RNS Number : 6174U
Alterian PLC
16 May 2008
The following announcement is an advertisement and not a prospectus and Alterian Shareholders and Mediasurface Shareholders should not
make any investment decision in relation to Alterian Shares except on the basis of the information in the Offer Document and Prospectus
which are proposed to be published by Alterian in due course
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
Embargoed until 7.00 a.m. on 16 May 2008
16 May 2008
RECOMMENDED OFFER
by
Alterian plc
for
Mediasurface plc
Summary of the Offer
* The boards of Alterian and Mediasurface are today pleased to announce that they have reached
agreement on the terms of a recommended offer by Alterian to acquire the entire issued and to be issued share capital of Mediasurface.
* The Offer will be on the basis of 9 pence in cash and 0.0375 of a Consideration Share for
each Mediasurface Share.
* The Offer values the entire issued and to be issued share capital of Mediasurface at approximately £18.1
million and each Mediasurface Share at 15 pence (based on the Closing Price of 160 pence per Alterian Share on 15 May 2008),
representing a premium of 150.0 per cent. to the Closing Price of 6 pence per Mediasurface Share on 23 April 2008 (being the last business
day prior to the commencement of the Offer Period).
* In order to fund the cash element of the Offer, Alterian has arranged a Placing and an Open Offer of
8,796,928 New Alterian Shares at 150 pence per Alterian Share to raise approximately £13.2 million before expenses. The Placing and
Open Offer has been fully underwritten by Investec.
* Alterian has been developing its software capability for online marketing and the Alterian Directors
believe that Mediasurface will be a strategic acquisition to enhance the Company's online marketing software offering as well as
providing a number of additional benefits.
* The Mediasurface Directors, who have been so advised by KBC Peel Hunt, consider the terms of the
offer to be fair and reasonable. In providing advice to the Mediasurface Directors, KBC Peel Hunt has taken into account the
Mediasurface Directors' commercial assessment of the Offer. The Mediasurface Directors intend to recommend unanimously that Mediasurface
Shareholders accept the Offer as the Mediasurface Directors have irrevocably undertaken to do so in respect of their own beneficial holdings
in Mediasurface comprising, in aggregate, 13,164,398 Mediasurface Shares, representing in aggregate approximately 11.2 per cent. of the
existing issued share capital of Mediasurface.
* In addition, Alterian has received irrevocable undertakings to accept the Offer from Elderstreet and
certain institutional shareholders of Mediasurface in respect of approximately 35.5 per cent. of the existing issued share capital of
Mediasurface. Accordingly, Alterian has received irrevocable undertakings to accept the Offer in respect of 54,926,920 Mediasurface Shares
in aggregate, representing approximately 46.6 per cent. of the existing issued share capital of Mediasurface.
* The Alterian Board, which has been so advised by Investec, considers the matters proposed in the
Resolutions to be in the best interests of Alterian and the Alterian Shareholders taken as a whole. In providing advice to the Alterian
Directors, Investec has taken into account the Alterian Board's commercial assessment of such matters. Accordingly, the Alterian Board
intends unanimously to recommend that Alterian Shareholders vote in favour of the Resolutions as each Alterian Director intends to do in
respect of his own beneficial holding in Alterian, representing, in aggregate, approximately 15.3 per cent. of the existing issued share
capital of Alterian.
* Alterian and Mediasurface have today seperately announced their preliminary and interim results
respectively.
The conditions and certain terms of the Offer are set out in the attached Announcement together with certain information on Mediasurface
and on Alterian. Further information on the Offer, Alterian, Mediasurface, the New Alterian Shares and the expected timetable of principal
events will be set out in the Prospectus and the Offer Document which will be published in due course. This summary should be read in
conjunction with, and is subject to, the full text of the following Announcement. Appendix II of the following Announcement contains the
sources and bases of certain information used in this summary and in the following Announcement. Appendix III of the following Announcement
contains definitions of certain terms used in this summary and the following Announcement.
Commenting on the Offer, Keith Hamill, Chairman of Alterian, said:
"Alterian has been making good progress with market acceptance of its technology, expanding distribution and product development in a
rapidly growing segment of the marketing sector. Alterian have also successfully integrated a number of acquisitions which have broadened
our product base. The results of this work are now starting to come through. The acquisition of Mediasurface will add complementary
technology and products which, when integrated will further broaden the Alterian product base and significantly increase the proportion of
revenues arising from the online sector. Mediasurface products will also benefit from Alterian's strong sales distribution in North America.
This is an important strategic development for Alterian which the Board considers will accelerate its success."
Commenting on the Offer, Michael Jackson, Chairman of Mediasurface, said:
"This transaction represents a very good deal for Mediasurface and its shareholders. When I took on additional responsibilities as
executive chairman last autumn, I became more convinced than ever of the strength of Mediasurface's products, operations and management
team, and I am delighted to have found an ideal new parent in Alterian who also recognise those qualities. It is a natural fit, both in
terms of products and geography, and I look forward to the combined company enjoying considerable future success. The last year has been a
challenging one for Mediasurface but the management team deserves great credit for demonstrating the underlying strength of the business and
delivering a substantial turnaround. Since it was founded, Mediasurface has been at the forefront of web content management software and
website management, and I believe that Alterian is now the right partner to build on that success and deliver future growth."
ENQUIRIES
Alterian
David Eldridge Tel: + 44 (0) 117 970 3200
David Cutler
Investec Bank (UK) Limited
Andrew Pinder Tel: + 44 (0) 20 7597 5970
Patrick Robb
Daniel Adams
Alterian's PR Advisers: Financial Dynamics
Harriet Keen Tel: +44 (0) 20 7269 7280
Haya Chelhot Tel: +44 (0) 20 7831 3113
Mediasurface
Lawrence Flynn Tel: + 44 (0) 1635 262 000
David Deacon
KBC Peel Hunt Ltd
Oliver Scott Tel: + 44 (0) 207 418 8900
Nicholas Marren
Mediasurface's PR Advisers: The Communication
Group
Richard Evans Tel: + 44 (0) 207 630 1411
Kit Bingham
A presentation to analysts will be held via conference call at 10.30 a.m. today, 16 May 2008,
The Offer Document, the Prospectus, the Circular and (in the case of Mediasurface Shares held in certificated form) the Form of
Acceptance will be posted to Mediasurface Shareholders as soon as practicable and, in any event, except with the consent of the Panel,
within 28 days of this Announcement, other than in relation to a Restricted Jurisdiction and the Open Offer will remain open for acceptance
for a further 15 business days thereafter.
The Mediasurface Directors accept responsibility for the information contained in this Announcement relating to Mediasurface and its
subsidiaries, themselves and their immediate families and connected persons. The Alterian Directors accept responsibility for all of the
other information contained in this Announcement. To the best of the knowledge and belief of the Alterian Directors and the Mediasurface
Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Announcement for which they
are respectively responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Investec Bank (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority is acting
exclusively for Alterian and no one else in connection with the Offer and Issue and will not be responsible to anyone other than Alterian
for providing the protections afforded to clients of Investec Bank (UK) Limited or for providing advice in connection with the Offer or the
Issue.
KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively
for Mediasurface and no one else in connection with the Offer and will not be responsible to anyone other than Mediasurface for providing
the protections afforded to clients of KBC Peel Hunt Ltd nor for providing advice in relation to the Offer.
The release, publication or distribution of the following announcement in jurisdictions other than the United Kingdom may be restricted
by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves
about, and observe, any applicable requirements. The following announcement has been prepared in accordance with English law, the Code and
the Disclosure and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance
with the laws of jurisdictions outside England.
This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or the solicitation of any
vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely by means of the Offer Document, an
advertisement to be published in the London Gazette and the Form of Acceptance (in respect of certificated Mediasurface Shares), which will
contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any acceptance or other response to
the Offer should be made only on the basis of the information in the Offer Document, the Form of Acceptance (in the case of certificated
Mediasurface Shares) and the Prospectus.
Unless otherwise determined by Alterian and permitted by applicable law and regulation, the Offer will not be made, directly or
indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction
(including the United States, Canada, Australia or Japan) and the Offer will not be capable of acceptance by any such use, means,
instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement are not being, and must not
be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons
receiving this Announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from a Restricted Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. The availability of the Offer to persons who are 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.
The New Alterian Shares to be issued in connection with the Offer and the Issue have not been, nor will they be, registered under the
US Securities Act or under the securities laws of any state of the United States; the relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the New Alterian Shares have been, nor will they
be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada,
Australia or Japan. Accordingly, the New Alterian Shares are not being and may not be (unless an exemption under relevant securities laws is
applicable) offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United
States, Canadian, Australian or Japanese person.
Applications will be made to the UK Financial Services Authority and the London Stock Exchange for the New Alterian Shares to be
admitted to listing on the Official List and to trading on the London Stock Exchange's market for listed securities respectively.
The New Alterian Shares are not being offered to the public by means of the following Announcement.
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more
of any class of "relevant securities" of Mediasurface or Alterian all "dealings" in any "relevant securities" of that company (including by
means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than
3.30 p.m. on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the
Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise
ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of Mediasurface or Alterian, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Mediasurface or Alterian by Alterian or
Mediasurface, or by any of their respective "associates", must be disclosed by no later than 12.00 noon on the business day following the
date of the relevant transaction (unless the "dealing" is for discretionary clients and the associate is an "exempt fund manager" in which
case the "dealing" must be privately disclosed in accordance with Notes 4(b) and 5(b) to Rule 8 of the Code).
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of
securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.
Terms in quotations marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to the
application of Rule 8 of the Code to you, please contact an independent financial adviser authorised under the Financial Services and
Markets Act 2000 (as amended), consult the Panel's website or contact the Panel on telephone number +44 (0) 20 7382 9026 or fax +44 (0) 20
7638 1554. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the Code, you should
consult the Panel.
If you are in any doubt about the action you should take, you are recommended to seek your own personal financial advice immediately
from your stockbroker, bank manager, solicitor, accountant or independent financial adviser authorised under the Financial Services and
Market Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent
financial adviser.
Copies of this Announcement can be found at Alterian's and Mediasurface's websites at www.alterian.com and www.mediasurface.com
respectively.
This announcement is an advertisement and not a prospectus and Alterian Shareholders and Mediasurface Shareholders should not make any
investment decision in relation to Alterian Shares except on the basis of the information in the offer document and prospectus which are
proposed to be published by Alterian in due course
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
Embargoed until 7.00 a.m. on 16 May 2008
16 May 2008
RECOMMENDED OFFER
by
Alterian plc
for
Mediasurface plc
1. Introduction
The boards of Alterian and Mediasurface are today pleased to announce the terms of a recommended offer to be made by Alterian, to
acquire the entire issued and to be issued ordinary share capital of Mediasurface.
2. The Offer
The Offer, which will be subject to the conditions and further terms set out in Appendix I to this Announcement, in the Offer Document,
the Prospectus and (in respect of certificated Mediasurface Shares) in the Form of Acceptance, will be made by Alterian, on the following
basis:
for each Mediasurface Share 9 pence in cash
And
0.0375of a Consideration Share
Based on the Closing Price of an Alterian Share of 160 pence on 15 May 2008 (being the last business day prior to the publication of
this Announcement), the Offer values the entire issued and to be issued share capital of Mediasurface at approximately £18.1 million and
each Mediasurface Share at 15 pence.
