TIDMAPC
RNS Number : 6863M
Specialist Components Limited
18 September 2019
Not for release, publication or distribution, in whole or in
part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction
(including the united states) where to do so would constitute a
violation of the relevant laws or regulations of such
jurisdiction.
this announcement contains inside information FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) No. 596/2014. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For immediate release
18 September 2019
RECOMMED CASH OFFER
for
APC TECHNOLOGY GROUP PLC
by
SPECIALIST COMPONENTS LIMITED
TO BE IMPLEMENTED BY MEANS OF A SCHEME OF ARRANGEMENT
UNDER PART 26 OF THE COMPANIES ACT 2006
Summary and Highlights:
-- The boards of directors of Specialist Components Limited
("Specialist Components") and APC Technology Group Plc ("APC" or
the "Company") are pleased to announce that they have reached
agreement on the terms of a recommended cash offer to be made by
Specialist Components for the entire issued and to be issued share
capital of APC (the "Offer"). It is intended that the Offer will be
implemented by way of a Court-sanctioned scheme of arrangement
between APC and its shareholders under Part 26 of the Companies Act
2006 (the "Scheme").
-- Under the terms of the Offer, Scheme Shareholders on the
register of members at the Scheme Record Time will receive 10 pence
in cash for each Scheme Share held, valuing the entire existing
issued share capital of APC at approximately GBP18.26 million.
-- The Cash Consideration of 10 pence per APC Share represents a premium of approximately:
(i) 9.59 per cent. to the Closing Price of 9.125 pence per APC
Share on 17 September 2019 (being the last Business Day prior to
the date of this Announcement); and
(ii) 17.31 per cent. to the volume weighted average price of
8.52 pence per APC Share over the six month period ended on and
including 17 September 2019 (being the last Business Day prior to
the date of this Announcement).
-- If any dividend or other distribution is authorised,
declared, made or paid in respect of APC Shares on or after the
date of this Announcement, Specialist Components reserves the right
to reduce the Cash Consideration by the aggregate amount of such
dividend or distribution.
-- APC (AIM: APC) provides design-in, specification and
distribution services for specialist electronic components and
systems, lighting technologies and connectivity products that help
its customers produce better equipment, improve efficiency and
achieve superior performance.
-- Specialist Components is a private limited company
incorporated in England and Wales, which was recently established
at the direction of Harwood Capital LLP, on behalf of certain of
its discretionary investment management and/or advisory clients
(the "Harwood Funds"), specifically for the purpose of making the
Offer.
-- Harwood Capital LLP is a private investment management firm
engaged in the provision of discretionary investment management
and/or advisory services to its clients. Following implementation
of the Proposals, Specialist Components will be wholly owned by the
Harwood Funds.
-- At the date of this Announcement, the Harwood Funds
beneficially own, in aggregate, 9,000,000 APC Shares representing
approximately 4.93 per cent. of APC's existing issued share
capital.
-- Implementation of the Scheme will be subject, inter alia, to
the approval of the Scheme by Voting Scheme Shareholders at the
Court Meeting and the passing of the resolutions by APC
Shareholders necessary to implement the Scheme at the General
Meeting, and the sanction of the Scheme by the Court. The Scheme
Document, setting out full details of the Scheme and the procedures
to be followed by APC Shareholders to approve the Scheme, together
with the Forms of Proxy, are expected to be published and
despatched to APC Shareholders and, for information purposes only,
to participants in the APC Share Option Schemes, as soon as
practicable, but in any event within 28 days from the date of this
Announcement, unless otherwise agreed with the Panel. The Scheme
Document will contain an expected timetable for the Offer process.
It is expected that the Scheme will become Effective in late
October / early November 2019, subject to the Conditions and
certain further terms set out in Appendix I to this Announcement,
and to be set out in the Scheme Document, being satisfied or
waived.
-- If the Scheme does not become Effective by the Longstop Date,
the Proposals will lapse except where the approval of Voting Scheme
Shareholders at the Court Meeting and APC Shareholders at the
General Meeting is obtained before this date, in which case the
Longstop Date for the Proposals may be extended to such later date
(if any) as Specialist Components and APC may agree and, if
required, the Court and the Panel may approve.
-- The APC Directors, who have been so advised by Shore Capital
and Corporate Limited ("Shore Capital"), the Company's financial
adviser, as to the financial terms of the Offer, consider the terms
of the Offer to be fair and reasonable. In providing its advice to
the APC Directors, Shore Capital has taken into account the
commercial assessments of the APC Directors. Shore Capital is
providing independent financial advice to the APC Directors for the
purposes of Rule 3 of the Code.
-- Accordingly, the APC Directors intend unanimously to
recommend that Voting Scheme Shareholders vote in favour of the
Scheme at the Court Meeting and that APC Shareholders vote in
favour of the special resolution necessary to implement the Scheme
at the General Meeting, as the APC Directors who currently hold or
control APC Shares have irrevocably undertaken so to do (or procure
to be done) in respect of their own beneficial shareholdings (or
the shareholdings they control), amounting, in aggregate, to
9,223,814 APC Shares representing approximately 5.05 per cent. of
APC's existing issued share capital.
-- In addition, Specialist Components has received irrevocable
undertakings to vote in favour of the Proposals from certain
institutional and other APC Shareholders (as set out in Appendix
III to this Announcement) in respect of, in aggregate, 57,726,759
APC Shares, representing approximately 31.61 per cent. of APC's
existing issued share capital.
-- Accordingly, Specialist Components has obtained irrevocable
undertakings over, in aggregate, 66,950,573 APC Shares,
representing approximately 36.66 per cent. of APC's existing issued
share capital.
-- Further details of the abovementioned irrevocable
undertakings are set out in section 6 of, and Appendix III to, this
Announcement.
Tony Lochery, Non-Executive Chairman of APC, commented:
"The Offer provides all APC Shareholders with the opportunity of
a cash exit at an attractive premium to the Company's prevailing
share price and we believe the Offer recognises the Company's
underlying value. Whilst the business has recently performed well
on the public market, we firmly believe that APC will be better
placed to deliver on the next phase of its strategic objectives and
the longer-term growth of its specialist electronics businesses in
the private arena and, subject to shareholders approving the
Scheme, look forward to the Company's ownership by Specialist
Components and the opportunities that will present for all of our
stakeholders."
Jeremy Brade, Director of Specialist Components, commented:
"This recommended cash offer provides APC Shareholders with the
opportunity to exit their investment in full at an attractive
valuation. We believe that APC has good potential and strong
management but that, given the Company's size and future capital
requirements, it would fare better as a private company with a more
cost-effective corporate structure."
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including the Appendices).
Implementation of the Scheme 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. Appendix II to this Announcement contains the
sources of information and bases of calculation of certain
information contained in this Announcement. Appendix III to this
Announcement contains a summary of the irrevocable undertakings in
respect of the Offer received by Specialist Components. Appendix IV
to this Announcement contains definitions of certain terms used in
this summary and the following content of this Announcement.
A copy of this Announcement will be made available, subject to
certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on APC's website at www.apcplc.com,
along with certain other documentation required to be posted online
pursuant to the Code.
Enquiries:
Specialist Components Limited Tel: +44 (0)207 640 3200
Jeremy Brade, Director
James Agnew, Director
Strand Hanson Limited Tel: +44 (0)207 409 3494
(Financial Adviser to Specialist Components
and Harwood Capital LLP)
Stuart Faulkner
Matthew Chandler
James Dance
Jack Botros
APC Technology Group plc Tel: +44 (0)330 313 3220
Tony Lochery, Non-Executive Chairman
Richard Hodgson, Chief Executive Officer
Shore Capital Tel: +44 (0)207 408 4090
(Financial Adviser, Nominated Adviser and
Broker to APC)
Antonio Bossi
James Thomas
Important Notice
Strand Hanson Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to Specialist Components and
Harwood Capital LLP and no-one else in connection with the
Proposals and other matters described in this Announcement and will
not be responsible to anyone other than Specialist Components and
Harwood Capital LLP for providing the protections afforded to
clients of Strand Hanson Limited nor for providing advice in
relation to the Proposals, the contents of this Announcement or any
other matter referred to herein. Neither Strand Hanson Limited nor
any of its subsidiaries, branches or 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 Strand Hanson Limited in
connection with this Announcement, any statement contained herein
or otherwise.
Shore Capital, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser, nominated adviser and broker to APC and
no-one else in connection with the Proposals and other matters
described in this Announcement and will not be responsible to
anyone other than APC for providing the protections afforded to
clients of Shore Capital nor for providing advice in relation to
the Proposals, the contents of this Announcement or any other
matter referred to herein. Neither Shore Capital nor any of its
subsidiaries, branches or 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 Shore Capital in connection with this
Announcement, any statement contained herein or otherwise.
Further information
THIS ANNOUNCEMENT IS MADE PURSUANT TO RULE 2.7 OF THE CODE AND
IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTED TO, AND DOES NOT,
CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION
TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF
ANY VOTE OR APPROVAL IN ANY JURISDICTION PURSUANT TO THE OFFER OR
OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE
SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF APPLICABLE LAW.
The Proposals will be subject to the Conditions and to the
further terms and conditions to be set out in the Scheme Document
(or any other document by which the Offer is made). The Proposals
will be made solely pursuant to the disclosures and information
contained in the Scheme Document (or any other document by which
the Offer is made) which, together with the Forms of Proxy, will
contain the full terms and conditions of the Proposals, including
details of how APC Shareholders may vote at the Meetings in respect
of the Proposals. Any vote in relation to the Proposals or other
response in relation to the Offer should be made only on the basis
of the information contained in the Scheme Document (or any other
document by which the Offer is made). APC Shareholders are advised
to read the Scheme Document (or any other document by which the
Offer is made) carefully when it becomes available.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The availability of the Offer and the release, publication and
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted by the laws of those jurisdictions
and therefore persons who are not resident in the United Kingdom
into whose possession this Announcement comes should inform
themselves about and observe any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction. In particular, the
ability of persons who are not resident in the United Kingdom to
participate in the Offer may be affected by the laws of the
relevant jurisdictions in which they are located.
This Announcement has been prepared for the purposes of
complying with English law, the Code and the AIM Rules and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws and regulations of jurisdictions outside the United
Kingdom.
The Offer will be implemented in accordance with applicable
English law and will be subject to the applicable requirements of
the Code, the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the Panel and the rules of the London
Stock Exchange (including the AIM Rules).
Unless otherwise determined by Specialist Components or required
by the Code, and permitted by applicable law and regulation, the
Offer 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
Offer from within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws
of that jurisdiction. Accordingly, copies of this Announcement, the
Scheme Document, the notices of Court Meeting and General Meeting,
the Forms of Proxy and all other documents relating to the Offer
are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
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 where to do so would violate the laws in such
jurisdictions. All persons receiving this Announcement (including,
without limitation, custodians, nominees and trustees) should
observe these restrictions and any applicable legal or regulatory
requirements of their jurisdiction and must not mail or otherwise
forward, send or distribute this Announcement in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Offer disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Additional information for US investors
These materials are not for distribution, directly or
indirectly, in or into the United States (including its territories
and possessions, any State of the United States and the District of
Columbia). These materials do not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States.
APC and Specialist Components are incorporated under the laws of
England and Wales and all of the officers and directors of APC and
Specialist Components are residents of countries other than the
United States. Accordingly, it may not be possible to sue APC and
Specialist Components or their respective directors in a non-US
court for violations of US securities laws. It may also be
difficult to compel APC, Specialist Components and their respective
affiliates to subject themselves to the jurisdiction and judgment
of a US court.
The Offer, to be implemented by way of the Scheme, is being made
to acquire the entire issued and to be issued share capital of a
company incorporated in England and Wales by way of a scheme of
arrangement provided for under Part 26 of the Companies Act 2006. A
transaction effected by way of a scheme of arrangement is not
subject to the proxy solicitation or tender offer rules under the
US Securities Exchange Act of 1934, as amended (the "US Exchange
Act"). Accordingly, the Scheme is subject to the disclosure
requirements, rules and practices applicable in the United Kingdom
to schemes of arrangement and takeover offers, which differ from
the disclosure requirements, style and format of US tender offer
and proxy solicitation rules. If Specialist Components determines
to extend the offer into the US, the Offer will be made in
compliance with applicable US laws and regulations. Financial
information included in this Announcement and the Scheme Document
has been or will have been prepared in accordance with non-US
accounting standards 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 US.
If Specialist Components were to elect to implement the Offer by
means of a contractual takeover offer, rather than the Scheme, such
offer would be made in compliance with applicable US laws and
regulations, including Section 14(e) of the US Exchange Act and
Regulation 14E thereunder and otherwise in accordance with the
Code. Such offer would be made in the US by Specialist Components
and no one else.
Neither the US Securities and Exchange Commission nor any
securities commission of any state of the United States has
approved or disapproved the Offer, nor have such authorities passed
upon or determined the fairness of the Offer or the adequacy or
accuracy of the information contained in this Announcement. Any
representation to the contrary is a criminal offence in the United
States.
If the Offer is required to be made in the US, it will be done
in compliance with the applicable tender offer rules under the US
Exchange Act.
