Pilat Media Global PLC Offer by SintecMedia Ltd. (7830X)

TIDMPGB TIDMTTM

RNS Number : 7830X

Pilat Media Global PLC

16 January 2014

For immediate release

Part 1 of 2

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

16 January 2014

Proposed acquisition of Pilat Media Global plc ("Pilat") by SintecMedia Ltd. ("SintecMedia") and Sintec Media Software Ltd. ("SMS"), a wholly owned subsidiary of SintecMedia, to be implemented by way of a Scheme of Arrangement under Part 26 of the Companies Act

Introduction

The Boards of SintecMedia, SMS and Pilat are pleased to announce the terms of a recommended proposal under which SintecMedia and its wholly owned subsidiary SMS will acquire for cash the entire issued and to be issued share capital of Pilat not already owned by SintecMedia.

The structure of the Acquisition is that SintecMedia will acquire 5 per cent. of the issued and to be issued share capital of Pilat and SMS will acquire the remaining issued and to be issued share capital of Pilat not already owned (or to be acquired pursuant to the Scheme) by SintecMedia.

The Scheme

The Scheme Price is 95 pence in cash for every Scheme Share. On this basis, the Scheme values the entire issued and to be issued share capital of Pilat at approximately GBP63.3 million (assuming the exercise of all outstanding options under the Pilat Share Schemes).

At the date of this announcement SintecMedia holds 14,210,782 Pilat Shares, representing approximately 22.73 per cent. of Pilat's existing issued share capital.

The Scheme Price represents:

- a premium of approximately 28.8 per cent. to the closing price of 73.75 pence per Pilat Share on AIM as at 15 January 2014, being the last UK dealing day prior to the date of this announcement;

- a premium of approximately 37.0 per cent. to the average closing price of approximately 69.4 pence per Pilat Share on AIM for the three month period ending 15 January 2014 being the last UK dealing day prior to the date of this announcement;

- a premium of approximately 35.9 per cent. to the closing price of 4.0 NIS per Pilat Share on the TASE (equivalent to 69.9 pence in accordance with the representative sterling-NIS exchange rate as published by the Bank of Israel on 15 January 2014), as at 15 January 2014, being the last Israeli dealing day prior to the date of this announcement; and

- a premium of approximately 44.3 per cent. to the average closing price of 3.8 NIS (equivalent to 65.8 pence in accordance with the representative sterling-NIS exchange rate as published by the Bank of Israel on 15 January 2014) per Pilat Share on the TASE for the three month period ending 15 January 2014, being the last Israeli dealing day prior to the date of this announcement.

The Scheme provides certainty of value to Pilat Shareholders through a cash exit at a significant premium to the recent share price.

Recommendation

The Pilat Directors, who have been so advised by Shore Capital, consider the terms of the Scheme to be fair and reasonable and will unanimously recommend all Pilat Shareholders to vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting in relation to the Scheme. In providing advice to the Pilat Directors, Shore Capital has taken into account the Pilat Directors' commercial assessments.

Background to and reasons for the Scheme

SintecMedia and Pilat have been developing and marketing business management software for broadcasters for many years. The two companies provide end-to-end integrated and modular solutions, targeting major broadcasters and media companies around the world. The market in which SintecMedia and Pilat operate is rapidly evolving, with new players and new technologies presenting new opportunities but also difficult challenges. The Boards of SintecMedia and Pilat believe that the merger of the SintecMedia and Pilat groups of companies will realise a number of benefits for clients and staff, resulting from the considerable additional scale of the Enlarged Group.

Irrevocable undertakings

The Pilat Directors have irrevocably undertaken to vote, or to procure the vote, in favour of the resolutions to be proposed at the Court Meeting and the General Meeting in relation to the Scheme in respect their own beneficial holdings of 7,485,945 Pilat Shares, representing, in aggregate, approximately 11.97 per cent. of the existing issued share capital of Pilat. Such irrevocable commitments extend to any Pilat Shares arising from the exercise of options held under the Pilat Share Schemes prior to the date of such meetings.

SMS and SintecMedia have also received, in aggregate, other irrevocable undertakings to vote, or to procure the vote, in favour of the resolutions to be proposed at the Court Meeting and the General Meeting in relation to the Scheme in respect of 17,418,322 Pilat Shares, representing approximately 27.85 per cent. of Pilat's existing issued share capital.

Details of those persons providing an irrevocable undertaking are as follows:

 
 Name of Pilat shareholder giving the     Number of Pilat Shares in respect of   Approximate percentage of Pilat's 
 undertaking                              which the undertaking is given         existing issued share capital 
 Pilat Directors 
 Michael Rosenberg                                                     198,000                                    0.32 
 Avi Engel                                                           2,202,102                                    3.52 
 Martin Blair                                                           68,500                                    0.11 
 Samuel Sattath                                                      3,111,993                                    4.98 
 Or Elovitch                                                            92,250                                    0.15 
 Alex Rabinovitch                                                 1,813,100(1)                                    2.90 
 Other Pilat Shareholders 
 Eurocom Investments LP                                             12,186,360                                   19.49 
 Eurocom Holdings (1979) Ltd                                           238,107                                    0.38 
 Michael Zuckerman                                                   2,440,991                                    3.90 
 Benjamin Moneta                                                     1,137,864                                    1.82 
 Ronnie Erlichman                                                    1,415,000                                    2.26 
 Total                                                              24,904,267                                   39.83

(1) The irrevocable undertaking provided by Alex Rabinovitch includes reference to 12,186,360 Pilat Shares in the name of Eurocom Investments LP who, themselves, have provided an irrevocable undertaking in respect of such Pilat Shares.

All the irrevocable commitments continue to be binding in the event of a higher competing offer being made for Pilat and will cease to be binding only if the Scheme lapses or is withdrawn. All of the irrevocable commitments, except those from Michael Rosenberg, Avi Engel, Martin Blair, Samuel Sattath, Michael Zuckerman, Benjamin Moneta and Ronnie Erlichman contain an undertaking to vote in favour of the resolution at the General Meeting to approve the Payments.

Dealing Disclosure Requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Israeli Withholding Tax on Scheme consideration

Pilat Shareholders should be aware that the consideration payable may, in certain circumstances, be subject to Israeli Withholding Tax of up to 25 per cent. Pilat Shareholders are advised to read carefully the paragraphs relating to Israeli Withholding Tax and the process for returning Israeli Tax Declaration Forms in the Scheme Document.