At 15 pence, the Offer Price represents:
* a premium of approximately 14.2 per cent. to the average Closing Price of 13.1 pence for each
Mediasurface Share for the 12 month period prior to 23 April 2008, being the 12 month period prior to the commencement of the Offer
Period;
* a premium of approximately 150.0 per cent. to the Closing Price of 6.0 pence for each
Mediasurface Share on 23 April 2008, being the last business day prior to the commencement of the Offer Period; and
* a premium of approximately 33.3 per cent. to the Closing Price of 11.25 pence for each
Mediasurface Share on 15 May 2008, being the last business day prior to the publication of this Announcement.
The Offer represents an enterprise value to sales multiple of 1.3 times (on the bases and sources set out in Appendix II of this
Announcement).
Full acceptance of the Offer (on the bases and assumptions set out in Appendix II to this Announcement) would result in the issue of
approximately 4,531,175 Consideration Shares representing approximately 7.9 per cent. of Alterian's Enlarged Issued Share Capital, and a
cash payment of approximately £10.9 million. This payment will be financed out of funds raised by the Issue, further details of which are
set out in paragraph 5 of this Announcement.
Applications will be made to the UK Listing Authority and to the London Stock Exchange for the New Alterian Shares, including the
Consideration Shares, to be admitted to the Official List and to trading on the London Stock Exchange's market for listed securities
respectively.
Fractions of Consideration Shares will not be allotted or issued to persons who accept (or are deemed to accept) the Offer. Instead, any
fractional entitlements will be aggregated and sold in the market with entitlements of less than £3 retained by Alterian.
The Offer is conditional upon, inter alia, the approval by Alterian Shareholders of the Resolutions at the General Meeting of Alterian,
further details of which will be set out in the Circular which will be sent to Alterian Shareholders in due course. Further details of the
Alterian General Meeting are provided in paragraph 18 below.
Details of the conditions and certain further terms of the Offer are set out below and in Appendix I to this Announcement. The expected
timetable of principal events will be set out in the Prospectus, which will be published in due course. Following publication of the Offer
Document, the Prospectus, the Circular and the Form of Acceptance, which except with the consent of the Panel, will be posted within 28 days
of the Announcement, the Open Offer is expected to remain open for application for a further 15 business days.
3. Mix and Match Facility
Mediasurface Shareholders who validly accept the Offer may, subject to availability, elect to vary the proportions in which they receive
Consideration Shares and the cash consideration for their Mediasurface Shares. The maximum number of Consideration Shares and the maximum
amount of cash consideration available under the Offer will not be varied, so that Alterian's ability to satisfy elections by Mediasurface
Shareholders will depend on the extent to which other Mediasurface Shareholders make off-setting elections. To the extent that such
elections cannot be satisfied in full, they will be scaled down on a pro rata basis.
As a result, Mediasurface Shareholders who make an election under the Mix and Match Facility will not necessarily know the exact number
of Consideration Shares or the amount of cash consideration which they will receive until settlement of the consideration under the Offer.
An announcement will be made, when the Offer becomes or is declared unconditional in all respects, of the approximate extent to which
elections under the Mix and Match Facility will be satisfied.
Alterian reserves the right to close the Mix and Match Facility on the first, or any subsequent, closing date of the Offer without
further notice. If the Offer is not then unconditional as to acceptances, Alterian may extend the Mix and Match Facility to a later date. If
the Mix and Match Facility has been closed, Alterian reserves the right to re-introduce a mix and match facility, subject to the rules of
the Code. The Mix and Match Facility will be conditional upon the Offer becoming or being declared unconditional in all respects.
Further terms of the Mix and Match Facility will be set out in the Offer Document.
4. Irrevocable undertakings
The Mediasurface Directors who hold Mediasurface Shares have entered into irrevocable undertakings to accept, or procure the acceptance
of, the Offer in respect of their beneficial interests in Mediasurface Shares amounting, in aggregate, to 13,164,398 Mediasurface Shares,
representing approximately 11.2 per cent. Of the entire existing issued share capital of Mediasurface. All of these undertakings remain
binding, even in the event of a higher competing offer for Mediasurface, unless the Offer lapses or is withdrawn.
In addition, Alterian has received an irrevocable undertaking to accept the Offer from Elderstreet for its entire holding of 20,934,987
Mediasurface Shares representing approximately 17.8 per cent. Of the entire existing issued share capital of Mediasurface. This undertaking
remains binding, even in the event of a higher competing offer for Mediasurface, unless the Offer lapses or is withdrawn.
Alterian has also received undertakings from certain other Mediasurface Shareholders to accept the offer in respect of, in aggregate,
20,827,535 Mediasurface Shares, representing approximately 17.7 per cent of the entire existing issued share capital of Mediasurface. These
undertakings will lapse and be of no effect if, inter alia, the Offer does not become or is not declared wholly unconditional before 16
August 2008 or a competing offer, the consideration under which is equal to or greater than 10 per cent. Of the value of the Offer, is
made.
Accordingly, Alterian has received irrevocable undertakings to accept, or procure acceptance of, the Offer from Mediasurface
Shareholders in respect of, in aggregate, 54,926,920 Mediasurface Shares, representing approximately 46.6 per cent. Of Mediasurface's entire
existing issued share capital.
Further details of these irrevocable undertakings are set out in Appendix II to this Announcement.
5. Information on Alterian and the Issue
5.1 Alterian
(a) Introduction
Alterian is a leading international provider of enterprise marketing management software with its headquarters in Bristol, UK but with a
significant proportion of its operations in North America. The Company employs over 130 staff in the United Kingdom and North America. Since
being admitted to the Official List in 2000, Alterian has grown both organically and through the completion of several acquisitions which
have been successfully integrated into its business in order to extend the Company's market reach and broaden it's product offering.
Alterian's Integrated Marketing Platform helps marketers gain measurable improvement in the results of their activities. It provides
marketers with practical and cost effective insight into their data and the tools to use this to execute an integrated marketing strategy
across both online and offline channels.
The Company has made a substantial investment in it's Integrated Marketing Platform, both through organic development and acquisitions,
to build on it's core marketing analytics engine with marketing execution capabilities and applications to manage the marketing process.
Alterian is highly rated by market researchers Gartner and Forrester as an enterprise marketing platform provider and by Jupiter as an
email marketing platform provider.
Seperately Alterian today announced its preliminary results for the year ended 31 March 2008. Alterian generated revenues for the
financial year ended 31 March 2008 of £19.3m (2007: £14.0 million) and profit before tax of £4.0 million (2007: £2.0 million). Further
financial information in relation to Alterian will be set out in the Prospectus.
(b) Alterian business overview
(i) History and Development
The Alterian business was established in 1997 to take advantage of the rapidly growing demand for marketing analytics software. The
Company was admitted to the Official List in July 2000, enabling the Company to increase its investment in software development and
accelerate distribution particularly in the North American market. The organic growth of the Company has been supported through selective
acquisitions.
The Company's principal markets are North America and the United Kingdom. Alterian entered the North American market in 2000, believing
that this represented the largest market for its products and offering the greatest opportunity for growth.
Alterian recognised that having the right software product was only one part of the key to success. The Company has also developed
relationships with marketing service providers, marketing agencies and system integrators ("Partners"), through which its products are
marketed, sold and implemented. Alterian had a base of 11 Partners at the time of its flotation and has since grown its Partner base to the
current level of over 80, including companies such as Acxiom, Experian, InfoGroup and Merkle.
Until 2005, Alterian had been developing its products purely internally, producing regular revisions and enhancements to its software.
In April 2005, Alterian made its first acquisition, MarkIT Information Services Limited, a specialist in delivering Alterian's marketing
technology as a service via the internet. MarkIT Information Services Limited was bought for a total consideration of £1.1 million. Since
this first acquisition, Alterian has made three others:
* May 2006: Alterian acquired Dynamics Direct, Inc, a US-based provider of email and online marketing software, for a maximum
consideration of US$5.5 million;
* September 2006: Alterian acquired Nvigorate Limited, a provider of marketing operations management, for a total consideration
of £1.5 million; and
* April 2007: Alterian acquired the intellectual property rights to the software product Campaign Calculus 2.0, for an initial
consideration of £0.5 million. Campaign Calculus 2.0 is a marketing optimisation software product.
These acquisitions, which complement Alterian's own continuing organic development, have expanded the Alterian software platform for
email and online marketing, marketing operations management and the optimisation of marketing campaigns. All have been successfully
integrated, and the resulting software products made generally available and sold.
The key developments in the Company's history have been:
* May 1997 * Alterian founded
* During 1998 * Alterian launches initial range of marketing analytics software
* July 2000 * Alterian admitted to the Official List, raising £37.5 million (net of expenses)
* During 2000 * Alterian begins operations in North America to develop distribution in this region
* December 2002 * Alterian launches its first marketing campaign management application
* December 2003 * Alterian launches marketing reporting application
* April 2005 * Alterian acquires MarkIT Information Services Limited
* February 2006 * Alterian announces major expansion of software platform, to include enterprise business reporting,
self-service statistical modelling and high volume campaign execution capability
* May 2006 * Alterian acquires Dynamics Direct, Inc
* September 2006 * Alterian acquires Nvigorate Limited
* April 2007 * Alterian acquires marketing optimisation software product Campaign Calculus 2.0
* June 2007 * Alterian positioned in Gartner*s Enterprise Marketing Management Magic Quadrant
* January 2008 * Alterian included in Forrester*s Enterprise Marketing Platform wave as Strong Performer
* March 2008 * Jupiter designates Alterian as a Market Leader in the Enterprise Email Service Provider market
* May 2008 * Alterian announces that North American revenues now make up more than half of total Company revenues and a record
profit before tax of £4.0 million.
(ii) Products and marketplace
The Alterian Directors believe that Alterian is well positioned to take advantage of the growth in the marketing applications and
technology market. The Alterian Directors believe that this market is growing as a result of, inter alia, the following factors:
* Corporations are seeking customer focus to gain competitive advantage. In highly competitive market places, companies view
optimising the customer experience as the key strategy for creating sustainable competitive advantage.
* Role of the marketing organisation is expanding and becoming analytically led. As companies evolve from undertaking
mass-marketing to customer-focused marketing, the focus of marketing is shifting from creative to analytical, encompassing visibility,
metrics and accountability of spend. Whilst still accountable for traditional brand building, marketing is now driving business model and
market strategy development, product and service offerings and customer loyalty and service plans.
* Marketing efforts need to be integrated, including database and online strategies, to increase efficiency and effectiveness.
Companies have considerably more data and channels than before with the Internet becoming the key channel to and from the customer.
Technology is needed to provide content, analysis, execution and reporting in order to utilise this data, streamline the workflows, and
support customer-focused initiatives.
* Technology can bring the creative and analytical aspects of marketing together. People, processes and technology across all
marketing roles and functions need to be aligned to achieve the best possible return on investment for marketing spend. Whilst the focus was
initially on a suite of marketing applications, it is increasingly turning towards an integrated platform for the marketing department.
(A) Alterian Marketing Services Platform
The Alterian Marketing Services Platform provides the marketer with an integrated set of applications built on top of a single data
infrastructure and accessed through a single user interface or marketing portal. It allows the marketer to analyse customer and prospect
data and create, execute and measure campaigns across multiple integrated communications channels.