Cautionary note regarding forward-looking statements
This Announcement (including information incorporated by
reference in this Announcement) contains certain statements that
are, or may be deemed to be, forward-looking statements with
respect to Specialist Components and/or APC. These forward-looking
statements can be identified by the fact that they do not relate to
historical or current facts. Forward-looking statements also often
use words such as "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", "hope", "aims", "continue",
"will", "may", "should", "would", "could" or other words of similar
meaning. 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
Specialist Components' or APC's operations and potential synergies
resulting from the Offer; and (iii) the effects of government
regulation on Specialist Components' or APC's business. These
statements are based on assumptions and assessments made by
Specialist Components and/or APC (as applicable) in light of their
experience and perception of historical trends, current conditions,
future developments and other factors they believe appropriate.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. Neither Specialist Components nor
APC undertakes any obligation to update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except to the extent required by applicable
law, the Panel or the Code.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, and future business combinations or dispositions.
No member of the Specialist Components Group or the APC Group
nor any of their respective associates, directors, officers,
employees or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this Announcement will actually
occur.
Except as expressly provided in this Announcement, no
forward-looking or other statements have been reviewed by the
auditors of the Specialist Components Group or the APC Group. All
subsequent oral or written forward-looking statements attributable
to any member of the Specialist Components Group or the APC Group,
or any of their respective associates, directors, officers,
employees or advisers, are expressly qualified in their entirety by
the cautionary statement above.
No profit forecasts, quantified financial benefit statements or
estimates
No statement in this Announcement is intended, or is to be
construed, as a profit forecast, profit estimate or quantified
financial benefit statement for any period. No statement in this
Announcement should be interpreted to mean that earnings per APC
Share for the current or future financial years would necessarily
match or exceed the historical published earnings per APC
Share.
Dealing and Opening Position Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of APC or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) APC and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies
must be made by no later than 3.30 p.m. (UK time) on the 10th
Business Day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (UK 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 APC 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 one per cent. or more of any class of relevant
securities of APC or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of APC or of any securities exchange offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) APC and (ii) any securities
exchange offeror(s), save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (UK 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 APC or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by APC and by any
offeror and Dealing Disclosures must also be made by APC, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on a website and availability of hard copies
This Announcement and the documents required to be published
pursuant to Rule 26 of the Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on APC's website at www.apcplc.com by no
later than 12.00 noon (UK time) on the Business Day following this
Announcement.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks on such website is incorporated into, or forms part of,
this Announcement.
A hard copy of this Announcement will be sent to APC
Shareholders (other than APC Shareholders who have elected to
receive electronic communications) in the near future. APC
Shareholders may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) free of
charge by contacting Neville Registrars on 0121 585 1131 from
within the UK or +44 (0)121 585 1131 if calling from outside the UK
between 9.00 a.m. to 5.00 p.m., Monday to Friday (except public
holidays in England and Wales) or by submitting a request in
writing to Neville Registrars at Neville House, Steelpark Road,
Halesowen B62 8HD. APC Shareholders may also request that all
future documents, announcements and information to be sent to them
in relation to the Proposals should be in hard copy form. If you
have received this Announcement in electronic form, hard copies of
this Announcement and any document or information incorporated by
reference into this Announcement will not be provided unless such a
request is made.
Rule 2.9 information
Pursuant to Rule 2.9 of the Code, APC confirms that, as at the
date of this Announcement, it has 182,627,088 ordinary shares of 2
pence each in issue and admitted to trading on AIM with
International Securities Identification Number GB0000373984.
Information relating to APC Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by APC Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from APC may be provided to Specialist Components during the Offer
Period as requested under Section 4 of Appendix 4 of the Code to
comply with Rule 2.11(c) 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.
Time
All times shown in this Announcement are UK times, unless
otherwise stated.
Not for release, publication or distribution, in whole or in
part, DIRECTLY OR INDIRECTLY in, into or from any jurisdiction
(including the united states) where to do so would constitute a
violation of the relevant laws or regulations of such
jurisdiction.
this announcement contains inside information FOR THE PURPOSES
OF THE MARKET ABUSE REGULATION (EU) No. 596/2014. UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
18 September 2019
RECOMMED CASH OFFER
for
APC TECHNOLOGY GROUP PLC
by
SPECIALIST COMPONENTS LIMITED
TO BE IMPLEMENTED BY MEANS OF A SCHEME OF ARRANGEMENT
UNDER PART 26 OF THE COMPANIES ACT 2006
1. Introduction
The boards of directors of Specialist Components and APC are
pleased to announce that they have reached agreement on the terms
of a recommended cash offer to be made by Specialist Components for
the entire issued and to be issued share capital of APC. The Offer
of 10 pence per APC Share values the existing issued share capital
of APC at approximately GBP18.26 million.
It is intended that the Offer will be implemented by way of a
Court-sanctioned scheme of arrangement between APC and its
shareholders under Part 26 of the Companies Act 2006. The Scheme
requires, inter alia, the approval of Voting Scheme Shareholders at
a meeting convened by the Court and the passing of the special
resolution by APC Shareholders necessary to implement the Scheme at
the General Meeting, and the subsequent sanction of the Scheme by
the Court. It is currently expected that the Scheme Document will
be published in September 2019; that the Court Meeting and the
General Meeting will be held in October 2019; and that the Scheme
will likely become Effective shortly thereafter.
The APC Directors intend unanimously to recommend that Voting
Scheme Shareholders vote in favour of the Scheme at the Court
Meeting and that APC Shareholders vote in favour of the special
resolution necessary to implement the Scheme at the General
Meeting, as the APC Directors who currently hold or control APC
Shares have irrevocably undertaken so to do (or procure to be done)
in respect of their own beneficial shareholdings (or the
shareholdings they control) amounting, in aggregate, to 9,223,814
APC Shares representing approximately 5.05 per cent. of the
existing issued share capital of APC.
Specialist Components is a private limited liability company
recently incorporated in England and Wales. It was established at
the direction of Harwood Capital LLP (on behalf of the Harwood
Funds) specifically for use in making the Offer. Harwood Capital
LLP and the Harwood Funds are deemed to be acting in concert with
Specialist Components for the purposes of the Code in light of
their connections with Mr Christopher Mills who is a director and
majority shareholder of Harwood Capital Management Limited which is
a designated corporate member and controller of Harwood Capital LLP
and the parent company of the Harwood Capital Management Group.
Following implementation of the Proposals, Specialist Components
will be wholly owned by the Harwood Funds. Further information on
Specialist Components, Harwood Capital LLP and the Harwood Funds is
set out in section 8 below.
2. The Proposals
Under the terms of the Offer, which will be subject to the
Conditions and further terms summarised below and in Appendix I to
this Announcement and to the full terms and conditions to be set
out in the Scheme Document, Scheme Shareholders who are on the
register of members of APC at the Scheme Record Time will be
entitled to receive:
for each Scheme Share 10 pence in cash
The Offer values the entire existing issued ordinary share
capital of APC at approximately GBP18.26 million and the Offer
Price represents a premium of approximately:
(i) 9.59 per cent. to the Closing Price of 9.125 pence per APC
Share on 17 September 2019 (being the last Business Day prior to
the date of this Announcement); and
(ii) 17.31 per cent. to the volume weighted average price of
8.52 pence per APC Share over the six month period ended on and
including 17 September 2019 (being the last Business Day prior to
the date of this Announcement).
If, on or after the date of this Announcement and before the
Effective Date, any dividend and/or other distribution and/or other
return of capital is declared, made or paid or becomes payable in
respect of the APC Shares, Specialist Components reserves the right
to reduce the consideration payable under the terms of the Offer by
an amount of up to the amount of such dividend and/or distribution
and/or return of capital. To the extent that any such dividend
and/or distribution and/or other return of capital is declared,
made or paid or is payable and it is: (i) transferred pursuant to
the Offer on a basis which entitles Specialist Components to
receive the dividend or distribution and to retain it; or (ii)
cancelled, the consideration payable under the terms of the Offer
will not be subject to change in accordance with this paragraph.
Any exercise by Specialist Components 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 the Scheme becomes Effective, Scheme Shareholders will not be
entitled to receive payments for any amounts of less than one penny
and any such amounts will be disregarded. Any amounts payable to
Scheme Shareholders which include fractions of one penny will be
rounded down to the nearest whole penny and such fractional
entitlements will be disregarded.
It is expected that the Scheme Document will be published as
soon as reasonably practicable but, in any event, on or before 16
October 2019 (unless Specialist Components and APC otherwise agree,
and the Panel consents, to a later date). It is currently expected
that the Scheme will become Effective in late October / early
November 2019, subject to the Conditions and certain further terms
set out in Appendix I to this Announcement and to be set out in the
Scheme Document being satisfied or waived. The Scheme Document will
contain an expected timetable for the Offer process, including
details regarding the Court Meeting and the General Meeting.
3. Background to and reasons for the Offer
Specialist Components has full confidence in the management of
APC and supports its existing strategy. However, it believes that
the public market place is a restricting environment for the
Company such that the Company is unlikely to achieve its full
potential as a listed entity with the additional regulations,
constraints and expenses associated with maintaining a UK public
quotation. Specialist Components believes that the Company would be
better suited to the more long-term focus of the private company
environment. Accordingly, it believes that with its support and
investment in growth capital, the management team would be in a
stronger, less obligated position.
Specialist Components believes that should APC remain publicly
quoted on AIM it will, as a relatively small and specialist
company, continue to find it difficult to attract and retain
sufficient interest and research coverage in its activities to
generate stock liquidity and a level of market rating that would
make retaining its existing AIM quotation worthwhile. Conversely,
de-listed from AIM, the business could progress within a simplified
corporate structure, free from the requirement to meet the public
equity market's shorter-term expectations.
Specialist Components intends to invest in and support the
growth of APC by enhancing the Company's services to its
established customer base, growing the customer base and developing
new and innovative product offerings. Specialist Components also
backs the strategy of pursuing bolt-on acquisitions and seeking
integration efficiencies within a simplified corporate
structure.
4. Recommendation of the APC Directors
The APC Directors, who have been so advised by Shore Capital,
the Company's financial adviser, as to the financial terms of the
Offer, consider the terms of the Offer to be fair and reasonable.
In providing its advice to the APC Directors, Shore Capital has
taken into account the commercial assessments of the APC Directors.
Shore Capital is providing independent financial advice to the APC
Directors for the purposes of Rule 3 of the Code. In addition, the
APC Directors consider the terms of the Offer to be in the best
interests of the APC Shareholders as a whole.
Accordingly, the APC Directors intend unanimously to recommend
that the Voting Scheme Shareholders vote or procure votes in favour
of the Scheme at the Court Meeting and that APC Shareholders vote
in favour of the special resolution relating to the Proposals to be
proposed at the General Meeting, as the APC Directors who currently
hold or control APC Shares have irrevocably undertaken so to do (or
procure to be done) in respect of their own beneficial
shareholdings (or the shareholdings they control), amounting, in
aggregate, to 9,223,814 APC Shares (representing approximately 5.05
per cent. of the existing issued share capital of APC).
The Scheme Document, which will be posted to APC Shareholders
on, or before, 16 October 2019, will contain, inter alia, details
of the Scheme and notices of the Meetings.
5. Background to and reasons for the APC Directors' recommendation of the Offer
APC's stated strategy is to pursue profitable cash-generative
growth through three tactical strands: (i) to grow revenue in the
established and growth technologies which it already distributes;
(ii) to expand its portfolio of proven technology partners; and
(iii) to grow by acquisition of established companies that can
provide additional revenue consistent with APC's strategic profile
and a customer base to which APC can cross-sell its other products
and technologies.
The acquisitions of Euro-Tech (Export) Limited, announced on 12
June 2019, and Wavelength Electronics Limited, announced on 25
January 2019, are recent examples of the implementation of this
strategy.
This acquisition-focused strategy will almost certainly lead to
the requirement for additional equity funding which, when combined
with the need to minimise the cost of such transactions as a public
company, would likely result in dilution to existing APC
Shareholders who may not be offered the opportunity to participate
in the requisite future equity funding rounds.
APC operates an international business which requires a very
robust capital structure to deal with the risks and opportunities
of changing global politics; the APC Directors believe that, as an
AIM quoted company with a relatively small market capitalisation,
APC lacks the capital structure to enable it to compete
successfully internationally.
For the APC Group's employees and contractors, the proposed new
ownership structure pursuant to the successful implementation of
the Offer should provide greater certainty of the access to, and
availability of, funding to pursue the Company's stated strategy
and its workforce will be able to pursue broader career
opportunities within the APC Group, with the confidence that the
Company will have the backing and resources of Specialist
Components and its owners to counter economic headwinds and take
advantage of opportunities that global change presents.
Furthermore, the APC Directors believe that the APC Group's
trading partners should gain comfort from the stronger capital base
which APC will have access to from its new ownership structure
which should serve to enable APC to more effectively compete on the
merits of the talent of its existing workforce. The APC Directors
expect that over time this will lead to longer term and more
rewarding strategic partnerships between APC and its trading
partners.
The APC Directors also expect that the access to growth capital
from its proposed new ownership structure should provide comfort to
vendors of potential acquisition targets and encourage such parties
to enter into discussions with APC.
Views of APC's Directors
The APC Directors believe that the Offer represents a certain
opportunity for APC Shareholders to realise the value of their
holdings in cash at an attractive premium to the Company's
prevailing and recent market share price, particularly in the
context of APC's relative lack of liquidity as a small AIM quoted
company. The Offer will enable APC Shareholders to crystallise the
value of their shareholdings at a premium of 9.59 per cent. to the
Closing Price of an APC Share on 17 September 2019, being the last
Business Day prior to the date of this Announcement, and a premium
of 17.31 per cent. to the volume weighted average price of an APC
Share of 8.52 pence over the six month period ended on and
including 17 September 2019.
Following careful consideration of the above factors, the APC
Directors believe that the Offer Price of 10 pence per Scheme Share
in cash provides an attractive value and certain exit opportunity
to APC Shareholders, recognising APC's current market position, its
future growth prospects and the risks associated with such
prospects.
