TIDMTCM
RNS Number : 7037Z
DBAY Advisors Limited
25 May 2021
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR A PROSPECTUS EXEMPT
DOCUMENT AND TELIT SHAREHOLDERS SHOULD NOT MAKE ANY DECISION IN
RELATION TO THE CONSIDERATION LOAN NOTES OR THE CONSIDERATION
SHARES EXCEPT ON THE BASIS OF THE INFORMATION TO BE CONTAINED IN
THE SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE
COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
25 May 2021
RECOMMED CASH OFFER
for
TELIT COMMUNICATIONS PLC
by
TRIESTE ACQUISITIONS HOLDING LIMITED
to be effected
by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
Summary
-- The boards of Trieste Acquisitions Holding Limited ("Bidco")
and Telit Communications plc ("Telit") are pleased to announce that
they have reached agreement on the terms of a recommended cash
offer to be made by Bidco for the entire issued and to be issued
ordinary share capital of Telit other than the Telit Shares held by
funds managed by DBAY (the "Acquisition").
-- Under the terms of the Acquisition, each Scheme Shareholder will be entitled to receive:
220 pence in cash per Scheme Share (the "Cash Offer")
-- Based on the Cash Offer, the Acquisition values the entire
issued and to be issued ordinary share capital of Telit at
approximately GBP306.9 million, on the basis of a fully diluted
share capital of 139,479,677 Telit Shares.
-- The Cash Offer represents a premium of approximately:
-- 58.5 per cent. to the Closing Price of 138.8 pence per Telit
Share on 2 November 2020 (being the last Business Day before the
Previous Offer Period began);
-- 64.1 per cent. to the Volume Weighted Average Price per Telit
Share during the one month period ended 2 November 2020;
-- 63.8 per cent. to the Volume Weighted Average Price per Telit
Share during the six month period ended on 2 November 2020;
-- 76.9 per cent. to the Volume Weighted Average Price per Telit
Share during the twelve month period ended on 2 November 2020;
-- 6.0 per cent. to the Closing Price of 207.5 pence per Telit
Share on 17 March 2021 (being the last Business Day before the
Current Offer Period began); and
-- 12.1 per cent. to the Volume Weighted Average Price per Telit
Share during the one month period ended 17 March 2021.
-- As an alternative to the Cash Offer, Telit Shareholders
(other than Telit Shareholders resident or located in a Restricted
Jurisdiction) may elect to receive one loan note from Bidco (a
"Consideration Loan Note") for each Scheme Share held (the
"Alternative Offer"). The Consideration Loan Notes will be issued
by Bidco, credited as fully paid, in amounts and integral multiples
equal to the Cash Offer. A Telit Shareholder may elect to take up
the Alternative Offer in respect of all (but not part) of his, her
or its holding of Scheme Shares. Each Consideration Loan Note will
be immediately exchanged for a loan note in Holdco (the "Holdco
Loan Note") by way of a call option exercised by Holdco and the
Holdco Loan Note will then be immediately exchanged by way of a
call option exercised by Midco, resulting in a non-voting B
ordinary share in Midco (a "Consideration Share") being issued to
those Telit Shareholders who accept the Alternative Offer. The
Consideration Shares will be issued within 14 days of the Effective
Date. The terms and conditions of the Alternative Offer are set out
in paragraph 11 of this Announcement and a summary of the rights
attaching to the Consideration Loan Notes and the Consideration
Shares is set out in Appendix IV to this Announcement. The
Consideration Shares are non-transferable and do not carry any
voting rights, other than after the occurrence of the limited
circumstances when they convert to voting shares.
-- Bidco is a limited company registered in England and Wales
and incorporated on 23 April 2021. Bidco was formed for the
purposes of the Acquisition and is an entity ultimately owned by
funds managed by DBAY Advisors Limited ("DBAY") and has not traded
since its date of incorporation, nor has it entered into any
obligations other than in connection with the Acquisition.
-- DBAY is a regulated investment manager licensed to conduct
investment business by the Isle of Man Financial Services
Authority. It was founded in 2011 and manages a range of funds and
co-investment vehicles for endowments, foundations and other
institutional investors. DBAY has offices in Douglas and London.
DBAY supports companies in which it makes long term investments to
develop clear growth opportunities with a particular emphasis on
creating long term value by working alongside management teams.
-- Telit is a global leader in Internet of Things (IoT)
enablement, with an extensive portfolio of wireless connectivity
modules, platforms and virtual cellular IoT operator services,
empowering hundreds of millions of connected 'things' to date, and
trusted by thousands of direct and indirect customers, globally.
With nearly two decades of IoT innovation experience, Telit
continues to redefine the boundaries of digital business, by
delivering secure, integrated end-to-end IoT solutions for many of
the world's largest brands, including enterprises, OEMs, system
integrators and service providers across a wide range of
industries, enabling their pursuit of enterprise digital
transformation.
-- The Telit Directors, who have been so advised by Rothschild
& Co as to the financial terms of the Cash Offer, consider that
the Cash Offer undervalues Telit and its longer-term prospects. In
providing advice to the Telit Directors as to the financial terms
of the Cash Offer, Rothschild & Co has taken into account the
commercial assessments of the Telit Directors.
-- The Telit Directors have considered a number of factors in
addition to value, including that the Cash Offer represents an
opportunity for Shareholders wanting to realise their investment in
cash to do so at material premium to the historical share price of
Telit. Accordingly, and after careful consideration, including
taking into account the factors set out in paragraph 3 of this
Announcement, the Telit Directors believe that the Acquisition is
in the best interests of Telit Shareholders as a whole and intend
to recommend unanimously that Telit Shareholders vote or procure
votes in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or, in the event
that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of the Takeover Offer), as the Telit
Directors have irrevocably undertaken to do in respect of their own
beneficial holdings of 1,027,989 Telit Shares (representing, in
aggregate, approximately 0.765 per cent. of the Telit Shares in
issue on the Last Practicable Date).
-- In considering the terms of the Alternative Offer, the Telit
Directors and Rothschild & Co have considered that the
Consideration Shares, which Scheme Shareholders will hold following
the exchange of the Consideration Loan Notes for the Holdco Loan
Notes and thereafter, the exchange of the Holdco Loan Notes for the
Consideration Shares, as described in Appendix IV to this
Announcement: (a) are unlisted and will not be admitted to trading
on any stock exchange (and will therefore, be illiquid and not
carry the standards and protections afforded to shareholders in a
company admitted to trading on AIM, as Telit currently is) and will
represent a minority investment in a company controlled by funds
managed by DBAY; (b) will not carry any right to vote at any
general meeting of Midco other than after the occurrence of the
limited circumstances when they convert to voting shares; (c) will
not be transferrable except in limited circumstances; and (d) will
only carry customary pre-emption rights on new issues of securities
by Midco if any such issue is for cash, and such rights will be
subject to other important exceptions presenting a risk of
significant dilution and reduction, for example if a management
incentive plan were introduced. The value of the Consideration
Shares will also be uncertain and there can be no assurance that
they will be capable of being sold in the future.
-- For the reasons set out above, together with risk factors and
other investment considerations set out in paragraph 11 of this
Announcement, Rothschild & Co are unable to advise the Telit
Directors as to whether or not the financial terms of the
Alternative Offer are fair and reasonable.
-- Accordingly, the Telit Directors cannot form an opinion as to
whether or not the terms of the Alternative Offer are fair and
reasonable and are not making any recommendation or giving any
advice to Telit Shareholders as to whether or not they should elect
for the Alternative Offer. Telit Shareholders are strongly
recommended to take into account the disadvantages and advantages
highlighted in paragraph 11 of this Announcement, as well as their
individual circumstances, when deciding whether or not to elect for
the Alternative Offer in respect of their holding of Scheme
Shares.
-- The Telit Directors strongly recommend that, in deciding
whether or not to elect for the Alternative Offer, the Telit
Shareholders should take their own independent financial, legal and
tax advice and consider carefully the disadvantages and advantages
of electing for the Alternative Offer (including, but not limited
to, those set out in paragraph 11 of this Announcement) in light of
their own financial circumstances and investment objectives.
-- Telit Shareholders should also ascertain whether acquiring or
holding the Consideration Loan Notes, the Holdco Loan Notes or the
Consideration Shares is affected by the laws of the relevant
jurisdiction in which they reside and consider whether the
Consideration Shares are a suitable investment in light of their
own personal circumstances. Telit Shareholders are, therefore,
strongly recommended to seek their own independent financial, tax
and legal advice in light of their own particular circumstances and
investment objectives before deciding whether to elect for the
Alternative Offer. Any decision to elect for the Alternative Offer
should be based on independent financial, tax and legal advice and,
to the extent available in such Scheme Shareholder's jurisdiction,
consideration of the Scheme Document (once published).
Disadvantages of electing for the Alternative Offer
-- The Consideration Shares, which Scheme Shareholders will hold following the exchange of the Consideration Loan Notes and the Holdco Loan Notes, as described in Appendix IV to this Announcement, are unlisted and will not be admitted to trading on any stock exchange and will therefore, be illiquid.
-- The Consideration Shares will be of uncertain value and there
can be no assurance that they will be capable of being sold in the
future.
-- The Consideration Shares are non-transferable, non-voting
shares and only the Midco A Shares carry voting rights.
-- The holders of the Consideration Shares will only have
customary pre-emption rights on new issues of securities by Midco
if any such issue is for cash.
-- The right of holders of Consideration Shares to participate
in future issues of securities by Midco will also be subject to
other important exceptions. These exceptions may be particularly
relevant in practice. Holders of Consideration Shares may well
suffer dilution, not only in their percentage ownership but also in
the value of their Consideration Shares since such further issues
may reduce any net return derived by the Consideration Shares when
compared to any such net return that might otherwise have been
derived had Midco not issued those securities. This dilution and
reduction may be significant. For example:
-- Holders of Consideration Shares will not be entitled to
participate in any issues of securities to actual or potential
employees, directors, officers or consultants of the Wider Telit
Group (whether of the same or different classes to the
Consideration Shares). This is important since, common to many
private equity acquisitions, DBAY may introduce one or more
management incentive plans for actual or potential employees,
directors, officers and consultants of the Wider Telit Group after
the Effective Date.
-- Management incentive plans generally provide participants
with a significant interest in securities in Midco, and, if one is
introduced, it may result in a significant dilution of the
Consideration Shares. In addition, Midco may not receive material
cash sums on the issue of such securities and the returns on those
securities may potentially be structured to increase their
proportionate interest in the value of the Wider Telit Group as it
increases in value (whether pursuant to a ratchet mechanism or
otherwise). These issues of securities may occur initially
following the Acquisition, but further issues are likely in the
future as the Wider Telit Group expands (whether as a result of
further acquisitions or organic growth or otherwise).
-- Similarly, holders of Consideration Shares will not be
entitled to participate in issues of securities by Midco in
consideration for, or in connection with, its acquisition of other
assets, companies or all or part of any other businesses or
undertakings (for example, if the Wider Telit Group expands).
-- In relation to those issues of securities in which holders of
Consideration Shares are entitled to participate, if they wish to
avoid their percentage interest in Midco being reduced by any such
issue, they will need to invest further cash sums in Midco.
-- The precise numbers of securities that may be issued by Midco
from time to time cannot be ascertained at the date of this
Announcement and will depend on a variety of factors including
those described above.
-- The Telit Shares are currently admitted to trading on AIM.
Certain standards and protections afforded to shareholders in a
company admitted to trading on AIM will be substantially different
to a shareholding in an unlisted private company which a Scheme
Shareholder would receive as a result of electing for the
Alternative Offer.
Advantages of electing for the Alternative Offer
-- The Alternative Offer allows Scheme Shareholders to invest
directly in the Wider Telit Group, providing continued economic
exposure to Telit under private ownership.
-- The Consideration Shares will rank economically pari passu
with the Midco A Shares in issue at the time the Consideration
Shares are allotted and issued, including the right to receive and
retain dividends and other distributions declared, made or paid by
reference to a record date falling after the Effective Date.
-- Pursuant to the irrevocable undertakings received from the
Telit Directors holding Telit Shares referred to above, each of the
Telit Directors who is interested in Telit Shares has irrevocably
undertaken to vote (or procure the vote) in favour of the Scheme at
the Court Meeting and in favour of the Resolutions to be proposed
at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer) in respect of their entire
beneficial holding of Scheme Shares.
-- In addition, Paolo Dal Pino, CEO of the Company, has
irrevocably undertaken to elect for the Alternative Offer, as he
wishes to continue to hold an investment in Telit and his personal
circumstances mean that he is willing to hold an unlisted,
non-transferable investment, and these factors outweigh the other
disadvantages listed above.
-- In addition to the irrevocable undertakings received from the
Telit Directors holding shares in Telit, Bidco has received
irrevocable undertakings from Richard Griffiths and Davide Serra
(the "Rollover Shareholders") (as detailed in Appendix III to this
Announcement) to: (a) vote or procure votes in favour of the Scheme
at the Court Meeting and the Resolutions to be proposed at the
General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, accept or procure
acceptance of the Takeover Offer); and (b) elect for the
Alternative Offer (subject to the terms and conditions of the
Alternative Offer set out in paragraph 11 of this Announcement), in
each case in respect of his entire beneficial holding of Scheme
Shares. In aggregate, the Rollover Shareholders hold 19,645,140
Telit Shares (representing, in aggregate, approximately 14.62 per
cent. of the Telit Shares in issue on the Last Practicable
Date).
-- In addition to the irrevocable undertakings noted above,
Bidco has received an irrevocable undertaking from Run Liang Tai
Management Limited (as detailed in Appendix III to this
Announcement) to: (a) vote or procure votes in favour of the Scheme
at the Court Meeting and the Resolutions to be proposed at the
General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, accept or procure
acceptance of the Takeover Offer); and (b) elect not to take up the
Alternative Offer, in respect of their entire beneficial holding of
Scheme Shares in respect of 20,030,495 Telit Shares (representing,
in aggregate, approximately 14.90 per cent. of the Telit Shares in
issue on the Last Practicable Date).
-- Bidco has also received a non-binding letter of intent from
Compass Asset Management SA (as detailed in Appendix III) to vote
or procure votes in favour of the Scheme at the Court Meeting and
the Resolutions to be proposed at the General Meeting (or, in the
event that the Acquisition is implemented by way of a Takeover
Offer, accept or procure acceptance of the Takeover Offer), in
respect of 2,220,002 Telit Shares (representing, in aggregate,
approximately 1.65 per cent. of the Telit Shares in issue on the
Last Practicable Date).
-- Therefore, as at the date of this Announcement, Bidco has
received irrevocable undertakings and a letter of intent in respect
of a total of 42,923,626 Telit Shares (representing approximately
31.94 per cent. of the Telit Shares in issue on the Last
Practicable Date).
-- Full details of the irrevocable undertakings and letter of
intent received by Bidco are set out in Appendix III to this
Announcement.
-- It is intended that the Acquisition be implemented by way of
a Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act (or, if Bidco so elects and with the consent of the
Takeover Panel and subject to the terms of the Co-operation
Agreement, a Takeover Offer). The purpose of the Scheme is to
provide for Bidco to become the owner of the entire issued and to
be issued ordinary share capital of Telit. The Scheme will be put
to Scheme Shareholders at the Court Meeting and to the Telit
Shareholders at the General Meeting. In order to become Effective,
the Scheme must be approved by a majority in number of the Scheme
Shareholders voting at the Court Meeting, either in person or by
proxy, representing at least 75 per cent. in value of the Scheme
Shares voted. The implementation of the Scheme must also be
approved by Telit Shareholders at the General Meeting.
-- If any dividend or other distribution in respect of the Telit
Shares is declared, paid or made on or after the date of this
Announcement, Bidco reserves the right to reduce the consideration
payable for each Telit Share under the terms of the Acquisition by
the amount per Telit Share of such dividend or distribution. If
Bidco exercises this right or makes such a reduction in respect of
a dividend or distribution, Telit Shareholders will be entitled to
receive and retain that dividend or distribution.
-- The Acquisition is subject to the Conditions and certain
further terms set out in Appendix I to this Announcement and to the
full terms and conditions of the Acquisition which will be set out
in the Scheme Document. The Acquisition is subject to the receipt
of certain regulatory approvals, in particular, in Italy and the US
which are set out in paragraphs 2(c) and 2(d) of Appendix I to this
Announcement.
-- The Scheme Document will include full details of the
Acquisition, together with notices of the Court Meeting and General
Meeting, the expected timetable of the Acquisition, full details of
the terms of the Consideration Loan Notes and the Consideration
Shares and will specify the action to be taken by Telit
Shareholders. It is expected that the Scheme Document will be
published within 28 days of this Announcement (or on such later
date as may be agreed by Bidco and Telit and the Takeover
Panel).
-- The Acquisition is currently expected to become Effective in
the second half of 2021, subject to the satisfaction or waiver of
the Conditions and certain further terms set out in Appendix I to
this Announcement and to the full terms and conditions of the
Acquisition which will be set out in the Scheme Document.
Commenting on the Acquisition, Simon Duffy of Telit, said:
"Telit has transformed in recent years and is now a business
built on strong financial, operational and governance foundations.
Whilst we believe that Telit is well positioned to capitalise on
growth opportunities in its markets, the Cash Offer represents an
opportunity for Shareholders wanting to realise their investment in
cash to do so at a material premium to the historical share price
of Telit. On behalf of the Telit Board, I would like to thank the
entire workforce of the Telit Group for their outstanding
contribution to making Telit the unique company it is today."
Commenting on the Acquisition, Julian Addison of DBAY, said:
"We are pleased to have reached agreement with the Telit Board
and that the Acquisition has received a unanimous recommendation.
The Cash Offer represents an opportunity for Telit Shareholders to
realise their investment in cash at a material premium to the
historical share price of Telit and as an alternative to the Cash
Offer we have offered Telit Shareholders the ability to retain a
shareholding in Telit going forward through the Alternative
Offer.
We strongly believe Telit would benefit from a return to private
ownership without the barrier of the current listing. We look
forward to working with Telit's management and employees to
accelerate Telit's current strategy and unlock the long-term value
in Telit.
Under Bidco's ownership, Telit will benefit from the flexibility
required to achieve its strategy, extensive access to follow-on
capital, and the operational best practices developed by the DBAY
team over 20 years."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement and its Appendices. In
particular, the Acquisition is subject to the Conditions and
certain further terms set out in Appendix I to this Announcement
and to the full terms and conditions which will be set out in the
Scheme Document. Appendix II to this Announcement contains details
of sources of information and bases of calculation contained in
this Announcement. Appendix III to this Announcement contains
certain details relating to the irrevocable undertakings and letter
of intent referred to in this Announcement. Appendix IV to this
Announcement contains further details of the Alternative Offer, the
Wider Bidco Group and the rights attaching to the Consideration
Loan Notes and the Consideration Shares. Appendix V contains
definitions of certain terms used in this Announcement. References
to paragraph numbers in this summary are to be read as references
to the relevant paragraphs included in the Announcement.
Enquiries
Bidco/DBAY Advisors Limited
Julian Addison Tel: +44 (0) 1624
Mike Haxby 690 900
Investec Bank plc (Financial adviser to Bidco/DBAY) Tel: +44 (0)
207 597 5970
Gary Clarence
William Godfrey
Temple Bar Advisory (Public relations adviser
to Bidco/DBAY)
Alex Child-Villiers Tel: +44 (0) 207 183 1190
William Barker
Telit Communications PLC
Paolo Dal Pino, CEO Tel: +44 20 3289
Eyal Shefer, CFO 3831
Rothschild & Co (Financial adviser under Rule 3 of the Code
to Telit)
Warner Mandel/Pietro Franchi Tel: +44 20 7280
5000
FinnCap (Financial adviser, Nomad and broker to Telit)
Henrik Persson/Giles Rolls/Charlie Beeson Tel: +44 20 7220
(corporate finance) 0500
Tim Redfern/Richard Chambers (corporate
broking)
FinElk (Public relations adviser to Telit)
Robin Haddrill/Cornelia Schnepf Tel: +44 7387 108
998
Email: telit@finelk.eu
Hogan Lovells International LLP is providing legal advice to
DBAY and Bidco. CMS Cameron McKenna Nabarro Olswang LLP is
providing legal advice to Telit.