· Marketing data infrastructure
The underlying foundation for the Alterian Marketing Services Platform is a "fit-for-purpose" marketing data infrastructure, which makes
all of the data, content and real time feedback available to marketers for analysis and marketing execution activities. By eliminating data
silos and sharing knowledge across functions, marketers benefit from a holistic, high performance view of the information required to
execute analytically-led marketing. This functionality is provided through the Alterian Engine software product.
Wrapped around the marketing data infrastructure are various functions meeting the needs of different marketing users. These functions
include: visualisation and analysis, planning and design, digital marketing, reporting and accountability and operational marketing.
· Visualisation and analysis
The volume and complexity of modern marketing requires innovative methods for understanding data and utilising this knowledge to drive
communications. Alterian places visualisation and analysis tools directly into the hands of marketers for use throughout the marketing
process. The Alterian products in this area are Data Discovery and Visualisation, and Modelling.
· Planning and design
The ability to take action on analysis is paramount for marketers. Alterian's planning and design applications enable marketers to
transform the results of analytical activities into tangible customer contact strategies. The Alterian products in this area are Contact
Optimizer, Campaign Manager and Selection Planner.
· Digital marketing
As contact options proliferate, marketing technology must accommodate the ability to deploy messages across various media, track results
in real time and provide a platform for managing consistent content across channels. The Alterian product in this area is Dynamic
Messenger.
· Reporting and accountability
Marketing is an iterative process and tracking and sharing the results of activities is as important as executing the campaigns
themselves. Alterian's reporting and accountability applications allow marketers to deliver relevant reports across a variety of formats and
media to everyone in the organisation who requires insight into the market department's activities. The Alterian products in this area are
Analytical Reporting and Business Reporting.
· Operational marketing
The pressure to provide return on investment is driving marketing departments to mature beyond tactical point solutions and tie the
entire marketing process together with improved product development processes, faster brief development and integration of planning,
insight, creative development, production and measurement with campaign management. The Alterian product in this area is Organizer.
The benefit of the Alterian Marketing Services Platform being tailored to the needs of the marketer and encompassing analytics and
multi-channel execution is illustrated by the fact that 83 per cent. of marketers are looking for and need "a more comprehensive and
integrated application suite in order to increase their effectiveness*the complexity of delivering consistent customer experiences,
integrating marketing processes and measuring marketing performances means point solutions are no longer sufficient" (Source: Forrester -
The Enterprise Marketing Software Landscape, May 2007).
(B) Partners
Alterian works through its global community of business partners, who add their own domain and service expertise and help organisations
to integrate their marketing processes. Alterian's Partners range from the largest database and list sales organisations such as Acxiom and
Experian, and leading direct marketing agencies, such as Targetbase and WWAV Rapp Collins, to system integrators such as Accenture.
Alterian provides software to these Partners which enables them to deliver closed loop marketing solutions thereby helping their clients
improve the effectiveness of their marketing activity. In total, Alterian-based marketing solutions have been implemented by over 500
organisations worldwide through a channel of over 80 Partners. Alterian's partners include 12 of the top 15 marketing service providers in
the UK and 10 of the top 12 marketing service providers in the US.
(iii) Key strengths
The Alterian Directors believe that Alterian is well placed to meet the trends in the market place and that the Acquisition and the
Issue will help Alterian provide an expanded Integrated Marketing Platform that will enable further incremental growth.
The Directors believe that Alterian has, in particular, the following key strengths:
* a track record of profitability and cash generative growth at an operating level;
* a strong balance sheet;
* significant recurring revenue;
* a proven ability to develop and commercialise differentiated technology;
* strong distribution, including in the strategically important North American market;
* a track record of acquiring and integrating complex businesses in the marketing technology sector of the industry; and
* a stable and experienced management team.
(iv) Strategy
Over 120 new end user organisations purchased Alterian technology in the year to 31 March 2008. The Alterian Directors believe that this
demonstrates strong market acceptance and represents significant opportunities moving forward in a market that continues to grow.
The Alterian Directors believe that Alterian is able to sustain its market leader status by continuing to invest in developing the
Integrated Marketing Platform, through its commitment to its global network of over 80 Partners and growing channels of marketing agencies
and system integrators, and by seeking to ensure high levels of success in delivering expected return on investment for end users of the
Alterian technology. In particular, the integration of further capability in the rapidly growing on-line marketing space and associated
distribution partners is a key focus for the Company.
The Alterian Directors intend to grow the Alterian business organically, through both existing and new Partners, and from selective
acquisitions.
5.2 The Issue
The total cash consideration payable to Mediasurface Shareholders pursuant to the Offer will be approximately £10.9 million. In order
to finance the cash consideration element of the Offer, the Company proposes to raise approximately £13.2 million before expenses
(approximately £11.9 million after expenses) through the Issue.
The Issue comprises the Firm Placing of 4,398,464 Issue Shares and the Open Offer of 4,398,464 Issue Shares. The Firm Placing Shares
have been conditionally placed with certain institutional shareholders. The Open Offer is an opportunity for all Alterian Shareholders to
subscribe for Open Offer Shares pro rata to their current holdings. Under the terms of the Open Offer (further details of which will be set
out in the Prospectus), all Qualifying Shareholders are being invited to apply for 1 Open Offer Share for every 10 Alterian Shares held by
them as at close of business at the Record Date. The Open Offer Shares have been conditionally placed with certain institutional
shareholders pursuant to the Placing, subject to a right of recall to satisfy valid applications under the Open Offer.
Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Any resulting fractional
entitlements of Qualifying Shareholders arising under the Open Offer will not be allocated pursuant to the Open Offer, but will be
aggregated and placed for the benefit of Alterian as part of the Issue.
The Issue Price represents a discount of approximately 6.3 per cent. to the Closing Price for Alterian Shares on 15 May 2008 (being the
last business day prior to the date of this Announcement).
The Issue Shares will represent approximately 15.3 per cent. of the Enlarged Issued Share Capital immediately following Admission. The
Issue is conditional, inter alia, upon the passing of the Resolutions, which include Alterian obtaining approval from its shareholders to
disapply statutory pre-emption rights and to grant its board of directors authority to allot the Issue Shares. The Issue, which has been
arranged by Investec, is also conditional upon the Offer becoming or being declared unconditional in all respects (other than the condition
relating to Admission) and upon Admission and has been fully underwritten by Investec at the Issue Price. Further details of the Issue will
be set out in the Prospectus.
The New Alterian Shares will, when issued, rank pari passu in all respects with the Existing Alterian Shares including the right to
receive any dividends and other distributions declared following Admission. Application will be made to the UK Listing Authority for the New
Alterian Shares to be admitted to the Official List and to the London Stock Exchange for the New Alterian Shares to be admitted to trading
on the London Stock Exchange's main market for listed securities.
Investec is satisfied that sufficient resources are available to Alterian to satisfy, in full, the cash consideration payable pursuant
to the Offer.
Further information on Alterian and the Issue will be set out in the Prospectus, which will be published in due course.
6. Financial effects of the Acquisition
The Alterian Directors believe that, taking into account the impact of the Issue, the Acquisition will be earnings per share enhancing
before amortisation and after expected cost savings in the year ending 31 March 2010.
Nothing in this Announcement is intended, or is to be construed, as a profit forecast or to be interpreted to mean that earnings per
Alterian or Mediasurface share for the current or future financial years, or those of the Enlarged Group, will necessarily match or exceed
the historical published earnings per Alterian or Mediasurface share.
7. Information on Mediasurface
7.1 Introduction
Mediasurface develops software used to enable the operation of sophisticated websites by non-technical business users. Mediasurface
provides implementation, training and ongoing support to a range of large organisations in various sectors including media, publishing,
government and finance. Mediasurface software is typically used to run internet, intranet and extranet web applications together with
support for other digital channels such as interactive digital television and WAP sites.
Mediasurface provides a range of Web Content Management solutions offering the ability to create, edit and manage: websites, intranets,
extranets, landing pages, micro-sites, blogs, iDTV, mobile and digital print output. Mediasurface's solutions are provided under the product
names Morello, Immediacy, and Pepperio.
Based in Newbury, the Mediasurface business was established in April 1996. During the period until 2001, Mediasurface has progressively
developed its software capability, expanded sales and operational infrastructure and marketing activities to establish the brand and sales
growth. Mediasurface also successfully raised private equity finance on a number of occasions to support growth prior to Mediasurface's
admission to trading on AIM in August 2004.
Mediasurface has offices in Newbury (which is also the corporate headquarters), Poole, Stanford, (Connecticut, United States), Sydney,
(Australia), the Netherlands and India. All of these offices act as sales offices with the exception of the office in Bangalore, which is a
software development centre.
Mediasurface employs 171 people, of which 46 are involved in sales and 43 in development. In July 2007, Mediasurface concluded the
acquisition of Immediacy Limited for a maximum consideration of approximately £5.8 million which added a new product to Mediasurface's
product portfolio addressing the medium sized enterprise market.
7.2 Mediasurface business overview
Mediasurface develops, markets and implements Web Content Management software that helps businesses take advantage of the capabilities
of the web by transforming the complex task of managing websites into straightforward activities.
Mediasurface has three products - Morello, Immediacy and Pepperio. Each embodies business critical technology which engages the business
user and helps remove the reliance on an IT professional. Mediasurface software empowers creativity and proactivity at all levels. It is
designed to allow IT departments to concentrate on their core responsibilities, free from the burden of day to day website management.
Mediasurface's flagship product, Morello, is a powerful and flexible Web Content Management solution for large enterprises, with clients
such as Astra Zeneca, The Foreign & Commonwealth Office, WWE, The Home Office, Citigroup, ESPN and Cancer Research UK. Morello is designed
to help organisations reduce the risks and costs involved in building and running sophisticated intranets, extranets, websites and other
digital channels. It aims to increase their ability to keep pace with change and assures the quality of the content published.
Immediacy is a sophisticated Web Content Management solution. It enables non-technical users to create and manage content, carry out
administrative tasks and add functionality across their web sites and intranets. Immediacy is widely acknowledged for its outstanding ease
of use and rapid deployment, as well as its ability to extend and integrate sites with other systems.
Pepperio is a one-stop-shop package for smaller businesses allowing them to easily create, manage and maintain a professional company
website. It is a rental solution exclusively offered by Mediasurface's network of accredited Pepperio partners. Pepperio allows smaller
businesses to run a professionally designed website without worrying about hardware, software, connectivity or other technical issues, all
for a fixed monthly fee.
Mediasurface has over 450 customers and markets its products through marketing partners and systems integrators.
Mediasurface's revenues are generated from licenses, implementation and training and software support and maintenance. In respect of the
year ended 30 September 2007, revenue was divided by geographic origin as follows: UK (£8.0 million); Europe (£2.4 million); and US
(£0.9 million).
Licence revenue is generated predominantly through sales of perpetual licences to customers which operate the software.
Mediasurface provides implementation and training services to channel partners and customers normally after the licence sale to assist
them with configuration of the software. Mediasurface adopts a project based approach and provides a rapid implementation methodology
therefore reducing the total cost of ownership for customers.