The APC Board further considers that the intentions of
Specialist Components as set out in section 13 of this Announcement
are consistent with its own plans and ambitions for the APC Group,
including its plans for retaining APC's head office location in
Rochester and other principal business locations and fixed asset
base, and, in particular, considers that the effects of the
implementation of the Offer will be beneficial to the employees of
the APC Group going forward, with no expected redundancies or
material changes to the existing terms and conditions of
employment, and Specialist Components' support and growth capital
assisting management with the implementation of its medium term
business plan and growth strategy for the benefit of stakeholders
as a whole.
In addition, APC's major shareholders and the APC Directors have
provided Specialist Components with irrevocable undertakings to
vote in favour of the Scheme at the Court Meeting and in favour of
the special resolution to be proposed at the General Meeting in
respect of their direct and indirect shareholdings in the Company,
being, in aggregate, 66,950,573 APC Shares, representing
approximately 36.66 per cent. of APC's existing issued share
capital (further details of the irrevocable undertakings obtained
by Specialist Components are set out in Appendix III to this
Announcement).
6. Irrevocable undertakings
Specialist Components has received irrevocable undertakings to
vote (or procure the vote) in favour of the resolutions required to
effect the Proposals at the Meetings (or, in the event that the
Proposals are implemented by way of a Takeover Offer, to accept, or
procure the acceptance of such offer) from certain institutional
and other APC Shareholders (who are listed in Appendix III to this
Announcement), in respect of, in aggregate, 57,726,759 APC Shares,
representing approximately 31.61 per cent. of the existing issued
ordinary share capital of APC.
The APC Directors who beneficially hold or control APC Shares as
at the date of this Announcement have also irrevocably undertaken
to vote (or procure the vote) in favour of the resolutions required
to effect the Proposals at the Meetings (or, in the event that the
Proposals are implemented by way of a Takeover Offer, to accept, or
procure the acceptance of such an offer) in respect of their entire
beneficial shareholdings (or shares over which they exercise
control), amounting to, in aggregate, 9,223,814 APC Shares,
representing approximately 5.05 per cent. of the existing issued
ordinary share capital of APC.
Specialist Components has therefore received irrevocable
undertakings to vote in favour of the resolutions required to
effect the Proposals at the Meetings (or, in the event that the
Proposals are implemented by way of a Takeover Offer, to accept, or
procure the acceptance of such offer) in respect of, in aggregate,
66,950,573 APC Shares, representing approximately 36.66 per cent.
of the existing issued ordinary share capital of APC.
No APC Shareholder who has entered into an irrevocable
undertaking with Specialist Components is acting in concert with
Specialist Components. Oryx International Growth Fund Limited
("Oryx"), which is deemed to be acting in concert with Specialist
Components, holds 9,000,000 APC Shares representing approximately
4.93 per cent. of the existing issued ordinary share capital of APC
and will be providing a letter of confirmation that (i) it approves
of, and agrees to be bound by, the Scheme in order to avoid the
need for a separate Court Meeting to be held to obtain its approval
and (ii) it will vote in favour of the special resolution to be
proposed at the General Meeting.
Further details of the irrevocable undertakings received by
Specialist Components (including the circumstances in which the
irrevocable undertakings will cease to remain binding) are set out
in Appendix III to this Announcement.
Copies of the irrevocable undertakings will be put on display on
APC's website (www.apcplc.com) by no later than 12.00 noon (UK
time) on 19 September 2019.
7. Information relating to the APC Group
APC was incorporated in England and Wales in 1982. Its ordinary
shares were admitted to the Official List of the London Stock
Exchange in 1996 and subsequently transferred to AIM on 12 November
2002. It provides design-in, specification and distribution
services for specialist electronic components and systems, lighting
technologies and connectivity products that help its customers
produce better equipment, improve efficiency and achieve superior
performance. It operates through six specific business units and
specialist teams:
- Hi-Reliability Electronic Components: sourcing and
distribution of high reliability electronic components principally
for the aerospace and defence industries;
- RF & Microwave: sourcing and distribution of radio frequency and microwave components;
- Embedded Processing and Peripherals: sourcing and distribution
of electronic components for embedded computing and displays;
- Locator: sourcing of obsolete and difficult to find components;
- Time and Frequency Synchronisation: representative for one of
the leading manufacturers of time and frequency synchronisation
electronic components; and
- Property Technology: sourcing and distribution of lighting (LED), connectivity and sensors.
Headquartered in Rochester, Kent, the APC Group supplies
reliable, high quality and technologically advanced components and
products to a number of blue-chip clients within the defence,
aerospace, industrial and real estate arenas, as well as in
healthcare and across the broader public sector. Its products range
from mission critical components and Internet of Things solutions,
to high efficiency LED lighting. APC aims to provide industry
leading technology and 'intelligent' products and solutions,
ensuring its offerings meet design specifications, improve
operational performance and achieve financial savings for its
clients.
In its latest financial year to 31 August 2018, the APC Group
reported audited total revenue of GBP17.15 million (2017: GBP15.56
million) and a profit after taxation (excluding exceptional and
non-recurring expenses) of GBP0.76 million (2017: GBP0.44
million).
APC's issued share capital comprises 182,627,088 ordinary shares
which, based on the Closing Price of an APC Share of 9.125 pence on
17 September 2019 (being the last Business Day prior to the date of
this Announcement), equates to a market capitalisation of
approximately GBP16.66 million. The APC Group has approximately 80
employees, all of which are situated in the UK.
Current trading and prospects
On 21 May 2019, APC announced its unaudited interim results for
the half year ended 28 February 2019, where it reported total
revenue of GBP10.66 million (H1 2018: GBP8.62 million) and a profit
after taxation (excluding exceptional and non-recurring expenses)
of GBP0.67 million (H1 2018: GBP0.40 million). As at 28 February
2019, unaudited total assets were GBP16.41 million (H1 2018:
GBP12.92 million), net assets were GBP8.24 million (H1 2018:
GBP4.55 million) and net debt was GBP2.75 million (H1 2018: GBP4.00
million).
On 12 June 2019, APC announced that it had completed the
acquisition of Euro-Tech (Export) Limited, a distributor and
international reseller of electronic components, for a
consideration of GBP1.05 million funded from the APC Group's
existing financing facilities.
The APC Group continues to trade in line with the APC Directors'
expectations.
Further financial and other information on APC will be set out
in the Scheme Document.
8. Information relating to Specialist Components, Oryx, Harwood
Capital LLP and the Harwood Funds
8.1 Specialist Components
Specialist Components is a private company incorporated in
England and Wales with limited liability on 16 September 2019 under
registration number 12210077. It was established at the direction
of Harwood Capital LLP (on behalf of the Harwood Funds)
specifically for use in making the Offer and implementing the
Proposals.
The current issued share capital of Specialist Components
comprises 100 Specialist Components Ordinary Shares, which are all
held by North Atlantic Value GP 4 Limited as general partner for
HPE IV. Specialist Components is to be funded for the purposes of
the Offer via the Subscription Agreement, details of which are
provided in section 10 below.
Specialist Components has no operations and has not traded since
its date of incorporation, has paid no dividends and has not
entered into any obligations other than in connection with the
Offer and the financing of the Offer. The directors of Specialist
Components are Mr Jeremy Brade and Mr James Agnew, appointees of
Harwood Capital LLP, and there are no employees. Specialist
Components does not currently have any subsidiaries or subsidiary
undertakings. Further information concerning Specialist Components
will be set out in the Scheme Document.
Following implementation of the Proposals, Specialist Components
will be wholly owned by the Harwood Funds.
8.2 Harwood Capital LLP
Harwood Capital LLP is a UK limited liability partnership
authorised to conduct investment business by the FCA since 23
September 2003. Its principal activity is the provision of
discretionary investment management and advisory services. The
funds it manages and/or advises typically take an active interest
in the running of the companies that they invest in with the aim of
adding significant value by changing or improving various aspects
of an investee company's business. As at 30 June 2019, the Harwood
Capital Management Group had approximately GBP1.4 billion in funds
under management (including advisory clients) and GBP6.2 billion of
funds under management, advice and influence.
8.3 Oryx
Oryx, a closed-ended investment fund managed and advised by
Harwood Capital LLP, holds 9,000,000 APC Shares, representing
approximately 4.93 per cent. of the existing issued share capital
of APC. Oryx is not a Voting Scheme Shareholder but will be
providing a letter of confirmation that (i) it approves of, and
agrees to be bound by, the Scheme in order to avoid the need for a
separate Court Meeting to be held to obtain its approval and (ii)
it will vote in favour of the special resolution to be proposed at
the General Meeting.
8.4 The Harwood Funds
As set out in section 9 below, Harwood Private Equity IV L.P.
("HPE IV") (a fund managed by Harwood Capital LLP), North Atlantic
Smaller Companies Investment Trust Plc ("NASCIT") and a
discretionary private client of Harwood Capital LLP will provide
funding for the Offer by subscribing for Specialist Components
Ordinary Shares and Specialist Components PIK Loan Notes pursuant
to the Subscription Agreement.
Brief descriptions of the specific Harwood Funds which are
investing in Specialist Components are set out below:
Harwood Private Equity IV L.P.
HPE IV is an English limited partnership incorporated on 9
October 2014 under registration number LP016260. The fund's
commencement date was 21 June 2015 and it has total committed
capital of GBP152.5 million. Harwood Capital LLP is the investment
manager and the fund's objective is to generate high absolute
returns from investing in a portfolio of unquoted small and medium
sized companies across a range of sectors principally in the United
Kingdom. It focuses on leveraged buyouts and similar transactions
including public-to-private investments.
North Atlantic Smaller Companies Investment Trust PLC
NASCIT is a UK investment trust listed on the Main Market of the
London Stock Exchange. Its objective is to provide capital
appreciation through investment in a portfolio of smaller companies
principally based in countries bordering the North Atlantic Ocean.
It invests in both listed and unlisted companies. Mr Christopher
Mills has been a director of NASCIT since 1984 and is currently its
Chief Executive and investment manager. He (along with persons
deemed to be acting in concert with him) is also its largest
shareholder being interested in approximately 28.34 per cent. of
its issued ordinary share capital. Until August 2014, the joint
managers of NASCIT were Mr Mills (through Growth Financial Services
Limited of which he is a director) and Harwood Capital LLP. It is
now an alternative investment fund under the Alternative Investment
Fund Managers Directive and has recently submitted an application
to the FCA to become an authorised internally managed full-scope
Alternative Investment Fund Manager. Mr Mills, as Chief Executive,
has control of investment decisions in relation to NASCIT's
investment portfolio subject to oversight by the board of
NASCIT.
Discretionary Private Client
Harwood Capital LLP is the discretionary manager of a private
client account which currently has assets of approximately US$151.8
million.
9. Financing of the Offer
Strand Hanson, financial adviser to Specialist Components, is
satisfied that sufficient financial resources are available to
Specialist Components to enable it to implement the Offer in full.
Assuming that the Cash Consideration is payable to all Scheme
Shareholders, full implementation of the Offer would require a
maximum cash payment of approximately GBP18.26 million by
Specialist Components which will be funded entirely out of
Specialist Components' cash resources made available by way of
subscriptions for Specialist Components Ordinary Shares and
Specialist Components PIK Loan Notes by HPE IV, NASCIT and a
discretionary private client of Harwood Capital LLP pursuant to the
Subscription Agreement, details of which are provided in section 10
below.
There is no requirement for any funding from third party
providers of finance to the Specialist Components Group.
10. Subscription Agreement
Pursuant to the Subscription Agreement, Harwood Capital LLP has
agreed to procure, inter alia, the subscription by HPE IV of, in
aggregate, GBP14 million of Specialist Components Ordinary Shares
and Specialist Components PIK Loan Notes and by one of its
discretionary private clients of, in aggregate, GBP2 million of
Specialist Components Ordinary Shares and Specialist Components PIK
Loan Notes. NASCIT has also agreed, pursuant to the Subscription
Agreement, to subscribe for, in aggregate, GBP4.9 million of
Specialist Components Ordinary Shares and Specialist Components PIK
Loan Notes. Such subscriptions will ensure, inter alia, that
Specialist Components has the amount required to satisfy the
maximum aggregate Cash Consideration payable in accordance with the
Scheme. The obligations to subscribe for Specialist Components
Ordinary Shares and Specialist Components PIK Loan Notes are
conditional upon the Offer becoming Effective. The subscription
monies shall be made available no later than five calendar days
after the date on which the Scheme becomes Effective.
The Specialist Components PIK Loan Notes will be constituted by
the Specialist Components PIK Loan Note Instrument. The notes will
be unsecured and carry a coupon of five per cent. per annum which
at the election of Special Components will be satisfied by the
issue of additional notes having a nominal value equivalent to the
amount of interest payable.
11. APC Share Option Schemes
Participants in the APC Share Option Schemes will be contacted
regarding the effect of the Offer on their rights under the APC
Share Option Schemes. In accordance with Rule 15 of the Code,
Specialist Components will make appropriate proposals to such
participants in due course and details of such proposals will also
be set out in the Scheme Document.
12. Structure and implementation of the Proposals
It is intended that the Offer will be implemented by means of a
Court-sanctioned scheme of arrangement between APC and its
shareholders under Part 26 of the Companies Act 2006, the
provisions of which will be set out in full in the Scheme Document
(although Specialist Components reserves the right to elect to
implement the Offer by means of a Takeover Offer (subject to Panel
consent)).