Important notices
Investec Bank plc, which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority, is acting as
financial adviser to Bidco and for no one else in connection with
the Acquisition or other matters referred to in this Announcement
and will not be responsible to anyone other than Bidco for
providing the protections afforded to its clients nor for providing
advice in relation to the Acquisition, the contents of this
Announcement or any other matters set out in this Announcement.
Rothschild & Co, which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively as financial
adviser under Rule 3 of the Code to Telit in connection with the
matters set out in this Announcement and for no one else and will
not be responsible to anyone other than Telit for providing the
protections afforded to its clients or for providing advice in
relation to the matters set out in this Announcement. Neither
Rothschild & Co nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Rothschild & Co in
connection with this Announcement, any statement contained herein,
the Acquisition or otherwise.
FinnCap, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively for Telit and for no one else
in connection with the subject matter of this Announcement and will
not be responsible to anyone other than Telit for providing the
protections afforded to its clients or for providing advice in
connection with the subject matter of this Announcement.
Further information
This Announcement is for information purposes only and is not
intended to and does not constitute, or form any part of, an offer
to sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in
any jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely through the Scheme Document and the
accompanying Forms of Proxy and Form of Election, which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Acquisition. Any approval,
decision or other response to the Acquisition should be made only
on the basis of the information in the Scheme Document. Telit
Shareholders are strongly advised to read the formal documentation
in relation to the Acquisition once it has been despatched. Each
Telit Shareholder is urged to consult its independent professional
adviser immediately regarding the tax consequences to it (or its
beneficial owners) of the Acquisition.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them, and service of this Announcement shall not give
rise to any implication that there has been no change in the facts
set forth in this Announcement since such date.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
Overseas shareholders
The release, publication or distribution of this Announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves about, and
observe, any applicable legal or regulatory requirements. In
particular the ability of persons who are not resident in the UK to
vote their Telit Shares at the Court Meeting or General Meeting, or
to appoint another person as proxy to vote at the Court Meeting or
General Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Any failure to
comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
This Announcement has been prepared for the purpose of complying
with the laws of England and Wales, Market Abuse Regulation, AIM
Rules and the Code
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 of England and
Wales. Unless otherwise determined by Bidco or required by the
Code, and permitted by applicable law and regulation, the
Acquisition will not be made available directly or indirectly in,
into or from a Restricted Jurisdiction where to do so would violate
the laws in that jurisdiction and no person may vote in favour of
the Acquisition by use of mail or any other means or
instrumentality (including, without limitation, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted Jurisdiction.
Copies of this Announcement and any formal documentation
relating to the Acquisition will not be and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent
in, into or from any Restricted Jurisdiction or any jurisdiction
where to do so would violate the laws of that jurisdiction and
persons receiving such documents (including custodians, nominees
and trustees) must not mail or otherwise forward, distribute or
send them in, into or from any Restricted Jurisdiction. Doing so
may render invalid any related purported vote in respect of the
Acquisition.
Where Bidco believes that an election for the Alternative Offer
by any Scheme Shareholder may infringe applicable legal or
regulatory requirements, or may result in a requirement for a
registration under the securities laws of any Restricted
Jurisdiction, Bidco will have the right to deem that such Scheme
Shareholder has not validly elected for the Alternative Offer and
such Scheme Shareholder will instead receive the Cash Offer in
respect of the Scheme Shares which were subject to such an election
in accordance with the terms of the Acquisition.
Further details in relation to Telit Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Additional information for US investors
The Acquisition relates to the shares of a UK company and is
being made by means of a scheme of arrangement provided for under
the laws of England and Wales. A transaction effected by means of a
scheme of arrangement is not subject to the proxy solicitation or
tender offer rules under the Exchange Act and is exempt from the
registration requirements of the Securities Act. Accordingly, the
Acquisition will be subject to disclosure requirements and
practices applicable in the UK and to schemes of arrangement under
the laws of England and Wales, which are different from the
disclosure and other requirements applicable to a US tender offer.
Neither the SEC, nor any securities commission of any state of the
United States, has approved or disapproved any offer, or comment
upon the adequacy or completeness of any of the information
contained in document. Any representation to the contrary is a
criminal offence in the United States.
Financial information relating to Telit included in this
Announcement and the Scheme Document has been or will have been
prepared in accordance with accounting standards applicable in the
United Kingdom that may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting
principles in the United States.
The Consideration Loan Notes to be issued pursuant to the Scheme
under the Alternative Offer may not be offered or sold in the
United States absent registration or an exemption from
registration. No US offer of such Consideration Loan Notes will be
made in the United States. The Consideration Loan Notes have not
been and will not be registered under the US Securities Act or
under the relevant securities laws of any state or territory or
other jurisdiction of the United States and will not be listed on
any stock exchange in the United States, and may not be offered,
sold or delivered, directly or indirectly, in, into or from the
United States. Neither the US Securities and Exchange Commission
nor any US state securities commission has approved or disapproved
of the Consideration Loan Notes or determined that this document is
accurate or complete. Any representation to the contrary is a
criminal offence.
Telit Shareholders located or resident in the United States or
who are otherwise US Persons will not be permitted to elect receipt
of the Consideration Loan Notes pursuant to the Alternative Offer,
and any purported election to receive Consideration Loan Notes
pursuant to the Alternative Offer by Telit Shareholders from the
United States, or which, at the sole discretion of Bidco, appear to
be made in respect of Telit Shares beneficially held by persons
located or resident in the United States or who otherwise appear to
be US Persons will not be accepted. Accordingly, Telit Shareholders
located or resident in the United States or who are otherwise US
Persons will receive cash pursuant to the Scheme, and no
Consideration Loan Notes will be issued to any such Telit
Shareholder.
By electing receipt of the Consideration Loan Notes pursuant to
the Alternative Offer, Telit Shareholders will be deemed to
represent and warrant, on behalf of themselves and any person on
whose behalf they beneficially hold their Telit Shares, that they:
(i) are not located or resident in the United States or otherwise a
US Person; and (ii) are not electing receipt of Telit Shares
pursuant to the Alternative Offer with a view to, or for offer or
sale of Consideration Loan Notes in connection with, any
distribution thereof (within the meaning of the Securities Act) in
the United States or to US Persons.
The receipt of cash consideration pursuant to the Cash Offer by
a US holder of Telit Shares as consideration for the transfer of
its Scheme Shares pursuant to the Scheme 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 US
holder is urged to consult his independent professional adviser
immediately regarding the tax consequences of the Acquisition
applicable to him, her or it.
It may be difficult for US holders of Telit Shares to enforce
their rights and any claims they may have arising under US Federal
securities laws in connection with the Acquisition, since Telit is
organised under the laws of a country other than the United States,
and some or all of its officers and directors may be residents of
countries other than the United States, and most of the assets of
Telit are located outside of the United States. US holders of Telit
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 Federal securities
laws. Further, it may be difficult to compel a non-US company and
its affiliates to subject themselves to a US court's jurisdiction
or judgment.
The Acquisition may, in the circumstances provided for in this
Announcement, instead be carried out by way of a Takeover Offer
under the laws of England and Wales. If Bidco exercises, with the
consent of the Takeover Panel and subject to the terms of the
Co-operation Agreement, its right to implement the Acquisition by
way of a Takeover Offer, such Takeover Offer will be made in
compliance with applicable US tender offer and US Federal
securities laws and regulations, including the exemptions
therefrom. In accordance with normal UK practice and pursuant to
rule 14e-5(b) of the Exchange Act, Bidco or its nominees, or its
brokers (acting as agents), may, from time to time, make certain
purchases of, or arrangements to purchase, Telit Shares outside of
the United States, other than pursuant to the Acquisition, until
the date on which the Acquisition becomes effective, lapses or is
otherwise withdrawn, in compliance with applicable law, including
the Exchange Act. 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 UK, will be reported to a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com .
Forward-looking statements
This Announcement, oral statements made regarding the
Acquisition, and other information published by Bidco and Telit
contain statements which are, or may be deemed to be,
"forward-looking statements" with respect to Bidco or Telit. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking
statements often (but not always) use words such as "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words
or terms of similar meaning or the negative thereof.
Forward-looking statements include statements relating to the
following: (i) future capital expenditures, expenses, revenues,
earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of
Bidco or Telit and potential synergies resulting from the
Acquisition; and (iii) the effects of government regulation on the
business of Bidco or Telit.
Although Bidco and Telit believe that the expectations reflected
in such forward-looking statements are reasonable, Bidco and Telit
can give no assurance that such expectations will prove to be
correct. These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause actual
results, performance or developments to differ materially from
those expressed in or implied by such forward-looking statements.
These forward-looking statements are based on numerous assumptions
regarding present and future strategies and environments. You are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent
oral or written forward-looking statements attributable to Bidco or
Telit or any person acting on their behalf are expressly qualified
in their entirety by the cautionary statement above. Should one or
more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in this Announcement. Bidco and
Telit expressly disclaim any intention or obligation to update
publicly or revise forward-looking or other statements contained in
this Announcement, whether as a result of new information, future
events or otherwise, except to the extent legally required.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per ordinary share for Telit or Bidco for the current or
future financial years would necessarily match or exceed the
historical published earnings or earnings per ordinary share for
Telit or Bidco.
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the
Takeover Panel and subject to the terms of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer
for the entire issued and to be issued ordinary share capital of
Telit as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms or, if Bidco
so decides, on such other terms being no less favourable (subject
to appropriate amendments), so far as applicable, as those which
would apply to the Scheme and subject to the amendment referred to
in Part B of Appendix I to this Announcement.
Rule 2.9 disclosures
In accordance with Rule 2.9 of the Code, as at close of business
on the Last Practicable Date , there were 134,389,782 Telit Shares
in issue and admitted to trading on AIM. There are no Telit Shares
held in treasury. The ISIN Number for the Telit Shares is
GB00B06GM726.
Publication on website and availability of hard copies
In accordance with Rule 26.1 of the Code, a copy of this
Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, on DBAY's website at
www.dbayadvisors.com/offer-docs/ and on Telit's website at https://www.telit.com/about/investor-relations/possible-offers/ by no later than 12:00 noon on the Business Day following this Announcement. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.
In accordance with Rule 30.3 of the Code, a person so entitled
may request a hard copy of this Announcement, free of charge, by
contacting the Company's registrars, Link Group during business
hours on 0371 664 0300 (or if calling from outside the UK +44(0)371
664 0300) or by submitting a request in writing at Link Group,
10(th) Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL,
United Kingdom. A hard copy of this Announcement will not be sent
unless so requested. A person so entitled may also request that all
future documents, announcements and information to be sent to them
in relation to the Acquisition should be in hard copy form.
Information relating to Telit Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Telit Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Telit may be provided to Bidco during the offer
period as required under section 4 of Appendix 4 of the Code.
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.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. 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: (a) the offeree company; and (b) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following
the commencement of the offer period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th Business Day following
the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. 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: (a) the offeree company; and (b) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) of the Code 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 of the Code.
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 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the 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.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under FSMA if you are resident in the
United Kingdom or, if not, from another appropriately authorised
independent financial adviser.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT IS NOT A PROSPECTUS OR A PROSPECTUS EXEMPT
DOCUMENT AND TELIT SHAREHOLDERS SHOULD NOT MAKE ANY DECISION IN
RELATION TO THE CONSIDERATION LOAN NOTES OR THE CONSIDERATION
SHARES EXCEPT ON THE BASIS OF THE INFORMATION TO BE CONTAINED IN
THE SCHEME DOCUMENT WHICH IS PROPOSED TO BE PUBLISHED IN DUE
COURSE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
25 May 2021
RECOMMED CASH OFFER
for
TELIT COMMUNICATIONS PLC
by
TRIESTE ACQUISITIONS HOLDING LIMITED
to be effected
by way of a scheme of arrangement
under Part 26 of the Companies Act 2006
1. Introduction
The boards of Trieste Acquisitions Holding Limited ("Bidco") and
Telit Communications plc ("Telit") are pleased to announce that
they have reached agreement on the terms of a recommended cash
offer to be made by Bidco for the entire issued and to be issued
ordinary share capital of Telit other than the Telit Shares held by
funds managed by DBAY (the "Acquisition").
It is intended that the Acquisition will be implemented by way
of a Court-sanctioned scheme of arrangement under Part 26 of the
Companies Act. Bidco reserves the right to elect, with the consent
of the Takeover Panel and subject to the terms of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer
as an alternative to the Scheme.
2. The Acquisition
Under the terms of the Acquisition, which will be subject to the
Conditions and certain further terms set out in Appendix I to this
Announcement and to the full terms and conditions which will be set
out in the Scheme Document, each Scheme Shareholder will be
entitled to receive:
220 pence in cash per Scheme Share (the "Cash Offer")
Based on the Cash Offer, the Acquisition values the entire
issued and to be issued ordinary share capital of Telit at
approximately GBP306.9 million, on the basis of a fully diluted
share capital of 139,479,677 Telit Shares.
The Cash Offer represents a premium of approximately:
-- 58.5 per cent. to the Closing Price of 138.8 pence per Telit
Share on 2 November 2020 (being the last Business Day before the
Previous Offer Period began);
-- 64.1 per cent. to the Volume Weighted Average Price per Telit
Share during the one month period ended 2 November 2020;
-- 63.8 per cent. to the Volume Weighted Average Price per Telit
Share during the six month period ended on 2 November 2020;
-- 76.9 per cent. to the Volume Weighted Average Price per Telit
Share during the twelve month period ended on 2 November 2020;
-- 6.0 per cent. to the Closing Price of 207.5 pence per Telit
Share on 17 March 2021 (being the last Business Day before the
Current Offer Period began); and
-- 12.1 per cent. to the Volume Weighted Average Price per Telit
Share during the one month period ended 17 March 2021.
As an alternative to the Cash Offer, Telit Shareholders (other
than Telit Shareholders resident or located in a Restricted
Jurisdiction) may elect to receive one loan note from Bidco (a
"Consideration Loan Note") for each Scheme Share held (the
"Alternative Offer"). The Consideration Loan Notes will be issued
by Bidco, credited as fully paid, in amounts and integral multiples
equal to the Cash Offer. A Telit Shareholder may elect to take up
the Alternative Offer in respect of all (but not part) of his, her
or its holding of Scheme Shares. Each Consideration Loan Note will
be immediately exchanged for one loan note from Holdco (a "Holdco
Loan Note") by way of a call option exercised by Holdco and the
Holdco Loan Note will thereafter be immediately exchanged by way of
a call option exercised by Midco, resulting in a non-voting B
ordinary share in Midco (a "Consideration Share") being issued to
those Telit Shareholders who accept the Alternative Offer. The
Consideration Shares will be issued within 14 days of the Effective
Date. The terms and conditions of the Alternative Offer are set out
in paragraph 11 of this Announcement and a summary of the rights
attaching to the Consideration Loan Notes and the Consideration
Shares is set out in Appendix IV to this Announcement. The
Consideration Shares are non-transferable and do not carry any
voting rights, other than after the occurrence of the limited
circumstances when they convert to voting shares.
Subject to the Conditions and further terms set out in Appendix
I to this Announcement and to be set out in full in the Scheme
Document, the Scheme Shares will be acquired by Bidco fully paid
and free from all liens, equitable interests, charges,
encumbrances, rights of pre-emption and any other third party
rights or interests whatsoever and together with all rights
existing at the date of this Announcement or thereafter attaching
thereto, including (without limitation) 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 the date of this Announcement in
respect of the Telit Shares.
If any dividend or other distribution in respect of the Telit
Shares is declared, paid or made on or after the date of this
Announcement, Bidco reserves the right to reduce the consideration
payable for each Telit Share under the terms of the Acquisition by
the amount per Telit Share of such dividend or distribution. To the
extent that any such dividend or other distribution and/or other
return of capital announced, declared, paid or made is: (a)
transferred pursuant to the Acquisition on a basis which entitles
Bidco to receive the dividend or other distribution and to retain
it; or (b) cancelled, then in either case the consideration payable
in respect of the Acquisition will not be subject to change in
accordance with this paragraph. If Bidco exercises this right or
makes such a reduction in respect of a dividend or distribution,
Telit Shareholders will be entitled to receive and retain that
dividend or distribution.
3. Background to and reasons for the Telit Director's Recommendation and the Recommendation
Background
DBAY initially approached the Telit Board in relation to a
possible acquisition of Telit at 175 pence per Telit share on 27
October 2020, when Telit's share price was 131.4 pence. The initial
proposal was rejected by the Telit Board. On 4 December 2020, DBAY
announced it had made purchases of Telit shares at 194.8 pence per
share, and on 15 December 2020, DBAY withdrew its interest and
released an announcement under Rule 2.8 of the Code.
On 10 February 2021, Telit received a request from DBAY to be
released from the restrictions imposed by Rule 2.8 of the Code, to
allow it to undertake a period of limited confirmatory due
diligence in order to submit an increased proposal. Following this
period of due diligence, DBAY provided a revised offer on 26 April
2021 at a price of 210 pence per Telit share. After a period of
negotiation, DBAY has now increased its proposal to 220 pence per
Telit Share .
In considering the terms of the Acquisition, and the intention
to recommend the Acquisition to Telit Shareholders, the Telit
Directors have taken into account various factors, including the
following factors set out below.
The Cash Offer is at a material premium to Telit's historical
share price, although it undervalues Telit and its longer-term
prospects
The Telit Directors note that until the disclosure of DBAY's
interest on 3 November 2020, Telit's share price had not closed
above the level of the Cash Offer since the share price decline
following the events of August 2017. The Cash Offer represents a
premium of 64.4 per cent. to the undisturbed share price on 30
October 2020 and a premium of 36 per cent. to the VWAP for the 12
months to 20 February 2020 (before the market decline in the first
quarter of 2020).
As highlighted in Telit's trading update published on 19 January
2021, Telit has shown resilience despite continued lockdown
measures across Telit's markets and the impact of the pandemic on
customer spending. The Telit Directors remain confident in Telit's
financial position as an independent business, and believe Telit
remains well positioned to capitalise on growth opportunities in
its markets. On balance therefore, although it represents a
material premium to historical share prices, the Telit Directors,
who have been so advised by Rothschild & Co as to the financial
terms of the Cash Offer, have given the Cash Offer careful
consideration and believe that it undervalues Telit and its
longer-term prospects. In providing advice to the Telit Directors,
Rothschild & Co has taken into account the commercial
assessments of the Telit Directors.
The current listing is a barrier to the long-term success of
Telit
The Telit Board believes that the equity markets have not
embedded in Telit's valuation the fundamental governance,
strategic, operating and financial changes in Telit since the
events of 2017. Despite the significant transformation which has
been undertaken with the aim of rebuilding the governance
foundations of Telit, the Telit Board believes these historical
management, governance and regulatory issues have had and are
likely to continue to have a fundamentally adverse effect on the
value of Telit shares in the near and medium term. The Telit Board
considers the perpetuation of this situation is to the detriment of
all Telit's stakeholders and that Telit's continued status as a
listed company represents a potential barrier to the long-term
success of Telit.
In contrast, the Telit Board notes DBAY's statements that:
-- it strongly believes that Telit will be able to achieve
superior growth as a private business, without the constraints and
distractions of a listing, and with a majority shareholder with the
financial resources and focus to accelerate the strategy; and
-- under DBAY's ownership, Telit will benefit from the
flexibility required to achieve its strategy, extensive access to
follow-on capital, and the operational best practices developed by
the DBAY team over 20 years.
Telit's shareholding is increasingly concentrated
As a result of DBAY's current 26 per cent. shareholding and an
additional 45 per cent. held by four other shareholders, the Telit
shareholder register has become increasingly concentrated. The
number of Telit Shares in public hands is now below 28 per cent.
Accordingly, the Cash Offer represents an opportunity for Telit
Shareholders who want to realise their investment in Telit in cash
to do so at a price that may not be reflected in the market should
the Acquisition lapse.