Mediasurface offers a full software support service for customers and channel partners typically on an annual renewable basis. These
contracts also entitle customers to upgrade previously purchased software modules at no additional licence cost.
In October 2007, Mediasurface announced a trading update for the year ended 30 September 2007 where the results were below market
expectations. Following the cost savings activities that have been implemented by Mediasurface since the trading update was announced in
October 2007, particularly in relation to the Pepperio product line, the Mediasurface Directors are confident that Mediasurface's prospects
are improved and that further progress will be achieved in the forthcoming financial year.
Further financial information on Mediasurface will be set out in the Prospectus.
8. Background to and reasons for the Offer
Alterian has been developing software for online marketing, an area of the market which is growing rapidly, to complement its existing
software for off-line marketing. According to Forrester, the online marketing spend in the US is due to increase from under US$20.0 billion
in 2007 to over US$60.0 billion in 2012 and in the EU from EUR7.0 billion in 2006 to EUR16.0 billion in 2012 (source: "Forrester - US
Interactive Marketing Forecast, 2007 to 2012, 10 October 2007" and "Forrester - European Online Marketing Tops EUR16 Billion in 2012, 12
July 2007" ). Technology is required to underpin marketing activity in these new channels. The Alterian Directors therefore consider this to
be an attractive market in which to operate.
In May 2006, Alterian acquired Direct Dynamics, Inc which provides software for email and marketing. This was the first step in
Alterian's execution of its strategy to enter the online marketing market. The Alterian Directors believe that Mediasurface's technology is
well regarded in the market, with a strong marketing user interface, and have identified Mediasurface as a strategic acquisition to enhance
the Company's online marketing software offering as well as providing a number of additional benefits.
Mediasurface provides Web Content Management software which enables the storage and delivery of content via websites and other
electronic channels. Whilst Web Content Management software can deliver personalised content, it is generally based on rules from other
software and requires significant services investment. Investments in website content management are increasingly being driven by a desire
to improve the customer experience.
The Alterian Directors believe that the benefits to Alterian of acquiring Mediasurface would be as follows:
* further expansion into the rapidly growing market for online marketing software, providing increased scale, visibility and
enhanced credibility with end users and industry analysts;
* the broadening of Alterian's marketing software platform to incorporate websites as an additional supported marketing
channel in addition to Alterian's existing channels of mail, telephone, email and RSS (web feed) formats. Alterian would be integrating
pre-existing analytics, content management and execution across multiple communications channels;
* the provision of a launch pad and customer base for the development of web analytics and web site optimisation software;
* the use of Alterian's strong and growing distribution presence in North America to increase the penetration of
Mediasurface's products in this area. For the year ended 30 September 2007, North American revenue represented just 7.6 per cent. of
Mediasurface's total revenues compared to Alterian's figure of over 50 per cent. for the year ended 31 March 2008;
* the benefit of Mediasurface's relationships with marketing agencies and system integrators to help accelerate Alterian's
penetration into these sales channels and opportunities for cross selling of products;
* the expansion of Alterian's geographic presence, taking advantage of Mediasurface's European and Asia Pacific presence;
* an improved ability to manage growth in research and development costs by utilising Mediasurface's India based research and
development centre; and
* the realisation of other cost savings.
The combination of the two businesses would create an Enlarged Group with, on the basis of the last audited accounts of Alterian and
Mediasurface, annualised revenues of over £30.0 million and which generates approximately 50 per cent. of its revenue from the sale of
online marketing software.
The Alterian Directors estimate that the integration costs of the two businesses would be approximately £1.0 million, which they expect
will achieve savings of approximately £2.0 million on an annual basis. The Alterian Directors also expect to initially reinvest
approximately £1.5 million per annum of these savings to drive new software sales through:
* increased research and development expenditure of approximately £0.5 million per year to realise new products from the
integration (this is in addition to the combined approximately £4 million current annual spend); and
* additional distribution expenditure of approximately £1.0 million per year.
In the longer term, Alterian will seek to integrate fully Mediasurface's products into the Alterian software platform to strengthen the
standalone products, to create a web analytics offering and create a web site optimisation offering.
9. Background and reasons for the Mediasurface Board recommendation
Mediasurface develops, markets and implements Web Content Management software designed to help businesses take advantage of the
capabilities of the internet with the aim of transforming the complex task of managing websites into straightforward activities.
Mediasurface was admitted to trading on AIM in August 2004. The Mediasurface Group's three major product lines are Morello, Immediacy and
Pepperio.
In July 2007, Mediasurface concluded the acquisition of Immediacy Limited which added a new product to Mediasurface's product portfolio
addressing the medium sized enterprise market. Immediacy Limited has enjoyed significant growth in this market sector and this has continued
to be the case post acquisition.
On 18 February 2008, Mediasurface announced increased annual revenues of £11.3 million (2006: £9.7 million) for the year ended 30
September 2007. However an operating loss was recorded of £1.7 million (2006: operating profit £0.7 million) as the environment for
Mediasurface's core product, Morello, became more challenging in the second half of the year, particularly within the financial services
sector which has recently experienced increased uncertainty. Sales of Pepperio products were also lower than expected and whilst the
Mediasurface Directors believe that the long term proposition for Pepperio remains attractive, shorter term expectations have been reset.
As a result of these lower than expected sales, management undertook two phases of significant cost cutting. The first, commencing in
October 2007, centred largely on reducing sales and marketing spend at the Pepperio business unit. The second phase of cost reduction,
commencing in January 2008, was focussed on headcount at Morello, the closure of Mediasurface's California and Chicago offices and an
associated reduction in marketing spend. It is estimated that these combined cost savings will reduce Mediasurface's cost base by
approximately £1.7 million per annum.
The Mediasurface Directors believe that Mediasurface has a strong future as an independent company, particularly as a result of the cost
saving initiatives referred to above. However, they also recognise the benefits of combining the business of Mediasurface with Alterian,
which would increase the capabilities, scale and presence of the Enlarged Group whilst providing an opportunity to accelerate the expansion
of Mediasurface's business in North America through Alterian's US distribution network. Combining the operations of both businesses may also
provide greater operational efficiencies as well. Such a combination would also address some of the challenges that Mediasurface currently
faces as a relatively small publicly quoted company.
Accordingly, the Mediasurface Directors believe that the Offer represents an attractive opportunity for Mediasurface Shareholders both
to realise a significant cash premium to the Closing Price on 23 April 2008 (being the last business day prior to the announcement of the
Offer Period) for a Mediasurface Share for the three months prior to the Announcement and to participate in the prospects of the Enlarged
Group through the Consideration Shares.
10. Alterian current trading, trends and prospects
For the year ended 31 March 2008, Alterian achieved revenue growth of 38 per cent. to £19.3 million (2007: £14.0 million). This
compares to 32 per cent. growth in the prior year. At last year's exchange rate, reported revenue would have been £20.0 million, an
increase of 43 per cent. Profit before tax for the year was £4.0 million (2007: £2.0 million).
The Group's investment programme to expand its distribution channels and product range is showing early success with all new products
released in the period generating revenue, and six new marketing agencies signed as partners. This investment programme and the availability
of integrated products are expected to continue to provide revenue growth in the coming financial year.
During the year Alterian won over 120 new end user clients and by the end of the year, had active relationships with 10 of the top 12
Marketing Services Providers in the United States and 12 of the top 15 marketing services providers in the UK, demonstrating significant
market acceptance and momentum. This, together with high recurring revenues from current contracts and the success of the Group's strategy
in broadening its product offering, place Alterian in a strong position to deliver significant future value. Since the year end, the Group
has continued to trade in line with the Alterian Board's expectations and the Alterian Board views the outlook for the year with
confidence.
11. Dividend policy
The Alterian Directors did not recommend a dividend for the year ended 31 March 2008 and, since its incorporation, Alterian has not paid
any dividends in relation to the Alterian Shares. The Alterian Directors consider that the Alterian Group's cash resources have been better
utilised to create shareholder value by funding growth, both organically and by acquisition. The Alterian Directors intend to continually
review the dividend policy as Alterian evolves.
12. Mediasurface current trading, trends and prospects
In the six months preceding 31 March 2008, Mediasurface achieved reported revenues of £7.1million (2007: £6.1million). The reported
loss before tax was £0.1 million (2007: Profit £0.4 million).
Since the beginning of April 2008, Mediasurface's pipeline of new business has continued to strengthen. As a result of this and the cost
cutting initiatives implemented since October 2007, particularly in relation to the Morello product line, the Mediasurface Directors are
confident that Mediasurface's prospects are improved and that the business will perform in line with management expectations in the current
financial year.
13. Mediasurface litigation
On 6 April 2005, Mediasurface acquired the entire issued share capital of Class-act BV ("Class Act") pursuant to the terms of a sale and
purchase agreement (the "SPA") made between Mediasurface and Van Engelen Verdoorn Holding B.V. ("VEVH") and others (the "Class Act
Acquisition"). The terms of the SPA were governed by the laws of the Netherlands. The consideration payable by Mediasurface for the
acquisition of Class Act was an initial cash payment of EUR100,000, the issue of the placing shares and the granting of options to subscribe
for the option shares (as each such terms are defined in the SPA) together with deferred consideration (if any) (the "Deferred
Consideration") payable over a period of two financial years from the completion of the Class Act Acquisition), subject to certain
performance criteria being fulfilled.
The Deferred Consideration was not paid by Mediasurface on the basis that it did not consider the performance criteria under the SPA to
have been achieved. Pursuant to a summons dated 28 February 2008, VEVH has alleged, inter alia, that Mediasurface has breached its
performance obligations under the SPA and is claiming damages for breach of contract and other related claims in the aggregate sum of up to
EUR1,020,000 (or such other sum as determined by the fairness of the Court), together with associated costs of the proceedings and statutory
interest.
The Mediasurface Directors do not believe that the VEVH claims have any merit and, accordingly, intend to vigorously defend them,
however, there can be no guarantee that such claims will not be successful in whole or in part.
14. Directors, management and employees
Each of the Mediasurface Directors has agreed to resign from the Mediasurface Board, conditional upon, and with effect from the date the
Offer becomes or is declared unconditional in all respects. In this regard, each of Lawrence Flynn and David Deacon (being the only
executive Mediasurface Directors) has entered into a compromise agreement with Mediasurface pursuant to which, inter alia, Mediasurface has
agreed to make certain termination payments to them in connection with their ceasing to be employed by the Mediasurface Group upon the Offer
becoming or being declared unconditional in all respects. Each of Mr Flynn and Mr Deacon has also entered into a consultancy agreement with
Alterian, pursuant to which they will provide certain transitional consultancy services to the Enlarged Group for a period of two months
from one week after the date on which the Offer becomes or is declared unconditional in all respects.
Further details of the arrangements with the Mediasurface Directors will be set out in the Offer Document.
The board of Alterian has given assurances to the Mediasurface Directors that, following the Offer becoming or being declared
unconditional in all respects, the existing employment rights, including pension rights, of all employees of the Mediasurface Group will be
fully safeguarded.
Alterian intends to continue the business of Mediasurface in broadly its current form. There are presently no intentions regarding any
major changes to the business of Mediasurface, the places of business of Mediasurface or to redeploy its fixed assets. There are also
presently no intentions regarding the disposal of Mediasurface or a material part of the business of Mediasurface over the next 12 months.