The purpose of the Scheme, together with any proposed changes to
the Articles, is to provide for Specialist Components (and/or its
nominee(s)) to become the holder(s) of the entire issued and to be
issued ordinary share capital of APC. Following the Scheme becoming
Effective, this is to be achieved by the transfer by Scheme
Shareholders of all of the Scheme Shares to Specialist Components,
in consideration for which Scheme Shareholders will be entitled to
receive the Cash Consideration on the basis set out in section 2
above. The transfer to Specialist Components of the Scheme Shares
will result in APC becoming a wholly-owned subsidiary of Specialist
Components. Implementation of the Proposals will be subject to the
satisfaction or waiver of each of the Conditions and the further
terms to be set out in the Scheme Document. In particular, the
Scheme will require the approval of Voting Scheme Shareholders by
the passing of a resolution at the Court Meeting. This resolution
must be approved by a majority in number of those Voting Scheme
Shareholders present and voting, either in person or by proxy, at
the Court Meeting representing 75 per cent. or more in value of all
Scheme Shares voted. Oryx is not a Voting Scheme Shareholder but
will be providing a letter of confirmation that it approves of, and
agrees to be bound by, the Scheme in order to avoid the need for a
separate Court Meeting to be held to obtain its approval.
Implementation of the Proposals will also require the passing of a
special resolution at the General Meeting to deal with certain
ancillary matters (including amending the Articles and implementing
the Scheme) which will require the approval of the requisite
majority of APC Shareholders at the General Meeting.
Following the Meetings, the Scheme will become Effective
following sanction by the Court and delivery of the Scheme Court
Order to the Registrar of Companies. Any APC Shareholder is
entitled to attend the Scheme Court Hearing in person or through
counsel to support or oppose the sanctioning of the Scheme.
Upon the Scheme becoming Effective, it will be binding on all
holders of Scheme Shares, irrespective of whether or not, being
entitled to do so, they attended or voted at the Court Meeting
and/or the General Meeting and share certificates in respect of APC
Shares will cease to be valid and should be destroyed. In addition,
entitlements to APC Shares held within the CREST system will be
cancelled upon, or shortly after, the Scheme becoming
Effective.
The Scheme will contain a provision for Specialist Components to
consent, on behalf of all persons concerned, to any modification
of, or addition to, the Scheme or to any condition that the Court
may approve or impose.
APC will despatch the Scheme Document, together with the Forms
of Proxy, to APC Shareholders and, for information only, to the
holders of options granted under the APC Share Option Schemes as
soon as reasonably practicable and, in any event, within 28 days of
the date of this Announcement (unless Specialist Components and APC
otherwise agree, and the Panel consents, to a later date).
As part of the implementation of the Proposals, it is
anticipated that application will be made to the London Stock
Exchange for the cancellation of the admission to trading on AIM of
the APC Shares as of, or shortly after, the first Business Day
after the day on which the Scheme becomes Effective and that APC
will be re-registered as a private limited company once its shares
are cancelled from admission to trading, as detailed in section 14
below.
A full expected timetable of principal events will be set out in
the Scheme Document.
If the Scheme is not Effective by the Longstop Date (or such
later date (if any) as Specialist Components and APC may, with the
consent of the Panel, agree and (if required) the Court may allow),
the Scheme will not be implemented and the Offer will not
proceed.
13. APC's Directors, management, employees, research and development and locations
Specialist Components recognises the significant skills,
technical ability, customer-oriented focus and operating experience
of the APC Board, its management and employees and expects that
they will play an important role in the future development of APC.
The Specialist Components Directors intend to support APC's
management in continuing to execute and refine their existing
medium term business plan and strategy for the development of the
APC Group.
The Specialist Components Directors believe that the Offer, if
successfully completed, will provide a stable and well capitalised
future for APC. The Specialist Components Directors have no
intention to change APC's existing head office location and
headquarters' functions in Rochester or other principal business
locations or to redeploy APC's fixed asset base. Similarly, they do
not plan to make any changes to the research and development
functions of APC and Specialist Components generally expects that,
following successful completion of the Offer, APC will operate
principally as it does today but as a subsidiary of Specialist
Components.
Specialist Components does not have any plans to make any
material changes either to the continued existence or terms and
conditions of employment or in the balance of the skills and
functions of the management and employees of the APC Group. The
Specialist Components Board has given assurances to the APC Board
that, following the Effective Date, the existing contractual and
statutory employment rights and terms and conditions of employment,
including any employer contributions to company pension schemes as
applicable, of the management and employees of the APC Group will
be fully safeguarded. Accordingly, the APC Directors believe that
the prospects of the employees of APC will not be adversely
affected by the implementation of the Scheme.
It is intended that the appointments of the APC Directors will
remain unchanged following the Effective Date, however there are no
agreements or arrangements between Specialist Components and the
directors, management or employees of APC in relation to their
on-going involvement in the business and the Offer will not be
conditional on reaching agreement with such persons.
Specialist Components has not entered into, nor is it in
discussions on any proposals to enter into, any form of
incentivisation arrangements with members of APC's management who
are interested in APC Shares and has no plans so to do. Following
the Scheme becoming Effective, Specialist Components may put in
place incentive arrangements for certain members of the APC
management team. No proposals have been made on the terms of any
incentive arrangements for relevant management.
Following the Scheme becoming Effective, Specialist Components
may, in the future, invite one or more of the APC Directors to join
the board of Specialist Components, however no proposals have been
made on the terms of any such potential appointment.
As set out in section 14 below, Specialist Components intends to
seek the cancellation of the admission of the APC Shares to trading
on AIM from or shortly after the Effective Date, thereby enabling
APC's management to be entirely focussed on the growth and
development of the business, rather than AIM investor and UK
publicly quoted company related matters.
In accordance with Rule 2.11 of the Code, APC will make
available to its employees a copy of this Announcement and will
inform its employees of the rights of any employee representatives
under Rule 25.9 of the Code to require that a separate opinion of
any employee representatives on the effects of the Scheme on
employment be appended to the Scheme Document. If and to the extent
that APC is provided with an opinion from the employee
representatives after the date of publication of the Scheme
Document, APC will publish that opinion in accordance with Rule
25.9 of the Code.
14. Cancellation of admission to trading on AIM and re--registration
On completion of the Offer, APC will become a wholly owned
subsidiary of Specialist Components. Prior to the Scheme becoming
Effective, APC will make an application to the London Stock
Exchange for the cancellation of the admission to trading on AIM of
APC Shares to take effect on or shortly after the first Business
Day after the Effective Date. The last day of dealings in, and
registration of transfers of, APC Shares (other than the
registration of the transfer of the Scheme Shares to Specialist
Components pursuant to the Scheme) on AIM is expected to be the
Business Day immediately prior to the Effective Date and no
transfers shall be registered after 6.00 p.m. on that date.
On the Effective Date, share certificates in respect of APC
Shares will cease to be valid and should be destroyed. Entitlements
to APC Shares held within the CREST system will be cancelled on or
shortly after the Effective Date.
It is also intended that, shortly after the Scheme becoming
Effective, and after cancellation of the admission to trading on
AIM of APC Shares, APC will be re--registered as a private limited
company under the relevant provisions of the Companies Act
2006.
15. Offer-related arrangements
Confidentiality Agreement
Harwood Capital LLP and APC entered into a confidentiality
agreement on 19 July 2019 (the "Confidentiality Agreement")
pursuant to which Harwood Capital LLP has undertaken to APC to keep
confidential information relating to APC and not disclose it to
third parties (other than to permitted persons) unless required by
law or regulation. Such confidentiality obligation will remain in
force until completion of the Offer or otherwise for a period of
two years from the date of the Confidentiality Agreement. The
Confidentiality Agreement also contains customary standstill
undertakings from Specialist Components to APC in connection with
the acquisition of interests in the securities of APC and related
arrangements.
16. Disclosure of interests in APC Group's relevant securities
Specialist Components confirms that within 10 Business Days of
the date of this Announcement, it will make an Opening Position
Disclosure, setting out the details required to be disclosed by it
under Rule 8.1(a) of the Code.
Save for 9,000,000 APC Shares held by Oryx, which represent
approximately 4.93 per cent. of APC's issued share capital (as set
out in section 8.3 above), and the irrevocable undertakings
referred to in section 6 above, as at the close of business on 17
September 2019 (being the last Business Day prior to the date of
this Announcement), neither Specialist Components, Harwood Capital
LLP or the Harwood Funds nor any of the directors or members (as
applicable) of Specialist Components or Harwood Capital LLP, nor so
far as the directors or members (as applicable) of Specialist
Components, Harwood Capital LLP and the Harwood Funds are aware,
any other person acting, or deemed to be acting, in concert (within
the meaning of the Code) with Specialist Components for the
purposes of the Offer had:
(a) any interest in, or right to subscribe for, any relevant securities of APC;
(b) any short positions in respect of any relevant securities of
APC (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 APC;
(c) borrowed or lent any relevant securities of APC (save for
any borrowed shares which have been either on-lent or sold);
(d) procured an irrevocable commitment or letter of intent to
vote in favour of the Scheme or accept a Takeover Offer in respect
of any relevant securities of APC; nor
(e) any arrangement in relation to any relevant securities of APC.
For these purposes, an "arrangement" includes any indemnity or
option arrangement, any agreement or any understanding, formal or
informal, of whatever nature, relating to relevant securities of
APC which is, or may be, an inducement to deal or refrain from
dealing in such securities.
17. General
Specialist Components reserves the right to elect, with the
consent of the Panel, to implement the acquisition of the APC
Shares by way of a Takeover Offer as an alternative to the Scheme.
In such event, the Takeover Offer would be made on substantially
the same terms as those which would apply to the Scheme (subject to
appropriate amendments, including an acceptance condition set at 90
per cent. of the shares to which such offer relates or such lesser
percentage, being more than 50 per cent., as Specialist Components
may decide).
The Scheme 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 to be set out in the Scheme Document. The
sources of information and bases of calculation contained in this
Announcement are set out in Appendix II to this Announcement. A
summary of the irrevocable undertakings is set out in Appendix III
to this Announcement. Certain terms used in this Announcement are
defined in Appendix IV to this Announcement.
The Scheme Document will include full details of the Scheme,
together with notices of the Court Meeting and the General Meeting
and the expected timetable of principal events, and will be
accompanied by Forms of Proxy for the Meetings. The Scheme will be
subject to the applicable requirements of the Code, the Panel, the
London Stock Exchange, the AIM Rules and the FCA.
This Announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) No 596/2014
("MAR"). Market soundings, as defined in MAR, were taken in respect
of the Offer, with the result that certain persons became aware of
inside information, as permitted by MAR. That inside information is
set out in this Announcement. Therefore, those persons that
received inside information in a market sounding are no longer in
possession of inside information relating to APC and its
securities.
18. Consents
Strand Hanson has given and not withdrawn its consent to the
publication of this Announcement with the inclusion in it of the
references to its name and (where applicable) advice in the form
and context in which they appear.
Shore Capital has given and not withdrawn its consent to the
publication of this Announcement with the inclusion in it of the
references to its name and (where applicable) advice in the form
and context in which they appear.
19. Documents available on a website
Copies of the following documents will be made available,
subject to certain restrictions relating to persons resident in any
Restricted Jurisdiction, on APC's website at www.apcplc.com by no
later than 12.00 noon (UK time) on 19 September 2019 up to and
including the Effective Date or the date that the Scheme lapses or
is withdrawn, whichever is earlier:
-- this Announcement;
-- the irrevocable undertakings referred to in section 6 above
and summarised in Appendix III to this Announcement;
-- the Confidentiality Agreement;
-- the Subscription Agreement and Specialist Components PIK Loan
Note Instrument referred to in section 10 above; and
-- the written consents provided by Strand Hanson and Shore
Capital referred to in section 18 of this Announcement.
Enquiries:
Specialist Components Limited Tel: +44 (0) 207 640 3200
Jeremy Brade, Director
James Agnew, Director
Strand Hanson Limited Tel: +44 (0) 207 409 3494
(Financial Adviser to Specialist Components
and Harwood Capital LLP)
Stuart Faulkner
Matthew Chandler
James Dance
Jack Botros
APC Technology Group plc Tel: +44 (0) 330 313 3220
Tony Lochery, Non-Executive Chairman
Richard Hodgson, Chief Executive Officer
Shore Capital Tel: +44 (0) 207 408 4090
(Financial Adviser, Nominated Adviser and
Broker to APC)
Antonio Bossi
James Thomas
Important Notice
Strand Hanson Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting
exclusively as financial adviser to Specialist Components and
Harwood Capital LLP and no-one else in connection with the
Proposals and other matters described in this Announcement and will
not be responsible to anyone other than Specialist Components and
Harwood Capital LLP for providing the protections afforded to
clients of Strand Hanson Limited nor for providing advice in
relation to the Proposals, the contents of this Announcement or any
other matter referred to herein. Neither Strand Hanson Limited nor
any of its subsidiaries, branches or 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 Strand Hanson Limited in
connection with this Announcement, any statement contained herein
or otherwise.
Shore Capital, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser, nominated adviser and broker to APC and
no-one else in connection with the Proposals and other matters
described in this Announcement and will not be responsible to
anyone other than APC for providing the protections afforded to
clients of Shore Capital nor for providing advice in relation to
the Proposals, the contents of this Announcement or any other
matter referred to herein. Neither Shore Capital nor any of its
subsidiaries, branches or 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 Shore Capital in connection with this
Announcement, any statement contained herein or otherwise.