A significant number of Telit shareholders support the
Acquisition
In considering the Acquisition, the Telit Board has also taken
into account the views of its shareholders. A significant number of
Telit's largest shareholders representing 58 per cent. of Telit's
share capital, have publicly expressed their support for the
Acquisition, including DBAY and shareholders that have provided
irrevocable undertakings and a letter of intent, as detailed in
this Announcement. Given this shareholder support for the
Acquisition, the Telit Board considers that it is in the interests
of all shareholders to be given the opportunity to consider the
merits of the Acquisition and, if they deem fit, to approve the
Scheme at the Court Meeting. In this regard, the Telit Board notes
that any of Bidco, DBAY or any funds managed by DBAY that hold
Telit Shares will not be permitted to vote their Telit Shares at
the Court Meeting (although they will be permitted to vote such
Telit Shares at the General Meeting). The unanimous recommendation
of the Telit Board of the Acquisition and the support of the Telit
Board in implementing the Acquisition through a scheme of
arrangement were pre-conditions to the making of this Announcement
by DBAY.
DBAY's intentions regarding management, employees and locations
of the Telit Group
In considering the intention to recommend the Acquisition to
Telit Shareholders, the Telit Directors have given due
consideration to the assurances given to management and employees
within the Telit Group. The Telit Board acknowledges that,
following completion of the Acquisition, there may be a
non-material reduction in the Telit Group's headcount (including
where the function was required to support Telit's status as a
publicly traded company). The Telit Board expects that any
headcount reductions that might occur will involve engagement and
consultation with the relevant employees, any employee
representatives and other stakeholders. Nevertheless, the Telit
Directors welcome DBAY's stated intention with respect to the
future operations of the business and its employees and, in
particular, the intentions to observe the existing contractual and
statutory employment rights of Telit employees and pension
obligations and to make no material change to the balance of skills
and functions of employees across the Telit Group. The Telit
Directors also welcome DBAY's stated intention to follow the
current management team's strategy with respect to Telit's
locations and offices.
Alternative transactions
The Telit Directors have explored the possibility of generating
viable alternatives to the Acquisition that would realise
additional value for Telit Shareholders. However, no viable
alternatives have been identified. Further, such alternative
transactions would almost certainly require the approval of a
majority of Telit Shareholders and there is no certainty that DBAY
or the other shareholders who are publicly supporting the
Acquisition would support any such proposal even if it were to be
recommended by the Telit Board.
Alternative Offer
In considering the terms of the Alternative Offer, the Telit
Directors and Rothschild & Co have considered the following
disadvantages and advantages:
-- Disadvantages: the Consideration Shares, which Scheme
Shareholders will hold following the exchange of the Consideration
Loan Notes and Holdco Loan Notes by way of call options exercisable
by Holdco and Midco, respectively, as described in Appendix IV to
this Announcement: (a) are unlisted and will not be admitted to
trading on any stock exchange (and will therefore, be illiquid) and
not carry the standards and protections afforded to shareholders in
a company admitted to trading on AIM, as Telit currently is and
will represent a minority investment in a company controlled by
funds managed by DBAY; (b) will not carry any right to vote at any
general meeting of Midco other than after the occurrence of the
limited circumstances when they convert to voting shares; (c) will
not be transferrable except in limited circumstances; and (d) will
only carry customary pre-emption rights on new issues of securities
by Midco if any such issue is for cash, and such rights will be
subject to other important exceptions presenting a risk of
significant dilution and reduction, for example if a management
incentive plan were introduced. The value of the Consideration
Shares will also be uncertain and there can be no assurance that
they will be capable of being sold in the future.
-- Advantages: the Alternative Offer: (a) allows Scheme
Shareholders to invest directly in the Wider Telit Group, providing
continued economic exposure to Telit under private ownership; and
(b) the Consideration Shares will rank economically pari passu with
the Midco A Shares in issue at the time the Consideration Shares
are allotted and issued, including the right to receive and retain
dividends and other distributions declared, made or paid by
reference to a record date falling after the Effective Date.
Conclusion and recommendation
Acquisition and Cash Offer
The Telit Directors, who have been so advised by Rothschild
& Co as to the financial terms of the Cash Offer, consider that
the Cash Offer undervalues Telit and its longer-term prospects. In
providing advice to the Telit Directors as to the financial terms
of the Cash Offer, Rothschild & Co has taken into account the
commercial assessments of the Telit Directors.
However, as set out above, the Telit Directors have considered a
number of factors in addition to value, including that the Cash
Offer represents an opportunity for Shareholders wanting to realise
their investment in cash to do so at a material premium to the
historical share price of Telit.
Accordingly and after careful consideration, including taking
into account the factors set out above, the Telit Directors believe
that the Acquisition is in the best interests of Telit Shareholders
as a whole and intend to recommend unanimously that Telit
Shareholders vote or procure votes in favour of the Scheme at the
Court Meeting and the Resolutions to be proposed at the General
Meeting (or, in the event that the Acquisition is implemented by
way of a Takeover Offer, to accept or procure acceptance of the
Takeover Offer).
Alternative Offer
For the reasons set out above, together with risk factors and
other investment considerations set out in paragraph 11 of this
Announcement, Rothschild & Co are unable to advise the Telit
Directors as to whether or not the financial terms of the
Alternative Offer are fair and reasonable. This is because of the
significant and variable impact the disadvantages (and advantages)
of the Alternative Offer may have to individual Scheme
Shareholders.
In relation to the Alternative Offer and for the reasons set out
above together with risk factors and other investment
considerations set out in paragraph 11 of this Announcement, the
Telit Directors cannot form an opinion as to whether or not the
terms of the Alternative Offer are fair and reasonable and are not
making any recommendation or giving any advice to Scheme
Shareholders as to whether or not they should elect for the
Alternative Offer. Scheme Shareholders are strongly recommended to
take into account the disadvantages and advantages highlighted
above, as well as their individual circumstances, when deciding
whether or not to elect for the Alternative Offer in respect of
their holding of Scheme Shares.
The Telit Directors strongly recommend that, in deciding whether
or not to elect for the Alternative Offer, the Telit Shareholders
should take their own independent financial, legal and tax advice
and consider carefully the disadvantages and advantages of electing
for the Alternative Offer (including, but not limited to, those set
out in paragraph 11 of this Announcement) in light of their own
financial circumstances and investment objectives.
Telit Shareholders should also ascertain whether acquiring or
holding the Consideration Loan Notes, the Holdco Loan Notes or the
Consideration Shares is affected by the laws of the relevant
jurisdiction in which they reside and consider whether the
Consideration Shares are a suitable investment in light of their
own personal circumstances. Telit Shareholders are, therefore,
strongly recommended to seek their own independent financial, tax
and legal advice in light of their own particular circumstances and
investment objectives before deciding whether to elect for the
Alternative Offer. Any decision to elect for the Alternative Offer
should be based on independent financial, tax and legal advice and,
to the extent available in such Scheme Shareholder's jurisdiction,
consideration of the Scheme Document (once published).
Directors' investment decisions
The Telit Directors have irrevocably undertaken to vote or
procure votes in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (or, in the event
that the Acquisition is implemented by way of a Takeover Offer, to
accept or procure acceptance of the Takeover Offer) in respect of
their own beneficial holdings of 1,027,989 Telit Shares
(representing, in aggregate, approximately 0.765 per cent. of the
Telit Shares in issue on the Last Practicable Date). In addition,
Paolo Dal Pino, CEO of the Company, has irrevocably undertaken to
elect for the Alternative Offer as he wishes to continue to hold an
investment in Telit and his personal circumstances mean that he is
willing to hold an unlisted, non-transferable investment, and these
factors outweigh the other disadvantages listed above. The
remaining Telit Directors, who hold Telit Shares intend to accept
the Cash Offer. Further details of the undertakings, including the
circumstances in which they cease to be binding, are set out in
Appendix III to this Announcement.
4. Background to and reasons for the Acquisition
DBAY has been following the Telit story for some time, attracted
by the business model, market opportunity and current management
team. DBAY became a Telit shareholder in July 2020 and since that
time its knowledge of Telit has continued to grow with its
shareholding. As Telit's largest shareholder with 26.02 per cent.
of the issued share capital, DBAY believes that, whilst the
business has strong growth potential with the current management
team, Telit's ability to deliver shareholder value as a listed
company is significantly restrained by a number of factors
including historical management and regulatory issues, current
shareholder composition and a lack of liquidity and these factors
are most likely to persist into the future. DBAY strongly believes
that Telit will be able to achieve superior growth as a private
business, without the constraints and distractions of a listing,
and with a majority shareholder with the financial resources and
focus to accelerate the strategy.
Despite the potential of the business, Telit's share price and
valuation have continued to be supressed, even since the FCA
formally completed its investigation into Telit on 9 June 2020 with
no enforcement actions, and DBAY believes that the composition of
the existing shareholder base is a significant deterrent to new
investors and is a cause of the lack of liquidity in the Telit
Shares. In addition, Telit has faced a series of distractions
related to former Board members, at least one of whom remains a
significant shareholder in Telit as at the date of this
Announcement. As a result of these factors, DBAY believes Telit
will not be able to realise its potential from both an operational
and valuation perspective as a public company.
The Cash Offer represents a clear vote of confidence in Telit,
its management and its strategy, and will allow Telit to execute
its growth and transformation strategy without the constraints of a
public listing. Under DBAY's ownership, Telit will benefit from the
flexibility required to achieve its strategy, extensive access to
follow-on capital, and the operational best practices developed by
the DBAY team over 20 years.
The Cash Offer allows Scheme Shareholders the ability to realise
their investment in cash at a share price not seen since August
2017 up until the Current Offer Period began on 18 March 2021 when
it was announced that DBAY had been released from the restrictions
imposed by Rule 2.8 of the Code and that it was conducting
confirmatory due diligence. Whilst the Cash Offer would provide
electing Scheme Shareholders with immediate liquidity at completion
of the Acquisition, DBAY recognises that some shareholders may wish
to retain an economic interest in the Telit Group. As such, DBAY
has made available the Alternative Offer to allow Scheme
Shareholders to retain an equity interest in the Telit Group.
Scheme Shareholders should take their own independent financial,
legal and tax advice and consider carefully the disadvantages and
advantages of electing for the Alternative Offer (including, but
not limited to, those set out in paragraph 11 of this Announcement)
in light of their own financial circumstances and investment
objectives.
5. Conditions
The Acquisition is conditional, amongst other things, upon:
-- the Scheme becoming Effective on or before 11.59 p.m. on the Long Stop Date;
-- the approval of the Scheme by a majority in number
representing not less than 75 per cent. in value of the Telit
Shareholders entitled to vote and present and voting, either in
person or by proxy, at the Court Meeting (or at any adjournment,
postponement or reconvention of such meeting) on or before the 22nd
day after the expected date of the Court Meeting to be set out in
the Scheme Document in due course (or such later date, if any, as
may be agreed between Bidco and Telit and the Court may allow);
-- the passing of the Resolutions by the requisite majority at
the General Meeting to be held on or before the 22nd day after the
expected date of the General Meeting to be set out in the Scheme
Document in due course (or such later date, if any, as Bidco and
Telit may agree and the Court may allow);
-- the sanction of the Scheme by the Court on or before the 22nd
day after the expected date of the Court Hearing to be set out in
the Scheme Document in due course (or such later date, if any, as
may be agreed between Telit and Bidco and the Court may allow) and
the delivery of a copy of the Court Order to the Registrar of
Companies;
-- Clearance by the Italian Foreign Investment Authority
pursuant to art. 2 of the Law Decree no. 21 of 15 March 2012 as
amended is obtained, on terms satisfactory to Bidco; and
-- Bidco and Telit obtaining CFIUS approval in connection with
the Acquisition through: (i) written notice from CFIUS that: (A)
CFIUS has concluded that the transaction described in a notice or
declaration submitted to CFIUS is not a "covered transaction" as
that term is defined in 31 C.F.R. -- 800.213; or (B) CFIUS has
concluded all action under Section 721 of the DPA, including all
implementing regulations; or (ii) the President's announcement of a
decision not to exercise the President's authority under section
721(d) of the DPA with respect to the Transaction.
The attention of Telit Shareholders is drawn to the fact that
the Acquisition is also conditional on other Conditions and certain
further terms set out in Appendix I to this Announcement and to the
full terms and conditions which will be set out in the Scheme
Document.
It is expected that the Scheme Document, along with the notice
of the Court Meeting and the General Meeting and the Forms of Proxy
and Form of Election, will be published within 28 days of this
Announcement (or on such later date as may be agreed by Bidco,
Telit and the Takeover Panel).
6. Irrevocable undertakings and letter of intent
Pursuant to the irrevocable undertakings received from the Telit
Directors holding Telit Shares referred to above, each of the Telit
Directors who is interested in Telit Shares has irrevocably
undertaken to vote (or procure the vote) in favour of the Scheme at
the Court Meeting and in favour of the Resolutions to be proposed
at the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer) in respect of their entire
beneficial holding of Scheme Shares. Paolo Dal Pino has in
addition, irrevocably undertaken to elect for the Alternative Offer
(subject to the terms and conditions of the Alternative Offer set
out in paragraph 11 of this Announcement), in respect of his entire
beneficial holding of Scheme Shares (including any Telit Shares
resulting from the exercise of options granted pursuant to the
Telit Share Plans).
In addition to the irrevocable undertakings received from the
Telit Directors holding Telit Shares, Bidco has received
irrevocable undertakings from Richard Griffiths and Davide Serra
(the "Rollover Shareholders") (as detailed in Appendix III to this
Announcement) to: (a) vote or procure votes in favour of the Scheme
at the Court Meeting and the Resolutions to be proposed at the
General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer); and (b) elect for the
Alternative Offer (subject to the terms and conditions of the
Alternative Offer set out in paragraph 11 of this Announcement), in
each case in respect of his entire beneficial holding of Scheme
Shares. In aggregate, the Rollover Shareholders hold 19,645,140
Telit Shares (representing, in aggregate, approximately 14.62 per
cent. of the Telit Shares in issue on the Last Practicable
Date).
In addition to the irrevocable undertakings noted above, Bidco
has received an irrevocable undertaking from Run Liang Tai
Management Limited to: (a) vote or procure votes in favour of the
Scheme at the Court Meeting and the Resolutions to be proposed at
the General Meeting (or, in the event that the Acquisition is
implemented by way of a Takeover Offer, to accept or procure
acceptance of the Takeover Offer); and (b) elect not to take up the
Alternative Offer, in respect of their entire beneficial holding of
Scheme Shares in respect of 20,030,495 Telit Shares (representing,
in aggregate, approximately 14.90 per cent. of the Telit Shares in
issue on the Last Practicable Date).
Bidco has also received a non-binding letter of intent (as
detailed in Appendix III) from Compass Asset Management SA to vote
or procure votes in favour of the Scheme at the Court Meeting and
the Resolutions to be proposed at the General Meeting (or, in the
event that the Acquisition is implemented by way of a Takeover
Offer, to accept or procure acceptance of the Takeover Offer), in
respect of 2,220,002 Telit Shares (representing, in aggregate,
approximately 1.65 per cent. of the Telit Shares in issue on the
Last Practicable Date).
In aggregate, therefore, Bidco has received irrevocable
undertakings to vote in favour of:
-- the Scheme at the Court Meeting in respect of 40,703,624
Telit Shares, representing approximately 30.29 per cent. of the
issued ordinary share capital of Telit and approximately 40.94 per
cent. of the Scheme Shares eligible to vote at the Court Meeting,
in each case on the Latest Practicable Date; and
-- the Resolutions at the General Meeting in respect of 40,703,624 Telit Shares, representing approximately 30.29 per cent. of the issued ordinary share capital of Telit on the Latest Practicable Date.
Full details of the irrevocable undertakings and letter of
intent received by Bidco are set out in Appendix III to this
Announcement.
7. Information on DBAY and Bidco
DBAY
DBAY is a regulated investment manager licensed to conduct
investment business by the Isle of Man Financial Services
Authority. It was founded in 2011 and manages a range of funds and
co-investment vehicles for endowments, foundations and other
institutional investors. DBAY has offices in Douglas and
London.
DBAY supports companies in which it makes long term investments
to develop clear growth opportunities with a particular emphasis on
creating long term value by working alongside management teams.
Bidco
Bidco is a limited company registered in England and Wales and
incorporated on 23 April 2021. Bidco was formed for the purposes of
the Acquisition and is an entity owned by funds managed by DBAY and
has not traded since its date of incorporation, nor has it entered
into any obligations other than in connection with the
Acquisition.
The current director of Bidco is Michael Haxby. Further details
in relation to Bidco will be contained in the Scheme Document.
8. Information on Telit
Telit, is a global leader in Internet of Things (IoT)
enablement, with an extensive portfolio of wireless connectivity
modules, platforms and virtual cellular IoT operator services,
empowering hundreds of millions of connected 'things' to date, and
trusted by thousands of direct and indirect customers, globally.
With nearly two decades of IoT innovation experience, Telit
continues to redefine the boundaries of digital business, by
delivering secure, integrated end-to-end IoT solutions for many of
the world's largest brands, including enterprises, OEMs, system
integrators and service providers across a wide range of
industries, enabling their pursuit of enterprise digital
transformation.
Telit provides critical ingredients to fulfil the need for real
time data from the physical world. These include the following
components:
-- IoT Products . A diversified portfolio of modules that allow
"things" to be connected using the best available and most suitable
technology (Cellular, GNSS, Wi-Fi and BT/BLE) for the applications
being developed. Telit's products provide a significant reduction
in time-to-market and total cost of ownership for customers. Telit
markets its IoT products to a broad range of market segments
including asset tracking, health care, security, telematics, point
of sale, wearables, telemetry, industry, energy and smart metering.
In order to cater to such diverse industries, Telit continues to
develop a wide range of cellular products from low bandwidth 2G and
NB-IoT to high category LTE and 5G modules.
-- IoT Cloud and Connectivity services . These allow scaling and
global deployments of customers' IoT solutions with a single point
of contact. Telit are now a licensed MVNO delivering coverage and
reliable networks, including LPWA in approximately 190 countries,
high availability services aligned with mission critical IoT
deployments including global IP network, based on premise with AWS
cloud hybrid backup. Telit's network security including all Telit's
SIM solutions, has Multi- IMSI support combined with Telit's IoT
connectivity management platform. We also continue to deliver the
ease of a single management platform, global flat price, single
bill and dedicated 24/7 IoT support services, without the need for
in-house experts, mapping and contracting separately with multiple
global MNOs. Telit continues to invest in and develop its IoT
connectivity business, which covers all customer connectivity needs
and provides a recurring revenue stream for Telit.
-- IoT Platform services. Telit's IoT platform is an industrial
grade suite of software that provides device management,
connectivity management, and application enablement, which allows
for the creation and management of IoT applications, from
standalone applications such as metering and asset tracking to more
robust Industry 4.0 / Industrial IoT (IIoT) and factory automation
solutions. The platform is designed to enable customers to manage
their IoT deployments through a single IoT portal which facilitates
interaction with MNOs, dash boarding tools, security and
administration as well as tying in with Telit's modules in the
field. The portal is a significant tool to manage any IoT
deployment efficiently, save costs, be flexible and solve issues
remotely. Telit expect to increase the attach rate of services to
our product's utilising our OneEdge solutions.
These three components allow Telit to quickly deploy IoT
solutions with complete life cycle management (long and short-range
connectivity devices, global data plans and IoT platform), in
traditional IoT verticals such as asset tracking, logistics, remote
industrial monitoring, automated utility meter reading, telematics,
mobile health devices, and the fast-growing enterprise market.
9. Telit Share Plans
Participants in the Telit Share Plans will be contacted
regarding the effect of the Acquisition on their rights under the
Telit Share Plans and appropriate proposals in accordance with Rule
15 of the Code will be made to such participants in due course.
Details of these proposals will be set out in the Scheme
Document.
10. Financing
The cash consideration payable to the Telit Shareholders under
the terms of the Cash Offer will be financed by a combination of
equity to be invested by funds managed by DBAY, intercompany loans
and debt to be provided under the Cash Bridge Facility and Facility
B (which will be made available to Bidco pursuant to an
intercompany loan agreement between US Holdco and Bidco).
Investec, as financial adviser to Bidco, is satisfied that
sufficient cash resources are available to Bidco to enable it to
satisfy in full the cash consideration to Telit Shareholders under
the terms of the Acquisition.