The Mediasurface Directors have welcomed the assurances received from the Alterian Directors and the Mediasurface Directors have
confirmed that it is their view that these measures are in the best interests of Mediasurface and its employees.
15. Mediasurface Share Option Schemes
The Offer will extend to any Mediasurface Shares which are issued or unconditionally allotted and fully paid (or credited as fully paid)
before the date on which the Offer closes (or, subject to the Code, by such earlier date as Alterian may decide), including Mediasurface
Shares issued pursuant to the exercise of options granted under the Mediasurface Share Option Schemes or otherwise.
To the extent that such options have not been exercised in full, Alterian will make appropriate proposals to the holders of Mediasurface
Options once the Offer becomes or is declared unconditional in all respects.
16. Recommendation
The Mediasurface Directors, having been so advised by KBC Peel Hunt, consider the terms of the Offer to be fair and reasonable. In
providing advice to the Mediasurface Directors, KBC Peel Hunt has taken into account the commercial assessments of the Mediasurface
Directors.
Accordingly, the Mediasurface Directors unanimously recommend Mediasurface Shareholders to accept the Offer as they have irrevocably
undertaken so to do in respect of their own beneficial interests in Mediasurface Shares comprising, in aggregate, 13,164,398 Mediasurface
Shares, representing approximately 11.2 per cent. of Mediasurface's entire existing issued share capital.
17. Disclosure of interests in Mediasurface
Save for the undertakings referred to in paragraph 4 of this Announcement, neither Alterian nor, so far as the Alterian Directors are
aware, any person acting in concert with it, has any interest in or right to subscribe for Mediasurface Shares or has any short position
(including any short positions under a derivative, any agreement to sell or any delivery obligation or right to require another person to
take delivery) in Mediasurface Shares, has borrowed or lent any Mediasurface Shares (save for any borrowed shares which have been either
on-lent or sold) or has any arrangement in relation to Mediasurface Shares. For these purposes, "arrangement" includes any agreement to sell
or any delivery obligation or right to require another person to purchase or take delivery and borrowing or lending of Mediasurface Shares.
An "arrangement" also includes any indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature
relating to Mediasurface Shares which may be an inducement to deal or refrain from dealing in such securities. "Interest" includes any long economic exposure, whether conditional or absolute,
to changes in the price of securities and a person is treated as having an "interest" by virtue of the ownership or control of securities,
or by virtue of any option in respect of, or derivative referenced to, securities.
In the interests of secrecy prior to this Announcement, Alterian has not made any enquiries in this respect of certain parties who may
be deemed by the Panel to be acting in concert with it for the purposes of the Offer. Enquiries of such parties will be made as soon as
practicable following the date of this Announcement and any material disclosure in respect of such parties will be included in the Offer
Document.
18. Further details of the Offer
The Mediasurface Shares to be acquired by Alterian pursuant to the Offer will be acquired fully paid and free from all liens, equities,
charges, encumbrances, rights of pre-emption and other third party rights and interests of any nature whatsoever and together with all
rights now or hereafter attaching thereto, including the right to receive and retain all dividends and other distributions (if any)
declared, paid or made on or after the date of this Announcement.
The Consideration Shares will be issued credited as fully paid and will rank pari passu in all respects with the Existing Alterian
Shares in issue, including the right to receive all dividends and other distributions declared, made or paid after Admission and otherwise
upon a return of capital.
Applications will be made to the UK Listing Authority and to the London Stock Exchange for the Consideration Shares to be admitted to
the Official List and to trading on the London Stock Exchange's market for listed securities respectively.
Fractions of Consideration Shares will not be allotted or issued to persons who accept (or are deemed to accept) the Offer. Instead, any
fractional entitlements will be aggregated and sold in the market with the net proceeds of such sale being distributed to those Mediasurface
Shareholders entitled thereto by cheque. Entitlements of less than £3 will not be distributed but will be retained by Alterian.
There are no agreements or arrangements to which Alterian is a party which relate to the circumstances in which it may or may not invoke
or seek to invoke a condition of the Offer.
19. Alterian Shareholder approval and Prospectus
Owing to its size, the Acquisition constitutes a Class 1 transaction for the purposes of the Listing Rules and therefore the Offer is
conditional, inter alia, on the approval of Alterian Shareholders of the Resolutions at the General Meeting. Authority will also be sought
from Alterian Shareholders to allot the New Alterian Shares and to disapply pre-emption rights in respect of such allotments. Further
details will be set out in the Circular.
Alterian will also be required to publish a prospectus in connection with the issue of the New Alterian Shares. The Prospectus will be
published in due course and will contain information on, inter alia, the Enlarged Group and the New Alterian Shares.
The expected timetable of principal events will be set out in the Prospectus.
20 Overseas Shareholders
Unless otherwise determined by Alterian and permitted by applicable law and regulation, the Offer will not be made, directly or
indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction
(including the United States, Canada, Australia or Japan) and the Offer will not be capable of acceptance by any such use, means,
instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement are not being, and must not
be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons
receiving this Announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from a Restricted Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. The availability of the Offer to persons who are 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. If you are in any doubt about your position, you should consult your legal adviser in the relevant
territory without delay.
The New Alterian Shares to be issued in connection with the Offer and the Issue have not been, nor will they be, registered under the US
Securities Act or under the securities laws of any state of the United States; the relevant clearances have not been, nor will they be,
obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the
Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the New Alterian Shares have not been, nor will
they be, registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of
Canada, Australia or Japan. Accordingly, the New Alterian Shares are not being and may not be (unless an exemption under relevant securities
laws is applicable) offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or
any other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any
United States, Canadian, Australian or Japanese person.
21. Admission and dealings in the New Alterian Shares
Applications will be made to the UK Listing Authority and to the London Stock Exchange for the New Alterian Shares to be admitted to
listing on the Official List and to trading on the London Stock Exchange's market for listed securities, respectively. It is expected that
listing will become effective and that dealings for normal settlement in the New Alterian Shares will commence on the first business day
following the day on which the Offer becomes or is declared unconditional in all respects (save only for the Admission of such shares
becoming effective).
22. Compulsory acquisition, cancellation of admission of Mediasurface Shares to trading on AIM and
re-registration
If Alterian receives acceptances under the Offer in respect of, and/or otherwise acquires, 90 per cent. or more of the Mediasurface
Shares to which the Offer relates and the Offer becomes or is declared unconditional in all respects, Alterian intends to exercise its
rights pursuant to the provisions of sections 974 to 991 (inclusive) of the Companies Act 2006 to acquire compulsorily any outstanding
Mediasurface Shares not acquired or agreed to be acquired pursuant to the Offer or otherwise.
Assuming that the Offer becomes or is declared unconditional in all respects, Alterian intends to procure the making of an application
by Mediasurface to the London Stock Exchange for the cancellation of the admission of the Mediasurface Shares to trading on AIM.
The cancellation of the trading of the Mediasurface Shares will significantly reduce the liquidity and marketability of any Mediasurface
Shares not assented to the Offer and their value may be affected in consequence.
It is also proposed that, in due course, Alterian will seek to procure the re-registration of Mediasurface as a private company under
the relevant provisions of the 2006 Act.
23. Issued share capital
In accordance with Rule 2.10 of the Code, Alterian confirms that it has 43,984,643 Alterian Shares in issue. The International
Securities Identification Number for Alterian Shares is GB0009221044.
In accordance with Rule 2.10 of the Code, Mediasurface confirms that it has 117,806,103 Mediasurface Shares in issue. The International
Securities Identification Number for Mediasurface Shares is GB00B01XYM75.
24. General
The Offer Document, the Prospectus, the Circular and (in the case of Mediasurface Shares held in certificated form) the Form of
Acceptance will be posted to Mediasurface Shareholders as soon as practicable and in any event within 28 days of this Announcement, except
with the consent of the Panel, other than in relation to a Restricted Jurisdiction and the Open Offer will remain open for acceptance for a
further 15 business days thereafter.
The bases and sources of certain financial information contained in this Announcement are set out in Appendix II of this Announcement
and definitions of certain expressions used in this Announcement are contained in Appendix III of this Announcement.
ENQUIRIES
Alterian
David Eldridge Tel: + 44 (0) 117 970 3200
David Cutler
Investec Bank (UK ) Limited
Andrew Pinder Tel: + 44 (0) 20 7597 5970
Patrick Robb
Daniel Adams
Alterian's PR Advisers: Financial Dynamics
Harriet Keen Tel: +44 (0) 20 7269 7280
Haya Chelhot Tel: +44 (0) 20 7831 3113
Mediasurface
Lawrence Flynn Tel: + 44 (0) 1635 262 000
David Deacon
KBC Peel Hunt Ltd
Oliver Scott Tel: + 44 (0) 207 418 8900
Nicholas Marren
Mediasurface's PR Advisers: The Communication
Group
Richard Evans Tel: + 44 (0) 207 630 1411
Kit Bingham
A presentation to analysts will be held via conference call at 10.30 a.m. today, 16 May 2008,
The Offer Document, the Prospectus, the Circular and (in thecase of Mediasurface Shares held in certificated form), the Form of
Acceptance will be posted to Mediasurface Shareholders as soon as practicable and, in any event, except with the consent of the Panel,
within 28 days of this Announcement, other than in relation to a Restricted Jurisdictio and the Open Offer will remain open for acceptance
for a further 15 business days thereafter..
The Mediasurface Directors accept responsibility for the information contained in this Announcement relating to Mediasurface and its
subsidiaries, themselves and their immediate families and connected persons. The Alterian Directors accept responsibility for all of the
other information contained in this Announcement. To the best of the knowledge and belief of the Alterian Directors and the Mediasurface
Directors (who have taken all reasonable care to ensure that such is the case) the information contained in this Announcement for which they
are respectively responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
Investec Bank (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority is acting
exclusively for Alterian and no one else in connection with the Offer and Issue and will not be responsible to anyone other than Alterian
for providing the protections afforded to clients of Investec Bank (UK) Limited or for providing advice in connection with the Offer or the
Issue.
KBC Peel Hunt Ltd, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively
for Mediasurface and no one else in connection with the Offer and will not be responsible to anyone other than Mediasurface for providing
the protections afforded to clients of KBC Peel Hunt Ltd nor for providing advice in relation to the Offer.
This Announcement does not constitute an offer or an invitation to purchase or subscribe for any securities or the solicitation of any
vote or approval in any jurisdiction pursuant to the Offer or otherwise. The Offer will be made solely by means of the Offer Document, an
advertisement to be published in the London Gazette and the Form of Acceptance (in respect of certificated Mediasurface Shares), which will
contain the full terms and conditions of the Offer, including details of how the Offer may be accepted. Any acceptance or other response to
the Offer should be made only on the basis of the information in the Offer Document, the Form of Acceptance (in the case of certificated
Mediasurface Shares) and the Prospectus.
The release, publication or distribution of the following announcement in jurisdictions other than the United Kingdom may be restricted
by law and, therefore, any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves
about, and observe, any applicable requirements. The following announcement has been prepared in accordance with English law, the Code and
the Disclosure and Transparency Rules and information disclosed may not be the same as that which would have been prepared in accordance
with the laws of jurisdictions outside England.