Commenting on the Scheme, Amotz Yarden, Chief Executive Officer of SintecMedia said:

"The Scheme Price represents a substantial premium to the closing price of 73.75 pence per Pilat Share on AIM on 15 January 2014 and of 4.0 NIS per Pilat Share on TASE on 15 January 2014, and the boards of SintecMedia and SMS believe that, given the economic uncertainty and market pressures facing the industry, this represents a very good opportunity for Pilat Shareholders to realise their investment in cash today. SintecMedia and SMS believe that the Acquisition will also provide the employees and clients of Pilat with an opportunity to benefit from the combined scale and technological strength of the Enlarged Group, which will be well placed to meet the challenges faced by the industry in the years to come."

Commenting on the Scheme, Avi Engel, Chief Executive Officer of Pilat said:

"Since becoming an independent public company in 2002 Pilat has successfully developed its business. This is reflected in the terms of the proposed Acquisition which offers Pilat Shareholders a cash exit at an attractive valuation of approximately US$100 million for the Company. Being part of a larger and privately held group is the right next step for the Company and joining forces with the SintecMedia group of companies is a natural choice that will enable the Enlarged Group to continue growing for the benefit of all its stakeholders."

This summary should be read in conjunction with the full text of this announcement. Appendix I to this announcement contains the conditions to, and certain further terms of, the Scheme. Appendix II to this announcement contains further details of the sources of information and bases of calculations set out in this announcement. Appendix III contains definitions of certain expressions used in this summary and in this announcement.

Enquiries:

SintecMedia Ltd./Sintec Media Software Ltd. Tel: +972 (2) 651-5122

Amotz Yarden, Chief Executive Officer

Shlomo Freidenreich, Chief Financial Officer

Cairn Financial Advisers LLP Tel: +44 (0)20 7148 7900

(Financial Adviser to SintecMedia and SMS)

Liam Murray

Avi Robinson

Pilat Media Global plc Tel: +44 (0)20 8782 0700

Avi Engel, Chief Executive Officer

Martin Blair, Chief Financial Officer

Shore Capital and Corporate Limited Tel: +44 (0)20 7408 4090

(Financial Adviser to Pilat)

Dru Danford

Patrick Castle

Abchurch Tel: +44 (0)20 7398 7719

(Public Relations Adviser to Pilat)

Henry Harrison-Topham

Jamie Hooper

Cairn, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for SMS and SintecMedia and no one else in connection with the Scheme and the matters referred to in this announcement. Cairn will not be responsible to any person other than SMS and SintecMedia for providing the protections afforded to clients of Cairn, nor for providing advice in relation to the Scheme or any other matter referred to in this announcement.

Shore Capital, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for Pilat and no one else in connection with the Scheme and the matters referred to in this announcement. Shore Capital will not be responsible to any person other than Pilat for providing the protections afforded to clients of Shore Capital, nor for providing advice in relation to the Scheme or any other matter referred to in this announcement.

Please note that addresses, electronic addresses and certain other information provided by Pilat Shareholders and other relevant persons for the receipt of communications from Pilat may be provided to an offeror as required under the Takeover Code.

This announcement is for information purposes only and does not constitute, or form part of, an offer to sell nor an invitation to subscribe for or purchase any securities nor the solicitation of an offer to buy securities pursuant to the Scheme or otherwise. The Scheme will be effected solely by means of the Scheme Document, which will contain the full terms and conditions of the Scheme, including details of how to vote in favour of the Scheme. Pilat, SintecMedia and SMS urge Pilat Shareholders to read the Scheme Document which will be distributed to Scheme Shareholders in due course (with the exception of certain Scheme Shareholders in Restricted Jurisdictions), as it will contain important information relating to the Scheme.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to the laws of other jurisdictions should inform themselves of, and observe, any applicable requirements.

Unless otherwise determined by SintecMedia and SMS or required by the Code, and permitted by applicable law and regulation, the Scheme will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any means, instrumentality or from within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and all other documents relating to the Scheme are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all other documents relating to the Scheme (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.

The availability of the Scheme to Pilat Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

Further details in relation to overseas Pilat Shareholders will be contained in the Scheme Document.

Forward-Looking Statements

This announcement, including information included or incorporated by reference in this announcement, contains statements that are or may be "forward-looking" concerning the Scheme, Pilat, members of the Pilat Group, SintecMedia and members of the SintecMedia Group.

Often but not always, forward-looking information statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes", or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "should", "would", "might", "will" or "continue to" be taken, occur or be achieved. By their nature forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Pilat, SintecMedia and/or their subsidiaries to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

These factors include, but are not limited to, the satisfaction of the conditions to the Scheme, factors identified elsewhere in this announcement as well as the following possibilities: future revenues are lower than expected; costs or difficulties relating to the integration of the businesses of the SintecMedia and Pilat Groups, or other future acquisitions, are greater than expected; expected cost savings from the transaction or from other future acquisitions are not fully realised or not realised within the expected time frame; competitive pressures in the industry increase; general economic conditions affecting the relevant industries, whether internationally or in the places where the SintecMedia and Pilat Groups do business, are less favourable than expected, and/or conditions in the securities market are less favourable than expected.

This list is not exhaustive of the factors that may affect the forward-looking information. These and other factors should be considered carefully and readers should not place undue reliance on such forward-looking information. Although SintecMedia, SMS and Pilat have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended.

Forward-looking statements contained in this announcement in respect of Pilat and/or SintecMedia and/or SMS are made as of the date of this announcement based on the opinions and estimates of the Pilat Directors or, as the context requires, the SintecMedia Directors and/or the SMS Directors. Subject to requirements to update under any applicable regulation or law, Pilat and/or SintecMedia and/or SMS disclaim any obligation to update any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise.

Not a profit forecast

No statement in this announcement is intended as a profit forecast or profit estimate and no statement in this announcement should be interpreted to mean that the future earnings per share of Pilat for current or future financial years will necessarily match or exceed the historical or published earnings per share of Pilat.

Publication on website

A copy of this announcement will be made available, free of charge but subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at www.sintecmedia.com and www.pilatmedia.com by no later than 12 noon (London time) on the Business Day following the date of this announcement.

