offer becomes or is declared unconditional in all
respects provided Science Group has obtained 75 per cent. or more
of the voting rights as described above or otherwise as soon as
Science Group obtains 75 per cent. or more of the voting rights as
described above.
If the Offer becomes or is declared wholly unconditional and
sufficient acceptances are received to enable Science Group to
apply the provisions of section 88 of the Companies Law of the
Cayman Islands in connection with the Offer, Science Group intends
to apply such provisions to acquire compulsorily any Frontier
Shares not acquired or agreed to be acquired by or on behalf of
Science Group pursuant to the Offer or otherwise on the same terms
as the Acquisition.
For the avoidance of doubt, Frontier Shareholders who sell
Frontier Shares through the Panmure Gordon Trading Facility will
not be subject to any of the Conditions set out in Appendix 1. This
facility provides immediate trading liquidity for Frontier
Shareholders that wish to sell their Frontier Shares before
completion of the Offer.
6. Information on Science Group
Science Group is an international consultancy providing applied
science, product development, technology advisory and regulatory
services to a client base in medical, food & beverage,
industrial and consumer markets.
For the year ended 31 December 2018, Science Group revenue was
GBP48.7 million and adjusted operating profit was GBP7.7 million.
Statutory profit before tax was GBP4.9 million resulting in basic
earnings per share ("EPS") of 10.7 pence and adjusted basic EPS of
14.7 pence. Science Group's gross cash balance at 31 December 2018
was GBP21.5 million with net funds of GBP8.8 million. Following the
year end, as announced on 20 February 2019, Science Group's bank
debt was increased by an additional GBP4.75 million such that at 30
April 2019, Science Group had gross cash balances in excess of
GBP26 million.
Science Group's long-term debt is secured against the Group's
significant freehold property assets in Harston, near Cambridge,
and Epsom, Surrey. These facilities provide not only an attractive
financial and operating model for an evolving science-based
organisation requiring a diverse range of laboratories and offices,
but also an excellent working environment for Science Group
employees.
7. Information on Frontier
Frontier is a pioneer in technologies for Digital Radio and
Smart IoT devices. According to the Frontier 2018 Annual Report and
Accounts, Frontier Smart Technologies is
(i) the world's leading provider of chips, modules and software
for consumer DAB and Smart Radios; and
(ii) a leading solution provider for third party brands building
smart audio devices based on the streaming and voice platforms of
Google, Amazon and Apple, a position Frontier is using to address
opportunities in the broader non-audio Smart IoT space.
For the year ended 31 December 2018, Frontier reported revenue
of US$41.8 million and a loss from continuing operations of US$2.7
million. In the prior year to 31 December 2017, Frontier reported
revenue of US$53.0 million and a loss from continuing operations of
US$1.7 million. Net assets at 31 December 2018 were US$18.9 million
including retained earnings of negative US$175.5 million.
On 9 May 2019, Frontier issued a trading update advising that
the "short-term trading outlook for the Group is challenging" and
that the "Board anticipates an H1 2019 Trading EBITDA loss of
US$2.2 million". Furthermore, at 30 April 2019, Frontier's net debt
had increased by US$1.4 million since 31 December 2018. This
statement was in contrast to the guidance provided by Frontier on
17 January 2019 and 20 March 2019.
This material reduction in Frontier's financial forecast for the
current financial year followed a similar profile to the prior
year. On 8 March 2018, the Frontier Board issued the preliminary
results for 2017 including an outlook statement which declared that
"In FY 2018, the Board expects to see modest growth in revenues and
EBITDA, as the Group continues to invest in Smart Audio". However,
on 23 May 2018, the Frontier Board announced that "Challenging
trading conditions in Q2-2018 are likely to have an adverse impact
on the Group's FY 2018 trading performance."
In summary, Frontier's revenue will have declined from US$53.0
million in 2017 to forecast sales of US$36.6 million two years
later. Furthermore, Frontier's cash position has deteriorated from
net cash of US$4 million at 31 December 2017 to net debt of US$3.9
million at 30 April 2019.
Consistent with the deterioration in operating performance,
between 1 January 2018 and 9 May 2019, the date of the Frontier
trading update, Frontier's share price declined by 92 per cent.
As set out in the Frontier 2018 Annual Report, Frontier has a
revolving credit facility of GBP5.0 million which at 31 December
2018 was fully drawn. The loan "carries certain covenants on the
business which are monitored at a historic and forecast level on a
monthly and quarterly basis by the Board". The Frontier
announcement on 9 May 2019 did not provide any detail as to the
headroom relative to the bank covenants, despite the reported
challenging trading environment and deteriorating cash position.
Science Group has requested on several occasions that Frontier
should update the market regarding bank debt covenant terms and
headroom but Frontier has ignored all such requests.
8. Financing of the Acquisition
The Acquisition Consideration payable by Science Group pursuant
to the Offer will be funded using the existing cash resources of
Science Group. The aggregate amount required to satisfy full
acceptance of the Offer would be approximately GBP10.2 million,
excluding the shares already owned by Science Group and the shares
held in the Frontier employee benefit trust.
At 31 December 2018, the audited accounts of Science Group
reported gross cash of GBP21.5 million. Science Group further
reported an increase in Science Group's bank facilities, secured on
Science Group's freehold property assets, on 20 February such that
at 30 April 2019, Science Group had gross cash balances in excess
of GBP26.0 million.
Science Group has confirmed to Panmure Gordon that, at the time
of making the Offer, sufficient cash resources are readily
available to Science Group to satisfy the total Acquisition
Consideration payable pursuant to the terms of the Offer.
9. Employees and Management
Science Group considers Frontier's employees to be one of its
main assets and a key element for its future growth and success.
Science Group believes that Frontier's management and employees
would benefit from enhanced career development opportunities in a
business of greater size and scope that incorporates the skills and
talents present in both Science Group and Frontier.
Science Group confirms that, following completion of the
Acquisition, it intends to safeguard the existing employment rights
of Frontier employees, in accordance with contractual and statutory
requirements.