Unless otherwise determined by Alterian and permitted by applicable law and regulation, the Offer will not be made, directly or
indirectly, in or into, or by the use of the mails or by any means or instrumentality (including, without limitation, telephonically or
electronically) of interstate or foreign commerce, or any facility of a national securities exchange, of a Restricted Jurisdiction
(including the United States, Canada, Australia or Japan) and the Offer will not be capable of acceptance by any such use, means,
instrumentality or facility or from within a Restricted Jurisdiction. Accordingly, copies of this Announcement are not being, and must not
be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from a Restricted Jurisdiction and persons
receiving this Announcement (including, without limitation, custodians, nominees and trustees) must not mail or otherwise forward,
distribute or send it in or into or from a Restricted Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. The availability of the Offer to persons who are 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.
The New Alterian Shares to be issued in connection with the Offer have not been, nor will they be, registered under the US Securities
Act or under the securities laws of any state of the United States; the relevant clearances have not been, nor will they be, obtained from
the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian
Securities and Investments Commission or the Japanese Ministry of Finance; and the New Alterian Shares have been, nor will they be,
registered under or offered in compliance with applicable securities laws of any state, province, territory or jurisdiction of Canada,
Australia or Japan. Accordingly, the New Alterian Shares are not being and may not be (unless an exemption under relevant securities laws is
applicable) offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia or Japan or any
other jurisdiction if to do so would constitute a violation of the relevant laws of, or require registration thereof in, such jurisdiction or to, or for the account or benefit of, any United States,
Canadian, Australian or Japanese person.
Applications will be made to the UK Financial Services Authority and the London Stock Exchange for the New Alterian Shares to be
admitted to listing on the Official List and to trading on the London Stock Exchange's market for listed securities respectively.
The New Alterian Shares are not being offered to the public by means of the following Announcement.
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or more
of any class of "relevant securities" of Mediasurface or Alterian all "dealings" in any "relevant securities" of that company (including by
means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than
3.30 p.m. on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the
Offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise
ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of Mediasurface or Alterian, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Mediasurface or Alterian by Alterian or
Mediasurface, or by any of their respective "associates", must be disclosed by no later than 12.00 noon on the business day following the
date of the relevant transaction (unless the "dealing" is for discretionary clients and the associate is an "exempt fund manager" in which
case the "dealing" must be privately disclosed in accordance with Notes 4 (b) and 5(b) to Rule 8 of the Code).
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of
securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities.
Terms in quotations marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to the
application of Rule 8 to you, please contact an independent financial adviser authorised under the Financial Services and Markets Act 2000
(as amended), consult the Panel's website or contact the Panel on telephone number +44 (0) 20 7382 9026 or fax +44 (0) 20 7638 1554. If you
are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8 of the Code, you should consult the Panel.
If you are in any doubt about the action you should take, you are recommended to seek your own personal financial advice immediately
from your stockbroker, bank manager, solicitor, accountant or independent financial adviser authorised under the Financial Services and
Market Act 2000, as amended if you are resident in the United Kingdom or, if not, from another appropriately authorised independent
financial adviser.
Copies of this Announcement can be found at Alterian's and Mediasurface's websites at www.alterian.com and www.mediasurface.com
respectively.
APPENDIX I
CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
The Offer, which will comply with the applicable rules and regulations of the London Stock Exchange, the UK Listing Authority and the
Code and will be governed by English law and subject to the jurisdiction of the courts of England, will be subject to the terms and
conditions set out below, in the Offer Document and (in respect of certificated Mediasurface Shares) in the Form of Acceptance:
(a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by not later than
3.00 p.m. on the 21st day after the making of the Offer or such later time(s) and/or date(s) as Alterian may, with the consent of the
Panel or subject to the Code, decide in respect of not less than 90 per cent. (or such lower percentage as Alterian may decide) in nominal
value of the Mediasurface Shares to which the Offer relates and not less than 90 per cent. (or such lower percentage as Alterian may decide)
of the voting rights carried by the Mediasurface Shares to which the Offer relates, provided that this condition will not be satisfied
unless Alterian and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire (whether pursuant to the Offer or
otherwise), Mediasurface Shares carrying, in aggregate, more than 50 per cent. of the voting rights then normally exercisable at a general
meeting of Mediasurface (including for this purpose, to the extent (if any) required by the Panel, any voting rights attaching to any
Mediasurface Shares which may be unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding
conversion or subscription rights or otherwise). For the purpose of this condition:
(i) the expression "Mediasurface Shares to which the Offer relates'' shall be construed in
accordance with sections 974 to 991 (inclusive) of the 2006 Act;
(ii) Mediasurface Shares which have been unconditionally allotted but not issued shall be deemed
to carry the voting rights which they will carry on issue; and
(iii) valid acceptance shall be treated as having been received in respect of any Mediasurface Shares
that Alterian shall, pursuant to section 979(8) and, if applicable, section 979(9) of the 2006 Act, be treated as having acquired or
unconditionally contracted to acquire by virtue of acceptances of the Offer;
(b) the passing at a General Meeting (or at any adjournment thereof) of Alterian of any resolution or
resolutions which are, in the opinion of Alterian (acting reasonably), necessary to approve, fund, effect and implement the Offer and
the acquisition of Mediasurface and of any Mediasurface Shares;
(c) the UK Financial Services Authority agreeing to admit the New Alterian Shares to the Official List and
(unless the Panel otherwise agrees) such admission becoming effective in accordance with the Listing Rules of the UK Listing Authority
and the London Stock Exchange agreeing to admit the New Alterian Shares to trading on its market for listed securities and (unless the Panel
otherwise agrees) such admission becoming effective in accordance with its admission and disclosure standards subject only to the allotment
of such shares;
(d) to the extent that the acquisition of the Mediasurface Shares would constitute a relevant merger within
the meaning of section 23 of the Enterprise Act 2002, the Office of Fair Trading indicating that it does not intend to refer the
proposed acquisition of Mediasurface by Alterian, or any aspect of it, to the Competition Commission;
(e) no central bank, government or governmental, quasi-governmental, supranational, statutory,
administrative or regulatory body, or any court, institution, investigative body, association, trade agency or professional or
environmental body or any other similar person or body in any jurisdiction (each, a "Relevant Authority'') having decided to take,
institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or enacted, made or proposed any statute,
regulation, decision or order or having taken any other step or done anything and there not continuing to be outstanding any statute,
regulation, decision or order which would or might reasonably be expected to, in each case to an extent which is material in the context of
the Mediasurface Group taken as a whole:
(i) restrict or restrain, prohibit, delay, impose additional adverse conditions or obligations with
respect to, or otherwise interfere with the implementation of, the Offer or the acquisition of any Mediasurface Shares by Alterian or
any matters arising therefrom;
(ii) result in a delay in the ability of Alterian, or render Alterian unable, to acquire some or all of
the Mediasurface Shares;
(iii) require, prevent or delay the divestiture (or alter the terms envisaged for such divestiture) by
any member of the wider Alterian Group or any member of the wider Mediasurface Group of all or any portion of their respective
businesses, assets or properties or impose any limitation on the ability of any of them to conduct their businesses or own their respective
assets or properties or any part thereof;
(iv) impose any limitation on, or result in a delay in, the ability of any member of the wider Alterian
Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership of shares or other securities
of any member of the wider Mediasurface Group or on the ability of any member of the wider Mediasurface Group to hold or exercise
effectively, directly or indirectly, all or any rights of ownership of shares or other securities or to exercise management control over any
other member of the wider Mediasurface Group;
(v) except pursuant to the Code or the 2006 Act, require any member of the wider Alterian Group
or the wider Mediasurface Group to offer to acquire any shares or other securities or rights thereover in any member of the wider
Mediasurface Group owned by any third party;
(vi) make the Offer or its implementation or the proposed acquisition by Alterian of any shares or
other securities in Mediasurface or the acquisition or control of Mediasurface or any member of the wider Mediasurface Group, illegal,
void or unenforceable in or under the laws of any jurisdiction or directly or indirectly restrict or delay, prohibit or otherwise interfere
with the implementation of, or impose additional conditions or obligations with respect to, or otherwise challenge, the Offer or the
acquisition of any shares in Mediasurface, or control of Mediasurface, by Alterian;
(vii) result in any member of the wider Mediasurface Group ceasing to be able to carry on business
under any name under which it presently does so, the consequences of which would be material in the context of the Mediasurface Group
taken as a whole;
(viii) impose any limitation on the ability of any member of the wider Alterian Group or the wider
Mediasurface Group to conduct or co-ordinate or integrate its business, or any part of it, with the business of any other member of the
wider Alterian Group or the wider Mediasurface Group; or
(ix) otherwise adversely affect the business, assets, prospects or profits of any member of the wider
Alterian Group or the wider Mediasurface Group,
and all applicable waiting and other time periods during which any such Relevant Authority could decide to take, institute, implement or
threaten any such action, proceeding, suit, investigation, enquiry or reference or otherwise intervene having expired, lapsed or been
terminated;
(f) all authorisations, orders, grants, recognitions, consents, confirmations, clearances, licences, permissions
and approvals ("authorisations'') required by law in any jurisdiction for or in respect of the Offer and the proposed acquisition of any
shares or securities, directly or indirectly, in, or control of, Mediasurface or any member of the wider Mediasurface Group by any member of
the wider Alterian Group having been obtained in terms and/or form reasonably satisfactory to Alterian from all appropriate Relevant
Authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any member of the wider Alterian
Group or the wider Mediasurface Group has entered into contractual arrangements and such authorisations together with all authorisations
necessary for any member of the wider Mediasurface Group to carry on its business (where the absence of such authorisation would have a
material and adverse effect on the wider Mediasurface Group taken as a whole) remaining in full force and effect and there being no notice
or intimation of any intention to revoke, suspend, materially modify or not to renew the same and all necessary filings having been made, all appropriate waiting and other time periods (including
extensions thereto) under any applicable legislation and regulations in any jurisdiction having expired, lapsed or been terminated and all
necessary statutory or regulatory obligations in any jurisdiction in respect of the Offer or the proposed acquisition of Mediasurface by
Alterian or of any Mediasurface Shares or any matters arising therefrom having been complied with;
(g) save as Disclosed, there being no provision of any agreement, permit, lease, licence or other instrument
to which any member of the wider Mediasurface Group is a party or by or to which it or any of its assets may be bound or subject which,
as a consequence of the making or implementation of the Offer or the acquisition by Alterian directly or indirectly of Mediasurface or
because of a change in the control or management of Mediasurface or any member of the wider Mediasurface Group, could or might reasonably be
expected to result in (in each case to an extent which is material and adverse in the context of the wider Mediasurface Group taken as a
whole):
(i) any monies borrowed by, or other indebtedness (actual or contingent) of, or grant available to,
any member of the wider Mediasurface Group becoming repayable or capable of being declared repayable immediately or earlier than the
stated maturity or repayment date or the ability of any member of the wider Mediasurface Group to borrow moneys or incur indebtedness being