11. Alternative Offer
Under the Alternative Offer, Scheme Shareholders (other than
Scheme Shareholders resident or located in a Restricted
Jurisdiction) may elect, in respect of all (but not part) of their
Scheme Shares to receive one Consideration Loan Note for each
Scheme Share in lieu of the Cash Offer to which they are otherwise
entitled. The Consideration Loan Notes will be issued by Bidco,
credited as fully paid, in amounts and integral multiples equal to
the Cash Offer.
The Consideration Loan Notes will be exchanged by way of a call
option exercisable by Holdco, for Holdco Loan Notes and the Holdco
Loan Notes will thereafter be exchanged by way of a call option
exercisable by Midco, for Consideration Shares .
The current share capital of Midco consists of 100 ordinary
voting shares. Prior to completion of the Acquisition, these shares
will be reclassified as Midco A Shares. On or around completion of
the Acquisition, Midco will issue Midco A Shares and Midco B
Shares. These shares comprise the aggregate of: (a) the
Consideration Shares (which shall be Midco B Shares) to be issued
to Telit Shareholders pursuant to the Alternative Offer; (b) the
Midco A Shares required to be subscribed for by DBAY and other
investor(s), indirectly via Topco, to part fund the cash
consideration payable in respect of the Acquisition; and (c) the
Midco A Shares to be issued to Topco in connection with the
acquisition by Midco of the Telit Shares currently held by funds
managed by DBAY. The number of Midco A Shares and Midco B Shares
issued is primarily dependent on the number of elections made for
the Alternative Offer as this will affect both the number of
Consideration Shares issued and the amount required to be
subscribed by Topco to part fund the cash consideration payable in
respect of the Acquisition.
The Alternative Offer is not being offered, sold or delivered,
directly or indirectly, in or into any Restricted Jurisdiction.
Further details in relation to Scheme Shareholders resident, or
located, in overseas jurisdictions will be contained in the Scheme
Document.
In addition, as described below, Telit Shareholders should note
that additional shares, loan notes or other securities may be
issued by Midco or its subsidiaries from time to time following the
Effective Date and that the holders of Midco B Shares will not
always be entitled to participate in any such issue, so that their
percentage interests in Midco may be diluted over time, potentially
significantly.
Risk factors and other investment considerations
Disadvantages of electing for the Alternative Offer
-- The Consideration Shares, which Scheme Shareholders will hold
following the exchange of the Bidco Loan Notes for the Holdco Loan
Notes and thereafter, the exchange of the Holdco Loan Notes for the
Consideration Shares, as described in Appendix IV to this
Announcement, are unlisted and will not be admitted to trading on
any stock exchange and will therefore, be illiquid.
-- The Consideration Shares will be of uncertain value and there
can be no assurance that they will be capable of being sold in the
future.
-- The Consideration Shares are non-transferable, non-voting
shares and only the Midco A Shares carry voting rights.
-- The holders of the Consideration Shares will only have
customary pre-emption rights on new issues of securities by Midco
if any such issue is for cash.
-- The right of holders of Consideration Shares to participate
in future issues of securities by Midco will also be subject to
other important exceptions. These exceptions may be particularly
relevant in practice. Holders of Consideration Shares may well
suffer dilution, not only in their percentage ownership but also in
the value of their Consideration Shares since such further issues
may reduce any net return derived by the Consideration Shares when
compared to any such net return that might otherwise have been
derived had Midco not issued those securities. This dilution and
reduction may be significant. For example:
-- Holders of Consideration Shares will not be entitled to
participate in any issues of securities to actual or potential
employees, directors, officers or consultants of Midco (whether of
the same or different classes to the Consideration Shares). This is
important since, common to many private equity acquisitions, DBAY
may introduce one or more management incentive plans for actual or
potential employees, directors, officers and consultants of the
Wider Telit Group after the Effective Date.
-- Management incentive plans generally provide participants
with a significant interest in securities in Midco, and, if one is
introduced, it may result in a significant dilution of the
Consideration Shares. In addition, Midco may not receive material
cash sums on the issue of such securities and the returns on those
securities may potentially be structured to increase their
proportionate interest in the value of the Wider Telit Group as it
increases in value (whether pursuant to a ratchet mechanism or
otherwise). These issues of securities may occur initially
following the Acquisition, but further issues are likely in the
future as the Wider Telit Group expands (whether as a result of
further acquisitions or organic growth or otherwise).
-- Similarly, holders of Consideration Shares will not be
entitled to participate in issues of securities by Midco in
consideration for, or in connection with, its acquisition of other
assets, companies or all or part of any other businesses or
undertakings (for example, if the Wider Telit Group expands).
-- In relation to those issues of securities in which holders of
Consideration Shares are entitled to participate, if they wish to
avoid their percentage interest in Midco being reduced by any such
issue, they will need to invest further cash sums in Midco.
-- The precise numbers of securities that may be issued by Midco
from time to time cannot be ascertained at the date of this
Announcement and will depend on a variety of factors including
those described above.
-- The Telit Shares are currently admitted to trading on AIM.
Certain standards and protections afforded to shareholders in a
company admitted to trading on AIM will be substantially different
to a shareholding in an unlisted private company which a Scheme
Shareholder would receive as a result of electing for the
Alternative Offer.
Advantages of electing for the Alternative Offer
-- The Alternative Offer allows Scheme Shareholders to invest
directly in the Wider Telit Group, providing continued economic
exposure to Telit under private ownership.
-- The Consideration Shares will rank economically pari passu
with the Midco A Shares in issue at the time the Consideration
Shares are allotted and issued, including the right to receive and
retain dividends and other distributions declared, made or paid by
reference to a record date falling after the Effective Date.
Upon the Scheme becoming Effective, Scheme Shareholders who have
not validly elected for the Alternative Offer in respect of all of
their holding of Scheme Shares will automatically receive the Cash
Offer in respect of their entire holding of Scheme Shares.
The issue of Consideration Loan Notes pursuant to the
Alternative Offer will be subject to the Conditions and further
terms set out in Appendix I to this Announcement and further
details of the Alternative Offer, the Wider Bidco Group and the
rights attaching to the Consideration Loan Notes and the
Consideration Shares are set out in Appendix IV to this
Announcement.
The Consideration Loan Notes will then be immediately exchanged
by way of a call option exercisable by Holdco for the Holdco Loan
Notes and the Holdco Loan Notes will thereafter be immediately
exchanged for the Consideration Shares by way of a call option
exercisable by Midco. The Holdco Loan Notes will have equivalent
terms to the Consideration Loan Note terms as described in Appendix
IV to this Announcement. The Consideration Shares will be issued
within 14 days of the Effective Date.
The Consideration Shares will be allotted and issued credited as
fully paid and, other than voting rights, will rank pari passu in
all respects with the Midco A Shares in issue at the time the
Consideration Shares are allotted and issued, including the right
to receive and retain dividends and other distributions declared,
made or paid by reference to a record date falling after the
Effective Date.
For the purposes of Rule 24.11 of the Code, Investec will
provide an estimate of the value of a Consideration Share, together
with the assumptions, qualifications and caveats forming the basis
of its estimate of value, in a letter to be set out in the Scheme
Document.
12. Management, employees and locations of the Telit Group
As discussed in paragraph 4 of this Announcement, DBAY has been
following the Telit story for some time, attracted by the business
model, market opportunity and management team. DBAY became a
shareholder in the business in July 2020 and since that time its
knowledge of Telit has continued to grow with its shareholding. As
Telit's largest shareholder, DBAY believes that, whilst the
business has strong growth potential, Telit will be able to achieve
superior growth as a private business, without the constraints and
distractions of a listing, and with a shareholder with the
financial resources and focus to accelerate the strategy.
Strategy
DBAY has spent a significant amount of time with Telit's senior
management team both through engagement as a shareholder and more
recently through a due diligence exercise. This has enabled DBAY to
evaluate the strategic and operational plans that the senior
management team has for Telit and DBAY is supportive of the Telit
management team's strategy. DBAY has also identified a number of
initiatives that it believes would help Telit accelerate its
existing strategy, including:
-- continued investment in Telit's global sales and marketing
functions to complete the transition from a product-led sales model
to selling value-added solutions and realising cross-sell
opportunities between hardware and cloud & connectivity
customers;
-- continued investment in R&D to maintain Telit's technology and innovation leadership;
-- continued focus on building Telit's leadership positions in
targeted end-customer industry verticals;
-- sourcing and executing financially and strategically accretive M&A opportunities;
-- continued operational and financial improvement initiatives
to deliver world class performance and leverage existing
infrastructure with increasing revenues; and
-- continued investment in the management and employee team,
with focus on depth of talent and succession planning.
Following completion of the Acquisition, DBAY intends to work
with Telit's management to undertake a detailed evaluation of the
Telit Group and its businesses. This evaluation will involve a
review of the short and long-term objectives for each of Telit's
businesses in order to enhance the strategic and operational
planning and support the acceleration of Telit's stated
strategy.
R&D
R&D is a critical success factor in Telit's proposition,
enabling it to provide best in class hardware, cloud and
connectivity solutions to customers. DBAY is supportive of the
management team's strategy around R&D, and the need to invest
in order to maintain technology leadership, and does not envisage
any changes to this approach.
Employees, Management and Directors
DBAY attaches great importance to the skills, experience and
continued commitment of Telit's management and employees, and
intends to support the CEO in continuing to build a world class
leadership team with organisational depth.
Recognising that Telit has undergone a number of operational
changes in recent years (including the divestment of its Automotive
segment in 2019), DBAY will support Telit's management team in the
continuous review of Telit's operations to ensure Telit is
optimised to deliver the Telit Group's strategic objectives
including any operational adjustments required as Telit transitions
from being a public company to a private company.
DBAY intends to safeguard the existing statutory and contractual
employment rights, including pension rights, of the employees and
management of the Telit Group. DBAY does not envisage making any
material reduction to the headcount, or any material change to the
conditions of employment or to the balance of skills and functions,
of the employees and management of the Telit Group.
The current non-executive directors of Telit will resign from
Telit on the Effective Date.
Pensions
Telit operates a number of defined contribution and defined
benefit pension plans, which require contributions to be made to a
separately administered fund. DBAY does not envisage making any
changes to the existing agreed pension contributions (including
with regard to the current arrangements for the funding of any
scheme deficit) or the accrual of benefits for existing members of
the Telit pension plans or the admission of any new members into
the existing Telit defined contribution pension plans.
Management incentives
DBAY has not entered into, and has not had discussion on
proposals to enter into, any form of incentive arrangements with
members of Telit's management. DBAY intends to put in place
appropriate long term incentive arrangements for Telit's management
following the completion of the Acquisition.
Locations of business, headquarters, and research and
development
Telit currently operates in multiple jurisdictions, with R&D
capabilities and senior management located across a number of
geographies. Following completion of the Acquisition, it is
envisaged that the R&D facilities and headquarter location and
functions will continue to operate from Telit's existing locations,
and DBAY does not envisage any change in the locations of Telit's
offices and plans to follow the current management team's strategy
with respect to Telit's locations and offices.
Fixed assets
DBAY does not envisage any redeployment of Telit's fixed asset
base, above and beyond any ordinary course development required for
Telit to execute its strategic plans.
Trading facilities
Telit Shares are currently traded on AIM and, as set out in
paragraph 15 of this Announcement, a request will be made to the
London Stock Exchange to cancel trading in Telit's shares on AIM,
to take effect from or shortly after the Effective Date. As stated
in paragraph 15 of this Announcement, dealings in Telit Shares will
be suspended prior to the Effective Date and thereafter there will
be no trading facilities in relation to Telit Shares. As a result
of the cancellation of admission to trading in Telit Shares on AIM,
DBAY expects to achieve savings from Telit no longer having to
comply with its ongoing public company reporting obligations.
No statements in this section are "post-offer undertakings" for
the purposes of Rule 19.5 of the Code.
13. Offer-related arrangements
Confidentiality Letter
DBAY and Telit entered into the Confidentiality Letter on 1
December 2020 pursuant to which each party has undertaken to keep
confidential information relating to the other and not to disclose
it to third parties (other than to permitted disclosees) unless
required by law or regulation. These confidentiality obligations
shall remain in force until the earlier of: (a) a period of 18
months from the date of the Confidentiality Letter; or (b)
completion of the Acquisition. The Confidentiality Letter further
includes customary non-solicitation obligations on DBAY.
Confidentiality and Joint Defence Agreement
DBAY, Telit, Hogan Lovells International LLP and CMS Cameron
McKenna Nabarro Olswang LLP entered into the Confidentiality and
Joint Defence Agreement on 20 April 2021 which governs the
relationship between the parties in the provision of information
for the purposes of competition and regulatory clearances without
triggering Rule 20.2 of the Code (which would require Telit to
share such information with a competing offeror if it was provided
to DBAY) as is outlined in Practice Statement 30 of the Code. The
effect of the Confidentiality and Joint Defence Agreement is that
certain information is shared on an outside counsel basis only,
although it does not restrict advice being given in respect of
conclusions drawn from that information.
Co-Operation Agreement
On 24 May 2021, Bidco and Telit entered into a co-operation
agreement (the "Co-operation Agreement"), in relation to the Offer
and other related matters. The Co-operation Agreement contains
certain undertakings, representations and warranties, with respect
to the co-operation of the parties relating to the implementation
of the Offer. Bidco therein reserves the right to implement the
Acquisition by way of a Takeover Offer if: (a) Telit provides its
consent in writing; (b) a third party announces a Competing
Proposal (as defined below) which is recommended in whole or in
part by the Telit Directors or following which the Telit Directors
fail to publicly reaffirm their recommendation to the Telit
Shareholders to vote in favour of the Scheme within two Business
Days of being requested by Bidco in writing to do so; or (c) the
Telit Directors: (i) do not include the unanimous recommendation of
the Telit Directors to the Telit Shareholders to vote or procure
votes in favour of the Scheme at the Court Meeting and the
Resolutions to be proposed at the General Meeting (the "Telit Board
Recommendation") in the Scheme Document; (ii) withdraw, qualify or
adversely modify the Telit Board Recommendation prior to the Court
Meeting or the General Meeting; or (iii) prior to publication of
the Scheme Document, withdraw, qualify or adversely modify their
intention to give the Telit Board Recommendation in any such
document, including making any public statement to such effect. In
addition, Bidco has agreed to certain provisions if the Scheme
should switch to a Takeover Offer.
Pursuant to the Co-operation Agreement, Bidco and Telit agree
they will work together in order to make the appropriate proposals,
in relation to the Offer, to participants in the Telit Share Plans
and co-operate and assist each other in obtaining the clearances
(as defined therein).
The Co-operation Agreement will terminate in certain
circumstances, save in respect of certain surviving provisions,
including if:
(a) the Telit Directors withdraw, adversely modify or adversely
qualify the Telit Board Recommendation;
(b) an announcement by a third party of a firm intention to make
an offer (whether or not subject to the satisfaction or waiver of
any pre-conditions) under the Code (a "Competing Proposal") is
recommended by the Telit Directors;
(c) a Competing Proposal completes, becomes effective or is
declared or becomes unconditional in all respects;
(d) the Scheme (or the Takeover Offer as the case may be) is
withdrawn or lapses in accordance with its terms and, where
required, with the consent of the Panel (other than where: (i) such
lapse or withdrawal is a result of the exercise of the right to
elect to implement the Acquisition by means of a Takeover Offer at
any time as an alternative to the Scheme as set out in this
Announcement; or (ii) is in connection with Bidco or a person
acting in concert with Bidco implementing the Acquisition by a
different takeover offer or scheme of arrangement on substantially
the same or improved terms in favour of the Telit Shareholders and
an announcement under Rule 2.7 of the Code is made in respect of
such takeover offer or scheme by Bidco or a person acting in
concert with Bidco within ten Business Days of such lapsing or
withdrawal);
(e) the Effective Date has not occurred by the Long Stop Date;
(f) any Condition becomes incapable of satisfaction (unless
otherwise waived by Bidco) or is invoked (with the permission of
the Panel) so as to cause the Acquisition not to proceed;
(g) if the Scheme is not approved by the requisite majority of
Telit Shareholders at the Court Meeting or the relevant resolutions
are not passed by the requisite majority of Telit Shareholders at
the General Meeting or the Scheme is not sanctioned by the Court at
the Court Hearing and, within ten Business Days of any such event,
Bidco has not elected, to implement the Acquisition by means of a
Takeover Offer; or
(h) agreed in writing between the Parties at any time prior to the Effective Date.
14. Structure of the Acquisition
Scheme
The Acquisition will be effected by a Court-sanctioned scheme of
arrangement between Telit and the Scheme Shareholders under Part 26
of the Companies Act. The purpose of the Scheme is to provide for
Bidco to become the owner of the entire issued and to be issued
ordinary share capital of Telit. Under the Scheme, the Acquisition
is to be achieved by the:
-- transfer of the Scheme Shares held by Scheme Shareholders to
Bidco in consideration for which the Scheme Shareholders will
receive the cash consideration under the Cash Offer or
Consideration Loan Notes under the Alternative Offer pursuant to
the Scheme; and
-- passing of the Resolutions at the General Meeting (including
amendments to Telit's Articles to ensure that any Telit Shares
issued between approval of the Scheme at the Court Meeting and the
Scheme Record Time will be subject to the Scheme and that any Telit
Shares issued after the Scheme Record Time will automatically be
acquired by Bidco).
Approval at the Court Meeting and General Meeting
To become Effective, the Scheme requires, amongst other
things:
-- the approval of a majority in number of the Telit
Shareholders who vote, representing not less than 75 per cent. in
value of the Scheme Shares voted, either in person or by proxy, at
the Court Meeting; and
-- the approval by the requisite majority of the Resolutions at
the General Meeting (to be held directly after the Court Meeting)
necessary in order to implement the Scheme.
Application to the Court to sanction the Scheme
Once the resolutions have been passed at the Court Meeting and
the General Meeting and the other Conditions have been satisfied or
(where applicable) waived, the Scheme must be sanctioned by the
Court at the Court Hearing.
The Scheme will become Effective in accordance with its terms on
delivery of a copy of the Court Order to the Registrar of
Companies. Upon the Scheme becoming Effective, it will be binding
on all Scheme Shareholders, irrespective of whether or not they
attended or voted at the Court Meeting or General Meeting, or
whether they voted in favour of or against the Scheme.
Full details of the Scheme to be set out in the Scheme
The Scheme Document will include full details of the Scheme,
including the expected timetable and the action to be taken by
Telit Shareholders. The Scheme will be governed by the laws of
England and Wales and will be subject to the applicable
requirements of the Code, the Takeover Panel, the AIM Rules, the
London Stock Exchange and the FCA.
It is expected that the Scheme Document, along with the notice
of the Court Meeting and the General Meeting and the Forms of Proxy
and Form of Election will be published within 28 days of this
Announcement (or on such later date as may be agreed by Bidco and
Telit with the consent of the Takeover Panel). Subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions, the Scheme Document will also be made available on
DBAY's website at www.dbayadvisors.com/offer-docs/ and on Telit's
website at
https://www.telit.com/about/investor-relations/possible-offers/.
At this stage, subject to the satisfaction or waiver of the
Conditions and certain further terms set out in Appendix I to this
Announcement, Bidco and Telit currently expect the Acquisition to
become Effective in the second half of 2021.
If the Scheme does not become Effective on or before 11.59 p.m.
on the Long Stop Date (or such later date as Telit and Bidco may,
with the consent of the Takeover Panel, agree and, if required, the
Court may approve) it will lapse and the Acquisition will not
proceed (unless the Takeover Panel otherwise consents).
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the
Takeover Panel and subject to the terms of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer
for the entire issued and to be issued ordinary share capital of
Telit as an alternative to the Scheme. In such circumstances, the
Takeover Offer will be implemented on the same terms or, if Bidco
so decides, on such other terms being no less favourable (subject
to appropriate amendments), so far as applicable, as those which
would apply to the Scheme and subject to the amendment referred to
in Part B of Appendix I to this Announcement.
15. Cancellation of admission to trading and re-registration of Telit
Prior to the Scheme becoming Effective, an application will be
made to the London Stock Exchange for admission of the Telit Shares
to trading on AIM to be cancelled on or shortly after the Effective
Date. The last day of dealings in, and for registration of
transfers of, Telit Shares is expected to be at the close of
business on the Business Day immediately following the Court
Hearing and no transfers will be registered after 6.00 p.m. on that
date. No dealings in Telit Shares will be registered after this
date.