Science Group would anticipate relocating the Frontier
operations at Sawston, near Cambridge, into Science Group's main
site at Harston, both of which are located on the south side of the
city. This would enable greater integration of the businesses and
provide Frontier employees with an attractive working
environment.
Science Group has not been provided with access to internal
Frontier data and therefore has only been able to undertake
diligence from industry information and publicly available data.
Accordingly, Science Group has not been able to undertake any
substantial analysis in order to formulate detailed plans or
intentions regarding the impact of the Acquisition on the Frontier
business.
10. Merger Procedure
Frontier is incorporated in the Cayman Islands. The Frontier
Board, in its various forms over the past 14 years, has elected not
to move the incorporation to the United Kingdom. In the opinion of
Science Group, this corporate structure introduces costs and
complexity
Frontier net retained losses, as reported in its Annual Report
and Accounts for 2018, totalled US$175.6 million. The Frontier
Annual Report also states that the Frontier Group has tax losses in
the UK of approximately US$31 million. As set out in the trading
update on 9 May 2019, Frontier does not anticipate making a profit
in the 2019 financial year. As a result, Science Group considers
that, in the foreseeable future, the potential tax benefits derived
from a Cayman Islands incorporation are less important than the
benefits to be derived from the simplification of the corporate
structure.
Science Group therefore anticipates undertaking a statutory
merger of Frontier, the Cayman Islands company, with a UK
subsidiary of Science Group as soon as practicable after the Offer
has become wholly unconditional. For Frontier Shareholders that
accept the Offer (or sell their shares through the Panmure Gordon
Trading Facility), this activity will have no consequences. For
Frontier Shareholders (if any) who elect not to sell their Frontier
Shares through either of these methods, Science Group announces
that:
(a) the statutory merger will be undertaken in accordance with the Companies Law;
(b) the statutory merger will require approval by 75% of those
shareholders voting (Science Group will be entitled to vote its
Frontier Shares in favour of any such statutory merger); and
(c) the price offered at the time of effecting the statutory
merger may be lower than the Acquisition Consideration.
The price offered in consideration of any statutory merger may
be adjusted downwards from the Acquisition Consideration if any of
the following have occurred prior to implementation of the
statutory merger:
(a) any fees incurred after 1 May 2019 by Frontier related to
the potential acquisition of Frontier, including but not limited to
financial and legal adviser fees, are or are expected to be in
excess of GBP350,000;
(b) any changes to Director, or key employee, remuneration or
emoluments outside of normal operating practice, made after 1 May
2019, including any bonuses or changes in employment terms;
(c) any accelerated vesting or exercise of share options, unless
contractually obliged and not subject to remuneration committee or
independent director discretion;
(d) any changes to the forecasts of Frontier relative to the
information provided to the market on 9 May 2019;
(e) any material adverse change affecting the Frontier Group; and/or
(f) any other matter reasonably considered by the Science Group
Board to have a material impact on the valuation of Frontier,
including but not limited to the matters set out in Appendix 1.
For the avoidance of doubt, Frontier Shareholders that accept
the Offer (or sell their shares through the Panmure Gordon Trading
Facility) will not be subject to the potential price adjustments
set out in this paragraph. Science Group therefore encourages all
Frontier Shareholders to accept the Offer once made or to sell
their shares to Science Group through the Panmure Gordon Trading
Facility.
The statutory merger, if implemented, will be effected under the
Companies Law of the Cayman Islands.
11. Overseas Shareholders
Unless otherwise determined by Science Group, and permitted by
applicable law and regulation, the Offer will not be made
available, directly or indirectly, in or into, or by the use of
mails or any means or instrumentality (including, but not limited
to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility
of a national, state or other securities exchange of any Restricted
Jurisdiction and the Offer will not be capable of acceptance by any
such use, means, instrumentality or facilities or from or within
any Restricted Jurisdiction.
The availability of the Offer to Overseas Shareholders may be
affected by the laws of the jurisdiction in which they are
resident.
Persons who are resident in any jurisdiction or territory other
than the United Kingdom or the United States should obtain
appropriate, independent professional advice in the relevant
jurisdiction without delay and observe any applicable legal or
regulatory requirements.
Frontier Shareholders who are resident in the United States
should refer to the Important Notices section of this
Announcement.
12. General
The Frontier Shares will be acquired by Science Group under the
Offer fully paid and free from all liens, equities, charges,
encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature whatsoever and together
with all rights attaching to them on or after the date of this
Announcement, including, without limitation, voting rights and the
right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid, or any other return
of capital (whether by way of reduction of share capital or share
premium account or otherwise) made on or after this
Announcement.
If, any dividend, and/or other distribution and/or other return
of capital is announced, declared, paid or becomes payable in
respect of the Frontier Shares on or after the date of this
Announcement, Science Group reserves the right in its sole
discretion to reduce the Acquisition Consideration by the amount of
the dividend or other distributions, in which case any reference in
this Announcement to the Acquisition Consideration will be deemed
to be a reference to the Acquisition Consideration as so reduced,
and the relevant eligible Frontier Shareholder will be entitled to
receive and retain such dividend and/or other distribution and/or
other return of capital. To the extent that such a dividend and/or
other distribution and/or other return of capital is announced,
declared, paid or becomes payable and is or shall be: (i)
transferred pursuant to the Acquisition on a basis which entitles
Science Group to receive the dividend or distribution or return of
capital in respect of all Frontier Shares and to retain it; or (ii)
cancelled, the Acquisition Consideration payable shall not be
subject to change in accordance with this paragraph. Any exercise
by Science Group of its rights referred to in this paragraph shall
not be regarded as constituting any revision or variation of the
Offer.
Science Group and its advisers have not had access to Frontier's
non-public information or documentation and accordingly have been
unable to perform any due diligence on such information or
documentation. All information relating to Frontier and the
Frontier Group has been sourced from publicly available information
and has not been subject to comment or verification by Frontier or
the relevant member of the Frontier Group or their respective
directors.
Science Group has requested that Frontier instructs its
registrars to provide a copy of the register of members of Frontier
to reflect the position as at close of business on the date of this
Announcement including details of both participant and account IDs
for holdings in CREST. It has also sought confirmation from
Frontier that it will instruct its registrar to comply with the
other provisions of Appendix 4 of the City Code in order to enable
mailing of the Offer Document to Frontier Shareholders and
acceptance of the Offer by Frontier Shareholders who hold their
Frontier Shares in CREST.