or becoming capable of being withdrawn or inhibited;
(ii) any such agreement, arrangement, permit, lease, licence or other instrument or any right,
interest, liability or obligation of any member of the wider Mediasurface Group therein, being terminated or adversely modified or
affected or any adverse action being taken or any onerous obligation or liability arising thereunder;
(iii) any mortgage, charge or other security interest being created over the whole or any part of the
business, property or assets of any member of the wider Mediasurface Group or any such security (whenever arising) becoming
enforceable;
(iv) the value of any member of the wider Mediasurface Group or its financial or trading position or
prospects being prejudiced or adversely affected;
(v) any assets or interests of any member of the wider Mediasurface Group being or falling to be
charged or disposed of or any right arising under which any such asset or interest could be required to be disposed of or charged
otherwise than in the ordinary course of business;
(vi) the rights, liabilities, obligations or interests or business of any member of the wider
Mediasurface Group in or with any other person, firm or company (or any arrangement relating to such interest or business) being
terminated or adversely modified or affected;
(vii) any member of the wider Mediasurface Group ceasing to be able to carry on business under
any name under which it currently does so; or
(viii) the creation of any liability, actual or contingent, by any member of the wider Mediasurface
Group;
(h) since 30 September 2007, save as Disclosed, no member of the Mediasurface Group having:
(i) (save for Mediasurface Shares issued pursuant to the exercise of options granted under the
Mediasurface Share Option Schemes or as between Mediasurface and wholly-owned subsidiaries of Mediasurface ("Intra-Mediasurface Group
Transactions")) issued or agreed to issue or authorised or proposed the issue of additional shares of any class or securities convertible
into or rights, warrants or options to subscribe for or acquire any such shares or convertible securities;
(ii) other than to another member of the Mediasurface Group, 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);
(iii) save for Intra-Mediasurface Group Transactions, merged or demerged with or acquired any
body corporate, partnership or business;
(iv) save for Intra-Mediasurface Group Transactions, acquired, or (other than in the ordinary course
of business) disposed of, transferred, mortgaged or charged or created any security interest over any asset or any right, title or
interest in any asset (including shares and trade investments) or authorised, proposed or announced any intention to do so which, in any
such case, is material in the context of the Mediasurface Group taken as a whole;
(v) save for Intra-Mediasurface Group Transactions, issued or authorised or proposed the issue of
any debentures or incurred or increased any indebtedness or contingent liability in each case to an extent which is material in the
context of the wider Mediasurface Group taken as a whole or made, authorised, proposed or announced an intention to propose any change in
its share or loan capital;
(vi) entered into or varied or announced its intention to enter into or vary any contract, transaction,
commitment or arrangement (whether in respect of capital expenditure or otherwise) which is of a long term or unusual nature or which
involves or could involve an obligation of a nature or magnitude which, in any such case, is material in the context of the Mediasurface
Group taken as a whole or which is or is likely to be restrictive in any material respect on the business of any member of the wider
Mediasurface Group or the wider Alterian Group;
(vii) entered into, implemented, authorised or proposed any reconstruction, amalgamation, scheme
of arrangement or other transaction or arrangement otherwise than in the ordinary course of business or announced any intention to do
so;
(viii) entered into, or varied in any material respect the terms of, any contract or agreement with any
of the directors or senior executives of Mediasurface or any of its subsidiaries;
(ix) taken or proposed any corporate action or had any legal proceedings started or threatened
against it or had any petition presented for its winding-up (voluntary or otherwise), dissolution or reorganisation or for the
appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets and/or revenues or
any analogous proceedings in any jurisdiction;
(x) waived or compromised any claim which is material in the context of the wider Mediasurface
Group taken as a whole other than in the ordinary course of business;
(xi) made any material amendment to its memorandum or articles of association;
(xii) purchased, redeemed or repaid or proposed the purchase, redemption or repayment of any of its
own shares or other securities or reduced or made any other change to any part of its share capital;
(xiii) been unable or admitted that it is unable to pay its debts or having stopped or suspended (or
threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of
its business; and
(xiv) made or agreed or consented to any significant change to the terms of the trust deeds
constituting the pension schemes established for its directors, employees or their dependants or to the benefits which accrue; or to the
pensions which are payable, thereunder, or to the basis on which qualification for, or accrual or entitlement to, such benefits or pensions
are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or
agreed or consented to any change to the trustees including the appointment of a trust corporation;
(xv) entered into, varied or modified any contract, commitment or agreement with respect to any of
the transactions, matters or events referred to in this condition (h) or announced an intention to do so;
(i) save as Disclosed, Alterian not having discovered that:
(i) any member of the wider Mediasurface Group does not own or have licensed to it or otherwise
possess legally enforceable rights to use all intellectual property that is:
(A) required or reasonably necessary for the conduct of business of the relevant member
of the wider Mediasurface Group as currently conducted; or
(B) under development for such business;
and, in either case, the absence of which, individually or in the aggregate, would be material in the context of the wider Mediasurface
Group taken as a whole; or
(ii) any member of the wider Mediasurface Group has infringed any intellectual property rights of
any third party where the consequences of which would be material in the context of the wider Mediasurface Group taken as a whole; or
(iii) any claims have been asserted in writing or threatened in writing by any person:
(A) that the wider Mediasurface Group infringes any intellectual property of any third
party; or
(B) challenging the ownership of any member of the wider Mediasurface Group of, or
the validity or effectiveness of, any of its intellectual property;
and any such claims are material in the context of the wider Mediasurface Group taken as a whole; or
(iv) any intellectual property held by any member of the wider Mediasurface Group that is material
in the context of the wider Mediasurface Group taken as a whole is not valid and subsisting; or
(v) there is material unauthorised use, infringement or misappropriation of any intellectual
property of any member of the wider Mediasurface Group by any third party; or
(vi) any persons who are now, or within the last five years have been, employees, consultants or
contractors of any member of the wider Mediasurface Group have failed to execute proprietary information and confidentiality agreements
where such failure is material in the context of the wider Mediasurface Group taken as a whole.
(j) since 30 September 2007, save as Disclosed:
(i) no litigation, arbitration, prosecution or other legal proceedings having been instituted,
announced or threatened or become pending or remaining outstanding by or against any member of the wider Mediasurface Group or to which
any member of the wider Mediasurface Group is or may become a party (whether as claimant, respondent or otherwise) and no enquiry or
investigation by or complaint or reference to any Relevant Authority or other investigative body having been threatened, announced,
implemented or instituted or remaining outstanding against or in respect of any member of the wider Mediasurface Group which, in any such
case, would or might reasonably be expected adversely to affect any member of the wider Mediasurface Group to an extent which is material in
the context of the Mediasurface Group taken as a whole;
(ii) no material adverse change having occurred in the business, assets, financial or trading
position, profits or prospects of the Mediasurface Group which is material in the context of the wider Mediasurface Group taken as a
whole;
(iii) no contingent or other liability having arisen which might reasonably be expected materially
adversely to affect the wider Mediasurface Group taken as a whole;
(iv) no investigation by any Relevant Authority having been threatened, announced, implemented
or instituted or remaining outstanding which in any case would be likely to have a material adverse effect on the financial position of
the Mediasurface Group taken as a whole;
(k) save as Disclosed, Alterian not having discovered that:
(i) any business, financial or other information concerning any member of the wider Mediasurface
Group publicly disclosed or disclosed to Alterian at any time by or on behalf of any member of the Mediasurface Group is misleading,
contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which, in
any such case, is material in the context of the wider Mediasurface Group taken as a whole;
(ii) any member of the wider Mediasurface Group is subject to any liability, actual or contingent
which is material in the context of the wider Mediasurface Group taken as a whole;
Alterian reserves the right to waive all or any of conditions (c) to (j) (inclusive) above, in whole or in part. Conditions (c) to (j)
(inclusive) must be fulfilled or waived by midnight on the 21st day after the later of the making of the Offer and the date on which
condition (a) is fulfilled (or such later date as the Panel may agree). Alterian shall be under no obligation to waive or treat as fulfilled
any of conditions (c) to (j) (inclusive) by a date earlier than the latest date specified above for the fulfilment thereof notwithstanding
that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no
circumstances indicating that any of such conditions may not be capable of fulfilment.
If Alterian is required by the Panel to make an offer for Mediasurface Shares under the provisions of Rule 9 of the Code, Alterian may
make such alterations to the conditions as are necessary to comply with the provisions of that Rule.
The Offer will lapse if, before 3.00 p.m. on the first closing date of the Offer or the date on which the Offer becomes or is declared
unconditional as to acceptances (whichever is later), (i) the Offer or any part of it is referred to the Competition Commission; or (ii)
following a request to the European Commission under Article 22(3) of Council Regulation 139/2004/EC (the "Regulation") in relation to the
Offer or any part of it, which request is accepted by the European Commission, the European Commission initiates proceedings under Article
6(1)(c) of the Regulation.
APPENDIX II
BASES AND SOURCES
1. Unless otherwise stated in this Announcement:
(a) financial information relating to Alterian has been extracted from the audited accounts of Alterian for the year
ended 31 March 2008;
(b) financial information relating to Mediasurface has been extracted from the audited accounts of Mediasurface
for the year ended 30 September 2007 and the unaudited interim accounts of Mediasurface for the six months ended 31 March 2008;
(c) the value of the fully diluted share capital of Mediasurface is calculated on the basis of:
(i) 117,806,103 Mediasurface Shares in issue on 15 May 2008 (being the last business day prior to the
publication of this Announcement); and
(ii) 3,025,229 Mediasurface Shares subject to options outstanding or to be granted under the
Mediasurface Share Option Schemes on 15 May 2008 (being the last business day prior to the publication of this Announcement) and are, or
will be upon the Offer becoming or being declared unconditional in all respects, capable of exercise;
(d) the amount of the cash payment and the number of Consideration Shares to be issued in respect of full
acceptance of the Offer is calculated based upon the number of Mediasurface Shares in issue (as described in paragraph (c) above)
resulting in the issue of approximately 4,531,175 Consideration Shares and a cash payment of approximately £10.9 million;
(e) all share prices are derived from the Daily Official List and the AIM Appendix of the Daily Official List, as
applicable;
(f) all prices quoted for Mediasurface Shares and Alterian Shares are Closing Prices; and
(g) the enterprise value to sales multiple set out in paragraph 2 of this Announcement is calculated on the following
basis: enterprise value of Mediasurface is calculated as £18.1 million equity valuation with the addition of net debt of £0.2 million,
which has been extracted from Mediasurface's statement of unaudited interim results for the six months ended 31 March 2008. Sales of £14.1
million are derived from annualising first half revenues of £7.1 million, which has been extracted from Mediasurface's statement of
unaudited interim results for the six months ended 31 March 2008.
2. Irrevocable undertakings to accept, or to procure the acceptance of, the Offer have been received by Alterian
from the following persons in respect of the following interests in Mediasurface Shares:
Name Number of Percentage of entire existing issued share
Mediasurface Shares capital of Mediasurface
committed
Michael Jackson (1) 10,418,232 8.8 per cent.
Lawrence Benedict John Flynn 1,865,077 1.6 per cent.
(1)(2)
David Deacon (1)(2) 781,089 0.7 per cent.
Francis Anthony Aylmer Maude 100,000 0.1 per cent.
(1)
Elderstreet Capital Partners 14,921,281 12.7 per cent.
(1)
Elderstreet VCT plc (1) 6,013,706 5.1 per cent.
Artemis Investment Management 8,981,884 7.6 per cent.
(3) Limited
Hargreave Hale Limited (3) 6,569,565 5.6 per cent.
Southwind Limited (3) 5,276,086 4.5 per cent.