Neither the content of the websites referred to in this announcement nor the content of any website accessible from hyperlinks on SintecMedia's or Pilat's website (or any other website) is incorporated into, or forms part of, this announcement.

Any person who has received this announcement in electronic form or by means of a website publication may request a copy of this announcement in hard copy form and may request that all future documents, announcements and information sent to him in relation to the offer be in hard copy form. Unless so requested, a hard copy of this announcement will not be sent to you. This announcement and all future documents, announcements and information can be requested in hard copy form (free of charge), by submitting a request in writing to Cairn Financial Advisers LLP, 61 Cheapside, London EC2V 6AX or by calling Cairn Financial Advisers LLP on 020 7148 7800.

Rule 2.10 Disclosures

In accordance with Rule 2.10 of the Code, Pilat confirms that it has 62,533,506 ordinary shares in issue and admitted to trading on AIM under ISIN reference GB0031172751.

If you are in any doubt about the Scheme, the contents of this announcement or what action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent professional adviser duly authorised under the Financial Services and Markets Act 2000 if you are resident in the UK or, if you are resident outside the UK, from another appropriately authorised independent financial adviser.

Part 2 of 2

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

16 January 2014

   1.     Introduction

The Pilat Directors intend unanimously to recommend that Pilat Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting in relation to the Scheme as they have irrevocably undertaken to do (or procure) in respect of their own beneficial holdings of 7,485,945 Pilat Shares, representing, in aggregate, approximately 11.97 per cent. of the existing issued share capital of Pilat.

   2.     Terms of the Scheme

The Scheme, which will be made on the terms and subject to the conditions set out below and in Appendix I to this announcement, and subject to the further terms to be set out in the Scheme Document, will be made on the following basis:

for each Scheme Share 95 pence in cash

The Scheme values the entire issued and to be issued share capital of Pilat at approximately GBP63.3 million (assuming the exercise of all outstanding options under the Pilat Share Schemes).

The Scheme Price represents:

- a premium of approximately 28.8 per cent. to the closing price of 73.75 pence per Pilat Share on AIM as at 15 January 2014, being the last UK dealing day prior to the date of this announcement;

Subsequent to the Scheme becoming effective, SintecMedia and SMS will have respective holdings of approximately 27.71 per cent. and 72.29 per cent. in Pilat.

   3.     Recommendation

The Pilat Directors, who have been so advised by Shore Capital, consider the terms of the Scheme to be fair and reasonable. In providing advice to the Pilat Directors, Shore Capital has taken into account the Pilat Directors' commercial assessments.

Accordingly, the Pilat Directors intend unanimously to recommend that Pilat Shareholders vote in favour of the resolutions to be proposed at the Court Meeting and the General Meeting in relation to the Scheme as they have irrevocably undertaken to do (or procure) in respect of their entire respective holdings of Pilat Shares, amounting in aggregate to 7,485,945 Pilat Shares, representing approximately 11.97 per cent. of the existing issued share capital of Pilat.

   4.     Background to and reasons for the Scheme

SintecMedia and Pilat have been developing and marketing business management software for broadcasters for many years. The two companies provide end-to-end integrated and modular solutions, targeting major broadcasters and media companies around the world. The market in which SintecMedia and Pilat operate is rapidly evolving, with new players and new technologies presenting new opportunities but also difficult challenges. The Boards of SintecMedia and Pilat believe that the merger of the SintecMedia and Pilat groups of companies would realise a number of benefits for clients and staff, resulting from the considerable additional scale of the Enlarged Group.

   5.     Irrevocable undertakings

The Pilat Directors have irrevocably undertaken to vote, or to procure the vote, in favour of the resolutions to be proposed at the Court Meeting and the General Meeting in relation to the Scheme in respect their own beneficial holdings of 7,485,945 Pilat Shares,representing, in aggregate, approximately 11.97 per cent. of the existing issued share capital of Pilat. Such irrevocable commitments extend to any Pilat Shares arising from the exercise of options held under the Pilat Share Schemes prior to the date of such meetings.

Details of those persons providing an irrevocable undertaking are as follows:

 
 Name of Pilat shareholder giving the     Number of Pilat Shares in respect of   Approximate percentage of Pilat's 
 undertaking                              which the undertaking is given         existing issued share capital 
 Pilat Directors 
 Michael Rosenberg                                                     198,000                                    0.32 
 Avi Engel                                                           2,202,102                                    3.52 
 Martin Blair                                                           68,500                                    0.11 
 Samuel Sattath                                                      3,111,993                                    4.98 
 Or Elovitch                                                            92,250                                    0.15 
 Alex Rabinovitch                                                 1,813,100(1)                                    2.90 
 Other Pilat Shareholders 
 Eurocom Investments LP                                             12,186,360                                   19.49 
 Eurocom Holdings (1979) Ltd                                           238,107                                    0.38 
 Michael Zuckerman                                                   2,440,991                                    3.90 
 Benjamin Moneta                                                     1,137,864                                    1.82 
 Ronnie Erlichman                                                    1,415,000                                    2.26 
 Total                                                              24,904,267                                   39.83 
 (1)    The irrevocable undertaking provided by Alex Rabinovitch includes reference to 12,186,360 Pilat Shares in

the name of Eurocom Investments LP who, themselves, have provided an irrevocable undertaking in respect of

such Pilat Shares.

   6.     Information on Pilat and SMS

Pilat is a company incorporated in England and Wales in 2000. Pilat has approximately 330 staff, with headquarters in the United Kingdom and subsidiary operations in the United States of America, Australia, the Netherlands and Israel. The Pilat Shares were admitted to trading on AIM in February 2002 and have also been listed on the TASE since February 2002.

The Pilat Group develops, markets and supports software systems for the management of media businesses (mainly TV and video on demand (VOD) services). Pilat provides two "off the shelf" products, IBMS and MediaPro and is currently developing a third product under the brand OTTilus, which is an Internet based Over The Top video delivery platform. IBMS, Pilat's main product, is an integrated modular system designed to enable efficient and flexible content and rights management, airtime scheduling, media trafficking and airtime sales. MediaPro provides an advertising sales management system with a European focus, which was added to Pilat's portfolio following the acquisition of the Amsterdam based ML Software Services BV. Pilat currently has over sixty five blue chip media clients located around the world.

Further details in relation to Pilat will be contained in the Scheme Document.