Your attention is drawn to the further information contained in
the Appendices which form part of, and should be read in
conjunction with, this Announcement.
Enquiries
Science Group
Martyn Ratcliffe, Chairman Tel: +44 (0) 1223 875 200
Sarah Cole, Company Secretary
Panmure Gordon (Financial Adviser,
Nominated Adviser and Broker to
Science Group)
Dominic Morley / Alina Vaskina Tel: +44 (0) 20 7886 2500
(Corporate Finance)
Erik Anderson (Corporate Broking)
MHP Communications (PR Adviser Tel: +44 (0) 20 3128 8100
to Science Group)
Reg Hoare / Pete Lambie
The person responsible for arranging for the release of this
Announcement on behalf of Science Group is Sarah Cole.
IMPORTANT NOTICES
Panmure Gordon (UK) Limited is acting exclusively for Science
Group and for no one else in relation to the matters described in
this Announcement and is not advising any other person and
accordingly will not be responsible to anyone other than Science
Group for providing the protections afforded to the customers of
Panmure Gordon (UK) Limited or for providing advice in relation to
the matters described in this Announcement.
The statements contained in thisAnnouncement are not to be
construed as legal, business, financial or tax advice. If you are
in any doubt about the Offer or the contents of this Announcement,
you should consult your own legal, financial and/or tax adviser for
legal, business, financial and/or tax advice.
Further information
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, pursuant to the Offer or
otherwise. The Offer will be made solely by means of the Offer
Document and the Form of Acceptance accompanying the Offer
Document, which will contain the full terms and conditions of the
Offer, including details of how the Offer may be accepted. Any
response to the Offer should be made only on the basis of
information contained in the Offer Document. Frontier Shareholders
are advised to read the formal documentation in relation to the
Offer carefully once it has been despatched.
This announcement has been prepared for the purposes of
complying with English law and the rules of AIM and the information
disclosed may not be the same as that which would have been
disclosed if this Announcement had been prepared in accordance with
the laws and regulations of any jurisdiction outside the United
Kingdom.
Overseas Shareholders
The release, publication or distribution of this Announcement
and/or any accompanying documents (in whole or in part) in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom should inform themselves
about, and observe, any applicable restrictions and legal and
regulatory requirements.
Frontier Shareholders who are in any doubt regarding such
matters should consult an appropriate independent adviser in the
relevant jurisdiction without delay. Any failure to comply with
such restrictions and/or requirements may constitute a violation of
the securities laws of any such jurisdiction.
This announcement has been prepared for the purpose of complying
with English law and the information disclosed may not be the same
as that which would have been disclosed if this Announcement had
been prepared in accordance with the laws of jurisdictions outside
the United Kingdom.
The Offer will be subject to the applicable requirements of
English Law, the AIM Rules and the FCA. Frontier is not subject to
the City Code or any requirements of the Panel.
Unless otherwise determined by Science Group, and permitted by
applicable law and regulation, the Offer will not be made
available, directly or indirectly, in or into or from, or by the
use of mails or any means or instrumentality (including, but not
limited to, facsimile, e-mail or other electronic transmission,
telex or telephone) of interstate or foreign commerce of, or of any
facility of a national, state or other securities exchange of any
Restricted Jurisdiction and the Offer will not be capable of
acceptance by any such use, means, instrumentality or facilities or
from or within any Restricted Jurisdiction.
Accordingly, copies of this Announcement and all documents
relating to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded, distributed or sent in
or into or from any Restricted Jurisdiction and persons receiving
such documents (including any custodians, nominees and trustees)
must not mail or otherwise forward, distribute or send them in or
into or from any Restricted Jurisdiction. Any person (including any
custodian, nominee or trustee) who has a contractual or legal
obligation, or may otherwise intend, to forward this Announcement
and/or any other related document to a jurisdiction outside the
United Kingdom should inform themselves of, and observe, any
applicable legal or regulatory requirements of their jurisdiction
and must not mail, send or otherwise forward or distribute them in,
into or from any Restricted Jurisdiction. Doing so may render any
purported acceptance of the Offer invalid.
Notes to U.S. holders of Frontier Shares
The Offer is being made in the United States pursuant to Section
14(e) of, and Regulation 14E under, the US Exchange Act, subject to
the exemptions provided by Rule 14d-1(c) and otherwise in
accordance with the requirements of Cayman law. Accordingly, the
Offer will be subject to disclosure and other procedural
requirements, including with respect to withdrawal rights, offer
timetable, settlement procedures and timing of payments that are
different from those applicable under US domestic tender offer
procedures and law.
The Offer is being made for the securities of a
Cayman-incorporated company with its shares admitted to trading on
AIM. The Offer is subject to AIM Rule disclosure requirements,
which are different from certain United States disclosure
requirements. The financial information on Frontier included in
this Announcement has been extracted from Frontier financial
statements which are stated by Frontier to have been prepared in
accordance with IFRS and may therefore 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.
The receipt of cash pursuant to the Offer by a US holder of
Frontier Shares may be a taxable transaction for US federal income
tax purposes and under applicable US state and local, as well as
foreign and other, tax laws. Each Frontier Shareholder is urged to
consult his or her independent professional adviser immediately
regarding the tax consequences of accepting the Offer. Furthermore,
the payment and settlement procedure with respect to the Offer will
differ from the United States payment and settlement procedures,
particularly with regard to the date of payment of
consideration.
The Offer will be made (including in the United States) by
Science Group and no one else. None of Panmure Gordon nor any of
its affiliates will be making the Offer in or outside the United
States.
It may be difficult for US holders of Frontier Shares to enforce
their rights and any claim arising out of US federal securities
laws, since Science Group is incorporated under the laws of England
and Frontier is incorporated under the laws of the Cayman Islands
and some or all of their officers and directors are residents of
non-US jurisdictions. In addition, most of the assets of Science
Group and Frontier are located outside the United States. US
holders of Frontier Shares may not be able to sue a non-US company
or its officers or directors in a non-US court for violations of 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
judgment.