Further information
THIS ANNOUNCEMENT IS MADE PURSUANT TO RULE 2.7 OF THE CODE AND
IS FOR INFORMATION PURPOSES ONLY AND IS NOT INTED TO, AND DOES NOT,
CONSTITUTE OR FORM ANY PART OF, AN OFFER TO SELL OR AN INVITATION
TO SUBSCRIBE FOR OR PURCHASE ANY SECURITIES OR THE SOLICITATION OF
ANY VOTE OR APPROVAL IN ANY JURISDICTION PURSUANT TO THE OFFER OR
OTHERWISE, NOR SHALL THERE BE ANY SALE, ISSUANCE OR TRANSFER OF THE
SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF APPLICABLE LAW.
The Proposals will be subject to the Conditions and to the
further terms and conditions to be set out in the Scheme Document
(or any other document by which the Offer is made). The Proposals
will be made solely pursuant to the disclosures and information
contained in the Scheme Document (or any other document by which
the Offer is made) which, together with the Forms of Proxy, will
contain the full terms and conditions of the Proposals, including
details of how APC Shareholders may vote at the Meetings in respect
of the Proposals. Any vote in relation to the Proposals or other
response in relation to the Offer should be made only on the basis
of the information contained in the Scheme Document (or any other
document by which the Offer is made). APC Shareholders are advised
to read the Scheme Document (or any other document by which the
Offer is made) carefully when it becomes available.
This Announcement does not constitute a prospectus or prospectus
equivalent document.
If you are in any doubt about the contents of this Announcement
or the action you should take, you are recommended to seek your own
independent financial advice immediately from your stockbroker,
bank manager, solicitor, accountant or other independent financial
adviser duly authorised under the Financial Services and Markets
Act 2000 (as amended) if you are resident in the United Kingdom or,
if not, from another appropriately authorised independent financial
adviser.
Overseas jurisdictions
The availability of the Offer and the release, publication and
distribution of this Announcement in jurisdictions other than the
United Kingdom may be restricted by the laws of those jurisdictions
and therefore persons who are not resident in the United Kingdom
into whose possession this Announcement comes should inform
themselves about and observe any such restrictions. Failure to
comply with any such restrictions may constitute a violation of the
securities laws of any such jurisdiction. In particular, the
ability of persons who are not resident in the United Kingdom to
participate in the Offer may be affected by the laws of the
relevant jurisdictions in which they are located.
This Announcement has been prepared for the purposes of
complying with English law, the Code and the AIM Rules and the
information disclosed may not be the same as that which would have
been disclosed if this Announcement had been prepared in accordance
with the laws and regulations of jurisdictions outside the United
Kingdom.
The Offer will be implemented in accordance with applicable
English law and will be subject to the applicable requirements of
the Code, the Disclosure Guidance and Transparency Rules of the
Financial Conduct Authority, the Panel and the rules of the London
Stock Exchange (including the AIM Rules).
Unless otherwise determined by Specialist Components or required
by the Code, and permitted by applicable law and regulation, the
Offer 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
Offer from within a Restricted Jurisdiction or any other
jurisdiction if to do so would constitute a violation of the laws
of that jurisdiction. Accordingly, copies of this Announcement, the
Scheme Document, the notices of Court Meeting and General Meeting,
the Forms of Proxy and all other documents relating to the Offer
are not being, and must not be, directly or indirectly, mailed or
otherwise forwarded, distributed or sent in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
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 where to do so would violate the laws in such
jurisdictions. All persons receiving this Announcement (including,
without limitation, custodians, nominees and trustees) should
observe these restrictions and any applicable legal or regulatory
requirements of their jurisdiction and must not mail or otherwise
forward, send or distribute this Announcement in, into or from any
Restricted Jurisdiction where to do so would violate the laws in
that jurisdiction. To the fullest extent permitted by applicable
law, the companies and persons involved in the Offer disclaim any
responsibility or liability for the violation of such restrictions
by any person.
Further details in relation to Overseas Shareholders will be
contained in the Scheme Document.
Additional information for US investors
These materials are not for distribution, directly or
indirectly, in or into the United States (including its territories
and possessions, any State of the United States and the District of
Columbia). These materials do not constitute or form a part of any
offer or solicitation to purchase or subscribe for securities in
the United States.
APC and Specialist Components are incorporated under the laws of
England and Wales and all of the officers and directors of APC and
Specialist Components are residents of countries other than the
United States. Accordingly, it may not be possible to sue APC and
Specialist Components or their respective directors in a non-US
court for violations of US securities laws. It may also be
difficult to compel APC, Specialist Components and their respective
affiliates to subject themselves to the jurisdiction and judgment
of a US court.
The Offer, to be implemented by way of the Scheme, is being made
to acquire the entire issued and to be issued share capital of a
company incorporated in England and Wales by way of a scheme of
arrangement provided for under Part 26 of the Companies Act 2006. A
transaction effected by way of a scheme of arrangement is not
subject to the proxy solicitation or tender offer rules under the
US Securities Exchange Act of 1934, as amended (the "US Exchange
Act"). Accordingly, the Scheme is subject to the disclosure
requirements, rules and practices applicable in the United Kingdom
to schemes of arrangement and takeover offers, which differ from
the disclosure requirements, style and format of US tender offer
and proxy solicitation rules. If Specialist Components determines
to extend the offer into the US, the Offer will be made in
compliance with applicable US laws and regulations. Financial
information included in this Announcement and the Scheme Document
has been or will have been prepared in accordance with non-US
accounting standards 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 US.
If Specialist Components were to elect to implement the Offer by
means of a contractual takeover offer, rather than the Scheme, such
offer would be made in compliance with applicable US laws and
regulations, including Section 14(e) of the US Exchange Act and
Regulation 14E thereunder and otherwise in accordance with the
Code. Such offer would be made in the US by Specialist Components
and no one else.
Neither the US Securities and Exchange Commission nor any
securities commission of any state of the United States has
approved or disapproved the Offer, nor have such authorities passed
upon or determined the fairness of the Offer or the adequacy or
accuracy of the information contained in this Announcement. Any
representation to the contrary is a criminal offence in the United
States.
If the Offer is required to be made in the US, it will be done
in compliance with the applicable tender offer rules under the US
Exchange Act.
Cautionary note regarding forward-looking statements
This Announcement (including information incorporated by
reference in this Announcement) contains certain statements that
are, or may be deemed to be, forward-looking statements with
respect to Specialist Components and/or APC. These forward-looking
statements can be identified by the fact that they do not relate to
historical or current facts. Forward-looking statements also often
use words such as "anticipate", "target", "expect", "estimate",
"intend", "plan", "goal", "believe", "hope", "aims", "continue",
"will", "may", "should", "would", "could" or other words of similar
meaning. 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
Specialist Components' or APC's operations and potential synergies
resulting from the Offer; and (iii) the effects of government
regulation on Specialist Components' or APC's business. These
statements are based on assumptions and assessments made by
Specialist Components and/or APC (as applicable) in light of their
experience and perception of historical trends, current conditions,
future developments and other factors they believe appropriate.
Forward-looking statements are not guarantees of future
performance. Such forward-looking statements involve known and
unknown risks and uncertainties that could significantly affect
expected results and are based on certain key assumptions. Many
factors could cause actual results to differ materially from those
projected or implied in any forward-looking statements. Due to such
uncertainties and risks, readers are cautioned not to place undue
reliance on such forward-looking statements, which speak only as of
the date of this Announcement. Neither Specialist Components nor
APC undertakes any obligation to update or revise any
forward-looking statement as a result of new information, future
events or otherwise, except to the extent required by applicable
law, the Panel or the Code.
There are several factors which could cause actual results to
differ materially from those expressed or implied in
forward-looking statements. Among the factors that could cause
actual results to differ materially from those described in the
forward-looking statements are changes in the global, political,
economic, business and competitive environments, market and
regulatory forces, future exchange and interest rates, changes in
tax rates, and future business combinations or dispositions.
No member of the Specialist Components Group or the APC Group
nor any of their respective associates, directors, officers,
employees or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in
any forward-looking statements in this Announcement will actually
occur.
Except as expressly provided in this Announcement, no
forward-looking or other statements have been reviewed by the
auditors of the Specialist Components Group or the APC Group. All
subsequent oral or written forward-looking statements attributable
to any member of the Specialist Components Group or the APC Group,
or any of their respective associates, directors, officers,
employees or advisers, are expressly qualified in their entirety by
the cautionary statement above.
No profit forecasts, quantified financial benefit statements or
estimates
No statement in this Announcement is intended, or is to be
construed, as a profit forecast, profit estimate or quantified
financial benefit statement for any period. No statement in this
Announcement should be interpreted to mean that earnings per APC
Share for the current or future financial years would necessarily
match or exceed the historical published earnings per APC
Share.
Dealing and Opening Position Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of APC or
of any securities exchange offeror (being any offeror other than an
offeror in respect of which it has been announced that its offer
is, or is likely to be, solely in cash) must make an Opening
Position Disclosure following the commencement of the offer period
and, if later, following the announcement in which any securities
exchange offeror is first identified. An Opening Position
Disclosure must contain details of the person's interests and short
positions in, and rights to subscribe for, any relevant securities
of each of (i) APC and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies
must be made by no later than 3.30 p.m. (UK time) on the 10th
Business Day following the commencement of the offer period and, if
appropriate, by no later than 3.30 p.m. (UK 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 APC 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 one per cent. or more of any class of relevant
securities of APC or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of APC or of any securities exchange offeror. A Dealing Disclosure
must contain details of the dealing concerned and of the person's
interests and short positions in, and rights to subscribe for, any
relevant securities of each of (i) APC and (ii) any securities
exchange offeror(s), save to the extent that these details have
previously been disclosed under Rule 8. A Dealing Disclosure by a
person to whom Rule 8.3(b) applies must be made by no later than
3.30 p.m. (UK 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 APC or a securities exchange
offeror, they will be deemed to be a single person for the purpose
of Rule 8.3.
Opening Position Disclosures must also be made by APC and by any
offeror and Dealing Disclosures must also be made by APC, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Panel's website at www.thetakeoverpanel.org.uk, including
details of the number of relevant securities in issue, when the
offer period commenced and when any offeror was first identified.
You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are
required to make an Opening Position Disclosure or a Dealing
Disclosure.
Publication on a website and availability of hard copies
This Announcement and the documents required to be published
pursuant to Rule 26 of the Code will be available free of charge,
subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on APC's website at www.apcplc.com by no
later than 12.00 noon (UK time) on the Business Day following this
Announcement.
Neither the content of any website referred to in this
Announcement nor the content of any website accessible from
hyperlinks on such website is incorporated into, or forms part of,
this Announcement.
A hard copy of this Announcement will be sent to APC
Shareholders (other than APC Shareholders who have elected to
receive electronic communications) in the near future. APC
Shareholders may request a hard copy of this Announcement (and any
information incorporated by reference in this Announcement) free of
charge by contacting Neville Registrars on 0121 585 1131 from
within the UK or +44 (0)121 585 1131 if calling from outside the UK
between 9.00 a.m. to 5.00 p.m., Monday to Friday (except public
holidays in England and Wales) or by submitting a request in
writing to Neville Registrars at Neville House, Steelpark Road,
Halesowen B62 8HD. APC Shareholders may also request that all
future documents, announcements and information to be sent to them
in relation to the Proposals should be in hard copy form. If you
have received this Announcement in electronic form, hard copies of
this Announcement and any document or information incorporated by
reference into this Announcement will not be provided unless such a
request is made.
Rule 2.9 information
Pursuant to Rule 2.9 of the Code, APC confirms that, as at the
date of this Announcement, it has 182,627,088 ordinary shares of 2
pence each in issue and admitted to trading on AIM with
International Securities Identification Number GB0000373984.
Information relating to APC Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by APC Shareholders, persons with information
rights and other relevant persons for the receipt of communications
from APC may be provided to Specialist Components during the Offer
Period as requested under Section 4 of Appendix 4 of the Code to
comply with Rule 2.11(c) 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.
Time
All times shown in this Announcement are UK times, unless
otherwise stated.
Appendix I
Conditions and certain further terms to the Implementation
of
the Scheme and the Proposals
The Proposals will be conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the Code, by not
later than the Longstop Date or such later date, if any, as
Specialist Components and APC may with the consent of the Panel
agree and (if required) the Court may allow.
Part A: Conditions to the Scheme
1. The Scheme will be conditional upon:
(a) (i) approval of the Scheme by a majority in number of the
Voting Scheme Shareholders present and voting (and entitled to
vote), representing not less than 75 per cent. in value of the
Scheme Shares held by such holders, either in person or by proxy,
at the Court Meeting and at any separate class meeting that may be
required by the Court (or at any adjournment of any such meeting),
and (ii) such Court Meeting being held 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 as may be agreed by Specialist
Components and APC and the Court may allow);
(b) (i) the special resolution required to approve and implement
the Scheme (including, without limitation, to amend the Articles)
and set out in the notice of the General Meeting being duly passed
by the requisite majority at the General Meeting (or at any
adjournment of such meeting), and (ii) such General Meeting being
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 as may be agreed by Specialist Components and APC 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 APC and Specialist Components); and
(d) (i) an office copy of the Scheme Court Order sanctioning the
Scheme being delivered to the Registrar of Companies, and (ii) the
Court Hearing being held on or before the 22nd day after the
expected date of such Court Hearing to be set out in the Scheme
Document (or such later date as may be agreed by Specialist
Components and APC and the Court may allow).