   7.     Information on SMS and SintecMedia

Established in 2000, SintecMedia is a leading provider of global broadcasting management solutions. It designs and implements management systems for the broadcast, cable and satellite industries using advanced software tools to address the gap between established programming, sales, traffic, billing and scheduling management systems. SintecMedia's proprietary management systems, OnAir, Medea, Nestor and SIMS, enable media companies to adopt new technologies and business models and provides tools for these companies to apply new media revenue models and address new media distribution channels.

SMS is a wholly owned subsidiary of SintecMedia, incorporated under the laws of England and Wales. SMS has not traded since incorporation, nor has it entered into any obligations other than in connection with the Acquisition and the financing of the Acquisition.

Further details in relation to SintecMedia and SMS will be contained in the Scheme Document.

   8.     Intentions regarding Pilat and the Pilat Directors, management and employees

The management of SintecMedia and Pilat have together agreed the approach for organising and managing the Enlarged Group harmoniously, leveraging the relative strengths of each organisation.

SintecMedia attaches great importance to the skills, experience and knowledge of the existing employees of the Pilat Group, who have contributed to the success of the business to date and believes that they will benefit from enhanced career and business opportunities within the Enlarged Group. SintecMedia's strategic plan for the Pilat business is to gradually integrate certain functions where appropriate to realise synergies and economies of scale; but as both companies face growing demand for their products and services and, given their backlogs of work, this is unlikely to affect the vast majority of positions and staff across the two companies. In conducting any rationalisation, SintecMedia intends that the employees of the Pilat and SintecMedia groups will have equal opportunity.

SintecMedia considers that its strategic plans for the Pilat Group will have no repercussions on the customers of the two groups and any product convergence initiatives will be evolutionary, with an emphasis on backward compatibility. By utilising both parties' products and human capital, the Enlarged Group will be able to strengthen its offering to the market, satisfy existing clients, win new business and overcome future challenges more effectively.

SintecMedia has given assurances to the Pilat Directors that the existing employment rights (including pension and severance rights and in Israel the applicability of "Clause 14" in respect of leavers for any reason) of all Pilat Group employees will be fully safeguarded following the Scheme becoming effective and there will be no changes in the conditions of their employment. In addition, SintecMedia intends to put in place appropriate retention plans for those individuals who are identified as key to the ongoing success of the Enlarged Group.

SintecMedia does not have any intention to change the locations of Pilat's places of business or to re-deploy its fixed assets.

If the Scheme becomes effective, the board of the Enlarged Group will comprise the SintecMedia Directors. The Pilat Directors have undertaken to resign from the Pilat Board upon the Scheme becoming effective. Avi Engel and Martin Blair, the executive Pilat Directors, have also undertaken to resign as employees of Pilat upon the Scheme becoming effective. Mr Engel and Mr Blair will provide handover support as part of their notice period for up to one month following their resignation, will then be released from their employment (although all restrictive covenants applicable to them will remain in force and binding in accordance with the terms of their respective contracts) and will be paid in lieu of the balance of their contractual notice period. In addition, Mr Engel and Mr Blair will undertake to provide up to 15 days of additional handover assistance within the first 12 month period following the Scheme becoming effective. It is intended that Mr Engel will also enter into a consultancy agreement with SintecMedia on terms to be agreed between SintecMedia and Mr Engel. Under this agreement Mr Engel will support SintecMedia in the process of integrating the two companies. Particulars of the payments in respect of termination of the Pilat Directors' contracts will be set out in the Scheme Document.

The Remuneration Committee of Pilat has agreed to pay Mr Blair and Mr Rosenberg GBP60,000 and GBP40,000 respectively in recognition of their roles in effecting the Acquisition. In addition, the Remuneration Committee of Pilat has agreed to pay Mr Engel an amount of GBP300,000 in recognition of his significant role in effecting the Acquisition. Eurocom Investments L.P. and Eurocom Holdings (1979) Ltd, who together constitute the Company's largest shareholder, were consulted in relation to the payments described above (the "Payments") and the irrevocable undertakings they provided in connection with the Scheme extend to voting in favour of the resolution to be proposed at the General Meeting in connection with the Payments. Further, SMS and SintecMedia have also been made aware of the Payments, and have confirmed that they have no objection to them.

Pursuant to the AIM Rules, the Payments are considered to be a "related party transaction" as defined in the AIM Rules. The Pilat Directors (excluding those Pilat Directors who are the beneficiaries of the Payments), having consulted with Shore Capital, the Company's Nominated Adviser, consider the terms of the Payments to be fair and reasonable in so far as Pilat Shareholders are concerned. Pursuant to Rule 16 of the Code, Shore Capital has advised the Independent Directors that the terms of the Payments are fair and reasonable in so far as Independent Shareholders are concerned. In providing its advice to the Independent Directors in relation to the Payments, Shore Capital has taken into account the commercial assessments of the Independent Directors and requested that the Payments are subject to approval by Independent Shareholders (by passing an ordinary resolution on a poll of Independent Shareholders at the General Meeting). The Payments are conditional on the Scheme becoming effective; however, the Scheme is not conditional on approval of the Payments by Independent Shareholders.

The Pilat Directors have given due consideration to SintecMedia's stated intentions and assurances noted above in deciding to recommend the Scheme.

   9.     Financing of the Scheme

Of the total cash consideration payable to Scheme Shareholders under the terms of the Scheme, GBP31,270,995 is to be funded by the Riverwood Funds., The Riverwood Funds comprise a number of private equity funds under the common management of Riverwood Capital Partners L.P, a US-based private equity firm which, through the Riverwood Funds, already has an equity stake in SintecMedia. Each of the Riverwood Funds has entered into an equity commitment agreement with SintecMedia and SMS dated 14 January 2014 pursuant to which the Riverwood Funds have irrevocably committed to procure that SintecMedia and/or SMS receives not less than GBP31,270,995 in cleared funds within 4 days of the Scheme becoming effective. The Riverwood Funds' new investment in SintecMedia and/or SMS will be by way of one or more direct or indirect capital contributions (which may take the form of ordinary equity, other equity, debt securities or shareholder loans at the Riverwood Funds' discretion).

The balance of the cash consideration payable to Scheme Shareholders under the terms of the Scheme will be funded from existing resources of the SintecMedia Group, including (to the extent required) pursuant to a pre-existing debt facility made available to SintecMedia by Bank Leumi, full details of which will be set out in the Scheme Document.