This Announcement does not constitute an offer of securities for
sale in the United States or an offer to acquire securities in the
United States. No offer to acquire securities or to exchange
securities for other securities has been made, or will be made,
directly or indirectly, in or into, or by the use of the mails of,
or by any means or instrumentality of interstate or foreign
commerce or any facilities of a national securities exchange of,
the United States or any other country in which such offer may not
be made other than: (i) in accordance with the tender offer
requirements under the US Exchange Act, or the securities laws of
such other country, as the case may be; or (ii) pursuant to an
available exemption from such requirements.
Neither the US Securities and Exchange Commission nor any US
state securities commission has approved or disapproved the Offer,
passed comment upon the fairness or merits of the Offer or passed
comment upon the adequacy or completeness of this Announcement. Any
representation to the contrary is a criminal offence in the United
States.
To the extent permitted by applicable law, in accordance with
normal UK market practice, Science Group or its nominees or brokers
(acting as agents) or their respective affiliates may from time to
time make certain purchases of, or arrangements to purchase, shares
or other securities in Frontier, other than pursuant to the Offer,
at any time prior to completion of the Offer (including, without
limitation, under the Panmure Gordon Trading Facility). These
purchases may occur either in the open market at prevailing prices
or in private transactions at negotiated prices. Any such
purchases, or arrangements to purchase, will comply with all
applicable UK and Cayman rules, the AIM Rules and Rule 14e-5 under
the Exchange Act to the extent applicable. In addition, in
accordance with, and to the extent permitted by normal UK market
practice, Panmure Gordon and its affiliates will continue to act as
exempt principal traders in Frontier Shares and engage in certain
other purchasing activities consistent with their respective normal
and usual practice and applicable law. To the extent required by
the applicable law, any information about such purchases will be
disclosed on a next day basis to a Regulatory Information Service
including the Regulatory News Service on the London Stock Exchange
website, www.londonstockexchange.com. To the extent that such
information is made public in the United Kingdom, this information
will also be deemed to be publicly disclosed in the United
States.
Cautionary note regarding forward-looking statements
This Announcement contains statements about Science Group and
Frontier which are, or may be deemed to be, "forward-looking
statements" and which are prospective in nature. All statements
other than statements of historical fact included in this
Announcement may be forward-looking statements. They are based on
current expectations and projections 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. Often, but
not always, forward-looking statements can be identified by the use
of forward-looking words such as "plans", "expects", "is expected",
"is subject to", "budget", "scheduled", "estimates", "forecasts",
"predicts", "intends", "anticipates", "believes", "targets",
"aims", "projects", "future-proofing" or words or terms of similar
substance or the negative of such words or terms, as well as
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. Such statements
are qualified in their entirety by the inherent risks and
uncertainties surrounding future expectations. 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 Science
Group's or Frontier's operations and potential synergies resulting
from the Offer; and (iii) the effects of global economic conditions
on Science Group's or Frontier's business.
These forward looking statements are not guarantees of future
financial performance and have not been reviewed by the auditors of
Science Group or Frontier. Such forward looking statements involve
known and unknown risks and uncertainties that could significantly
affect expected results and are based on certain key assumptions.
Many factors could cause actual results to differ materially from
those projected or implied in any forward looking statements. Due
to such uncertainties and risks, readers are cautioned not to place
undue reliance on such forward looking statements, which speak only
as of the date of this Announcement. All subsequent oral or written
forward looking statements attributable to Science Group or any of
its members, directors, officers or employees or any persons acting
on its behalf are expressly qualified in their entirety by the
cautionary statement above. Science Group disclaims any obligation
to update any forward looking or other statements contained herein,
except as required by applicable law.
No member of Science Group, nor any of its associates,
directors, officers, employees 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.
Other than in accordance with its legal or regulatory
obligations, Science Group is not under any obligation and Science
Group expressly disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
All subsequent oral or written forward-looking statements
attributable to Science Group, or any of its associates, directors,
officers, employees or advisers, are expressly qualified in their
entirety by the cautionary statement above.
No profit forecasts or estimates
No statement in, or referred to in, this Announcement or
incorporated by reference into this Announcement is intended as or
shall be deemed to be a profit forecast or estimate for any period.
No statement in, or referred to in, this Announcement or
incorporated by reference into this Announcement should be
interpreted to mean that cash flow from operations, free cash flow,
earnings or earnings per share for Frontier, Science Group or the
Enlarged Group (as applicable) for the current or future financial
years would necessarily match or exceed the historic published cash
flow from operations, free cash flow, earnings or earnings per
share for Frontier, Science Group or the Enlarged Group (as
applicable).
Publication on website and availability of hard copies
A copy of this Announcement will be available free of charge
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions on Science Group's website at
www.sciencegroup.com as soon as reasonably practicable following
the date of publication of this Announcement.
Save as expressly referred to in this announcement, neither the
contents of Science Group's website (nor the contents of any
website accessible from hyperlinks on Science Group's website) are
incorporated into, or form part of, this Announcement.
No representations
No adviser, dealer, salesperson or other person is authorised by
Science Group to give any information or to make any
representations with respect to the Offer other than such
information or representations contained in this Announcement and,
if given or made, such information or representations must not be
relied upon as having been authorised by Science Group.
Rounding
Certain figures included in this Announcement have been
subjected to rounding adjustments. Accordingly, figures shown for
the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures that precede them.
Definitions
Certain words and terms used in this Announcement are defined in
Appendix 3 of this Announcement.
Time
All times shown in this Announcement are London times, unless
otherwise stated.
Appendix 1
CONDITIONS TO AND FURTHER TERMS OF THE OFFER Part A: Conditions
to the Acquisition
The Offer will be governed by English Law and will be subject to
the exclusive jurisdiction of the English courts. The Offer will be
made on the terms and subject to the conditions set out in this
Appendix 1 and the Offer Document and, in the case of Frontier
Shares in certificated form, in the Form of Acceptance.