Part B: Conditions to the Proposals
2. Subject to Part C below and to the requirements of the Panel,
the Proposals will also be conditional upon the following matters,
and, accordingly, the Scheme Court Order will not be delivered to
the Registrar of Companies unless such Conditions (as amended as
appropriate) have been satisfied (where capable of satisfaction)
and continue to be satisfied or, where relevant, waived:
(a) all notifications and filings which are necessary in
connection with the Proposals having been made by the relevant
party, all necessary waiting periods (including any extension to
them) under any applicable legislation or regulations of any
jurisdiction having expired, lapsed or been terminated, all
necessary statutory or regulatory obligations in any relevant
jurisdiction having been complied with and all Authorisations which
in each case are necessary for or in respect of the Offer, its
implementation or any acquisition of any shares in, or control or
management of, APC or any other member of the Wider APC Group by
any member of the Wider Specialist Components Group, in each case
where the absence of such notification, filing or application would
have a material adverse effect on the Wider Specialist Components
Group or the Wider APC Group in each case taken as a whole, and all
Authorisations necessary in respect thereof having been obtained on
terms and in a form reasonably satisfactory to Specialist
Components from all Relevant Authorities or persons with whom any
member of the Wider APC Group has entered into contractual
arrangements (other than contractual arrangements which have
been Fairly Disclosed) in each case where the direct consequence of
a failure to make such notification or filing or to wait for the
expiry, lapse or termination of any such waiting period or to
comply with such obligation or obtain such Authorisation from such
a person would have a material adverse effect on the Wider APC
Group taken as a whole, and all such Authorisations, together with
all Authorisations necessary to carry on the business of any member
of the Wider APC Group, remaining in full force and effect at the
time when the Scheme becomes wholly unconditional and Effective and
there being no intimation of any intention to revoke or not to
renew, withdraw, suspend, withhold, modify or amend the same in
consequence of the Scheme becoming Effective;
(b) no Relevant Authority having instituted, implemented or
threatened any action, suit, proceedings, investigation, reference
or enquiry, or enacted, made or proposed any statute, regulation,
order or decision, or having taken any other steps or measures that
would or might reasonably be expected to, in any case which would
be material in the context of the Wider APC Group or the Wider
Specialist Components Group, as the case may be, when taken as a
whole:
(i) make the Proposals, their implementation or the acquisition
or proposed acquisition of any shares or other securities in, or
control over, APC or any member of the Wider APC Group by
Specialist Components or any member of the Wider Specialist
Components Group, illegal, void or unenforceable under the laws of
any relevant jurisdiction or otherwise directly or indirectly
materially restrict, restrain, prohibit, delay, frustrate or
interfere in the implementation of or impose additional material
conditions or obligations with respect to or otherwise materially
challenge the Proposals or such proposed acquisition in any case in
a manner which is material in the context of the Wider APC Group
when taken as a whole (including without limitation, taking any
steps which would entitle the Relevant Authority to require any
member of the Wider Specialist Components Group to dispose of all
or some of its APC Shares or restrict the ability of any member of
the Wider Specialist Components Group to exercise voting rights in
respect of some or all of such APC Shares);
(ii) require, prevent or materially delay a divestiture by any
member of the Wider Specialist Components Group of any shares or
other securities in APC;
(iii) impose any material limitation on, or result in a material
delay in, the ability of Specialist Components or APC or any member
of the Wider Specialist Components Group to acquire or hold or
exercise effectively, directly or indirectly, any rights of
ownership of shares or other securities in any member of the Wider
APC Group or voting rights or management control over any member of
the Wider APC Group;
(iv) require, prevent or materially delay a divestiture by any
member of the Wider Specialist Components Group or the Wider APC
Group of all or any material portion of their respective
businesses, assets or properties or impose any material limitation
on the ability of any of them to conduct their respective
businesses or own their respective assets or properties;
(v) result in any member of the Wider APC Group or the Wider
Specialist Components Group ceasing to be able to carry on their
business under any name under which it presently does so;
(vi) impose any material limitation on the ability of any member
of the Wider Specialist Components Group or of the Wider APC Group
to integrate or co-ordinate its business, or any part of it, with
the businesses or any part of the businesses of any other member of
the Wider Specialist Components Group or of the Wider APC Group in
a manner that is materially adverse to the relevant group taken as
a whole;
(vii) otherwise affect any or all of the businesses, assets,
prospects or profits of any member of the Wider Specialist
Components Group or any member of the Wider APC Group in a manner
which is material and adverse to the relevant group taken as a
whole; or
(viii) except pursuant to Chapter 3 of Part 28 of the Companies
Act 2006, require any member of the Wider APC Group or the Wider
Specialist Components Group to offer to acquire any shares or other
securities owned by any third party in any member of the Wider APC
Group by any third party;
and all applicable waiting and other time periods during which
any such Relevant Authority could institute, or implement or
threaten any proceedings, suit, investigation or enquiry or enact,
make or propose any such statute, regulation or order or take any
other such step having expired, lapsed or been terminated;
(c) except as Fairly Disclosed there being no provision of any
Authorisation or other instrument to which any member of the Wider
APC Group is a party, or by or to which any such member, or any of
its assets, is bound or subject, which could or might reasonably be
expected, as a consequence of the Proposals or of the proposed
acquisition by Specialist Components of any shares or other
securities (or the equivalent) in APC or because of a change in, or
control or management of, any member of the Wider APC Group,
result, in any case to an extent which is material in the context
of the Wider APC Group taken as a whole, in:
(i) any assets or interests of any member of the Wider APC Group
being or falling to be disposed of or charged, or any right arising
under which any such assets or interests could be required to be
disposed of or charged or could cease to be available to any member
of the Wider APC Group, other than in the ordinary course of
business;
(ii) any monies borrowed by or other indebtedness or material
liabilities (actual or contingent) of, or any grant available to,
any member of the Wider APC Group becoming repayable or being
capable of being declared repayable immediately or earlier than its
stated repayment date or the ability of such member of the Wider
APC Group to incur any indebtedness becoming or being capable of
being or becoming withdrawn or prohibited;
(iii) any such Authorisation or other instrument being
terminated or materially adversely modified, affected, amended or
varied or any materially adverse action being taken or any onerous
obligation or liability arising thereunder;
(iv) the business or interests of any member of the Wider APC
Group with any firm, body or person (or any arrangements relating
to such business or interests) being terminated, modified,
affected, amended or varied in any materially adverse manner;
(v) the value of or the financial or trading position or
prospects of any member of the Wider APC Group being prejudiced or
adversely affected;
(vi) the creation of any liability (actual or contingent) by any
member of the Wider APC Group other than in the ordinary course of
business;
(vii) any liability of any member of the Wider APC Group to make
any severance, termination, bonus or other payment to any of its
directors or other officers;
(viii) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any member of the Wider APC Group or any such
mortgage, charge or security (whenever arising or having arisen)
becoming enforceable; or
(ix) any member of the Wider APC Group ceasing to be able to
carry on business under any name under which it currently does
so,
and no event having occurred which, under any provision of any
Authorisation or other instrument to which any member of the Wider
APC Group is a party, or by or to which any such member, or any of
its assets, is bound, or subject, would reasonably be expected to
result, in any case to an extent which is material and adverse in
the context of the Wider APC Group taken as a whole, in any of the
events or circumstances as are referred to in items (i) to (ix)
inclusive of this section;
(d) since 31 August 2018 and except as Fairly Disclosed:
(i) no enquiry or investigation by or complaint or reference to
any Relevant Authority against or in respect of any member of the
Wider APC Group or no criminal proceedings, litigation, arbitration
proceedings, mediation proceedings, prosecution or other legal
proceedings to which any member of the Wider APC Group is or may
become a party (whether as claimant, defendant or otherwise) having
been instituted or threatened or remaining outstanding against or
in respect of any member of the Wider APC Group which in any case
is material in the context of the Wider APC Group taken as a
whole;
(ii) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits of any
member of the Wider APC Group which in any case is material in the
context of the Wider APC Group taken as a whole;
(iii) no contingent or other liability having arisen, become
apparent or increased which in any case is material in the context
of the Wider APC Group taken as a whole; and
(iv) no steps having been taken and no omissions having been
made which would reasonably be expected to result in the
withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider APC Group, which is
material to, and necessary for the proper carrying on of, its
business;
(e) since 31 August 2018 and except as Fairly Disclosed, neither
APC nor any other member of the Wider APC Group having:
(i) issued or agreed to issue or authorised or announced its
intention to authorise or propose the issue or grant of additional
shares of any class, or securities convertible into or exchangeable
for, or rights, warrants or options to subscribe for or acquire any
such shares or convertible securities or transferred or sold any
APC Shares out of treasury (save as between APC and any member of
the Wider APC Group or between any members of the Wider APC Group
and save for the issue of APC Shares pursuant to the entitlements
of participants under the APC Share Option Schemes);
(ii) purchased, redeemed or repaid any of its own shares or
other securities or reduced or made any other changes to its share
capital, except in respect of the matters mentioned in Condition
2(e)(i) above;
(iii) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any dividend, bonus or other
distribution whether payable in cash or otherwise, other than to
APC or a wholly-owned subsidiary of APC;
(iv) save for any transaction between APC and any member of the
Wider APC Group or between any members of the Wider APC Group,
merged with, demerged or acquired any body corporate, partnership
or business or acquired or disposed of or transferred, mortgaged,
charged or created any security interest over any assets or any
right, title or interest in any assets (including shares in
subsidiaries and trade investments) which in any case would be
material in the context of the Wider APC Group taken as a
whole;
(v) save for any transaction between APC and any member of the
Wider APC Group or between any members of the Wider APC Group,
issued or authorised the issue of any debentures or incurred or
increased any indebtedness or liability or become subject to a
contingent liability which in any case is material in the context
of the Wider APC Group taken as a whole;
(vi) entered into, varied or authorised any arrangement,
transaction, contract or commitment other than in the ordinary
course of business (whether in respect of capital expenditure or
otherwise) which is of a long-term, onerous or unusual nature or
which involves an obligation of a nature and magnitude which is
material in the context of the Wider APC Group taken as a whole or
is likely to materially restrict the scope of the existing business
of any member of the Wider APC Group other than to a nature and
extent which is normal in the context of the business
concerned;
(vii) save for any transaction between APC and any member of the
Wider APC Group or between any members of the Wider APC Group,
entered into, implemented, effected or authorised any merger,
demerger, reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement (other than the Scheme) in relation to
itself or another member of the Wider APC Group otherwise than in
the ordinary course of business which in any case is material in
the context of the APC Group taken as a whole;
(viii) otherwise than in the ordinary course of business, waived
or compromised any claim which is material in the context of the
Wider APC Group taken as a whole;
(ix) taken any corporate action or had any legal proceedings
started or threatened against it for its winding up (whether
voluntary or otherwise), dissolution or reorganisation or analogous
proceedings in any jurisdiction or for the appointment of a
receiver, trustee, administrator, administrative receiver or
similar officer in any jurisdiction of all or any of its assets and
revenues or had any such person appointed which in any case is
material in the context of the Wider APC Group taken as a
whole;
(x) taken or proposed any steps, corporate action or had any
legal proceedings instituted or threatened against it in relation
to the suspension of payments or a moratorium of any indebtedness
that is material in the context of the Wider APC Group;
(xi) been unable or admitted in writing that it is unable to pay
its debts or having stopped or suspended (or threatened to do so)
payments of its debts generally or ceased or threatened to cease
carrying on all or a substantial part of its business in any case
which is material in the context of the Wider APC Group taken as a
whole;
(xii) save for any transaction between APC and any member of the
Wider APC Group or between any members of the Wider APC Group made
or authorised any change in its loan capital which is material in
the context of the Wider APC Group taken as a whole;
(xiii) entered into or varied in any material respect the terms
of any letter of appointment or service agreement (as the case may
be) with or relating to any of the executive directors,
non--executive directors or senior executives of APC or any of the
directors or senior executives of any other member of the Wider APC
Group;
(xiv) proposed, agreed to provide or modified in any material
respect the terms of any share option scheme, incentive scheme or,
other than in the ordinary course of business, any other benefit
relating to the employment or termination of employment of any
person employed by the Wider APC Group which in any case is
material in the context of the Wider APC Group taken as a
whole;
(xv) save as envisaged in the Proposals, made any alteration to
its Articles or other incorporation or constitutional documents
which is material in the context of the Offer; or
(xvi) otherwise than in the ordinary course of business entered
into any agreement or commitment or passed any resolution or made
any offer which remains open for acceptance or proposed or
announced any intention with respect to any of the transactions,
matters or events referred to in this paragraph (e);
(f) Specialist Components not having discovered that, except as Fairly Disclosed:
(i) any financial, business or other information concerning the
Wider APC Group disclosed publicly or disclosed to any member of
the Wider Specialist Components Group by any member of the Wider
APC Group at any time is to a material extent misleading, contains
a material misrepresentation of fact or omits to state a fact
necessary to make the information therein not misleading to a
material extent and which was not corrected before the date of the
announcement of the Proposals either by public disclosure through a
Regulatory Information Service or by a written disclosure to the
Wider Specialist Components Group and which is material in the
context of the Wider APC Group taken as a whole; or
(ii) any information which affects the import of any information
disclosed to any member of the Specialist Components Group at any
time by or on behalf of any member of the Wider APC Group which is
material in the context of the APC Group taken as a whole; or
(iii) any member of the Wider APC Group has not complied with
any applicable legislation or regulations of any relevant
jurisdiction with regard to the use, storage, transport, treatment,
handling, disposal, release, discharge, spillage, leak or emission
of any waste or hazardous substance or any substance likely to
impair the environment or harm human health, or otherwise relating
to environmental matters or the health and safety of any person
where non-compliance would be likely to give rise to any liability
or cost (whether actual or contingent) on the part of any member of
the Wider APC Group which in any case is material in the context of
the Wider APC Group taken as a whole; or
(iv) there has been an emission, discharge, disposal, spillage
or leak of waste or hazardous substance or any substance likely to
impair the environment or harm human health which would be likely
to give rise to any liability or cost (whether actual or
contingent) on the part of any member of the Wider APC Group which
in any case is material in the context of the Wider APC Group taken
as a whole; or
(v) there is or is likely to be any liability (whether actual or
contingent) to improve or install new plant or equipment or make
good, repair, reinstate or clean up any property now or previously
owned, occupied or made use of by any past or present member of the
Wider APC Group under any environmental legislation, regulation,
notice, circular or order of any Relevant Authority or any other
person or body in any jurisdiction which in any case is material in
the context of the Wider APC Group taken as a whole; or
(vi) circumstances exist whereby a person or class of person
would be likely to have any claim or claims in respect of any
product or process of manufacture or materials used therein now or
previously manufactured, sold or carried out by any past or present
member of the Wider APC Group which in any case is material in the
context of the Wider APC Group taken as a whole; and
(g) except as Fairly Disclosed, no member of the APC Group nor
the trustees of any relevant pension scheme having, since 31 August
2018 (and in each case to an extent which is material in the
context of the Wider APC Group taken as a whole):
(i) made or agreed or consented to any significant change (i) to
the terms of any trust deeds constituting the pension schemes
established for the directors or employees (or their dependants) of
any member of the Wider APC Group, (ii) to the benefits which
accrue, (iii) to the pensions which are payable thereunder for all
members or any category of members, (iv) to the basis on which
qualification for, or accrual or entitlement to, such benefits or
pensions are calculated or determined for all members or any
category of members (including with regard to commutation factors
where employer agreement is required to change such factors), or
(v) to the basis on which the liabilities (including pensions) of
such pension schemes are funded (including putting in place,
agreeing or consenting to technical provisions, actuarial
valuations, statements of funding principles, schedules of
contributions and recovery plans pursuant to Part 3 of the Pensions
Act 2004); or
(ii) established any new pensions arrangements.