Notes:
1. These irrevocable undertakings to accept the Offer remain binding, even if a higher competing offer is announced by a third
party, unless the Offer lapses or is withdrawn.
2. These irrevocable undertakings also cover options over Mediasurface Shares granted under the Mediasurface Option Schemes.
Pursuant to such undertakings, the relevant Mediasurface Directors have irrevocably agreed to either (i) accept, when made, the proposals to
Mediasurface Optionholders; or (ii) exercise in full the relevant option and accept the Offer in full in respect of all Mediasurface Shares
arising therefrom. The number of Mediasurface Shares stated as being irrevocably committed excludes any Mediasurface Shares arising from the
exercise of Mediasurface Options.
3. These undertakings to accept the Offer will lapse and be of no effect if, inter alia, the Offer does not become or is not
declared unconditional before 16 August 2008, or in the event of an offer from a third party which represents a value 10 per cent. higher
than the Offer.
APPENDIX III
DEFINITIONS
The following definitions apply throughout this Announcement unless the context otherwise requires:
"1985 Act'' the Companies Act 1985 (as amended)
"2006 Act" the Companies Act 2006 (as amended)
"Acquisition" the proposed acquisition of Mediasurface by Alterian to
be effected by means of the Offer
"Admission'' the admission to the Official List and to trading on the
London Stock Exchange's market for listed securities
respectively of the New Alterian Shares, including the
Consideration Shares, becoming effective in accordance
with the Listing Rules and the Admission Standards
"Admission Standards" the admission and disclosure standards for companies
published from time to time by the London Stock Exchange
"AIM'' AIM, the market of that name operated by the London
Stock Exchange
"Alterian'' or "Company" Alterian plc
"Alterian Directors'' or the directors of Alterian as at the date of this
"Alterian Board" Announcement
"Alterian Group'' or "Group'' Alterian and its existing subsidiary undertakings
"Alterian Share Schemes'' the Alterian plc Share Option Plan, the Alterian plc
Enterprise Management Incentives Scheme, the Alterian
plc Share Incentive Plan, the Alterian plc Non-statutory
Stock Option Plan, the Alterian plc Incentive Stock
Option Plan and the Alterian plc Restricted Share Plan
"Alterian Shareholders'' holders of Existing Alterian Shares
"Alterian Shares'' ordinary shares of 25 pence each in the capital of
Alterian
"Announcement" this announcement
"Australia" the commonwealth of Australia, its states, territories
or possessions
"business day" a day (not being a Saturday, a Sunday or a public
holiday) on which clearing banks in the City of London
are open for normal business
"Canada" Canada, its possessions, provinces and territories and
all areas subject to its jurisdiction or any political
subdivision thereof
"certificated'' or in relation to a share or other security, not in
"in certificated form'' uncertificated form (that is, not in CREST)
"Circular" the circular to be sent to Alterian Shareholders
containing information relating to the Offer, the Issue
and the General Meeting
"Closing Price" the closing middle market quotation of a share as
derived from the Daily Official List in the case of
Alterian and from the AIM Appendix of the Daily Official
List in the case of Mediasurface
"Code'' The City Code on Takeovers and Mergers
"Consideration Shares" the 4,531,175 new Alterian Shares proposed to be issued
and credited as fully paid to Mediasurface Shareholders
pursuant to the Offer
"CREST'' the relevant system (as defined in the Regulations) in
respect of which Euroclear UK & Ireland Limited is the
operator
"Daily Official List'' the Daily Official List of the London Stock Exchange
"Disclosed" means (i) as disclosed in Mediasurface's report and
accounts for the year ended 30 September 2007; (ii) as
publicly announced by Mediasurface (by the delivery of
an announcement to an authorised Regulatory Information
Service prior to 16 May 2008); (iii) as disclosed in
this Announcement; or (iv) as otherwise disclosed in
writing, or in the documentation or written information
provided, to Alterian or its advisers by or on behalf of
Mediasurface prior to 16 May 2008 in the context of the
Offer
"Elderstreet" Elderstreet Capital Partners and Elderstreet VCT plc
"Enlarged Group'' the combined businesses of the Alterian Group and the
Mediasurface Group following the Offer becoming or being
declared unconditional in all respects
"Enlarged Issued Share the issued share capital of Alterian, as enlarged by the
Capital" issue of the New Alterian Shares
"General Meeting" the extraordinary general meeting of Alterian to be held
to approve the issue of the New Alterian Shares,
including the Consideration Shares, or at any
adjournment thereof, notice of which is set out in the
Circular
"Existing Alterian Shares'' the Alterian Shares in issue at the date of this
Announcement
"Firm Placing" the conditional firm placing by Investec, as agent, on
behalf of Alterian of the Firm Placing Shares at the
Issue Price pursuant to the Placing Agreement
"Firm Placing Shares" the 4,398,464 new Alterian Shares which are the subject
of the Firm Placing
"Form of Acceptance'' the form of acceptance, election and authority relating
to the Offer in respect of certificated Mediasurface
Shares
"Investec" Investec Bank (UK) Limited and its divisions: Investec
Investment Banking and Investec Securities, as the
context requires
"Issue" the Firm Placing, the Placing and the Open Offer
"Issue Price" 150 pence per New Alterian Share
"Issue Shares" the Firm Placing Shares and Open Offer Shares
"Japan" Japan, its cities, prefectures, territories and
possessions
"KBC Peel Hunt" KBC Peel Hunt Ltd
"Listing Rules" the Listing Rules of the UK Listing Authority made
pursuant to section 74 of the Financial Services and
Markets Act 2000, as amended
"London Stock Exchange'' London Stock Exchange plc
"Mediasurface'' Mediasurface plc
"Mediasurface Directors'' or the directors of Mediasurface at the date of this
"Mediasurface Board" Announcement
"Mediasurface Group'' Mediasurface and its existing subsidiary undertakings
"Mediasurface Optionholders" holders of Mediasurface Options
"Mediasurface Options" options or other rights to acquire Mediasurface Shares
under the Mediasurface Share Option Schemes or otherwise
"Mediasurface Share Option the Mediasurface Enterprise Management Incentives Scheme
Schemes'' and the Mediasurface Unapproved Share Option Plan
"Mediasurface Shareholders'' holders of Mediasurface Shares
"Mediasurface Shares'' the existing issued fully paid ordinary shares of 1
pence each in the capital of Mediasurface and any
further such shares which are unconditionally allotted
or issued and fully paid or credited as fully paid
before the date on which the Offer closes (or such
earlier date, not being earlier than the date on which
the Offer becomes or is declared unconditional as to
acceptances as Alterian may, subject to the Code,
decide)
"Mix and Match Facility" the facility under which Mediasurface Shareholders who
validly accept the Offer may elect to vary the
proportions in which they receive Consideration Shares
and cash as consideration for their Mediasurface Shares
to the extent that other Mediasurface Shareholders make
off-setting elections
"New Alterian Shares'' the Consideration Shares, the Firm Placing Shares and
the Open Offer Shares
"Offer'' the proposed offer to be made by Alterian, on the terms
and subject to the conditions set out in the Offer
Document and the Form of Acceptance (in respect of
certificated Mediasurface Shares), to acquire all of
issued and to be issued share capital of Mediasurface
(including, where the context requires, any subsequent
revision, variation, extension or renewal of such offer)
"Offer Document'' the document proposed to be sent to Mediasurface
Shareholders containing, inter alia, the details of the
Offer
"Offer Period'' the period commencing on 24 April 2008
"Offer Price" 15 pence for every Mediasurface Share based on the
closing price of an Alterian Share of 160 pence on 15
May 2008 (being the last business day prior to the date
of this announcement)
"Official List" the Official List of the UK Listing Authority.
"Open Offer" the conditional open offer made by Investec, on behalf
of the Company, to Qualifying Shareholders to apply for
the Open Offer Shares at the Issue Price on the terms
and conditions set out in the Prospectus
"Open Offer Shares" the 4,398,464 new Alterian Shares which are the subject
of the Open Offer
"Overseas Shareholders" Alterian Shareholders who have a registered address in,
or who are citizens or residents of, or domiciled in,
countries other than the UK
"Panel'' the Panel on Takeovers and Mergers
"Placing" the conditional placing (subject to a right of recall to
satisfy valid applications from Qualifying Shareholders
under the Open Offer) by Investec, on behalf of Alterian
of the Open Offer Shares at the Issue Price pursuant to
the Placing Agreement
"Placing Agreement" the Placing Agreement entered into on 16 May 2008
between Alterian, the Alterian Directors and Investec
relating to the Issue, further details of which will be
set out in the Offer Document
"pounds", "£" or "pence" the lawful currency of the United Kingdom
"Prospectus" the document to be issued in relation to, inter alia,
Alterian, Mediasurface and the New Alterian Shares which
comprises a prospectus prepared in accordance with the
Prospectus Rules
"Prospectus Rules" the Prospectus Rules of the Financial Services Authority
"Qualifying Shareholders" holders of existing Alterian Shares in the register of
members of Alterian at the Record Date, other than
certain Overseas Shareholders who are not entitled to
participate in the Open Offer
"Record Date" the record date for the Open Offer, being close of
business on 14 May 2008
"Regulations'' the Uncertificated Securities Regulations 2001 (SI 2001
No. 3755)
"Regulatory Information any channel recognised as a channel for the
Service" dissemination of regulatory information by listed
companies as defined in the Listing Rules
"Resolutions" the resolutions to be put to Alterian Shareholders at
the General Meeting
"Restricted Jurisdiction" the United States, Canada, Australia or Japan or any
other jurisdiction where extension or acceptance of the
Offer would violate the law of that jurisdiction
"Securities Act" the United States Securities Act 1933, as amended
"uncertificated'' or "in in relation to a share or other security, recorded on
uncertificated form'' the relevant register in uncertificated form in CREST
and title to which, by virtue of the Regulations, may be
transferred by means of CREST
"United Kingdom'' or "UK'' the United Kingdom of Great Britain and Northern Ireland
"UK Listing Authority" the Financial Services Authority acting in its capacity
as the competent authority for the purposes of Part VI
of the Financial Services and Markets Act 2000, as
amended
"US","USA" or "United States" the United States of America, its territories and
possessions, any state of the United States of America
and the District of Columbia and all other areas subject
to its jurisdiction
"US$", "$" or "cents" the lawful currency of the United States of America
"wider Mediasurface Group'' means Mediasurface, its subsidiaries, subsidiary
undertakings and associated undertakings and any other
body corporate, partnership, joint venture or person in
which Mediasurface and such undertakings (aggregating
their interests) have an interest in 20 per cent. or
more of the voting or equity capital (or the equivalent)
"wider Alterian Group'' means Alterian, its subsidiaries, subsidiary
undertakings and associated undertakings and any other
body corporate, partnership, joint venture or person in
which Alterian and such undertakings (aggregating their
interests) have an interest in 20 per cent. or more of
the voting or equity capital (or the equivalent)
Save where otherwise stated, for the purpose of this Announcement, "subsidiary'', "subsidiary undertaking'', "associated undertaking''
and "undertaking'' shall be construed in accordance with the 1985 Act (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A of
the 1985 Act).
In this Announcement, the singular includes the plural and vice versa, unless the context otherwise requires. All references to time in
this Announcement are to London time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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