Conditions
The Offer will be subject to the following Conditions:
Acceptance Condition
(a) valid acceptances of the Offer having been received (and
not, where permitted, withdrawn) by no later than
1.00 p.m. (London time) on the First Closing Date of the Offer
as specified in the Offer Document (or such later time(s) and/or
date(s) as Science Group may decide) in respect of Frontier Shares
which, taken together with all other Frontier Shares which Science
Group its Affiliates (and/or their respective nominee(s)) has
acquired or agreed to acquire (whether pursuant to the Offer or
otherwise), carry in aggregate more than 50 per cent. of the voting
rights then normally exercisable at a general meeting of
Frontier;
for the purposes of this Condition:
(a) Frontier Shares which have been unconditionally allotted but
not issued before the Offer becomes or is declared unconditional as
to acceptances, whether pursuant to the exercise of any outstanding
subscription or conversion rights or otherwise, shall be deemed to
carry the voting rights they will carry upon issue;
(b) valid acceptances shall be deemed to have been received in
respect of Frontier Shares which are treated for the purposes of
section 88 of the Companies Law as having been acquired or
contracted to be acquired by Science Group, whether by virtue of
acceptance of the Offer or otherwise; and
(c) all percentages of voting rights and share capital are to be
calculated by reference to the percentage held and in issue outside
treasury,
in addition, the Acquisition will be conditional upon the
following Conditions and, accordingly, the Offer will not become or
be declared wholly unconditional unless the following Conditions
(as amended if appropriate) have been satisfied, or where relevant,
waived:
General Third Party clearances
(b) the waiver (or non-exercise within any applicable time
limits) by any relevant government or governmental,
quasi-governmental, supranational, statutory, regulatory,
environmental or investigative body, court, trade agency,
association, institution, any entity owned or controlled by any
relevant government or state, or any other body or person
whatsoever in any jurisdiction (each a Third Party) of any
termination right, right of pre-emption, first refusal or similar
right (which is material in the context of the Wider Frontier Group
taken as a whole) arising as a result of or in connection with the
Acquisition including, without limitation, its implementation and
financing or the proposed direct or indirect acquisition of any
shares or other securities in, or control of, Frontier by Science
Group or any member of the Science Group;
(c) no Third Party having decided to take, institute, implement
or threaten any action, proceeding, suit, investigation, enquiry or
reference, or enacted, made or proposed any statute, regulation,
decision or order, or having taken any other steps which would or
might reasonably be expected to:
(i) require, prevent or delay the divestiture, or alter the
terms envisaged for any proposed divestiture by any member of the
Wider Science Group or any member of the Wider Frontier Group of
all or any portion of their respective businesses, assets or
property or impose any limitation on the ability of any of them to
conduct their respective businesses (or any of them) or to own any
of their respective assets or properties or any part thereof which
in any such case would be material in the context of the Wider
Frontier Group taken as a whole;
(ii) require, prevent or delay the divestiture by any member of
the Wider Science Group of any shares or other securities in
Frontier;
(iii) impose any limitation on, or result in a delay in, the
ability of any member of the Wider Science Group directly or
indirectly to acquire or to hold or to exercise effectively any
rights of ownership in respect of shares or loans or securities
convertible into shares or any other securities (or the equivalent)
in any member of the Wider Frontier Group or the Wider Science
Group or to exercise management control over any such member;
(iv) otherwise adversely affect the business, assets, profits or
prospects of any member of the WiderScience Group or of any member
of the Wider Frontier Group;
(v) make the Acquisition or its implementation or the
acquisition or proposed acquisition by Science Group or any member
of the Wider Science Group of any shares or other securities in, or
control of Frontier void, illegal, and/or unenforceable under the
laws of any jurisdiction, or otherwise, directly or indirectly,
restrain, restrict, prohibit, delay or otherwise interfere with the
same, or impose additional conditions or obligations with respect
thereto, or otherwise challenge or interfere therewith;
(vi) require any member of the Wider Science Group or the Wider
Frontier Group to offer to acquire any shares or other securities
(or the equivalent) or interest in any member of the Wider Frontier
Group or the Wider Science Group owned by any third party;
(vii) impose any limitation on the ability of any member of the
Wider Frontier Group to co-ordinate its business, or any part of
it, with the businesses of any other members; or
(viii) result in any member of the Wider Frontier Group ceasing
to be able to carry on business under any name under which it
presently does so,
and all applicable waiting and other time periods during which
any such Third Party could institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference or
any other step under the laws of any jurisdiction in respect of the
Acquisition or the acquisition or proposed acquisition of any
Frontier Shares having expired, lapsed or been terminated;
(d) all necessary filings or applications having been made in
connection with the Acquisition and all statutory or regulatory
obligations in any jurisdiction having been complied with in
connection with the Acquisition or the acquisition by any member of
the Wider Science Group of any shares or other securities in, or
control of, Frontier and all authorisations, orders, recognitions,
grants, consents, licences, confirmations, clearances, permissions
and approvals or the proposed acquisition of any shares or other
securities in, or control of, Frontier by any member of the Wider
Science Group having been obtained in terms and in a form
satisfactory to Science Group from all appropriate Third Parties or
persons with whom any member of the Wider Frontier Group has
entered into contractual arrangements and all such authorisations,
orders, recognitions, grants, consents, licences, confirmations,
clearances, permissions and approvals together with all
authorisations orders, recognitions, grants, licences,
confirmations, clearances, permissions and approvals necessary or
appropriate to carry on the business of any member of the Wider
Frontier Group remaining in full force and effect and all filings
necessary for such purpose have been made and there being no notice
or intimation of any intention to revoke or not to renew any of the
same at the time at which the Acquisition becomes otherwise
unconditional and all necessary statutory or regulatory obligations
in any jurisdiction having been complied with;
Certain matters arising as a result of any arrangement,
agreement etc.