Cairn (in its capacity as financial adviser to SintecMedia and SMS) confirms that it is satisfied that sufficient resources are available to SintecMedia and SMS to satisfy in full the consideration payable under the terms of the Scheme (including any Pilat Shares that are issued as a result of the exercise of options under the Pilat Share Schemes).

Each Scheme Shareholder will be given the option to receive the consideration due to them upon the Scheme becoming effective either in Pounds Sterling or an equivalent amount in NIS (calculated by reference to the representative sterling-NIS exchange rate as published by the Bank of Israel on the date immediately prior to the effective date of the Scheme).

   10.   Pilat Share Schemes

Participants in the Pilat Share Schemes will be contacted separately regarding the effect of the Scheme on their rights under the Pilat Share Schemes and appropriate proposals will be made to such persons in due course. The Scheme will extend to any Pilat Shares which are unconditionally allotted and/or issued before the Scheme Record Time as a result of the exercise of Pilat Share Options.

   11.   Structure of the Scheme

It is intended that the proposals will be effected by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act. The Scheme is an arrangement between Pilat and the Scheme Shareholders and is subject to the approval of the Court.

The structure of the Acquisition is that SintecMedia will acquire 5 per cent. of the issued and to be issued share capital of Pilat not already owned by it and SMS will acquire the remaining issued and to be issued share capital of Pilat not already owned (or to be acquired pursuant to the Scheme) by SintecMedia.

The purpose of the Scheme is to provide for SMS and SintecMedia to become the holders of the entire issued and to be issued share capital of Pilat. This is to be achieved by the cancellation of the Scheme Shares held by Scheme Shareholders and the application of the reserve arising from such cancellation in paying up in full such number of new ordinary shares of 5 pence each in Pilat as is equal in nominal value to the nominal value of the Scheme Shares cancelled. Such new ordinary shares will be issued to SMS and SintecMedia in the proportions set out above in consideration for which SintecMedia and SMS will subsequently pay the cash consideration to which Pilat Shareholders on the register of members at the Scheme Record Time are entitled pursuant to the terms of the Scheme.

To become effective, the Scheme will require, amongst other things, the approval by a majority in number of each class of Scheme Shareholders representing at least 75 per cent. in value of the Scheme Shares of each class held by such Scheme Shareholders voting, either in person or by proxy, at the relevant Court Meeting (or any adjournment thereof), and the passing by the Pilat Shareholders of a special resolution necessary to implement the Scheme (including approving appropriate amendments to the articles of association of Pilat and approving the Delisting) at the General Meeting (or any adjournment thereof). In addition, the Scheme must be sanctioned, and the Capital Reduction must be confirmed, by the Court.

The Scheme will also be subject to certain conditions and certain further terms referred to in Appendix I of this announcement and to be set out in the Scheme Document.

Once the necessary approvals from Pilat Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme will become effective upon the delivery of the Reduction Court Order to the Registrar. The Scheme is expected to become effective towards the end of the first quarter of 2014. If the Scheme does not become effective on or before the Long Stop Date, it will lapse and the Scheme will not proceed (unless the parties agree otherwise with the consent of the Panel).

Upon the Scheme becoming effective, it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting.

Further details of the Scheme, including how Scheme Shareholders may participate in the Court Meeting and General Meeting, will be contained in the Scheme Document.

   12.   Expected Timetable

Pilat currently anticipates that:

(a) it will despatch the Scheme Document, together with the Forms of Proxy, to Pilat Shareholders and, for information only, to the holders of options and awards granted under the Pilat Share Schemes on or around 10 February 2014;

(b) the Court Meeting and General Meeting will take place on or around 6 March 2014 but in any event by 31 March 2014; and

(c) subject to the Scheme becoming unconditional and effective in accordance with its terms, the Scheme is expected to become effective towards the end of the first quarter of 2014, with the consideration being paid to Scheme Shareholders no later than 14 days after the Effective Date.

The timing of events which relate to the implementation of the Scheme is, however, subject to the approval of the Court and is therefore subject to change. A full anticipated timetable will be set out in the Scheme Document.

If the Scheme does not become effective by the Long Stop Date, the Scheme will lapse except where the requisite approvals at the Court Meeting and the General Meeting in relation to the Scheme have been obtained before this date, in which case the long stop date for the Scheme may be extended to such later date as SintecMedia, SMS and Pilat may agree and, if appropriate, the Court may approve.

   13.   Regulatory conditions

The Scheme will be subject to the conditions and further terms set out below and in Appendix I and the full terms and conditions which will be set out in the Scheme Document.

   14.   Overseas Shareholders

The availability of the Scheme or distribution of this announcement to persons not resident in the United Kingdom may be prohibited or affected by the laws of the relevant jurisdictions. Such persons should inform themselves about, and observe, any applicable requirements. Further details in relation to overseas Pilat Shareholders will be contained in the Scheme Document.

   15.   Delisting and re-registration

The Pilat Shares are admitted to trading on AIM and on the TASE.

It is intended that SintecMedia and SMS will procure that Pilat cancels the admission of the Pilat Shares to trading on AIM and the TASE upon or shortly after the Effective Date.

On the Effective Date, Pilat will be wholly owned by SintecMedia and SMS and share certificates in respect of the Pilat Shares will cease to be valid and should be destroyed. Entitlements to Scheme Shares held within the CREST system will be cancelled on the Effective Date.

On the Effective Date trading of Pilat Shares on the TASE will cease and shortly thereafter the listing of Pilat Shares on the TASE will be cancelled.

After the cancellation of Pilat Shares from admission to trading on AIM and the TASE, Pilat will be re-registered as a private company under the relevant provisions of the Companies Act.

   16.   Disclosure of interests in Pilat relevant securities

SintecMedia and SMS each confirm that it will today make an Opening Position Disclosure, setting out the details required to be disclosed by it under Rule 8.1(a) of the Code.