Part C: Further terms of the Proposals
3. Specialist Components reserves the right to waive in whole or
in part all or any of the above Conditions. The Scheme will not
become Effective unless all of the Conditions have been fulfilled
or waived or, where appropriate, have been determined by Specialist
Components to be or remain satisfied by the earlier of (i) 11.59
p.m. on the date immediately preceding the date of the Scheme Court
Hearing, and (ii) the Longstop Date (or such later date as
Specialist Components or APC may agree and the Panel and the Court
may allow). Specialist Components shall be under no obligation to
waive or treat as fulfilled any of Conditions 2(a) to (g) earlier
than that date, notwithstanding that other of the Conditions may at
an 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.
4. If Specialist Components is required by the Panel to make an
offer for APC Shares under the provisions of Rule 9 of the Code,
Specialist Components may make such alterations to the terms and
conditions of the Offer as are necessary to comply with the
provisions of that Rule, and such offer shall be subject to the
terms and conditions as so amended.
5. Specialist Components reserves the right to elect (with the
consent of the Panel (if required)) to implement the acquisition of
the APC Shares by way of a Takeover Offer as an alternative to the
Scheme. Any such Takeover Offer will be subject to an acceptance
condition set at 90 per cent. (or such lesser percentage (being
more than 50 per cent.) as Specialist Components may decide) of (i)
the APC Shares to which such Takeover Offer relates and (ii) the
voting rights normally exercisable at a general meeting of APC. Any
such Takeover Offer would be made on substantially the same terms
(subject to appropriate amendments) as those which would apply to
the Scheme and in compliance with applicable laws and regulations.
Further, if sufficient acceptances of such Takeover Offer are
received and/or sufficient APC Shares are otherwise acquired, it
would be the intention of Specialist Components to apply the
provisions of the Companies Act 2006 to acquire compulsorily any
outstanding APC Shares to which such Takeover Offer relates.
6. The availability of the Offer to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements. Unless otherwise determined by Specialist Components
or required by the Code and permitted by applicable law and
regulation, the Offer is not being, and will not be, made, directly
or indirectly, in or into or by the use of the mails of, or by any
other means or instrumentality (including, without limitation,
facsimile transmission, telex, telephone, internet or other forms
of electronic transmission) of interstate or foreign commerce of,
or by 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.
7. Under Rule 13.5 of the Code, Specialist Components may only
invoke a Condition so as to cause the Scheme not to proceed, to
lapse or to be withdrawn where the circumstances which give rise to
the right to invoke the Condition are of material significance to
Specialist Components in the context of the Proposals. The
Conditions contained in section 1 above are not subject to Rule
13.5 of the Code.
8. APC Shares will be acquired pursuant to the Offer fully paid
with full title guarantee and free from all liens, charges,
equitable interests, encumbrances, rights of pre-emption and any
third party interests and other rights of any nature whatsoever and
together with all rights now or hereafter attaching thereto,
including voting rights and the right to receive and retain in full
all dividends and other distributions (if any), and any other
return of capital (whether by way of reduction of share capital or
share premium account or otherwise), declared, made or paid on or
after the date of this Announcement.
9. If, on or after the date of this Announcement and before the
Effective Date, any dividend and/or other distribution and/or other
return of capital is declared, made or paid or becomes payable in
respect of the APC Shares, Specialist Components reserves the right
to reduce the consideration payable under the terms of the Offer
for the APC Shares by an amount up to the amount of such dividend
and/or distribution and/or return of capital, in which case any
reference in this Announcement or in the Scheme Document to the
consideration payable under the terms of the Offer will be deemed
to be a reference to the consideration as so reduced. To the extent
that any such dividend and/or distribution and/or other return of
capital is declared, made or paid or is payable and it is: (i)
transferred pursuant to the Offer on a basis which entitles
Specialist Components to receive the dividend or distribution and
to retain it; or (ii) cancelled, the consideration payable under
the terms of the Offer will not be subject to change in accordance
with this paragraph. Any exercise by Specialist Components 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.
10. The Scheme will be governed by the laws of England and Wales
and be subject to the jurisdiction of the English courts. The
Scheme will also be subject to the applicable requirements of the
Code, the Panel, the London Stock Exchange, the FCA and the AIM
Rules. In addition, it will be subject to the terms and conditions
set out in the Scheme Document.
11. The Proposals will lapse and the Scheme will not proceed if,
prior to the date of the Court Meeting and the General Meeting,
there is a CMA Phase 2 Reference, or if Phase 2 European Commission
proceedings are initiated under Article 6(1) of the European
Council Merger Regulation or if, following a referral of the
Proposals by the European Commission under Article 9(1) of the
European Council Merger Regulation to a competent authority in the
United Kingdom, there is a CMA Phase 2 Reference in respect of the
Proposals, or any matter arising from the Proposals.
Appendix II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated, or the context
otherwise requires, the following bases and sources have been
used:
1. The value attributed to the existing issued share capital of
APC is based upon the 182,627,088 APC Shares in issue on 17
September 2019 (being the last Business Day prior to the date of
this Announcement).
2. Unless otherwise stated, all prices for APC Shares are
closing middle market quotations derived from the AIM Appendix to
the London Stock Exchange's Daily Official List for the particular
date(s) concerned.
3. The volume weighted average price of 8.52 pence per APC Share
over the six month period up to and including 17 September 2019, is
derived from Bloomberg's daily volume weighted average price
data.
4. Unless otherwise stated, the financial information relating
to the APC Group has been extracted or derived (without material
adjustment) from APC's audited consolidated financial statements
for the financial year ended 31 August 2018 and unaudited interim
results for the half year ended 28 February 2019, prepared in
accordance with IFRS.
5. All information relating to Specialist Components has been
provided by persons duly authorised by the Specialist Components
Board.
6. All information relating to Harwood Capital LLP, Oryx and the
Harwood Funds has been extracted from published sources and/or
provided by persons duly authorised by Harwood Capital LLP, Oryx
and the Harwood Funds.
7. The maximum cash consideration payable under the Proposals is
based on the Offer Price and the 182,627,088 APC Shares in issue on
17 September 2019 (being the last Business Day prior to the date of
this Announcement).
Appendix III
DETAILS OF IRREVOCABLE UNDERTAKINGS
1. Irrevocable undertakings
APC Directors
The APC Directors have given irrevocable undertakings to vote in
favour of the Scheme at the Court Meeting and the special
resolution to be proposed at the General Meeting (or if Specialist
Components exercises its right to structure the Offer as a Takeover
Offer, to accept or procure the acceptance of such Offer) as
follows:
Name of APC Director Number of APC Shares Percentage of APC's Percentage of
to which undertaking existing issued APC Shares entitled
relates ordinary share to vote at the
capital Court Meeting*
Tony Lochery 4,915,214 2.69% 2.83%
Richard Hodgson 3,300,000 1.81% 1.90%
Phillip Lancaster 1,008,600 0.55% 0.58%
Total 9,223,814 5.05% 5.31%
* - assuming that no additional APC Shares are issued prior to
the Court Meeting pursuant to options outstanding under the APC
Share Option Schemes and given that Oryx is not a Voting Scheme
Shareholder.
These irrevocable undertakings cease to be binding on the date
the Scheme (or the Takeover Offer) becomes Effective, or prior to
that date if:
(i) this Announcement had not been released by 8.00 a.m. (UK
time) on 20 September 2019 or such later date as Specialist
Components and APC may have agreed;
(ii) the Scheme Document (or the formal document containing the
terms of the Offer, if applicable) has not been published within 28
days of the date of release of this Announcement (or within such
longer period as the Panel may agree); or
(iii) the Offer lapses or is withdrawn on or before 31 December
2019, except if:
a. the Offer is withdrawn or lapses as a result of Specialist
Components exercising its right to implement the Offer by way of a
Takeover Offer rather than by way of a Scheme or vice versa; or
b. if a new, revised or replacement scheme of arrangement
pursuant to Part 26 of the Companies Act 2006 or a Takeover Offer
is or has been announced by Specialist Components, in accordance
with Rule 2.7 of the Code, within 10 Business Days after any such
lapse or renewal.
Institutional and other APC Shareholders
The following APC Shareholders have given irrevocable
undertakings to vote in favour of the Scheme at the Court Meeting
and the resolutions to be proposed at the General Meeting (or if
Specialist Components exercises its right to structure the Offer as
a Takeover Offer, to accept or procure the acceptance of such
Offer) as follows:
Name of APC Shareholder Number of APC Percentage Percentage
Shares to which of APC's existing of APC Shares
undertaking issued ordinary entitled to
relates share capital vote at the
Court Meeting*
Canaccord Genuity Group
Inc. (incorporating Hargreave
Hale Limited) 26,733,623 14.64% 15.40%
Rockridge Investments SA 20,900,000 11.44% 12.04%
Roger Robinson and related
family trusts 10,093,136 5.53% 5.81%
TOTAL: 57,726,759 31.61% 33.25%
* - assuming that no additional APC Shares are issued prior to
the Court Meeting pursuant to options outstanding under the APC
Share Option Schemes and given that Oryx is not a Voting Scheme
Shareholder.
These irrevocable undertakings cease to be binding on the date
the Scheme (or the Takeover Offer) becomes Effective, or prior to
that date if:
(i) this Announcement had not been released by 8.00 a.m. (UK
time) on 20 September 2019 or such later date as Specialist
Components and APC may have agreed;
(ii) the Scheme Document (or the formal document containing the
terms of the Offer, if applicable) has not been published within 28
days of the date of release of this Announcement (or within such
longer period as the Panel may agree);
(iii) any third party makes an offer to acquire the entire
issued and to be issued ordinary share capital of APC (not already
owned by such party) which values each APC Share at a price which
is at least 10 per cent. higher than the Offer Price (a "Higher
Competing Offer") provided that by 1.00 p.m. on the tenth Business
Day after the day on which the Higher Competing Offer is made,
Specialist Components has not announced a revised offer for the
entire issued and to be issued ordinary share capital of APC under
Rule 2.7 of the Code which is no less favourable than the Higher
Competing Offer; or
(iv) the Offer lapses or is withdrawn on or before 31 December
2019, except if the Offer is withdrawn or lapses as a result of
Specialist Components exercising its right to implement the Offer
by way of a Takeover Offer rather than by way of a Scheme or vice
versa.