(e) there being no provision of any agreement, arrangement,
licence, permit or other instrument to which any member of the
Wider Frontier Group is a party or by or to which any such member
or any of its assets may be bound, entitled or subject, which in
consequence of the Acquisition or the proposed acquisition of any
shares or other securities in Frontier or because of a change in
the control or management of Frontier or otherwise, could or might
reasonably be expected to result in any of the following:
(i) any moneys borrowed by or any other indebtedness (actual or
contingent) of, or grant available to any such member, being or
becoming repayable or capable of being declared repayable
immediately or earlier than their or its stated maturity date or
repayment date or the ability of any such member to borrow moneys
or incur any indebtedness being withdrawn or inhibited or being
capable of becoming or being withdrawn or inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of
any such member thereunder being terminated or modified or affected
or any obligation or liability arising or any action being taken or
arising thereunder;
(iii) any assets or interests of any such member being or
falling to be disposed of or charged or any right arising under
which any such asset or interest could be required to be disposed
of or charged other than in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any such member;
(v) the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any
person, firm or body (or any arrangement or arrangements relating
to any such interest or business) being terminated, adversely
modified or affected;
(vi) the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business
under any name under which it presently does so; or
(viii) the creation or acceleration of any liability, actual or
contingent, by any such member,
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider Frontier Group is a party or by or to
which any such member or any of its assets may be bound, entitled
or subject, would or might reasonably be expected to result in any
of the events or circumstances as are referred to in sub-paragraphs
(i) to (viii) of this condition;
No material transactions, claims or changes in the conduct of
the business of the Frontier Group
(f) no member of the Wider Frontier Group having, since 31 December 2018;
(i) save as between Frontier and wholly-owned subsidiaries of
Frontier or for Frontier Shares issued pursuant to the vesting of
awards (provided that such vesting happens automatically as a
matter of contract and neither the board of Frontier nor the
remuneration committee of Frontier have any discretion to prevent
such vestings), granted under the any Frontier Share Plans, issued
or agreed to issue, authorised or proposed the issue of additional
shares of any class;
(ii) save as between Frontier and wholly-owned subsidiaries of
Frontier or for the grant of options and awards under the Frontier
Share Plans (provided that such vesting happens automatically as a
matter of contract and neither the board of Frontier nor the
remuneration committee of Frontier have any discretion to prevent
such vestings), issued or agreed to issue, authorised or proposed
the issue of securities convertible into shares of any class or
rights, warrants or options to subscribe for, or acquire, any such
shares or convertible securities;
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution whether payable in cash or otherwise;
(iv) merged or demerged with any body corporate or acquired or
disposed of or transferred, mortgaged or charged or created any
security interest over any assets or any right, title or interest
in any asset (including shares and trade investments) or authorised
or proposed or announced any intention to propose any merger,
demerger, acquisition or disposal, transfer, mortgage, charge or
security interest, in each case, other than in the ordinary course
of business;
(v) made or authorised or proposed or announced an intention to
propose any material change in its loan capital;
(vi) issued, authorised or proposed the issue of any debentures
or, save in the ordinary course of business, incurred or increased
any indebtedness or become subject to any contingent liability;
(vii) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, save in respect to the matters mentioned in
sub-paragraph (i) above, made any other change to any part of its
share capital;
(viii) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in
the ordinary course of business or entered into or changed the
terms of any contract with any director or senior executive;
(ix) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction or
commitment (whether in respect of capital expenditure or otherwise)
which is of a long term, onerous or unusual nature or magnitude or
which is or could be restrictive on the businesses of any member of
the Wider Frontier Group or the Wider Science Group or which
involves or could involve an obligation of such a nature or
magnitude or which is other than in the ordinary course of
business;
(x) (other than in respect of a member which is dormant and was
solvent at the relevant time) taken any corporate action or had any
legal proceedings started or threatened against it for its
winding-up, dissolution or reorganisation or for the appointment of
a receiver, administrative receiver, administrator, trustee or
similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or had any such person
appointed;
(xi) entered into any contract, transaction or arrangement which
would be restrictive on the business of any member of the Wider
Frontier Group or the Wider Science Group other than to a nature
and extent which is normal in the context of the business
concerned;
(xii) waived or compromised any claim;
(xiii) entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to
propose to, effect any of the transactions, matters or events
referred to in this condition and which is material in the context
of the Wider Frontier Group;
(xiv) having made or agreed or consented to any change to:
(A) the terms of the trust deeds constituting the pension
scheme(s) established by any member of the
Wider Frontier Group for its directors, employees or their
dependents;
(B) the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
(C) the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
(D) the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made; or
(xv) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any person employed
by the Wider Frontier Group,
and, for the purposes of paragraphs (iii), (iv), (v) and (vi) of
this condition, the term Frontier Group shall mean Frontier and its
wholly-owned subsidiaries;
No adverse change, litigation or regulatory enquiry
(g) since 31 December 2018:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of operational performance of any member of the Wider
Frontier Group which is material in the context of the Wider
Frontier Group taken as a whole and no circumstances have arisen
which would or might reasonably be expected to result in such
adverse change;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Frontier
Group is or may become a party (whether as a plaintiff, defendant
or otherwise) and no investigation by any Third Party against or in
respect of any member of the Wider Frontier Group having been
instituted announced or threatened by or against or remaining
outstanding in respect of any member of the Wider Frontier
Group;
(iii) no contingent or other liability having arisen or become
apparent to Science Group which would be likely to materially and
adversely affect any member of the Wider Frontier Group; and
(iv) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider Frontier Group which is
necessary for the proper carrying on of its business;
No discovery of certain matters
(h) Science Group not having discovered:
(i) that any financial, business or other information concerning
the Wider Frontier Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider
Frontier Group is materially misleading, contains a material
misrepresentation of fact or omits to state a fact necessary to
make that information not materially misleading;
(ii) that any member of the Wider Frontier Group partnership,
company or other entity in which any member of the Wider Frontier
Group has a significant economic interest and which is not a
subsidiary undertaking of Frontier is subject to any liability
(contingent or otherwise) which is not disclosed in the annual
report and accounts of Frontier for the year ended 31 December
2018; or
(iii) any information which affects the import of any
information disclosed at any time by or on behalf of any member of
the Wider Frontier Group and which is material in the context of
the Wider Frontier Group;
(i) Science Group not having discovered that:
(i) any past or present member of the Wider Frontier Group has
failed to comply with any and/or all applicable legislation or
regulation, of any jurisdiction with regard to the use, treatment,
storage, carriage, disposal, spillage, release, discharge, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment or harm human health or animal
health or otherwise relating to environmental matters or the health
and safety of humans, or that there has otherwise been any such
storage, carriage, disposal, spillage, release, discharge, leak or
emission (whether or not the same constituted a non-compliance by
any person with any such legislation or regulations, and wherever
the same may have taken place) any of which storage, carriage,
disposal, spillage, release, discharge, leak or emission would be
likely to give rise to any liability (actual or contingent) on the
part of any member of the Wider Frontier Group; or
(ii) there is, or is likely to be, for that or any other reason
whatsoever, any liability (actual or contingent) of any past or
present member of the Wider Frontier Group to make good, repair,
reinstate or clean up any property now or previously owned,
occupied, operated or made use of or controlled by any such past or
present member of the Wider Frontier Group, under any environmental
legislation, regulation, notice, circular or order of any
government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body,
agency, court, association or any other person or body in any
jurisdiction; and
(iii) circumstances exist whereby a person or class of persons
would be likely to have any claim or claims in respect of any
product, or process of manufacturing or materials used therein
currently or previously manufactured, sold or carried out by any
past or present member of the Wider Frontier Group.