   17.   Acquisition-related arrangements

Pilat and SintecMedia have entered into a mutual confidentiality agreement dated 11 December 2013 (the "Confidentiality Agreement") pursuant to which each of Pilat and SintecMedia has undertaken to keep certain information relating to: (i) the Acquisition and (ii) the other party, confidential and not to disclose such information to third parties, except (i) to certain permitted disclosees for the purposes of evaluating the Acquisition or (ii) if required by applicable laws or regulations. These confidentiality obligations will remain in force until such time as the confidential information disclosed becomes publically known and made generally available. Pursuant to the terms of the Confidentiality Agreement, SintecMedia has agreed that, from 11 December 2013 to 30 June 2014, it shall not, and procure that none of its connected persons shall, amongst other things, acquire or offer to acquire any Pilat Shares. Such restrictions shall cease to apply: (i) if, and only for so long as, the board of Pilat has recommended an offer for Pilat by SintecMedia or any of its subsidiary undertakings and has not withdrawn that recommendation, or (ii) if a third party (not acting in concert with SintecMedia) announces a firm intention to make an offer for Pilat.

In addition, each of Pilat and SintecMedia have undertaken to each other not to solicit, endeavour to entice away or offer to employ any person employed or engaged by the other party for the nine month period following the date of the Confidentiality Agreement, except with the other's consent or otherwise in certain limited circumstances.

   18.   Documents on display

Copies of the following documents will be made available, subject to certain restrictions relating to persons resident in any Restricted Jurisdiction, on SintecMedia's website (www.sintecmedia.com) and Pilat's website (www.pilatmedia.com) by no later than 12 noon (London time) on 17 January 2014 until the Effective Date:

- this announcement;

- the irrevocable undertakings referred to in paragraph 5 above; and

- the Confidentiality Agreement referred to in paragraph 17 above.

   19.   General

The Scheme will be on the terms and subject to the conditions and further terms set out herein and in Appendix I to this announcement. The bases and sources of certain financial information contained in this announcement are set out in Appendix II to this announcement. Certain terms used in this announcement are defined in Appendix III to this announcement.

Enquiries:

SintecMedia Ltd./Sintec Media Software Ltd. Tel: +972 (2) 651-5122

Amotz Yarden, Chief Executive Officer

Shlomo Freidenreich, Chief Financial Officer

Cairn Financial Advisers LLP Tel: +44 (0)20 7148 7900

(Financial Adviser to SintecMedia and SMS)

Liam Murray

Avi Robinson

Pilat Media Global plc Tel: +44 (0)20 8782 0700

Avi Engel, Chief Executive Officer

Martin Blair, Chief Financial Officer

Shore Capital and Corporate Limited Tel: +44 (0)20 7408 4090

(Financial Adviser to Pilat)

Dru Danford

Patrick Castle

Abchurch Tel: +44 (0)20 7398 7719

(Public Relations Adviser to Pilat)

Henry Harrison-Topham

Jamie Hooper

This announcement is for information purposes only and does not constitute, or form part of, an offer to sell nor an invitation to subscribe for or purchase any securities nor the solicitation of an offer to buy securities pursuant to the Scheme or otherwise. The Scheme will be made solely by means of the Scheme Document, which will contain the full terms and conditions of the Scheme, including details of how to vote in favour of the Scheme. Pilat, SintecMedia and SMS urge Pilat Shareholders to read the Scheme Document which will be distributed to Scheme Shareholders in due course (with the exception of certain Scheme Shareholders in Restricted Jurisdictions), as it will contain important information relating to the Scheme.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas shareholders

Further details in relation to overseas Pilat Shareholders will be contained in the Scheme Document.

Forward-Looking Statements

These factors include, but are not limited to, the satisfaction of the conditions to the Scheme, factors identified elsewhere in this announcement as well as the following possibilities: future revenues are lower than expected; costs or difficulties relating to the integration of the businesses of the SintecMedia and Pilat Groups, or other future acquisitions, are greater than expected; expected cost savings from the transaction or from other future acquisitions are not fullyrealised or not realised within the expected time frame; competitive pressures in the industry increase; general economic conditions affecting the relevant industries, whether internationally or in the places where the SintecMedia and Pilat Groups do business, are less favourable than expected, and/or conditions in the securities market are less favourable than expected.

Forward-looking statements contained in this announcement in respect of Pilat and/or SintecMedia and/or SMS are made as of the date of this announcement based on the opinions and estimates of the Pilat Directors or, as the context requires, the SintecMedia Directors and/or SMS Directors. Subject to requirements to update under any applicable regulation or law, Pilat and/or SintecMedia and/or SMS disclaim any obligation to update any forward-looking statements, whether as a result of new information, estimates or opinions, future events or results or otherwise.

Not a profit forecast

Dealing Disclosure Requirements

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Publication on website

You will not be sent a hard copy of this announcement unless you request one. You may request a hard copy of this announcement, free of charge, by contacting Cairn Financial Advisers LLP, 61 Cheapside, London EC2V 6AX. Pilat Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Scheme should be in hard copy form.

Rule 2.10 Disclosures

In accordance with Rule 2.10 of the Code, Pilat confirms that it has 62,533,506 ordinary shares in issue and admitted to trading on AIM under ISIN reference GB0031172751.

Appendix I

Conditions and further terms of the Scheme

1 The Scheme is conditional upon it becoming unconditional and effective by not later than the Long Stop Date or such later date (if any) as Pilat, SintecMedia and SMS may, subject to the Takeover Code and/or with the consent of the Panel, agree and (if required) the Court may approve.

   2             The Scheme will be conditional upon:

(a) approval of the Scheme by a majority in number, representing at least 75 per cent. in value, of the Pilat Shareholders - other than SintecMedia - who are on the register of members of Pilat at the Voting Record Time and who are also present and voting, either in person or by proxy, at the Court Meeting or at any adjournment of that meeting by not later than 31 March 2014 (or such later date (if any) as SintecMedia, SMS and Pilat may, subject to the Takeover Code and/or with the consent of the Panel, agree and (if required) the Court may approve);

(b) the resolutions in connection with or required to approve and implement the Scheme and approve the Capital Reduction, to be set out in the notice of the General Meeting, being duly passed by the requisite majority at the General Meeting or at any adjournment of that meeting by not later than 31 March 2014 (or such later date (if any) as SintecMedia, SMS and Pilat may, subject to the Takeover Code and/or with the consent of the Panel, agree and (if required) the Court may approve); and

   (c)         the:

(i) sanction of the Scheme and the confirmation of the Capital Reduction, in either case without modification or with modification (on terms reasonably acceptable to SintecMedia, SMS and Pilat) by the Court, and the delivery for registration of copies of the Court Orders and the statements of capital attached thereto to the Registrar of Companies, and (if so ordered in order to take effect) the registration of the Reduction Court Order and such statement of capital by the Registrar of Companies; and

(ii) Scheme Court Hearing being held on or before 18 April 2014 or such later date as is agreed between SintecMedia, SMS and Pilat.