APPIX IV
DEFINITIONS
The following definitions apply throughout this Announcement
unless the context requires otherwise:
"AIM" AIM, a market operated by the London Stock
Exchange;
"AIM Rules" the AIM Rules for Companies published by the
London Stock Exchange (as amended from time
to time);
"Announcement" this announcement including its Appendices
made pursuant to Rule 2.7 of the Code dated
18 September 2019;
"APC" or the "Company" APC Group plc, a public limited company incorporated
in England and Wales with registered number
01635609 whose registered office is at 6 Stirling
Park, Laker Road, Rochester, Kent, England,
ME1 3QR;
"APC Directors" the board of directors of APC as at the date
of this Announcement;
"APC Group" APC and its subsidiary undertakings;
"APC Share Option the Company's Long Term Incentive Plan, 2003
Schemes" Employee Share Option Scheme and 2013 Employee
Share Option Scheme;
"APC Shareholders" registered holders of APC Shares from time
to time;
"APC Shares" the ordinary shares of 2 pence each in the
capital of the Company;
"Appendices" the appendices to this Announcement;
"Articles" the articles of association of APC and "Article"
shall mean any article of those Articles;
"Authorisations" regulatory authorisations, grants, orders,
recognitions, confirmations, arrangement, consents,
licences, clearances, certificates, permissions,
exemptions or approvals;
"Bloomberg" Bloomberg L.P., a financial software services,
news and data company;
"Board" the board of directors of APC or Specialist
Components (as applicable) and the terms "APC
Board" and "Specialist Components Board" shall
be construed accordingly;
"Business Day" a day (other than a Saturday, Sunday or UK
public holiday) on which clearing banks in
the City of London are open for the transaction
of general commercial business;
"Cash Consideration" the cash consideration offered to Scheme Shareholders
under the terms of the Offer;
"certificated" or the description of a share or other security
"in certificated form" which is not in uncertificated form (that is,
not in CREST);
"Closing Price" the closing middle market price of an APC Share
on a particular trading day as derived from
the AIM Appendix to the Daily Official List
for that trading day;
"CMA Phase 2 Reference" a reference of the Offer to the chair of the
Competition and Markets Authority 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 in the
UK issued by the Panel;
"Companies Act 2006" the Companies Act 2006 (as amended from time
to time);
"Competition and Markets a UK statutory body established under the Enterprise
Authority" and Regulatory Reform Act 2013;
"Conditions" the conditions to implementing the Proposals
(including the Scheme) as set out in Appendix
I to this Announcement and to be set out in
the Scheme Document;
"Confidentiality Agreement" the confidentiality agreement entered into
by APC and Harwood Capital LLP on 19 July 2019
in respect of confidential information relating
to APC;
"Court" the High Court of Justice in England and Wales;
"Court Meeting" the meeting of Voting Scheme Shareholders to
be convened by order of the Court pursuant
to section 896 of the Companies Act 2006, notice
of which will be set out in the Scheme Document,
for the purpose of considering and, if thought
fit, approving the Scheme (with or without
amendment), including any adjournment or reconvening
thereof;
"CREST" the computerised settlement system (as defined
in the CREST Regulations) operated by Euroclear
UK & Ireland Limited which facilitates the
transfer of title to shares in uncertificated
form;
"CREST Regulations" the Uncertificated Securities Regulations 2001
(SI2001 No. 3755), including (i) any enactment
or subordinate legislation which amends or
supersedes those regulations and (ii) any applicable
rules made under those regulations or any such
enactment or subordinate legislation for the
time being in force;
"Daily Official List" the Daily Official List published by the London
Stock Exchange;
"Dealing Disclosure" has the same meaning as in Rule 8 of the Code;
"Effective" the Scheme having become effective pursuant
to and in accordance with its terms, or, if
Specialist Components elects and the Panel
consents to implement the Offer by way of a
Takeover Offer, when the Takeover Offer is
declared or becomes unconditional in all respects
in accordance with the requirements of the
Code;
"Effective Date" the date on which the Scheme becomes Effective
in accordance with its terms, or, if Specialist
Components elects and the Panel consents to
implement the Offer by way of a Takeover Offer,
the date on which the Takeover Offer is declared
or becomes unconditional in all respects in
accordance with the requirements of the Code;
"Fairly Disclosed" as publicly announced by or on behalf of APC
through (i) a Regulatory Information Service
on or before the date of this Announcement,
(ii) the publication of such information on
the main website maintained by APC before the
date of this Announcement, (iii) filings made
with the Registrar of Companies and appearing
on APC's or any member of the Wider APC Group's
file at Companies House within the last two
years, (iv) in this Announcement, or (v) as
otherwise fairly disclosed by any member of
the APC Group or any of its professional advisers,
including any of its legal advisers and any
of its financial advisers, to a member of the
Specialist Components Group or any of its professional
advisers, including to any of its legal advisers
and any of its financial advisers, before the
date of this Announcement (including all matters
fairly disclosed in the written replies, correspondence,
documentation and information provided in an
electronic data room created by or on behalf
of APC or sent to any member of the Specialist
Components Group or any of its professional
advisers during the due diligence process and
whether or not in response to any specific
request for information made by any member
of the Specialist Components Group or any of
its professional advisers);
"Financial Conduct the Financial Conduct Authority in its capacity
Authority" or "FCA" as the competent authority for the purposes
of Part VI of the FSMA, including its successor(s)
from time to time;
"Forms of Proxy" the form of proxy for use at the Court Meeting
and the form of proxy for use at the General
Meeting, which will accompany the Scheme Document,
and "Form of Proxy" means either of them;
"FSMA" the Financial Services and Markets Act 2000
(as amended from time to time);
"General Meeting" the general meeting of APC Shareholders to
be convened in connection with the Proposals,
and any adjournment thereof, notice of which
will be set out in the Scheme Document;
"Harwood Capital LLP" Harwood Capital LLP, a limited liability partnership
incorporated in England and Wales under the
Limited Liability Partnerships Act 2000 under
registered number OC304213;
"Harwood Capital Management" Harwood Capital Management Limited, a company
incorporated in England and Wales under registration
number 07667924 with limited liability having
its registered office at 6 Stratton Street,
London W1J 8LD;
"Harwood Capital Management Harwood Capital Management and its subsidiaries;
Group"
"Harwood Funds" certain discretionary investment management
and/or advisory clients of Harwood Capital
LLP, including, inter alia, HPE IV and NASCIT;
"HPE IV" Harwood Private Equity IV L.P., a limited partnership
registered in England and Wales on 9 October
2014 under registration number LP016260;
"IFRS" International Financial Reporting Standards
as adopted by the European Union;
"Internet of Things" the interconnection via the internet of computing
devices embedded in everyday objects, enabling
them to send and receive data;
"LED" light-emitting diode;
"London Stock Exchange" London Stock Exchange plc, a public company
incorporated in England and Wales under number
02075721, together with any successors thereto;
"Longstop Date" means 31 December 2019, or such later date
(if any) as Specialist Components and APC may
agree and (if required) the Panel and the Court
may allow;
"Main Market" the main market of the London Stock Exchange;
"Meetings" together, the Court Meeting and the General
Meeting;
"NASCIT" North Atlantic Smaller Companies Investment
Trust Plc, whose shares are traded on the Main
Market, whose registered number is 01091347;
"Neville Registrars" Neville Registrars Limited, the Receiving Agent;
"Offer" the recommended offer of 10 pence in cash to
be made by Specialist Components for the entire
issued and to be issued share capital of APC
on the terms and conditions to be set out in
the Scheme Document (or if Specialist Components
elects (subject to the consent of the Panel)
in the offer document relating to the Takeover
Offer), including, where the context so requires,
any subsequent revision, variation, extension
or renewal of such offer;
"Offer Period" the offer period (as defined by the Code) relating
to APC, which commenced on 18 September 2019,
being the date of this Announcement, and ending
on the Effective Date;
"Offer Price" 10 pence per APC Share;
"Opening Position has the same meaning as in Rule 8 of the Code;
Disclosure"
"Oryx" Oryx International Growth Fund Limited, a closed-ended
investment company incorporated in Guernsey,
whose shares are traded on the Main Market,
whose registered number is GG28917;
"Overseas Shareholders" APC Shareholders (or nominees of, or custodians
or trustees for, APC Shareholders) not resident
in, or nationals or citizens of, the United
Kingdom;
"Panel" the Panel on Takeovers and Mergers in the UK;
"pence", "penny" or UK pence sterling, the lawful currency of the
"p" United Kingdom;
"pounds" or "GBP" UK pounds sterling, the lawful currency of
the United Kingdom;
"Proposals" the Scheme and the other matters related to
the Scheme to be considered at the Meetings;
"Receiving Agent" Neville Registrars;
"Registrar of Companies" the Registrar of Companies in England and Wales
within the meaning of the Companies Act 2006;
"Regulatory Information a primary information provider which has been
Service" approved by the FCA to disseminate regulated
information and is included in the list maintained
on the London Stock Exchange's website;
"Relevant Authority" any central bank, government or governmental,
quasi-governmental, supranational, statutory,
regulatory, environmental, administrative,
fiscal or investigative body, court, trade
agency, association, institution, environmental
body, employee representative body or any other
body or person whatsoever in any jurisdiction;
"Restricted Jurisdiction" the United States, Australia or any other jurisdiction
where making the Offer or making information
concerning the Offer available may (i) constitute
a violation of the relevant laws or regulations
of such jurisdiction, or (ii) result in the
requirement to comply with any governmental
or other consents or any registration, filing
or other formality which Specialist Components
and APC regard as unduly onerous;
"Rule" a rule of the Code;
"Scheme" the proposed scheme of arrangement under Part
26 of the Companies Act 2006 between APC and
each Scheme Shareholder (the full terms and
conditions of which will be set out in the
Scheme Document), with or subject to any modification,
addition thereto or condition approved or imposed
by the Court and agreed to by APC and Specialist
Components;
"Scheme Court Hearing" the hearing by the Court of the petition to
sanction the Scheme;
"Scheme Court Order" the order of the Court sanctioning the Scheme
under section 899 of the Companies Act 2006;
"Scheme Document" the formal document to be sent to APC Shareholders
containing, inter alia, the Scheme, an explanatory
statement in compliance with Part 26 of the
Companies Act 2006 and the notices convening
the Meetings;
"Scheme Record Time" the date and time to be specified in the Scheme
Document by reference to which the Scheme will
be binding on the holders of APC Shares;
"Scheme Shareholders" the holders of Scheme Shares;
"Scheme Shares" all APC Shares which are:
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme
Document but before the Voting Record Time;
and
(c) (if any) issued on or after the Voting
Record Time but prior to the Scheme Record
Time, on terms that the original or subsequent
holder shall be bound by the Scheme, or in
respect of which the original or any subsequent
holder agrees in writing to be bound by the
Scheme,
which in each case remain in issue at the Scheme
Record Time, but excluding any APC Shares registered
in the name of Specialist Components or held
by APC in treasury;
"Shore Capital" Shore Capital and Corporate Limited, the financial
adviser and nominated adviser to APC or Shore
Capital Stockbrokers Limited, the broker to
APC, as the context requires;
"Specialist Components" Specialist Components Limited, a company incorporated
in England and Wales under registration number
12210077 with limited liability having its
registered office at 6 Stratton Street, London
W1J 8LD;
"Specialist Components the board of directors of Specialist Components,
Directors" as at the date of this Announcement;
"Specialist Components Specialist Components and its direct and indirect
Group" holding companies (including, for the avoidance
of doubt, the Harwood Funds);
"Specialist Components ordinary shares of GBP1 each in the capital
Ordinary Shares" of Specialist Components;
"Specialist Components the five per cent. fixed rate GBP27,500,000
PIK Loan Notes" nominal amount unsecured loan notes, to be
issued on the terms of the Specialist Components
PIK Loan Note Instrument;
"Specialist Components the instrument constituting the Specialist
PIK Loan Note Instrument" Components PIK Loan Notes, to be executed by
Specialist Components on or shortly after the
Scheme becoming Effective;
"Strand Hanson" Strand Hanson Limited, the financial adviser
to Specialist Components and Harwood Capital
LLP;
"Subscription Agreement" the agreement made between (i) Specialist Components,
(ii) Harwood Capital LLP and (iii) NASCIT,
dated 17 September 2019;
"Takeover Offer" as defined in section 974 of the Companies
Act 2006;
"uncertificated" or recorded on the relevant register of the share
"in uncertificated or security concerned as being held in uncertificated
form" form in CREST and title to which, by virtue
of the CREST Regulations, may be transferred
by means of CREST;
"United Kingdom" or the United Kingdom of Great Britain and Northern
"UK" Ireland;
"United States", "USA" the United States of America, its territories
or "US" and possessions, any state of the United States
of America, the District of Columbia and all
areas subject to its jurisdiction or any political
sub-division thereof;
"US$" or "US Dollars" US dollars, the currency of the United States;
"US Exchange Act" the US Securities Exchange Act of 1934, as
amended from time to time, and the rules and
regulations thereunder;
"Voting Record Time" the date and time to be specified in the Scheme
Document by reference to which entitlement
to vote at the Court Meeting will be determined;
"Voting Scheme Shareholders" the holders of Scheme Shares (other than Oryx,
which will confirm its approval of, and agreement
to be bound by, the Scheme by way of a letter
of confirmation);
"Wider Specialist the Specialist Components Group and associated
Components Group" undertakings of Specialist Components and any
other body corporate, partnership, joint venture
or person in which members of the Specialist
Components Group (aggregating their interests)
have an interest of more than 20 per cent.
of the voting or equity capital or the equivalent;
and
"Wider APC Group" the APC Group and associated undertakings of
APC and any other body corporate, partnership,
joint venture or person in which members of
the APC Group (aggregating their interests)
have an interest of more than 20 per cent.
of the total voting rights or equity share
capital or the equivalent.
For the purposes of this Announcement, "subsidiary", "subsidiary
undertaking", "parent undertaking", "undertaking" and "associated
undertaking" have the respective meanings given thereto by the
Companies Act 2006.
All references to "GBP", "pounds", "pounds Sterling",
"Sterling", "GBP", "pence", "penny" and "p" are to the lawful
currency of the United Kingdom.
All times referred to in this Announcement are UK times unless
otherwise stated.
In this Announcement, references to the singular include the
plural and vice versa, unless the context otherwise requires and
words importing the masculine gender shall include the feminine or
neutral gender.
All references to legislation in this Announcement are to
English legislation unless the contrary is stated.
Any references to any provision of any legislation shall include
any amendment, modification, re-enactment or extension thereof.
END
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END
OFFSFUESWFUSESU
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September 18, 2019 02:01 ET (06:01 GMT)
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