Anti-corruption, sanctions and criminal property
(j) Science Group not having discovered that:
(i) (a) any past or present member, director, officer or
employee of the Wider Frontier Group is or has at any time engaged
in any activity, practice or conduct which would constitute an
offence under the Bribery Act 2010, the U.S. Foreign Corrupt
Practices Act of 1977 or any other applicable anti-corruption
legislation or (b) any person that performs or has performed
services for or on behalf of the Wider Frontier Group is or has at
any time engaged in any activity, practice or conduct in connection
with the performance of such services which would constitute an
offence under the Bribery Act 2010, the U.S. Foreign Corrupt
Practices Act of 1977 or any other applicable anti-corruption
legislation;
(ii) any asset of any member of the Wider Frontier Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition);
(iii) any past or present member, director, officer or employee
of the Frontier Group, or any other person for whom any such person
may be liable or responsible, has engaged in any business with,
made any investments in, made any funds or assets available to or
received any funds or assets from: (a) any government, entity or
individual in respect of which U.S. or European Union persons, or
persons operating in those territories, are prohibited from
engaging in activities or doing business, or from receiving or
making available funds or economic resources, by U.S. or European
Union laws or regulations, including the economic sanctions
administered by the United States Office of Foreign Assets Control,
or HM Treasury in the UK; or (b) any government, entity or
individual targeted by any of the economic sanctions of the United
Nations, the United States, the European Union or any of its member
states; or
(iv) no member of the Frontier Group being engaged in any
transaction which would cause Science Group to be in breach of any
law or regulation upon its acquisition of Frontier, including the
economic sanctions of the United States Office of Foreign Assets
Control, or HM Treasury in the UK, or any government, entity or
individual targeted by any of the economic sanctions of the United
Nations, the United States, the European Union or any of its member
states.
Frontier Register of Members
(k) Frontier having instructed its registrars to provide all
information to Science Group and/or the Receiving Agent appointed
by Science Group in connection with the Offer that it would be
required to provide to Science Group if the Offer was subject to
the City Code and Frontier's registrar having complied in full with
such instruction.
Part B: Waiver and invocation of Conditions
1. To the extent permitted by law, Science Group reserves the
right to waive, in whole or in part, all or any of the Conditions
in Part A of this Appendix 1.
2. The Offer will lapse unless all of the Conditions set out in
Part A of this Appendix 1 have been fulfilled or where appropriate,
have been determined by Science Group to be waived or to be or
remain satisfied, by midnight (London time) on the 21st day after
the later of (i) the First Closing Date; and (ii) the date on which
the Offer becomes or is declared unconditional as to acceptances
(or, in each case, such later date as Science Group may
determine).
3. Science Group shall be under no obligation to waive (if
capable of waiver), to determine to be or remain satisfied or to
treat as fulfilled any of the Conditions set out in Part A of this
Appendix 2 by a date earlier than the latest date specified above
in paragraph 2 of this Part B for the fulfilment or waiver thereof,
notwithstanding that the other Conditions may at such earlier date
have been waived or fulfilled and that there are at such earlier
date no circumstances indicating that any of such Conditions may
not be capable of fulfilment.
Appendix 2
Sources of Information and Bases of Calculation
In this Announcement, unless otherwise stated or the context
requires, the following bases and sources have been used;
(a) the financial information relating to Frontier is extracted
(without adjustment) from the audited financial statements of
Frontier for the relevant year and/or from regulatory announcements
made by Frontier; and
(b) all prices and closing prices for Frontier Shares are
derived from Thompson Reuters Datastream.