3 Subject to paragraph 4 below and to the requirements of the Panel, application to the Court to sanction the Scheme and to confirm the Capital Reduction will not be made unless the conditions at paragraphs 2(a) and (b) above have been fulfilled, and unless immediately prior to the hearing to sanction the Scheme the following conditions (as amended if appropriate) are satisfied or, save in the case of the conditions in paragraph 3(a), waived (and in the case of the conditions in paragraphs 3(a) remain satisfied):

(a) neither the UK Competition Commission nor the European Commission (including, without limitation, any other national anti-trust or merger control authority, or any other similar body or person whatsoever in any relevant jurisdiction (each a "Third Party")) having instituted or implemented or threatened, or having decided to institute, implement or threaten, any action, proceeding, suit, investigation, enquiry or reference (and in each case not having withdrawn the same) or having made, proposed or enacted any statute, regulation, order or decision or taken any other steps which is reasonably likely to (in each case to an extent which is material in the context of the Wider Pilat Group or the Wider SintecMedia Group, as the case may be, in each case taken as a whole):

(i) make the Scheme or its implementation or the acquisition by SintecMedia and SMS of all or any Pilat Shares not already owned by SintecMedia, or the acquisition or proposed acquisition of other securities in, or under the control of, Pilat by SintecMedia and SMS, void, illegal and/or unenforceable under the laws of any relevant jurisdiction or otherwise, directly or indirectly, restrain, restrict, prohibit, challenge, frustrate, materially delay or interfere with the same, or impose additional material conditions or obligations with respect thereto, or otherwise require material amendment to the terms of the Scheme or any such acquisition (including, without limitation, taking any steps which would entitle the Pilat Directors to require SintecMedia to dispose of all or some of its Pilat Shares or restrict the ability of SintecMedia to exercise voting rights in respect of some or all of such Pilat Shares);

(ii) require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture, by any member of the Wider SintecMedia Group or any member of the Wider Pilat 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 respective businesses or to own any of their respective assets or property;

(iii) impose any limitation on, or result in a delay in, the ability of any member of the Wider SintecMedia Group to acquire or hold or exercise effectively, directly or indirectly, all or any rights of ownership in respect of shares or other securities (or the equivalent) in any member of the Wider Pilat Group or to exercise management control over any such member;

(iv) otherwise adversely affect in any respect any or all of the businesses, assets, profits or financial or trading position of any member of the Wider SintecMedia Group or any member of the Wider Pilat Group respectively in each case;

(v) result in any member of the Wider Pilat Group ceasing to be able to carry on business or impose any limitation on the ability of any member of the Wider SintecMedia Group or any member of the Wider Pilat Group to integrate or co-ordinate its business, or any part of it, with the business of any member of the Wider Pilat Group or the Wider SintecMedia Group;

(vi) result in a delay in the ability of any member of the Wider SintecMedia Group, or render any member of the Wider SintecMedia Group unable, to acquire all or some of the Pilat Shares or other securities in Pilat or require, prevent or delay a divestiture by any member of the Wider SintecMedia Group of any such shares or securities;

(vii) result in any member of the Wider SintecMedia Group having to dispose of any shares or other securities (or the equivalent) in any member of the Wider Pilat Group or the Wider SintecMedia Group;

(viii) save pursuant to the Scheme, require any member of the Wider SintecMedia Group or of the Wider Pilat Group to acquire or offer to acquire any shares or other securities in any member of the Wider Pilat Group owned by any third party; or

(ix) impose any charge, lien, contribution notice, financial support direction or restoration order on any member of the Wider SintecMedia Group or any member of the Wider Pilat Group respectively or over any or all of their respective businesses, assets or profits,

and all applicable waiting and other time periods during which any such Third Party could take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference under the laws of any relevant jurisdiction having expired, lapsed or been terminated;

(b) save as Fairly Disclosed there being no provision of any agreement, arrangement, licence or other instrument to which any member of the Pilat Group is a party or by or to which any member of the Pilat Group or any part of its assets may be bound, entitled or subject or any circumstance that, as a result of the Acquisition, or change in the control or management of any member of the Pilat Group or otherwise, would or might reasonably be expected to result in (to an extent that is material in the context of the Pilat Group taken as a whole):

(i) any moneys borrowed by, or any other indebtedness, actual or contingent of, or grant available to, any such member being or becoming repayable or capable of being declared repayable immediately or earlier than the repayment date provided for in such agreement, arrangement, licence or other instrument, or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited;

(ii) any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation or liability arising or any material and adverse action being taken or arising thereunder;

(iii) the assets, rights, liabilities, obligations, interests or business of any member of the Pilat Group under any such agreement, arrangement, licence or instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangements relating to any such interests or business) being terminated or adversely modified or affected;

(iv) any such member ceasing to be able to carry on its business under any name which it at present uses;

(v) any assets or interests of or the use of which is enjoyed by any such member being or failing to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the Wider SintecMedia Group or of the Pilat Group, in each case otherwise than in the ordinary course of business;

(vi) any change in or effect on the ownership or use of any intellectual property rights owned or used by any member of the Pilat Group;

(vii) the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any such member or any such security interest (whenever and wherever arising or having arisen) becoming enforceable;

(viii) the value of any such member or their respective financial or trading position or profits or prospects being prejudiced or adversely affected or materially and adversely modified; or

(ix) the creation or acceleration of any liability (actual or contingent) of any member of the Pilat Group;

and no event having occurred which, under any provision of any agreement, arrangement, licence, permit or other instrument to which any member of the Pilat Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, would or might reasonably be expected to result in any of the events or circumstances as are referred to in sub-paragraphs (i) to (ix) of this Condition;