On the Effective Date, Telit will become a wholly-owned
subsidiary of Bidco and share certificates in respect of the Telit
Shares will cease to be valid and should be destroyed. In addition,
entitlements to Telit Shares held within the CREST system will be
cancelled on the Effective Date.
It is also intended that shortly after the Effective Date, Telit
will be re-registered as a private limited company under the
relevant provisions of the Companies Act.
16. Disclosure of interests in Telit
As at the close of business on the Last Practicable Date, save
for: (i) the disclosures set out in this paragraph 16; and (ii) the
irrevocable undertakings and letter of intent referred to in
paragraph 6 of this Announcement, none of Bidco or any director of
Bidco or, so far as Bidco is aware, any person acting, or deemed to
be acting, in concert with Bidco:
(a) had an interest in, or right to subscribe for, relevant securities of Telit;
(b) had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of Telit;
(c) had procured an irrevocable commitment or letter of intent
to accept the terms of the Acquisition in respect of relevant
securities of Telit; or
(d) had borrowed or lent, or entered into any financial
collateral arrangements, or was party to any dealing arrangement of
the kind referred to in Note 11 on the definition of acting in
concert in the Code, in relation to relevant securities of Telit
(save for any borrowed relevant securities of Telit which have been
either on lent or sold).
Furthermore, save for the irrevocable undertakings and letter of
intent described in paragraph 6 of this Announcement, no
arrangement exists between Bidco or Telit or a person acting in
concert with Bidco or Telit in relation to Telit Shares. For these
purposes, an "arrangement" includes any indemnity or option
arrangement, any agreement or any understanding, formal or
informal, of whatever nature, relating to Telit Shares which may be
an inducement to deal or refrain from dealing in such
securities.
Holdings in Telit of DBAY
Funds managed by DBAY beneficially own, in aggregate, 34,970,165
Telit Shares, representing approximately 26.02 per cent. of the
voting rights attributable to Telit's issued share capital as at
the Latest Practicable Date.
17. Overseas shareholders
The availability of the Acquisition and the distribution of this
Announcement to Telit Shareholders who are not resident in the UK
may be affected by the laws of the relevant jurisdiction in which
they are located. Such persons should inform themselves of, and
observe, any applicable legal or regulatory requirements of their
jurisdiction. Telit Shareholders who are in any doubt regarding
such matters should consult an appropriate independent professional
adviser in the relevant jurisdiction without delay.
This Announcement does not constitute an offer for sale of any
securities or an offer or an invitation to purchase any securities.
Telit Shareholders are advised to read carefully the Scheme
Document and related Forms of Proxy and Form of Election once they
have been despatched.
The Alternative Offer is not being made available in the United
States, Canada, Japan, South Africa, Australia or any other
Restricted Jurisdiction.
Telit Shareholders located or resident in the United States or
who are otherwise US Persons will not be permitted to elect receipt
of the Consideration Loan Notes pursuant to the Alternative Offer,
and any purported election to receive Consideration Loan Notes
pursuant to the Alternative Offer by Telit Shareholders from the
United States, or which, at the sole discretion of Bidco, appear to
be made in respect of Telit Shares beneficially held by persons
located or resident in the United States or who otherwise appear to
be US Persons will not be accepted. Accordingly, Telit Shareholders
located or resident in the United States or who are otherwise US
Persons will receive cash pursuant to the Scheme.
Where Bidco believes that an election for the Alternative Offer
by any Scheme Shareholder may infringe applicable legal or
regulatory requirements, or may result in a requirement for a
registration under the securities laws of any Restricted
Jurisdiction, Bidco will have the right to deem that such Scheme
Shareholder has not validly elected for the Alternative Offer and
such Scheme Shareholder will instead receive the Cash Offer in
respect of the Scheme Shares which were subject to such an election
in accordance with the terms of the Acquisition.
Further information for Telit Shareholders resident, or located,
in overseas jurisdictions will be set out in the Scheme
Document.
18. General
The Acquisition will be subject to the Conditions and certain
further terms set out in Appendix I to this Announcement and to the
full terms and conditions which will be set out in the Scheme
Document and Forms of Proxy and Form of Election. It is expected
that the Scheme Document, along with the notice of the Court
Meeting and the General Meeting and the Forms of Proxy and Form of
Election will be published within 28 days of this Announcement (or
on such later date as may be agreed by the Takeover Panel).
Investec, Rothschild & Co and FinnCap have each given and
not withdrawn their consent to the inclusion in this Announcement
of the references to their respective names in the form and context
in which they appear.
Appendix II to this Announcement contains details of sources of
information and bases of calculations contained in this
Announcement. Appendix III to this Announcement contains certain
details relating to the irrevocable undertakings and letter of
intent referred to in this Announcement. Appendix IV to this
Announcement contains further details of the Alternative Offer, the
Wider Bidco Group and the rights attaching to the Consideration
Loan Notes and the Consideration Shares. Appendix V to this
Announcement contains definitions of certain terms used in this
Announcement.
19. Documents on display
Copies of this Announcement and the following documents will, by
no later than 12 noon on the Business Day following the date of
this Announcement, be made available on DBAY's website at
www.dbayadvisors.com/offer-docs/ and on Telit's website at
https://www.telit.com/about/investor-relations/possible-offers/
until the end of the Acquisition:
-- the irrevocable undertakings and letter of intent referred to
in paragraph 6 (Irrevocable undertakings and letter of intent) and
described in Appendix III to this Announcement;
-- the Cash Bridge Facility and Facility B referred to in paragraph 10 (Financing);
-- the Confidentiality Letter referred to in paragraph 13 (Offer-related arrangements);
-- the Confidentiality and Joint Defence Agreement referred to in paragraph 13 (Offer-related arrangements);
-- the Co-operation Agreement referred to in paragraph 13 (Offer-related arrangements); and
-- the consents from Investec, Rothschild & Co and FinnCap
to being named in this Announcement.
Enquiries:
Bidco/DBAY Advisors Limited
Julian Addison Tel: +44 (0) 1624
Mike Haxby 690 900
Investec Bank plc (Financial adviser to Bidco/DBAY) Tel: +44 (0)
207 597 5970
Gary Clarence
William Godfrey
Temple Bar Advisory (Public relations adviser to Bidco/DBAY)
Alex Child-Villiers Tel: +44 (0) 207 183 1190
William Barker
Telit Communications PLC
Paolo Dal Pino, CEO Tel: +44 20 3289
Eyal Shefer, CFO 3831
Rothschild & Co (Financial adviser under Rule 3 of the Code
to Telit)
Warner Mandel/Pietro Franchi Tel: +44 20 7280
5000
FinnCap (Financial adviser, Nomad and broker to Telit)
Henrik Persson/Giles Rolls/Charlie Beeson Tel: +44 20 7220
(corporate finance) 0500
Tim Redfern/Richard Chambers (corporate
broking)
FinElk (Public relations adviser to Telit)
Robin Haddrill/Cornelia Schnepf Tel: +44 7387 108
998
Email: telit@finelk.eu
Hogan Lovells International LLP is providing legal advice to
DBAY and Bidco. CMS Cameron McKenna Nabarro Olswang LLP is
providing legal advice to Telit.
Important notices
Investec Bank plc, which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct
Authority and the Prudential Regulation Authority, is acting as
financial adviser to Bidco and for no one else in connection with
the Acquisition or other matters referred to in this Announcement
and will not be responsible to anyone other than Bidco for
providing the protections afforded to its clients nor for providing
advice in relation to the Acquisition, the contents of this
Announcement or any other matters set out in this Announcement.
Rothschild & Co, which is authorised and regulated in the
United Kingdom by the FCA, is acting exclusively as financial
adviser under Rule 3 of the Code to Telit in connection with the
matters set out in this Announcement and for no one else and will
not be responsible to anyone other than Telit for providing the
protections afforded to its clients or for providing advice in
relation to the matters set out in this Announcement. Neither
Rothschild & Co nor any of its affiliates owes or accepts any
duty, liability or responsibility whatsoever (whether direct or
indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Rothschild & Co in
connection with this Announcement, any statement contained herein,
the Acquisition or otherwise.
FinnCap, which is authorised and regulated by the FCA in the
United Kingdom, is acting exclusively for Telit and for no one else
in connection with the subject matter of this Announcement and will
not be responsible to anyone other than Telit for providing the
protections afforded to its clients or for providing advice in
connection with the subject matter of this Announcement.
Further information
This Announcement is for information purposes only and is not
intended to and does not constitute, or form any part of, an offer
to sell or subscribe for or any invitation to purchase or subscribe
for any securities or the solicitation of any vote or approval in
any jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely through the Scheme Document and the
accompanying Forms of Proxy and Form of Election, which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Acquisition. Any approval,
decision or other response to the Acquisition should be made only
on the basis of the information in the Scheme Document. Telit
Shareholders are strongly advised to read the formal documentation
in relation to the Acquisition once it has been despatched. Each
Telit Shareholder is urged to consult its independent professional
adviser immediately regarding the tax consequences to it (or its
beneficial owners) of the Acquisition.
The statements contained in this Announcement are made as at the
date of this Announcement, unless some other time is specified in
relation to them, and service of this Announcement shall not give
rise to any implication that there has been no change in the facts
set forth in this Announcement since such date.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
Overseas shareholders
The release, publication or distribution of this Announcement in
or into jurisdictions other than the UK may be restricted by law
and therefore any persons who are subject to the law of any
jurisdiction other than the UK should inform themselves about, and
observe, any applicable legal or regulatory requirements. In
particular the ability of persons who are not resident in the UK to
vote their Telit Shares at the Court Meeting or General Meeting, or
to appoint another person as proxy to vote at the Court Meeting or
General Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Any failure to
comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest
extent permitted by applicable law, the companies and persons
involved in the Acquisition disclaim any responsibility or
liability for the violation of such restrictions by any person.
This Announcement has been prepared for the purpose of complying
with the laws of England and Wales, Market Abuse Regulation, AIM
Rules and the Code 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 of England and Wales. Unless otherwise determined by Bidco
or required by the Code, and permitted by applicable law and
regulation, the Acquisition will not be made available directly or
indirectly in, into or from a Restricted Jurisdiction where to do
so would violate the laws in that jurisdiction and no person may
vote in favour of the Acquisition by use of mail or any other means
or instrumentality (including, without limitation, facsimile, email
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or any facility of a national, state or
other securities exchange of, any Restricted Jurisdiction.
Copies of this Announcement and any formal documentation
relating to the Acquisition will not be and must not be, directly
or indirectly, mailed or otherwise forwarded, distributed or sent
in, into or from any Restricted Jurisdiction or any jurisdiction
where to do so would violate the laws of that jurisdiction and
persons receiving such documents (including custodians, nominees
and trustees) must not mail or otherwise forward, distribute or
send them in, into or from any Restricted Jurisdiction. Doing so
may render invalid any related purported vote in respect of the
Acquisition.
Where Bidco believes that an election for the Alternative Offer
by any Scheme Shareholder may infringe applicable legal or
regulatory requirements, or may result in a requirement for a
registration under the securities laws of any Restricted
Jurisdiction, Bidco will have the right to deem that such Scheme
Shareholder has not validly elected for the Alternative Offer and
such Scheme Shareholder will instead receive the Cash Offer in
respect of the Scheme Shares which were subject to such an election
in accordance with the terms of the Acquisition.
Further details in relation to Telit Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Additional information for US investors
The Acquisition relates to the shares of a UK company and is
being made by means of a scheme of arrangement provided for under
the laws of England and Wales. A transaction effected by means of a
scheme of arrangement is not subject to the proxy solicitation or
tender offer rules under the Exchange Act and is exempt from the
registration requirements of the Securities Act. Accordingly, the
Acquisition will be subject to disclosure requirements and
practices applicable in the UK and to schemes of arrangement under
the laws of England and Wales, which are different from the
disclosure and other requirements applicable to a US tender offer.
Neither the SEC, nor any securities commission of any state of the
United States, has approved or disapproved any offer, or comment
upon the adequacy or completeness of any of the information
contained in document. Any representation to the contrary is a
criminal offence in the United States.
Financial information relating to Telit included in this
Announcement and the Scheme Document has been or will have been
prepared in accordance with accounting standards applicable in the
United Kingdom that may not be comparable to financial information
of US companies or companies whose financial statements are
prepared in accordance with generally accepted accounting
principles in the United States.
The Consideration Loan Notes to be issued pursuant to the Scheme
under the Alternative Offer may not be offered or sold in the
United States absent registration or an exemption from
registration. No US offer of such Consideration Loan Notes will be
made in the United States. The Consideration Loan Notes have not
been and will not be registered under the US Securities Act or
under the relevant securities laws of any state or territory or
other jurisdiction of the United States and will not be listed on
any stock exchange in the United States, and may not be offered,
sold or delivered, directly or indirectly, in, into or from the
United States. Neither the US Securities and Exchange Commission
nor any US state securities commission has approved or disapproved
of the Consideration Loan Notes or determined that this document is
accurate or complete. Any representation to the contrary is a
criminal offence.
Telit Shareholders located or resident in the United States or
who are otherwise US Persons will not be permitted to elect receipt
of the Consideration Loan Notes pursuant to the Alternative Offer,
and any purported election to receive Consideration Loan Notes
pursuant to the Alternative Offer by Telit Shareholders from the
United States, or which, at the sole discretion of Bidco, appear to
be made in respect of Telit Shares beneficially held by persons
located or resident in the United States or who otherwise appear to
be US Persons will not be accepted. Accordingly, Telit Shareholders
located or resident in the United States or who are otherwise US
Persons will receive cash pursuant to the Scheme, and no
Consideration Loan Notes will be issued to any such Telit
Shareholder.
By electing receipt of the Consideration Loan Notes pursuant to
the Alternative Offer, Telit Shareholders will be deemed to
represent and warrant, on behalf of themselves and any person on
whose behalf they beneficially hold their Telit Shares, that they:
(i) are not located or resident in the United States or otherwise a
US Person; and (ii) are not electing receipt of Telit Shares
pursuant to the Alternative Offer with a view to, or for offer or
sale of Consideration Loan Notes in connection with, any
distribution thereof (within the meaning of the Securities Act) in
the United States or to US Persons.
The receipt of cash consideration pursuant to the Cash Offer by
a US holder of Telit Shares as consideration for the transfer of
its Scheme Shares pursuant to the Scheme 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 US
holder is urged to consult his independent professional adviser
immediately regarding the tax consequences of the Acquisition
applicable to him, her or it.
It may be difficult for US holders of Telit Shares to enforce
their rights and any claims they may have arising under US Federal
securities laws in connection with the Acquisition, since Telit is
organised under the laws of a country other than the United States,
and some or all of its officers and directors may be residents of
countries other than the United States, and most of the assets of
Telit are located outside of the United States. US holders of Telit
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 Federal securities
laws. Further, it may be difficult to compel a non-US company and
its affiliates to subject themselves to a US court's jurisdiction
or judgment.
The Acquisition may, in the circumstances provided for in this
Announcement, instead be carried out by way of a Takeover Offer
under the laws of England and Wales. If Bidco exercises, with the
consent of the Takeover Panel and subject to the terms of the
Co-operation Agreement, its right to implement the Acquisition by
way of a Takeover Offer, such Takeover Offer will be made in
compliance with applicable US tender offer and US Federal
securities laws and regulations, including the exemptions
therefrom. In accordance with normal UK practice and pursuant to
rule 14e-5(b) of the Exchange Act, Bidco or its nominees, or its
brokers (acting as agents), may, from time to time, make certain
purchases of, or arrangements to purchase, Telit Shares outside of
the United States, other than pursuant to the Acquisition, until
the date on which the Acquisition becomes effective, lapses or is
otherwise withdrawn, in compliance with applicable law, including
the Exchange Act. 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 UK, will be reported to a Regulatory
Information Service and will be available on the London Stock
Exchange website at www.londonstockexchange.com.
Forward-looking statements
This Announcement, oral statements made regarding the
Acquisition, and other information published by Bidco and Telit
contain statements which are, or may be deemed to be,
"forward-looking statements" with respect to Bidco or Telit. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking
statements often (but not always) use words such as "anticipate",
"target", "expect", "estimate", "intend", "plan", "goal",
"believe", "will", "may", "should", "would", "could" or other words
or terms of similar meaning or the negative thereof.
Forward-looking statements include statements relating to the
following: (i) future capital expenditures, expenses, revenues,
earnings, synergies, economic performance, indebtedness, financial
condition, dividend policy, losses and future prospects; (ii)
business and management strategies and the expansion and growth of
Bidco or Telit and potential synergies resulting from the
Acquisition; and (iii) the effects of government regulation on the
business of Bidco or Telit.
Although Bidco and Telit believe that the expectations reflected
in such forward-looking statements are reasonable, Bidco and Telit
can give no assurance that such expectations will prove to be
correct. These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause actual
results, performance or developments to differ materially from
those expressed in or implied by such forward-looking statements.
These forward-looking statements are based on numerous assumptions
regarding present and future strategies and environments. You are
cautioned not to place undue reliance on such forward-looking
statements, which speak only as of the date hereof. All subsequent
oral or written forward-looking statements attributable to Bidco or
Telit or any person acting on their behalf are expressly qualified
in their entirety by the cautionary statement above. Should one or
more of these risks or uncertainties materialise, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described in this Announcement. Bidco and
Telit expressly disclaim any intention or obligation to update
publicly or revise forward-looking or other statements contained in
this Announcement, whether as a result of new information, future
events or otherwise, except to the extent legally required.
No profit forecasts or estimates
No statement in this Announcement is intended as a profit
forecast or estimate for any period and no statement in this
Announcement should be interpreted to mean that earnings or
earnings per ordinary share for Telit or Bidco for the current or
future financial years would necessarily match or exceed the
historical published earnings or earnings per ordinary share for
Telit or Bidco.
Right to switch to a Takeover Offer
Bidco reserves the right to elect, with the consent of the
Takeover Panel and subject to the terms of the Co-operation
Agreement, to implement the Acquisition by way of a Takeover Offer
for the entire issued and to be issued ordinary share capital of
Telit as an alternative to the Scheme. In such an event, the
Takeover Offer will be implemented on the same terms or, if Bidco
so decides, on such other terms being no less favourable (subject
to appropriate amendments), so far as applicable, as those which
would apply to the Scheme and subject to the amendment referred to
in Part B of Appendix I to this Announcement.
Rule 2.9 disclosures
In accordance with Rule 2.9 of the Code, as at close of business
on the Last Practicable Date , there were 1 34,389,782 Telit Shares
in issue and admitted to trading on AIM. There are no Telit Shares
held in treasury. The ISIN Number for the Telit Shares is
GB00B06GM726.
Publication on website and availability of hard copies
In accordance with Rule 26.1 of the Code, a copy of this
Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, on DBAY's website at
www.dbayadvisors.com/offer-docs/ and on Telit's website at https://www.telit.com/about/investor-relations/possible-offers/ by no later than 12:00 noon on the Business Day following this Announcement. Neither the contents of this website nor the content of any other website accessible from hyperlinks on such websites is incorporated into, or forms part of, this Announcement.
In accordance with Rule 30.3 of the Code, a person so entitled
may request a hard copy of this Announcement, free of charge, by
contacting the Company's registrars, Link Group during business
hours on 0371 664 0300 (or if calling from outside the UK +44(0)371
664 0300) or by submitting a request in writing at Link Group,
10(th) Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL,
United Kindgom. A hard copy of this Announcement will not be sent
unless so requested. A person so entitled may also request that all
future documents, announcements and information to be sent to them
in relation to the Acquisition should be in hard copy form.
Information relating to Telit Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Telit Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Telit may be provided to Bidco during the offer
period as required under section 4 of Appendix 4 of the Code.
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.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1
per cent. 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: (a) the offeree company; and (b) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) of the Code applies must be made by no
later than 3.30 pm (London time) on the 10th Business Day following
the commencement of the offer period and, if appropriate, by no
later than 3.30 pm (London time) on the 10th Business Day following
the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal
in the relevant securities of the offeree company or of a
securities exchange offeror prior to the deadline for making an
Opening Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1 per cent. 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: (a) the offeree company; and (b) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8 of the Code. A Dealing Disclosure by a
person to whom Rule 8.3(b) of the Code 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 of the Code.