Appendix 3
Definitions
The following definitions apply throughout this Announcement
(unless the context otherwise requires):
Acceptance Condition the Condition as to acceptances
set out in paragraph (a) of Part
A of Appendix 1 of this Announcement
Acquisition the proposed acquisition of the
entire issued and to be issued
share capital of Frontier by Science
Group, other than those Frontier
Shares already owned by Science
Group and its Affiliates
Acquisition Consideration the cash amount of 35 pence per
Frontier Share payable by Science
Group pursuant to the Acquisition,
as adjusted in accordance with
the terms of the Acquisition as
set out in this Announcement and
to be set out in the Offer Document
and Form of Acceptance
Affiliates in relation to a party, any person
that directly or indirectly, through
one or more intermediaries, controls,
is controlled by, or is under
common control with, the party,
and for these purposes a party
shall be deemed to control a person
if such party possesses, directly
or indirectly, the power to direct
or cause the direction of the
management and policies of the
person, whether through the ownership
of over 50 per cent. of the voting
securities or the right to appoint
over 50 per cent. of the relevant
board of directors by contract
or otherwise, but, in relation
to Science Group, specifically
excluding Frontier and each other
member of the Frontier Group
AIM the Alternative Investment Market
of the London Stock Exchange
AIM Rules the AIM Rules for companies issued
by the London Stock Exchange as
at March 2018
Announcement this announcement made on 1 July
2019 by Science Group of its intention
to make an offer for the entire
issued and to be issued share
capital of Frontier
Business Day a day (other than a Saturday or
Sunday or public or bank holiday
in the UK) on which clearing banks
are open for general business
in London
City Code the City Code on Takeovers and
Mergers
Companies Law the Companies Law (2018 Revision)
of the Cayman Islands (as amended)
Conditions the conditions to the Acquisition
set out in Appendix 1 to this
Announcement, and Condition means
any one of them
CREST the relevant system (as defined
in the Regulations) in respect
of which Euroclear is the Operator
(as defined in the Regulations)
CREST Manual the manual published by Euroclear
for further information on the
CREST system, as amended from
time to time
CREST member a person who has been admitted
by Euroclear as a system member
(as defined in the Regulations)
CREST participant a person who is, in relation to
CREST, a system-participant (as
defined in the Regulations)
CREST sponsor a CREST participant admitted to
CREST as a CREST sponsor
CREST sponsored member a CREST member admitted to CREST
as a sponsored member
Depositary Interest the dematerialized depositary
interests which are transferred
through the CREST system and represent
the underlying Frontier Shares
that are held on trust by the
depositary for the holders of
the depositary interests
Digital Radio digital audio broadcasting radios
Enlarged Group Science Group and its subsidiaries
and its subsidiary undertakings
following completion of the Acquisition
Euroclear Euroclear UK & Ireland Limited,
the operator of CREST
FCA the UK Financial Conduct Authority
or its successor from time to
time
FCA Handbook the FCA's Handbook of rules and
guidance as amended
First Closing Date 1.00 p.m. (London time) on the
date specified in the Offer Document
as being the first closing date
(or such later time(s) and/or
date(s) as Science Group may decide)
Form of Acceptance the form of acceptance and authority
relating to the Offer accompanying
the Offer Document
Frontier Frontier Smart Technologies Group
Limited, an exempted company incorporated
in the Cayman Islands with limited
liability with number FC031563
Frontier Board the directors of Frontier at the
date of this Announcement, collectively
Frontier Group Frontier and its subsidiaries
and subsidiary undertakings from
time to time
Frontier Share Plans any applicable employee share
plans of Frontier
Frontier Shareholders holders of Frontier Shares from
time to time
Frontier Shares the existing unconditionally allotted
or issued and fully paid ordinary
shares of 10 pence each in the
capital of the Frontier (including
such shares represented by Depositary
Interests) and any further such
ordinary shares which are unconditionally
allotted or issued and fully paid
while the Offer remains open for
acceptance or before such earlier
time and date as Science Group
may determine, not being earlier
than the time and date on which
the Offer becomes or is declared
unconditional as to acceptances
or, if later, the First Closing
Date (but excluding any such ordinary
shares held or which become held
in treasury), and Frontier Share
means any one of them
Offer the cash offer to be made by Science
Group to acquire the entire issued
and to be issued share capital
of Frontier (other than those
Frontier Shares already owned
by Science Group and its Affiliates
or their respective nominee/(s))
on the terms and subject to the
Conditions to be set out in the
Offer Document and, in the case
of Frontier Shares held in certificated
form, the Form of Acceptance including,
where the context so requires,
any subsequent revision, variation,
extension or renewal of such offer
Offer Document the document to be sent to the
Frontier Shareholders containing
the terms and conditions of the
Offer
Overseas Shareholders Frontier Shareholders resident
in, ordinarily resident in, or
citizens or nationals of, jurisdictions
outside the United Kingdom
Panel the Panel on Takeovers and Mergers
Panmure Gordon Panmure Gordon (UK) Limited of
One New Change, London EC4M 9AF
Panmure Gordon Trading Facility the facility to be provided by
Panmure Gordon to enable Frontier
Shareholders to sell their Frontier
Shares to Science Group outside
any Offer for consideration per
Frontier Share equal to the Cash
Consideration, details of which
are set out in Section 3 of this
Announcement
Regulations the Uncertificated Securities
Regulations 2001 (S.I. 2001/3755)
Regulatory Information Service a regulatory information service
as defined in the FCA Handbook
Restricted Jurisdiction any jurisdiction where local laws
or regulations may result in a
significant risk of civil, regulatory
or criminal exposure if information
concerning the Offer is sent or
made available to Frontier Shareholders
in that jurisdiction
Scheme of Arrangement a scheme of arrangement under
section 86 of the Companies, with
or subject to any modification,
addition or condition approved
or imposed by the Courts of the
Cayman Islands
Science Group Science Group plc, a public company
incorporated under the laws of
England and Wales with registered
number 06536543
Science Group Board the directors of Science Group
at the date of this Announcement,
collectively
significant interest a direct or indirect interest
in ten per cent. or more of the
equity share capital (as defined
in the Companies Act)
Smart IoT Devices smart internet of things devices
UK or United Kingdom the United Kingdom of Great Britain
and Northern Ireland
uncertificated or in uncertificated in relation to a share or other
form security, a share or other security
which is recorded on the relevant
register of the share or security
concerned as being held in uncertificated
form in CREST and title to which,
by virtue of the Regulations,
may be transferred by means of
CREST
United States or U.S. the United States of America,
its territories and possessions,
any state of the United States
of America, the District of Columbia,
and all other areas subject to
its jurisdiction
U.S. Exchange Act the U.S. Securities Exchange Act
1934, as amended and the rules
and regulations promulgated thereunder
Wider Frontier Group Frontier and its subsidiary undertakings,
associated undertakings and any
other undertaking in which Frontier
and/or such undertakings (aggregating
their interests) have a significant
interest but excluding, for the
avoidance of doubt, the Wider
Science Group
Wider Science Group Science Group and its subsidiary
undertakings, associated undertakings
and any other undertaking in which
Science Group and/or such undertakings
(aggregating their interests)
have a significant interest but
excluding, for the avoidance of
doubt, the Wider Frontier Group
GBP or pounds sterling pounds sterling, the lawful currency
for the time being of the UK and
references to "pence" and "p"
shall be construed accordingly
US$ or U.S. dollars U.S. dollars, the lawful currency
for the time being of the United
States
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
OFFFMGFVGGKGLZZ
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