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 of
the Code).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the 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.
General
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or independent financial
adviser duly authorised under FSMA if you are resident in the
United Kingdom or, if not, from another appropriately authorised
independent financial adviser.
APPIX I
CONDITIONS OF THE ACQUISITION AND CERTAIN FURTHER TERMS
Part A: Conditions of the Scheme and Acquisition
The Acquisition is conditional upon the Scheme becoming
Effective by not later than 11.59 p.m. on the Long Stop Date.
1. The Scheme shall be subject to the following conditions:
(a) its approval by a majority in number of the Scheme
Shareholders who are on the register of members of Telit (or the
relevant class or classes thereof) at the Voting Record Time and
who are present and vote, whether in person or by proxy, at the
Court Meeting (and at any separate class meeting which may be
required by the Court) and who represent not less than 75 per cent.
in value of the Scheme Shares voted by those Scheme Shareholders on
or before the 22nd day after the expected date of the Court Meeting
to be set out in the Scheme Document (or such later date, if any,
as Bidco and Telit may agree and the Court may allow);
(b) the passing of the Resolutions by the requisite majority at
the General Meeting to be held on or before the 22nd day after the
expected date of the General Meeting to be set out in the Scheme
Document (or such later date, if any, as Bidco and Telit may agree
and the Court may allow);
(c) the sanction of the Scheme by the Court (with or without
modification but subject to any modification being on terms
acceptable to Bidco and Telit) on or before the 22nd day after the
expected date of the Court Hearing to be set out in the Scheme
Document (or such later date, if any, as Bidco and Telit may agree
and the Court may allow); and
(d) delivery of a copy of the Court Order to the Registrar of Companies.
2. In addition, subject as stated in Part B below and to the
requirements of the Takeover Panel, the Acquisition shall be
conditional upon the following Conditions and, accordingly, the
Court Order shall not be delivered to the Registrar of Companies
unless such Conditions (as amended, if appropriate) have been
satisfied (and continue to be satisfied pending the commencement of
the Court Hearing) or, where relevant, waived in writing prior to
the Scheme being sanctioned by the Court:
Regulatory approvals and clearances
(a) no Third Party having decided, threatened or given notice of
a decision to take, institute, implement or threaten any action,
proceeding, suit, investigation, enquiry or reference (and in each
case, not having withdrawn the same), or having required any action
to be taken or otherwise having done anything, or having enacted,
made or proposed any statute, regulation, decision, order or change
to published practice (and in each case, not having withdrawn the
same) and there not continuing to be outstanding any statute,
regulation, decision or order which would or might reasonably be
expected to (in any case to an extent or in a manner which is
material in the context of the Acquisition, the Wider Telit Group
or the Wider Bidco Group, as the case may be, in each case, taken
as a whole):
(i) require, prevent or materially delay the divestiture or
materially alter the terms envisaged for such divestiture by any
member of the Wider Bidco Group or by any member of the Wider Telit
Group of all or any part of their respective businesses, assets,
property or any shares or other securities (or the equivalent) in
any member of the Wider Telit Group or any member of the Wider
Bidco Group or impose any limitation on the ability of all or any
of them to conduct their respective businesses (or any part
thereof) or to own, control or manage any of their respective
assets or properties (or any part thereof);
(ii) except pursuant to Chapter 3 of Part 28 of the Companies
Act, in the event that Bidco elects to implement the Acquisition by
way of a Takeover Offer, require any member of the Wider Bidco
Group or the Wider Telit Group to acquire or offer to acquire any
shares, other securities (or the equivalent) or interest in any
member of the Wider Telit Group or any asset owned by any Third
Party (other than in connection with the implementation of the
Acquisition);
(iii) impose any material limitation on, or result in a material
delay in, the ability of any member of the Wider Bidco Group,
directly or indirectly, to acquire, hold or exercise effectively
all or any rights of ownership in respect of shares or loans or
securities convertible into shares or other securities (or the
equivalent) in Telit or on the ability of any member of the Wider
Telit Group or any member of the Wider Bidco Group, directly or
indirectly, to hold or exercise effectively all or any rights of
ownership in respect of shares or loans or any other securities (or
the equivalent) in, or to exercise voting or management control
over, any other member of the Wider Telit Group;
(iv) except as Disclosed, result in any member of the Wider
Telit Group or any member of the Wider Bidco Group ceasing to be
able to carry on business under any names under which it currently
carries on business;
(v) make the Acquisition, its implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control or management of, Telit by any member of the Wider Bidco
Group void, unenforceable and/or illegal under the laws of any
relevant jurisdiction, or otherwise, directly or indirectly,
prevent or prohibit, restrict, restrain or delay or otherwise
interfere with the implementation of, or impose additional
conditions or obligations with respect to, or otherwise challenge,
impede, interfere or require material amendment to the terms of the
Acquisition or the acquisition or proposed acquisition of any
shares or other securities in, or control or management of, any
member of the Wider Telit Group by any member of the Wider Bidco
Group;
(vi) impose any material limitation on, or result in material
delay in, the ability of any member of the Wider Bidco Group or any
member of the Wider Telit Group to conduct, integrate or
co-ordinate all or any part of its business with all or any part of
the business of any other member of the Wider Bidco Group and/or
the Wider Telit Group;
(vii) require any member of the Wider Telit Group or the Wider
Bidco Group to relinquish, terminate or amend in any material way
any material contract to which any member of the Wider Telit Group
or the Wider Bidco Group is a party;
(viii) require any member of the Wider Bidco Group or any member
of the Wider Telit Group to: (A) invest, contribute or loan any
capital or assets to; or (B) guarantee or pledge capital assets for
the benefit of any member of the Wider Telit Group, which in each
such case or together is material and adverse in the context of any
member of the Wider Telit Group or in the context of the
Acquisition;
(ix) otherwise materially adversely affect all or any of the
business, assets, liabilities, profits, financial or trading
position of any member of the Wider Telit Group or any member of
the Wider Bidco Group,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Third Party could take,
institute, implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under
the laws of any jurisdiction in respect of the Acquisition or
otherwise intervene having expired, lapsed or been terminated;
Other regulatory approvals
(b) each Governmental Entity, which regulates or licences any
member of the Telit Group, Bidco Group or any other body corporate
in which any member of the Telit Group or Bidco Group has an
interest in shares, and whose prior approval, non-objection or
consent to the Acquisition is required, or any Governmental Entity,
whose prior approval or consent is otherwise required in order to
complete the Acquisition, or from whom one or more material
licences or permissions are required in order to complete the
Acquisition, having given its approval, non-objection or legitimate
deemed consent or consent in writing thereto and, as the case may
be, having granted such licences and permissions (in each case
where required and on terms reasonably satisfactory to Bidco), and
in each case the impact of which would materially adversely affect
the Wider Telit Group or the Wider Bidco Group, taken as a whole,
if not obtained;
Foreign Direct Investment Clearances
(c) Clearance by the Italian Foreign Investment Authority
pursuant to art. 2 of the Law Decree no. 21 of 15 March 2012 as
amended having been obtained, on terms satisfactory to Bidco;
(d) Bidco and Telit obtaining CFIUS approval in connection with the Acquisition through:
(i) written notice from CFIUS that: (A) CFIUS has concluded that
the transaction described in a notice or declaration submitted to
CFIUS is not a "covered transaction" as that term is defined in 31
C.F.R. -- 800.213; or (B) CFIUS has concluded all action under
Section 721 of the Defense Production Act of 1950, as amended (the
"DPA"), including all implementing regulations; or
(ii) the President's announcement of a decision not to exercise
the President's authority under section 721(d) of the DPA with
respect to the Transaction;
Notifications, waiting periods and authorisations
(e) other than in relation to the matters referred to in
Conditions 2(a) to 2(d) (inclusive), all material notifications,
filings or applications which are necessary or reasonably
considered by Bidco to be appropriate having been made in
connection with the Acquisition and all necessary waiting and other
time periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated (as appropriate) and all
statutory and regulatory obligations in any jurisdiction having
been complied with, in each case, in respect of the Scheme and the
Acquisition in each case where the direct consequence of a failure
to make such notification, filing or application or to wait for the
expiry, lapse or termination of any such waiting or other time
period would be unlawful in any relevant jurisdiction or have a
material adverse effect on the Wider Telit Group, any member of the
Wider Bidco Group or the ability of Bidco to implement the Scheme
and all Authorisations which are necessary or reasonably considered
by Bidco to be appropriate in any jurisdiction for or in respect of
the Acquisition and, except pursuant to Chapter 3 of Part 28 of the
Companies Act, the Acquisition or the proposed acquisition of any
shares or other securities in, or control or management of, Telit
or any other member of the Wider Telit Group by any member of the
Wider Bidco Group having been obtained in terms and in a form
reasonably satisfactory to Bidco from all appropriate Third Parties
or (without prejudice to the generality of the foregoing) from any
person or bodies with whom any member of the Wider Telit Group or
the Wider Bidco Group has entered into contractual arrangements
where the direct consequence of a failure to obtain such
Authorisation would be unlawful in any relevant jurisdiction or
have a material adverse effect on the Wider Telit Group, any member
of the Wider Bidco Group or the ability of Bidco to implement the
Acquisition and all such Authorisations remaining in full force and
effect at the time at which the Acquisition becomes otherwise
wholly unconditional and there being no notice or intimation of an
intention to revoke, suspend, restrict, modify or not to renew such
Authorisations;
Telit Shareholder resolution
(f) except with the consent or the agreement of Bidco, no
resolution of Telit Shareholders in relation to any acquisition or
disposal of assets or shares (or the equivalent thereof) in any
undertaking or undertakings (or in relation to any merger,
demerger, consolidation, reconstruction, amalgamation or scheme)
being passed at a meeting of Telit Shareholders other than in
relation to the Acquisition or the Scheme and, other than with the
consent or the agreement of Bidco, no member of the Wider Telit
Group having taken (or agreed or proposed to take) any action that
requires, or would require, the consent of the Takeover Panel or
the approval of Telit Shareholders in accordance with, or as
contemplated by, Rule 21.1 of the Code;
Certain matters arising as a result of any arrangement,
agreement, etc.
(g) except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Wider Telit Group is a party
or by or to which any such member or any of its assets is or may be
bound, entitled or subject, or any event or circumstance which, as
a consequence of the Acquisition or because of a change in the
control or management of any member of the Wider Telit Group or
otherwise, would or might reasonably be expected to result in (in
each case to an extent or in a manner which is material in the
context of the Wider Telit Group, taken as a whole):
(i) any monies borrowed by, or any other indebtedness or
liabilities, actual or contingent, of, or any grant available to,
any such member being or becoming repayable, or capable of being
declared repayable, immediately or prior to its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) the creation, save in the ordinary and usual course of
business, or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or
assets of such member or any such mortgage, charge or other
security interest (whenever created, arising or having arisen)
becoming enforceable;
(iii) any liability of any such member to make any severance,
termination, bonus or other payment to any of its directors or
other officers;
(iv) the rights, liabilities, obligations, interests or business
of any such member or any member of the Wider Telit Group under any
such arrangement, agreement, licence, permit, lease or instrument
or the interests or business of any such member or any member of
the Wider Telit Group in or with any other person or body or firm
or company (or any arrangement relating to any such interests or
business) being or becoming capable of being terminated, or
adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken thereunder;
(v) any member of the Wider Telit Group ceasing to be able to
carry on business under any name under which it presently carries
on business;
(vi) the financial or trading position or prospects of, any such
member being prejudiced or adversely affected;
(vii) the creation or acceleration of any liability (actual or
contingent) by any such member other than trade creditors or other
liabilities incurred in the ordinary course of business; or
Certain events occurring since 31 December 2020
(h) except as Disclosed, and except, where relevant between
Telit and/or wholly owned subsidiaries of Telit, no member of the
Wider Telit Group having since 31 December 2020:
(i) issued or agreed to issue or authorised or proposed or
announced its intention to authorise or propose the issue, of
additional shares of any class, or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such shares, securities or
convertible securities or transferred or sold or agreed to transfer
or sell or authorised or proposed the transfer or sale of Telit
Shares out of treasury (except, where relevant as between Telit and
wholly-owned subsidiaries of Telit or between the wholly-owned
subsidiaries of Telit and except for the issue or transfer out of
treasury of Telit Shares on the exercise of employee share options
or vesting of employee share awards in the ordinary course under
the Telit Share Plans);
(ii) 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) other than
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly-owned subsidiary of
Telit to Telit or any of its wholly-owned subsidiaries;
(iii) other than pursuant to the Acquisition (and except for
transactions in the ordinary course of business and except for and
except for transactions between Telit and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Telit)
implemented, effected, authorised or proposed or announced its
intention to implement, effect, authorise or propose any merger,
demerger, reconstruction, amalgamation, scheme, commitment or
acquisition or disposal of assets or shares or loan capital (or the
equivalent thereof) in any undertaking or undertakings in any such
case to an extent which is material in the context of the Wider
Telit Group taken as a whole or in the context of the
Acquisition;
(iv) except for transactions in the ordinary course of business
and except for transactions between Telit and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Telit,
disposed of, or transferred, mortgaged or created any security
interest over any material asset or any right, title or interest in
any material asset or authorised, proposed or announced any
intention to do so in any such case to an extent which is material
in the context of the Wider Telit Group taken as a whole or in the
context of the Acquisition;
(v) except for transactions between Telit and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Telit,
issued, authorised or proposed or announced an intention to
authorise or propose, the issue of or made any change in or to the
terms of any debentures or become subject to any contingent
liability or incurred or increased any indebtedness which in any
such case is material in the context of the Wider Telit Group taken
as a whole or in the context of the Acquisition;
(vi) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any material contract,
arrangement, agreement, transaction or commitment (whether in
respect of capital expenditure or otherwise) except in the ordinary
course of business which is of a long term, unusual or onerous
nature or magnitude or which is or which involves or could
reasonably be expected to involve an obligation of such nature or
magnitude and which is or would be reasonably likely to be
restrictive on the business of any member of the Wider Telit Group
taken as a whole;
(vii) entered into or varied the terms of, or made any offer
(which remains open for acceptance) to enter into or vary to a
material extent the terms of any contract, service agreement,
commitment or arrangement with any director or senior executive of
any member of the Wider Telit Group, otherwise than in the ordinary
course of business;
(viii) 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 employee of the
Wider Telit Group, otherwise than in the ordinary course of
business and other than in accordance with the terms of the
Co-operation Agreement or the Acquisition;
(ix) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or made any other change to any part of its share
capital (except for the issue or transfer out of treasury of Telit
Shares on the exercise of employee share options or vesting of
employee share awards under the Telit Share Plans as
Disclosed);
(x) except in the ordinary course of business, waived,
compromised or settled any claim which is material in the context
of the Wider Telit Group as a whole or in the context of the
Acquisition;
(xi) terminated or varied the terms of any agreement or
arrangement between any member of the Wider Telit Group and any
other person in a manner which would or might have a material
adverse effect on the financial position of the Wider Telit Group
taken as a whole or in the context of the Acquisition;
(xii) made any material alteration to its memorandum, articles
of association or other incorporation documents or any material
alteration to the memorandum, articles of association or other
incorporation documents of any other member of the Wider Telit
Group (other than in connection with the Acquisition);
(xiii) made or agreed or consented to any material change to:
(A) the terms of the trust deeds and rules constituting the
pension scheme(s) established by any member of the Wider Telit
Group for its directors, employees or their dependants;
(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, made, agreed or consented
to,
in each case, to an extent which is in any such case material in
the context of the Wider Telit Group taken as a whole or in the
context of the Acquisition and other than as required by law;
(xiv) been unable, or admitted in writing that it is unable, to
pay its debts or commenced negotiations with one or more of its
creditors with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its business
which is material in the context of the Wider Telit Group or in the
context of the Acquisition;
(xv) (other than in respect of a member of the Wider Telit Group
which is dormant and was solvent at the relevant time) taken or
proposed any steps, corporate action or had any legal proceedings
instituted or threatened against it in relation to the suspension
of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the
appointment of a receiver, administrator, manager, administrative
receiver, trustee or similar officer of all or any material part of
its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed in any such
case to an extent which is material in the context of the Wider
Telit Group taken as a whole or in the context of the
Acquisition;
(xvi) except for transactions between Telit and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Telit,
made, authorised, proposed or announced an intention to propose any
change in its loan capital which is material in the context of the
Wider Telit Group taken as a whole or in the context of the
Acquisition;
(xvii) entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities, which in any such case
is material in the context of the Wider Telit Group as a whole or
in the context of the Acquisition; or
(xviii) entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition 2(h);
No adverse change, litigation, regulatory enquiry or similar
(i) except as Disclosed, since 31 December 2020, there having been:
(i) no adverse change and no circumstance having arisen which
would reasonably be expected to result in any adverse change in,
the business, assets, liabilities, shareholders' equity, financial
or trading position or profits, operational performance or
prospects of any member of the Wider Telit Group which is material
in the context of the Wider Telit Group taken as a whole or in the
context of the Acquisition;
(ii) no litigation, arbitration proceedings, prosecution or
other legal proceedings to which any member of the Wider Telit
Group is or may become a party (whether as a claimant, defendant or
otherwise) having been threatened, announced, implemented or
instituted by or against or remaining outstanding against or in
respect of, any member of the Wider Telit Group, in each case which
would reasonably be expected to have a material adverse effect on
the Wider Telit Group taken as a whole or in the context of the
Acquisition;
(iii) no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Wider Telit Group (or any person in respect of which any
such member has or may have responsibility or liability) having
been threatened, announced, implemented or instituted or remaining
outstanding by, against or in respect of any member of the Wider
Telit Group, in each case, which would reasonably be expected to
have a material adverse effect on the Wider Telit Group taken as a
whole or in the context of the Acquisition;
(iv) no contingent or other liability having arisen or become
apparent to Bidco or increased other than in the ordinary course of
business which is reasonably likely to affect adversely the
business, assets, financial or trading position or profits of any
member of the Wider Telit Group to an extent which is material in
the context of the Wider Telit Group taken as a whole or in the
context of the Acquisition; and
(v) no steps having been taken and no omissions having been made
which are likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Telit Group which is necessary for the proper carrying on
of its business and the withdrawal, cancellation, termination or
modification of which would reasonably be expected to have a
material adverse effect on the Wider Telit Group taken as a whole
or in the context of the Acquisition;
No discovery of certain matters regarding information and
liabilities, corruption and intellectual property
(j) except as Disclosed, Bidco not having discovered that:
(i) any financial, business or other information concerning the
Wider Telit Group announced publicly and delivered by or on behalf
of Telit through a RIS prior to the date of this Announcement or
disclosed to any member of the Wider Bidco Group by or on behalf of
any member of the Wider Telit Group prior to the date of this
Announcement is misleading, contains a misrepresentation of any
fact, or omits to state a fact necessary to make that information
not misleading and which was not subsequently corrected before the
date of this Announcement by disclosure either publicly or
otherwise to Bidco or its professional advisers and, in any such
case, which is material in the context of the Wider Telit Group
taken as a whole or in the context of the Acquisition;
(ii) any member of the Wider Telit Group since 31 December 2020
and which is not a subsidiary undertaking of Telit, otherwise than
in the ordinary course of business, is subject to any liability,
contingent or otherwise, and which is material in the context of
the Wider Telit Group taken as a whole or in the context of the
Acquisition;
(iii) any past or present member, director, officer or employee
of the Wider Telit Group, or any person that performs or has
performed services on behalf of the Wider Telit Group, has not
complied with the OECD Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions and any
laws implementing the same, the UK Bribery Act 2010 and/or the US
Foreign Corrupt Practices Act of 1977;
(iv) any past or present member, director, officer or employee
of the Wider Telit Group, or any person that performs or has
performed services on behalf of the Wider Telit Group, has engaged
in any business with or made any investment in, or made any
payments to: (A) any government, entity or individual with which US
or EU persons are prohibited from engaging in activities or doing
business by US or EU laws or regulations, including the economic
sanctions administered by the United States Office of Foreign
Assets Control; or (B) any government, entity or individual
targeted by any of the economic sanctions of the United Nations or
the European Union or any of their respective member states;
(v) any asset of any member of the Wider Telit Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition);
and
(vi) since 31 December 2020, no circumstance having arisen or
event having occurred in relation to any intellectual property
owned, used or licensed by the Wider Telit Group or to any third
parties, including: (A) any member of the Wider Telit Group losing
its title to any intellectual property or any intellectual property
owned by the Wider Telit Group being revoked, cancelled or declared
invalid; (B) any agreement regarding the use of any intellectual
property licensed to or by any member of the Wider Telit Group
being terminated or varied; or (C) any claim being filed suggesting
that any member of the Wider Telit Group infringed the intellectual
property rights of a third party or any member of the Wider Telit
Group being found to have infringed the intellectual property
rights of a third party, in each case which is material in the
context of the Wider Telit Group taken as a whole or in the context
of the Acquisition.
Part B: Certain further terms of the Acquisition
3. Subject to the requirements of the Takeover Panel, Bidco
reserves the right in its sole discretion to waive (if capable of
waiver) in whole or part:
(a) any of the Conditions set out in the above Condition 1 of
Part A relating to the timing of the Court Meeting, the General
Meeting and the Court Hearing. If any of the deadlines for those
events are not met, Bidco shall make an announcement by 8.00 a.m.
on the Business Day following such deadline confirming whether it
has invoked or waived the relevant Condition or agreed with Telit
to extend the deadline in relation to the relevant Condition;
and
(b) all or any of the above Conditions 2(a) (Regulatory
approvals and clearances) to 2(j) (No Discovery of certain matters
regarding information and liabilities, corruption and intellectual
property) of Part A (inclusive).
4. Conditions 2(a) (Regulatory approvals and clearances) to 2(j)
(No Discovery of certain matters regarding information and
liabilities, corruption and intellectual property) of Part A
(inclusive) must be fulfilled or waived by no later than 11:59 p.m.
on the date immediately preceding the date of the Court Hearing,
failing which the Scheme will lapse or, if the Acquisition is
implemented by way of a Takeover Offer, no later than as permitted
by the Takeover Panel. Bidco shall be under no obligation to waive
or treat as fulfilled any of the Conditions which are capable of
being waived by a date earlier than the latest date specified above
for the fulfilment or waiver thereof, notwithstanding that the
other Conditions of the Scheme and the Acquisition 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.
5. Under Rule 13.5 of the Code, Bidco may not invoke a Condition
so as to cause the Acquisition not to proceed, to lapse or be
withdrawn, unless the circumstances which give rise to the right to
invoke the Condition are of material significance to Bidco in the
context of the Acquisition. Condition 1 of Part A (and, if
applicable, any acceptance condition adopted on the basis specified
in paragraph 7 below in relation to any Takeover Offer) are not
subject to this provision of the Code.
6. If Bidco is required by the Takeover Panel to make an offer
for Telit Shares under the provisions of Rule 9 of the Code, Bidco
may make such alterations to the Conditions and certain further
terms of the Acquisition as are necessary to comply with the
provisions of that Rule.
7. Bidco reserves the right to elect (with the consent the
Takeover Panel and subject to the terms of the Co-operation
Agreement) to implement the Acquisition by way of a Takeover Offer
as an alternative to the Scheme. In such event, the Takeover Offer
will be implemented on substantially the same terms, subject to
appropriate amendments, as far as applicable, as those which would
apply to the Scheme. The acceptance condition would be set at 90
per cent. of the shares to which such Takeover Offer relates (or
such lesser percentage as Bidco may decide with the consent of the
Takeover Panel and subject to the terms of the Co-operation
Agreement provided that if it became or was declared unconditional
in all respects, the Takeover Offer would result in Bidco holding
Telit Shares carrying greater than 50 per cent. of the voting
rights in Telit). Further, if sufficient acceptances of the
Takeover Offer are received and/or sufficient Telit Shares are
otherwise acquired, it is the intention of Bidco to apply the
provisions of the Companies Act to compulsorily acquire any
outstanding Telit Shares to which such Takeover Offer relates.
8. The Acquisition will lapse (unless otherwise agreed with the Takeover Panel) if:
(a) in so far as the Acquisition or any matter arising from or
relating to the Scheme or Acquisition would give rise to a
concentration with a community dimension within the scope of the
Merger Regulation, the European Commission initiates proceedings
under Article 6(1)(c) of the Merger Regulation; or
(b) in so far as the Acquisition or any matter arising from the
Scheme or Acquisition comes within the statutory provisions for a
possible CMA Phase 2 Reference, the Scheme or Acquisition or any
matter arising from or relating to the Acquisition becomes subject
to a CMA Phase 2 Reference,
in each case, before the date of the Court Meeting.
9. Subject to paragraph 10 below, the Telit Shares shall be
acquired by Bidco, with full legal title and beneficial ownership,
fully paid and free from all liens, equitable interests, charges,
encumbrances, rights of pre-emption and any other third party
rights and interests whatsoever and together with all rights
existing at the date of this Announcement or thereafter attaching
thereto, including (without limitation) 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 the date of this Announcement in
respect of the Telit Shares.
10. Without prejudice to any right Bidco may have, with the
consent of the Takeover Panel, to invoke Condition 2(h)(ii), if any
dividend or other distribution in respect of the Telit Shares is
declared, paid or made on or after the date of this Announcement,
Bidco reserves the right to reduce the consideration payable for
each Telit Share under the terms of the Acquisition by the amount
per Telit Share of such dividend or distribution, in which case any
reference in this Announcement or in the Scheme Document to the
offer consideration for the Telit Shares will be deemed to be a
reference to the offer consideration as so reduced. To the extent
that any such dividend or other distribution and/or other return of
capital announced, declared, paid or made is: (a) transferred
pursuant to the Acquisition on a basis which entitles Bidco to
receive the dividend or other distribution and to retain it; or (b)
cancelled, then in either case the consideration payable in respect
of the Acquisition will not be subject to change in accordance with
this paragraph. Any exercise by Bidco of its rights referred to in
this paragraph shall be the subject of an announcement and, for the
avoidance of doubt, shall not be regarded as constituting any
revision or
variation of the Offer. If Bidco exercises this right or makes
such a reduction in respect of a dividend or distribution, Telit
Shareholders will be entitled to receive and retain that dividend
or distribution.
11. The availability of the Acquisition to persons not resident
in the United Kingdom may be affected by the laws of the relevant
jurisdictions. Therefore any persons who are subject to the laws of
any jurisdiction other than the United Kingdom and any Telit
Shareholders who are not resident in the United Kingdom will need
to inform themselves about and observe any applicable
requirements.
12. Unless otherwise determined by Bidco or required by the Code
and permitted by applicable law and regulations, the Acquisition is
not being, and will not be, made, directly or indirectly, in, into
or by the use of the mails of, or by any other means or
instrumentality (including, without limitation, facsimile, email 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 will
not be capable of acceptance by any such use, means,
instrumentality or facility or from within any Restricted
Jurisdiction.
13. Each of the Conditions shall be regarded as a separate
Condition and shall not be limited by reference to any other
Condition.
14. This Announcement and any rights or liabilities arising
hereunder, the Acquisition, the Scheme and the Forms of Proxy and
Form of Election will be governed by the laws of England and Wales
and will be subject to the jurisdiction of the courts of England.
The Acquisition will be subject to the applicable requirements of
the Code, the Takeover Panel, the AIM Rules and the FCA.
15. The Scheme will not become Effective unless the Conditions
have been fulfilled or (if capable of waiver) waived or, where
appropriate determined by Bidco to be or remain satisfied by 11.59
p.m. (London time) on the Long Stop Date.
16. Bidco reserves the right for any other entity directly or
indirectly owned by funds managed by DBAY from time to time (other
than Midco) to implement the Acquisition. In such an event, the
terms of the Alternative Offer and, in particular, the rights of
the Consideration Shares, will be the same, other than in respect
of the issuing entity.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
1. The value attributed to the existing issued and to be issued
share capital of Telit is based upon:
(a) 134,389,782 Telit Shares in issue on the Last Practicable Date; and
(b) an additional 6,003,835 Telit Shares which may be issued on
or after the date of this Announcement pursuant to outstanding
options and awards under the Telit Share Plans as at the Last
Practicable Date; less
(c) 913,940 Telit Shares expected to be held by the Telit
Employee Benefit Trust by the Effective Date which can be used to
satisfy the exercise of options granted under the Telit Share
Plans.
2. Volume-weighted average prices (VWAP) have been derived from
Bloomberg and have been rounded to the nearest single decimal
place.
3. The number of shares "in public hands" being below 28 per
cent. has been calculated as the Telit Shares in issue less the sum
of the holdings by: (a) the directors; (b) shareholders with an
interest in 5 per cent. or more of the shares; and (c) the 913,940
Telit Shares expected to be held by the Telit Employee Benefit
Trust, divided by the number of Telit Shares in issue.
4. Unless otherwise stated, the financial information on Telit
is extracted from Telit's Annual Report and Accounts for the year
ended 31 December 2020.
5. Unless otherwise stated, the Closing Price of a Telit Share
is derived from the AIM Appendix to the Official List.
APPIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS AND LETTER OF INTENT
Bidco has received irrevocable undertakings and a letter of
intent in respect of a total of 42,923,626 Telit Shares
(representing approximately 31.94 per cent. of the Telit Shares in
issue on the Last Practicable Date):
Telit Directors' irrevocable undertakings
Number Per cent. of
Number of Telit of Options Telit Shares
Name Shares in issue (%)
Anthony Dixon 9,018 0 0.01
Harald Rosch 435,000 0 0.32
Simon Duffy 43,971 0 0.03
Paolo dal Pino 540,000 2,000,000 0.40
Total 1,027,989 2,000,000 0.76
The irrevocable undertakings from the Telit Directors holding
Telit Shares will only cease to be binding:
-- if the Acquisition is implemented by way of a Scheme, and the
Scheme or any resolution to be proposed is not approved by the
requisite majority of the Telit Shareholders at the General Meeting
or the Court Meeting unless, within ten business days of such
event, Bidco has elected, in accordance with the terms of the
Co-operation Agreement, to implement the Acquisition by means of a
Takeover Offer;
-- if the Scheme Document or Takeover Offer document (as the
case may be) is not published within 28 days of the date of
publication of this Announcement (or within such longer period as
Bidco and Telit may agree, with the consent of the Takeover
Panel);
-- if any competing offer for the entire issued and to be issued
share capital of Telit becomes or is declared wholly unconditional
or, if proceeding by way of scheme of arrangement, becomes
effective;
-- on the earlier of: (i) the Long Stop Date; or (ii) the date
on which the Scheme or Takeover Offer (as the case may be) has
lapsed or been withdrawn in accordance with its terms and no new,
revised or replacement Takeover Offer or Scheme has been announced
by Bidco or its affiliates in accordance with Code at the same
time; or
-- if any event occurs or becomes known to Bidco before despatch
of the Scheme Document or the Takeover Offer document (as the case
may be) as a result of which the Takeover Panel requires or agrees
that Bidco need not make the Acquisition.
Other Telit Shareholders' irrevocable undertakings
Per cent. of Telit
Shares
Name Number of Telit Shares in issue (%)
-------------------------- ----------------------- -------------------
Run Liang Tai Management
Limited 20,030,495 14.90
Richard Griffiths 9,117,817 6.78
Davide Serra 10,527,323 7.83
Total 39,675,635 29.52
The irrevocable undertaking from Run Liang Tai Management
Limited will only cease to be binding if:
-- the Scheme Document or Takeover Offer document (as the case
may be) is not published within 28 days of the date of publication
of this Announcement (or within such longer period as Bidco and
Telit may agree, with the consent of the Takeover Panel);
-- the Scheme or the Takeover Offer does not become wholly
unconditional before 11.59 p.m. on the Long Stop Date;
-- the Acquisition is withdrawn, lapses or otherwise terminates
in accordance with its terms and no new, revised or replacement
Takeover Offer or Scheme has been announced by Bidco or its
affiliates in accordance with Code at the same time;
-- with the consent of the Takeover Panel, Bidco publicly
announces before the Scheme Document or the Takeover Offer document
(as the case may be) is published that it does not intend to
proceed with the Acquisition; or
-- in accordance with the Code, a third party announces a firm
intention to acquire the whole of the issued and to be issued share
capital of Telit for cash (a "Competing Cash Proposal") which is
recommended by the Telit board and the cash consideration payable
in respect of each Telit Share under the Competing Cash Proposal
represents in the reasonable opinion of the Telit board a premium
of more than 10 per cent. to the value of the Cash Offer and Bidco
does not increase the consideration to be paid for the Telit Shares
to at least an equivalent amount per Telit Share within five days
of such Competing Cash Proposal.
(each being a "Shareholder Irrevocable Termination Event").
The irrevocable undertaking from Richard Griffiths and Davide
Serra will only cease to be binding if:
-- a Shareholder Irrevocable Termination Event occurs; or
-- any amendment is made or proposed to the terms and conditions
of the Alternative Offer set out in this Announcement whether
pursuant to the Scheme (or Takeover Offer, as applicable) or any
new, revised or replacement Scheme (or Takeover Offer, as
applicable) announced by Bidco in accordance with the Code.
Letter of intent
Compass Asset Management SA has given a non-binding letter of
intent to vote or procure votes in favour of the Scheme at the
Court Meeting and the Resolutions to be proposed at the General
Meeting (or, if Bidco, with the consent of the Takeover Panel and
subject to the terms of the Co-operation Agreement, exercises its
right to implement the Acquisition by way of a Takeover Offer, to
accept such offer), in respect of 2,220,002 Telit Shares
(representing approximately 1.65 per cent. of the Telit Shares in
issue on the Last Practicable Date).
APPIX IV
THE WIDER BIDCO GROUP, CONSIDERATION LOAN NOTES AND
CONSIDERATION SHARES
1. Additional information in respect of the Wider Bidco Group
The Wider Bidco Group is owned and controlled by funds managed
by DBAY and was formed for the purpose of implementing the
Acquisition. As at the date of this Announcement, the Wider Bidco
Group comprises Bidco, Topco, Midco, Holdco, and US Holdco. None of
the members of the Wider Bidco Group has traded since the date of
its incorporation nor entered into any obligations other than in
connection with the Acquisition and its financing.
The holding company in the Wider Bidco Group is Topco. Topco is
the sole shareholder of Midco, a private limited company which was
incorporated in England and Wales on 23 April 2021 under the
Companies Act with registered number 13353458. Midco is the sole
shareholder of Holdco, a private limited company which was
incorporated in England and Wales on 23 April 2021 under the
Companies Act with registered number 13353451. Holdco is the sole
shareholder of Bidco, a private limited company which was
incorporated in England and Wales on 23 April 2021 under the
Companies Act with registered number 13353444. Bidco is the sole
shareholder of US Holdco, a private limited company which was
incorporated in the state of Delaware on 23 April 2021.
Bidco is the borrower under the Cash Bridge Facility and, US
Holdco is the borrower under Facility B, which have been entered
into in order to fund the cash consideration due in connection with
the Acquisition.
2. Consideration Loan Notes and Holdco Loan Notes
The Consideration Loan Notes will be governed by English law and
will be issued by Bidco, credited as fully paid, in amounts and
integral multiples of 220 pence. The Consideration Loan Notes will
constitute direct, unsecured and unsubordinated obligations of
Bidco.
The Consideration Loan Notes will bear interest at a rate of 3
per cent. per annum, such interest beginning to accrue two business
days following their date of issue.
The Consideration Loan Notes will be redeemable annually on each
anniversary of the Effective Date at the option of the holder and
Bidco may repurchase, redeem or exchange the Consideration Loan
Notes at any time. Any Consideration Loan Notes not previously
repaid, redeemed or purchased will be repaid in full at par on the
fifth anniversary of their issue.
The Consideration Loan Notes are not transferrable.
Under the terms of the Consideration Loan Notes, Holdco will be
granted a call option (the "Call Option"), pursuant to which Holdco
will have the right to acquire the Consideration Loan Notes from
the noteholders in consideration for the issue of the Holdco Loan
Notes to the noteholders. The Call Option will be exercisable
during the period commencing on the date of issue of the
Consideration Loan Notes and ending on the date that is 14 days
after the issue of the Consideration Loan Notes. In addition, the
holders of the Consideration Loan Notes will be granted a put
option (the "Put Option"), pursuant to which the noteholders will
have the right (exercisable on behalf of the noteholders by Bidco)
to require Holdco to acquire the Consideration Loan Notes in
consideration for the issue of the Holdco Loan Notes to them. The
Put Option will be exercisable during the period commencing on the
date that is 15 days after the issue of the Consideration Loan
Notes and ending on the date that is 28 days after the issue of the
Consideration Loan Notes.
The Holdco Loan Notes will have equivalent terms to the
Consideration Loan Notes as described above except that the holders
of the Holdco Loan Notes will be granted:
-- a call option pursuant to which Midco will have the right to
acquire the Holdco Loan Notes from the noteholders in consideration
for the issue of the Midco B Shares to the noteholders; and
-- a put option, pursuant to which the noteholders will have the
right (exercisable on behalf of the noteholders by Holdco) to
require Midco to acquire the Holdco Loan Notes from the noteholders
in consideration for the issue of the Midco B Shares to them.
3. Midco share capital
As set out above, following the Effective Date, the
Consideration Loan Notes will, immediately following their issue,
be exchanged by way of a call option for the Holdco Loan Notes and
the Holdco Loan Notes will immediately following their issue, be
exchanged by way of a call option for the Consideration Shares.
The Consideration Shares will be ordinary B shares in Midco
allotted and issued credited as fully paid. The Consideration
Shares will hold no voting rights in Midco but will otherwise rank
pari passu in all respects with the Midco A Shares in issue at the
time the Consideration Shares are allotted and issued, including
the right to receive and retain dividends and other distributions
declared, made or paid by reference to a record date falling after
the Effective Date, and on any return of capital or exit.
For the purposes of Rule 24.11 of the Code, Investec will
provide an estimate of the value of a Consideration Share, together
with the assumptions, qualifications and caveats forming the basis
of its estimate of value, in a letter to be set out in the Scheme
Document.
As at the date of this Announcement, the issued share capital of
Midco is 100 Midco Shares with a nominal value of USD0.01 each,
which are held by Topco, a subsidiary of funds managed by DBAY.
Upon the Scheme becoming Effective, Midco will issue Consideration
Shares to the Rolling Shareholders and other Telit Shareholders who
have elected for the Alternative Offer pursuant to the Alternative
Offer following the series of transactions described above. Midco
Shares will also be issued to part fund the cash consideration
payable in respect of the Acquisition. The number of Midco Shares
issued is primarily dependent on the number of elections made for
the Alternative Offer as this will affect both the number of
Consideration Shares issued and the amount required to be
subscribed by Topco to part fund the cash consideration payable in
respect of the Acquisition.
As set out in paragraph 4 of this Appendix IV below, it is
anticipated that, following the Scheme becoming Effective, any
further new issues of Midco Shares will be on a pre-emptive basis.
There may, however, be some circumstances in which the directors of
Midco consider that it would be appropriate to issue further Midco
Shares on a non-pre-emptive basis. In such circumstances, the
appropriate Midco shareholder approvals shall be sought, if
required, however, this may result in the interests of Telit
Shareholders who elected to take up the Alternative Offer in Midco
becoming diluted over time.
4. Rights attaching to Midco
The share capital of the Midco will comprise one class of A
ordinary shares with a nominal value of USD0.01 each ("Midco A
Shares") and one class of B ordinary shares with a nominal value of
USD0.01 each ("Midco B Shares" and together with the Midco A
Shares, the "Midco Shares").
Voting rights
On a poll, holders of Midco A Shares will have one vote per
Midco A Share. Midco B Shares will not entitle holders of those
shares to voting rights in Midco. If Topco dismisses Paolo Dal Pino
as CEO other than for cause or with the agreement of the holders of
more than 75 per cent. of the Midco B Shares, the non-voting Midco
B Shares will automatically convert into B-1 ordinary shares which
have voting rights on an equivalent basis to those attaching to the
Midco A Shares, but otherwise have the same rights as the Midco B
Shares.
New share issues
New issues of equity securities in Midco will be made on a
pro-rata, pre-emptive basis. There may, however, be some
circumstances in which the directors of Midco consider that it
would be appropriate to issue further equity securities in Midco on
a non-pre-emptive basis (including, without limitation, in
connection with an employee incentive plan). Pre-emption rights may
be disapplied by special resolution, but this cannot be used to
treat the holders of Midco B Shares disproportionately compared to
the holders of Midco A Shares.
New shareholder debt issues
In the event that Topco advances a shareholder loan or
subscribes for loan notes in any member of the Midco Group, each
holder of Midco B Shares shall be given the opportunity to advance
shareholder loans or subscribe for loan notes on a pro-rata,
pre-emptive basis and on the same terms. This will not apply to
intra-group issues by wholly-owned subsidiaries or any third party
debt finance.
Share transfers
Midco Shares will not be transferable except for certain
categories of permitted transfer, transfers on exercise of the
drag-along or tag-along (each as described below) and transfers
made with the written consent of the holders of not less than 75
per cent. of the Midco A Shares.
Drag-along
If the holders of more than 75 per cent. of the Midco A Shares
(the "Selling Shareholders") agree a sale of their shares to a bona
fide third party (the "Proposed Buyer") and the consideration is
payable in cash or a readily realisable cash equivalent, then the
Selling Shareholders may require all other shareholders (holding
both Midco A Shares and Midco B Shares) to sell their shares to the
Proposed Buyer on the same terms.
Tag-along
If any person (the "Buyer") proposes to acquire more than 50 per
cent. of those Midco Shares which have voting rights, from Topco or
any other person who holds Midco Shares (the "Seller(s)") then the
Seller(s) shall procure that, before effecting the proposed
acquisition, the Buyer makes an offer (the "Offer") to acquire the
Midco Shares held by the other shareholders (holding both Midco A
Shares and Midco B Shares) at a price per share equal to the
highest price per share paid by the Buyer in the 12 months prior to
and including the sale/purchase which triggered the obligation to
make the Offer.
Board appointment rights
The Midco B Shareholders may collectively appoint or remove one
director to the board of the Midco for as long as the Midco B
Shareholders collectively hold 10% or more of the Midco Shares. The
shareholder(s) appointing a director may require that director to
be appointed to any committee of the board of Midco and to the
board of any subsidiary undertaking of Midco. The director
appointed by the Midco B Shareholders shall not have any veto
rights at board level. Any other appointment or removal of a
director shall require the written consent of the holders of not
less than 75 per cent. of the Midco A Shares.
If the Midco B Shareholders have not or, are not entitled to,
appoint a director, they may appoint an observer to the board of
directors.
Conduct of the Wider Bidco Group
All material matters will be decided by the board of directors
of Topco. In addition, there are a number of matters set out in the
Articles of Association which will require the written consent of
(or ratification by) the holders of not less than 75 per cent. of
the Midco A Shares. The holders of more than 75 per cent. of the
Midco B Shares will have limited veto rights in relation to
fundamental matters affecting their Midco B Shares, but not in
relation to any strategic or operational matters.
APPIX V
DEFINITIONS
In this Announcement, the following words and expressions have
the following meanings, unless the context requires otherwise:
Acquisition the recommended offer to be made by Bidco
to acquire the entire issued and to be
issued ordinary share capital of Telit
other than the Telit Shares held by funds
managed by DBAY to be effected by means
of the Scheme (or, if Bidco so elects
and subject to the consent of the Takeover
Panel and the terms of the Co-operation
Agreement, a Takeover Offer) on the terms
and subject to the conditions set out
in this Announcement and to be set out
in the Scheme Document;
AIM AIM, a market operated by the London
Stock Exchange;
AIM Rules the rules of AIM as set out in the 'Aim
Rules for Companies' and the 'AIM Rules
for Nominated Advisors' issued by the
London Stock Exchange from time to time
relating to AIM traded securities and
the operation of AIM;
Alternative Offer the alternative offer under which Telit
Shareholders (other than Telit Shareholders
resident or located in a Restricted Jurisdiction)
may elect to receive Consideration Loan
Notes, in lieu of cash under the Cash
Offer, on the basis of one Consideration
Loan Note for each Scheme Share held;
Announcement this announcement of the Acquisition
made in accordance with Rule 2.7 of the
Code;
Authorisations regulatory authorisations, orders, recognitions,
grants, consents, clearances, confirmations,
certificates, licences, permissions,
determinations, exemptions or approvals;
Bidco Trieste Acquisitions Holding Limited,
a company incorporated in England and
Wales with registered number 13353444,
whose registered office is at Princes
House, 38 Jermyn Street, London, SW1Y
6DN, United Kingdom;
Bidco Directors the directors of Bidco from time to time;
Bidco Group Bidco and any of its direct or indirect
holding companies, subsidiaries and subsidiary
undertakings;
Business Day a day, other than a Saturday, Sunday,
public holiday or bank holiday, on which
banks are generally open for normal business
in the City of London and New York;
Cash Bridge Facility the USD60 million facility in the Senior
Facilities Agreement and provided under
the terms of the Senior Facilities Agreement;
Cash Offer the offer to Telit Shareholders of 220
pence in cash per Scheme Share;
CFIUS Committee on Foreign Investment in the
United States;
Clearances all approvals, consents, clearances,
permissions, confirmations, comfort letters,
waivers and/or filings that are necessary
or reasonably considered by Bidco to
be appropriate to be obtained in connection
with the Acquisition or are required
or necessary reasonably considered by
Bidco to be appropriate in order to satisfy
the Conditions and all waiting periods
that may need to have expired, from or
under the laws, regulations or practices
applied by any relevant Regulatory Authority
(or under any agreements or arrangements
to which any Regulatory Authority is
a party) in connection with the Acquisition
or its implementation;
Closing Price the closing middle market quotation for
a Telit Share at the close of business
on the day to which such price relates,
as derived from the AIM appendix to the
Daily Official List;
CMA the UK Competition and Markets Authority,
being the independent body which conducts
inquiries into mergers, markets and the
regulation of the major regulated industries
in the United Kingdom (or any successor
body or bodies carrying out the same
functions in the United Kingdom from
time to time);
CMA Phase 2 Reference a reference pursuant to sections 22,
33, 45 or 62 of the Enterprise Act 2002
(as amended) of the Acquisition to the
chair of the CMA for the constitution
of a group under Schedule 4 to the Enterprise
and Regulatory Reform Act 2013;
Code the City Code on Takeovers and Mergers;
Companies Act the UK Companies Act 2006;
Conditions the conditions to the implementation
of the Acquisition, which are set out
in Appendix I to this Announcement and
to be set out in the Scheme Document;
Confidentiality and the confidentiality and joint defence
Joint Defence Agreement agreement entered into by DBAY, Telit,
Hogan Lovells International LLP and CMS
Cameron McKenna Nabarro Olswang LLP on
20 April 2021;
Confidentiality Letter the confidentiality letter entered into
by DBAY and Telit on 1 December 2020;
Consideration Loan has the meaning given in paragraph 2
Note of this Announcement;
Consideration Shares has the meaning given in paragraph 2
of this Announcement;
Co-operation Agreement the agreement entered into by Bidco and
Telit on 24 May 2021, a summary of which
is set out in paragraph 13 of this Announcement;
Court the High Court of Justice in England
and Wales;
Court Hearing the hearing by the Court to sanction
the Scheme and, if such hearing is adjourned,
references to the commencement of any
such hearing shall mean the commencement
of the final adjournment thereof;
Court Meeting the meeting (or any adjournment, postponement
or reconvention thereof) of the Telit
Shareholders (or the relevant class or
classes thereof) to be convened by order
of the Court pursuant to Part 26 of the
Companies Act to consider and, if thought
fit, approve the Scheme (with or without
modification);
Court Order the order of the Court sanctioning the
Scheme;
CREST the relevant system (as defined in the
Regulations) in respect of which Euroclear
UK & Ireland is the Operator (as defined
in the Regulations) in accordance with
which securities may be held and transferred
in uncertified form;
Current Offer Period the offer period (as defined in the Code)
relating to Telit, which commenced on
18 March 2021, and ending on the earlier
of the Effective Date and/or the date
on which it is announced that the Scheme
has lapsed or been withdrawn (or such
other date as the Code may provide or
the Takeover Panel may decide);
Daily Official List the Daily Official List of the London
Stock Exchange;
DBAY DBAY Advisors Limited;
Dealing Disclosure has the same meaning as in Rule 8 of
the Code;
Disclosed (a) matters fairly disclosed in the information
made available to DBAY or Bidco (or their
respective officers, employees, agents
or advisers in their capacity as such)
in the data room established by Telit
for the purposes of the Acquisition;
(b) information fairly disclosed in writing
by or on behalf of Telit to DBAY or Bidco
(or their respective officers, employees,
agents or advisers in their capacity
as such) prior to the date of this Announcement;
(c) information included in the annual
report and accounts of the Telit Group
for the financial year ended 31 December
2020;
(d) information disclosed in a public
announcement to an RIS made by Telit
prior to the date of this Announcement;
or
(e) information disclosed in this Announcement;
Disclosure Table the disclosure table on the Takeover
Panel's website at www.thetakeoverpanel.org.uk;
DPA has the meaning given in Condition 2(d)(i);
Effective in the context of the Acquisition: (a)
if the Acquisition is implemented by
way of a Scheme, the Scheme having become
effective in accordance with its terms,
upon the delivery of the court order
to the Registrar of Companies; or (b)
if the Acquisition is implemented by
way of a Takeover Offer, the Takeover
Offer having been declared or become
unconditional in all respects in accordance
with the requirements of the Code;
Effective Date the date upon which: (a) the Scheme becomes
Effective; or (b) if Bidco elects, with
the consent of the Takeover Panel and
subject to the terms of the Co-operation
Agreement, to implement the Acquisition
by way of a Takeover Offer, the Takeover
Offer becomes Effective;
Exchange Act the United States Securities Exchange
Act of 1934, as amended;
Excluded Shares any: (i) Telit Shares legally or beneficially
held by funds managed by DBAY or any
member of the Wider Bidco Group; and
(ii) Treasury Shares;
FCA the UK Financial Conduct Authority or
its successor from time to time;
Facility B the USD150 million facility in the Senior
Facilities Agreement and provided under
the terms of the Senior Facilities Agreement;
FinnCap FinnCap Ltd, nominated adviser and broker
to Telit;
Form of Election the form of election for use by an eligible
Scheme Shareholder who holds Scheme Shares
in certificated form in relation to the
Alternative Offer;
Forms of Proxy the forms of proxy for use at the Court
Meeting and the General Meeting respectively,
which shall accompany the Scheme Document;
FSMA the Financial Services and Markets Act
2000, as amended;
General Meeting the general meeting (or any adjournment,
postponement or reconvention thereof)
of Telit Shareholders to be convened
in connection with the Acquisition;
Governmental Entity any supranational, national, state, municipal,
local or foreign government, any instrumentality,
subdivision, court, arbitrator or arbitrator
panel, regulatory or administrative agency
or commission, or other authority thereof,
or any regulatory or quasi-regulatory
organisation or private body exercising
any regulatory, taxing, importing or
other governmental or quasi-governmental
authority;
Holdco Notano Holdco Limited, a company incorporated
in England and Wales with registered
number 13353451, whose registered office
is at Princes House, 38 Jermyn Street,
London, SW1Y 6DN, United Kingdom;
Holdco Loan Note has the meaning given in paragraph 2
of this Announcement;
Investec Investec Bank plc;
Last Practicable Date 24 May 2021 (being the last Business
Day prior to the date of this Announcement);
London Stock Exchange London Stock Exchange Group Plc;
Long Stop Date 24 February 2022 or such later date (if
any) as Bidco and Telit may, with the
consent of the Takeover Panel, agree
and (if required) the Court may allow;
Market Abuse Regulation Regulation (EU) No 596/2014 of the European
Parliament and of the Council of 16 April
2014 (as it forms part of Retained EU
Law (as defined in the European Union
(Withdrawal) Act 2018);
Merger Regulation Council Regulation (EC) No 139/2004;
Midco Notano Midco Limited, a company incorporated
in England and Wales with registered
number 13353458, whose registered office
is at Princes House, 38 Jermyn Street,
London, SW1Y 6DN, United Kingdom;
Midco Group Midco and its direct and indirect subsidiaries
including, following completion of the
Acquisition, the Telit Group;
Midco Shares the Midco A Shares and the Midco B Shares;
Midco A Shares A ordinary shares of USD0.01 each in
the capital of Midco;
Midco B Shares B ordinary shares of USD0.01 each in
the capital of Midco, holding no voting
rights in Midco;
Midco B Shareholders those Telit Shareholders who have elected
for the Alternative Offer and been issued
Midco B Shares and their permitted transferees;
Opening Position Disclosure has the same meaning as in Rule 8 of
the Code;
PRA the UK Prudential Regulation Authority
or its successor from time to time;
Previous Offer Period the offer period (as defined in the Code)
relating to Telit, which commenced on
3 November 2020, and ended on 18 January
2021;
Registrar of Companies the Registrar of Companies in England
and Wales;
Regulations the Uncertificated Securities Regulations
2001 (SI 2001/3755);
Resolutions the resolutions to be proposed by Telit
at the General Meeting in connection
with, amongst other things, the approval
of the Scheme, the amendment of Telit's
Articles (including, without limitation,
the adoption and inclusion of a new article
under which any Telit Shares issued or
transferred after the General Meeting
shall either be subject to the Scheme
or (after the Effective Date) be immediately
transferred to Bidco (or as it may direct)
in exchange for the same consideration
as is due under the Scheme) and such
other matters as may be necessary to
implement the Acquisition;
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
Acquisition is sent or made available
in that jurisdiction, including, without
limitation, the United States, Canada,
Japan, South Africa and Australia;
RIS a service approved by the London Stock
Exchange for the distribution to the
public of announcements and included
within the list maintained on the London
Stock Exchange's website;
Rollover Shareholders has the meaning given in paragraph 6
of this Announcement;
Rothschild & Co N.M. Rothschild and Sons Limited;
Scheme the proposed scheme of arrangement under
Part 26 of the Companies Act to effect
the Acquisition between Telit and the
Scheme Shareholders (the full terms of
which will be set out in the Scheme Document),
with or subject to any modification,
addition or condition which Bidco and
Telit may agree, and, if required, the
Court may approve or impose;
Scheme Document the document to be despatched to (amongst
others) Telit Shareholders containing,
amongst other things, the terms and conditions
of the Scheme and the notices convening
the Court Meeting and the General Meeting;
Scheme Record Time the time and date to be specified in
the Scheme Document, expected to be 6:00
p.m. on the Business Day immediately
after the Court Hearing;
Scheme Shareholders holders of Scheme Shares;
Scheme Shares the Telit Shares:
(a) in issue at the date of the Scheme
Document;
(b) (if any) issued after the date of
the Scheme Document and prior to the
Voting Record Time; and
(c) (if any) issued at or after the Voting
Record Time but at or before the Scheme
Record Time in respect of which the original
or any subsequent holder thereof is bound
by the Scheme or shall by such time have
agreed in writing to be bound by the
Scheme,
in each case, which remain in issue at
the Scheme Record Time and other than
any Excluded Shares;
SEC the United States Securities and Exchange
Commission;
Securities Act the United States Securities Act of 1933,
as amended;
Senior Facilities Agreement a senior term and revolving facilities
agreement dated on 24 May 2021 and entered
into between, inter alia, Holdco (as
parent), Bidco (as company), US Holdco
(as borrower), Deutsche Bank AG, London
Branch (as mandated lead arranger) and
Lucid Agency Services Limited (as agent
and security agent);
Takeover Offer should the Acquisition be implemented
by way of a takeover offer as defined
in section 974 of the Companies Act,
the offer to be made by or on behalf
of Bidco to acquire the entire issued
and to be issued ordinary share capital
of Telit other than the Telit Shares
held by funds managed by DBAY on the
terms and subject to the conditions set
out in the related offer document and,
where the context requires, any subsequent
revision, variation, extension or renewal
of such offer;
Takeover Panel the UK Panel on Takeovers and Mergers;
Telit Telit Communications plc, a company incorporated
in England and Wales with registered
number 05300693, whose registered office
is at Cannon Place, 78 Cannon Street,
London EC4N 6AF;
Telit's Articles Telit's Articles of Association currently
adopted and filed with Companies House;
Telit Board or Telit the directors of Telit from time to time;
Directors
Telit Employee Benefit the employee benefit trust established
Trust pursuant to the Trust Deed and which
is expected to hold 913,940 Telit Shares
on trust for the benefit of the Beneficiaries
(as defined in the Trust Deed);
Telit Group Telit and its subsidiaries and subsidiary
undertakings;
Telit Shareholders the holders of Telit Shares;
Telit Shares ordinary shares of one penny each in
the capital of Telit;
Telit Share Plans the Telit Communications plc 2015 Employee
Share Plan and the Telit Communications
plc 2015 Non-Employee Share Plan;
Third Party each of a central bank, government or
governmental, quasi-governmental, supranational,
statutory, regulatory, professional or
investigative body or authority (including
any antitrust or merger control authority),
court, trade agency, professional association,
institution, works council, employee
representative body or any other similar
body or person whatsoever in any jurisdiction;
Topco Notano Topco Limited, a company incorporated
in England and Wales with registered
number 13353435 whose registered office
is at Princes House, 38 Jermyn Street,
London, SW1Y 6DN, United Kingdom;
Treasury Shares any Telit Shares which are for the time
being held by Telit as treasury shares
(within the meaning of the Companies
Act);
Trust Deed the trust deed between Telit and VG Corporate
Trustee Limited dated on or around the
date of this Announcement;
United Kingdom or UK the United Kingdom of Great Britain and
Northern Ireland;
United States or US the United States of America, its territories
or USA or United States and possessions, all areas subject to
of America its jurisdiction or any subdivision thereof,
any state of the United States of America
and the District of Columbia;
US Holdco Trieste Acquisitions Inc, a company duly
incorporated and existing under the laws
of the state of Delaware, whose registered
office is at c/o Corporation Service
Company, 251 Little Falls Drive, Wilmington,
new Castle County, Delaware 19808;
US holder a holder of Telit Shares located in or
resident in the United States or who
is otherwise a US Person;
US Person a US Person as defined in rule 902(o)
under the Securities Act;
US Securities Act the United States Securities Act of 1933,
as amended, and the rules and regulations
promulgated thereunder;
Volume Weighted Average the volume weighted average of the per
Price share trading prices of Telit Shares
on AIM, calculated in accordance with
paragraph 2 of Appendix II to this Announcement;
Voting Record Time the date and time specified in the Scheme
Document by reference to which entitlements
to vote on the Scheme will be determined,
expected to be 6.00 p.m. on the day which
is two days before the date of the Court
Meeting or, if the Court Meeting is adjourned,
6.00 p.m. on the second day before the
date of such adjourned meeting;
Wider Bidco Group Bidco, Topco, Midco, Holdco and US Holdco,
their subsidiary undertakings, and any
other body corporate, partnership, joint
venture or person in which they and/or
such undertakings (aggregating their
interests) have an interest of more than
20 per cent. of the voting or equity
capital or the equivalent;
Wider Telit Group Telit, its parent undertakings and its
and such parent undertakings' subsidiary
undertakings, and any other body corporate,
partnership, joint venture or person
in which Telit and/or such undertakings
(aggregating their interests) have an
interest of more than 20 per cent. of
the voting or equity capital or the equivalent;
and
GBP or GBP or pence pounds sterling or pence, the lawful
currency of the United Kingdom.
In this Announcement:
(a) all times referred to are to London time unless otherwise stated;
(b) references to the singular include the plural and vice
versa, unless the context otherwise requires;
(c) "subsidiary", "subsidiary undertaking" and "undertaking"
have the meanings given by the Companies Act and "associated
undertaking" has the meaning given to it by paragraph 19 of
Schedule 6 of the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, other than paragraph 1(b)
thereof which shall be excluded for this purpose; and
(d) all references to statutory provision or law or to any order
or regulation shall be construed as a reference to that provision,
law, order or regulation as extended, modified, replaced or
re-enacted from time to time and all statutory instruments,
regulations and orders from time to time made thereunder or
deriving validity therefrom.
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END
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