(c) all material notifications, filings or applications which are necessary or reasonably considered appropriate in connection with the Acquisition having been made and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Acquisition or the acquisition by any member of the Wider SintecMedia Group of any shares or other securities in, or control of, Pilat and all material authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals reasonably deemed necessary or appropriate by SintecMedia and/or SMS or any member of the Wider SintecMedia Group for or in respect of the Acquisition or the proposed acquisition of any shares or other securities in, or control of, Pilat by any member of the Wider SintecMedia Group having been obtained in terms and in a form reasonably satisfactory to SintecMedia and/or SMS from all appropriate third parties or persons with whom any member of the Pilat Group has entered into contractual arrangements and all such authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals together with all authorisations, orders, recognitions, grants, licences, confirmations, clearances, permissions and approvals necessary or appropriate to carry on the business of any member of the Pilat Group remaining in full force and effect and all filings necessary for such purpose have been made and there being no notice or intimation of any intention to revoke or not to renew any of the same at the time at which the Acquisition becomes otherwise unconditional and all necessary statutory or regulatory obligations in any jurisdiction having been complied with;

(d) except as Fairly Disclosed, no member of the Pilat Group having, since 31 December 2012 (to an extent that is material in the context of the Pilat Group taken as a whole):

(i) save as between Pilat and wholly owned subsidiaries of Pilat or for Pilat Shares issued pursuant to the exercise of options granted under the Pilat Share Schemes, issued or agreed to issue, authorised or proposed the issue of additional shares (or other securities) of any class;

(ii) save as between Pilat and wholly owned subsidiaries of Pilat or for the grant of options under the Pilat Share Schemes, issued or agreed to issue, authorised or proposed the issue of securities convertible into shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities;

(iii) other than to another member of the Pilat Group, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution whether payable in cash or otherwise;

(iv) save for intra-Pilat Group transactions or pursuant to the Acquisition, merged or demerged with any body corporate or acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any right, title or interest in any asset (including shares and trade investments) or authorised or proposed or announced any intention to propose any merger, demerger, acquisition or disposal, transfer, mortgage, charge or security interest, in each case, other than in the ordinary course of business;

(v) save for intra-Pilat Group transactions, made or authorised or proposed or announced an intention to propose any change in its loan capital;

(vi) issued or agreed to issue, authorised or proposed the issue of any debentures or, save in the ordinary course of business, incurred or increased, or agreed to incur or increase, any indebtedness or become, or agreed to become, subject to any contingent liability;

(vii) purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, save in respect to the matters mentioned in sub-paragraphs (i) and (ii) above, made any other change to any part of its share capital;

(viii) implemented, or authorised, proposed or announced its intention to implement, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business or entered into or changed the terms of any contract with any director or senior executive;

(ix) entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or could be materially restrictive on the businesses of any member of the Pilat Group other than to a nature and extent which is normal in the context of the business concerned or which involves or could involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business;

(x) (other than in respect of a member which is dormant and was solvent at the relevant time) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any relevant jurisdiction or had any such person appointed which in any such case would be material in the context of the Wider SintecMedia Group taken as a whole;

   (xi)        waived or compromised any claim otherwise than in the ordinary course of business;

(xii) save as agreed in writing by SintecMedia and SMS and with the consent of the Panel, proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Pilat Group;

(xiii) save as agreed in writing by SintecMedia and SMS taken (or agreed or proposed to take) any action which requires, or would require, the consent of the Panel or the approval of Pilat Shareholders in general meeting in accordance with, or as contemplated by, Rule 21.1 of the Code; or

(xiv) entered into any contract, commitment, arrangement or agreement otherwise than in the ordinary course of business or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition;

   (e)        except as Fairly Disclosed, since 31 December 2012:

(i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Pilat Group which, in any such case, is material in the context of the Pilat Group taken as a whole and no circumstance having arisen which would or might reasonably be expected to result in any such adverse change or deterioration;

(ii) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Pilat Group is or may become a party (whether as a claimant, defendant or otherwise) and no investigation by any third party against or in respect of any member of the Pilat Group having been instituted, announced or threatened in writing to a member of the Pilat Group by or against or remaining outstanding in respect of any member of the Pilat Group which, in any such case, has had, or might reasonably be expected to have, a material adverse effect on the Pilat Group taken as a whole;

(iii) no contingent or other liability of the Pilat Group having arisen or become apparent to SintecMedia and/or SMS which has had, or might reasonably be expected to have, a material adverse effect on the Pilat Group taken as a whole; and

(iv) no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence, accreditation or regulatory approval held by any member of the Pilat Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which has had, or might reasonably be expected to have, a material adverse effect on the Pilat Group taken as a whole;

(f) SintecMedia and SMS not having discovered that any financial, business or other information concerning the Pilat Group as contained in the information publicly disclosed at any time by or on behalf of any member of the Pilat Group by a Regulatory Information Service was when so publicly disclosed misleading, contained a misrepresentation of fact or omitted to state a fact necessary to make that information not misleading, in each case to an extent which is now material in the context of the Pilat Group taken as a whole.

4 The Scheme will lapse and the Scheme will not proceed if, prior to the date of the Court Meeting, (i) the Scheme, or any matter arising from it, is referred to the UK Competition Commission; or (ii) following a request to the European Commission under Article 22(3) of the EC Merger Regulation in relation to the Scheme 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 EC Merger Regulation.

The conditions in paragraphs 1, 2 and paragraph 3(a) of this Appendix I may not be waived. Subject to the requirements of the Panel, SintecMedia and SMS reserves the right to waive in whole or in part, in its discretion, all or any of the conditions contained in paragraphs 3(b) to 3(f) of this Appendix I.

If SintecMedia and/or SMS is/are required by the Panel to make an offer for any Pilat Shares under the provisions of Rule 9 of the Takeover Code, SintecMedia and/or SMS may make such alterations to the terms and conditions of the proposals, including switching to a contractual offer, as are necessary to comply with the provisions of that Rule.

In accordance with Rule 13.5 of the Takeover Code, SintecMedia and SMS will not invoke any Condition so as to cause the Scheme not to proceed, to lapse or to be withdrawn, unless the circumstances which give rise to the right to invoke the Condition are of material significance to SintecMedia and/or SMS in the context of the Scheme and the Panel consents to such right being invoked.

The Scheme will be governed by and construed in accordance with English law. The English Courts will have exclusive jurisdiction for determining any matter which may arise under or in connection with the Scheme or the Scheme generally.

Appendix II

Bases of calculations and sources

a) The number of Pilat Shares to which the Scheme is expected to relate is 52,383,392, which is the aggregate of the existing number of Pilat Shares in issue of 62,533,506 as at 15 January 2014 (being the latest practicable date prior to the date of this announcement), and the number of outstanding options under the Pilat Shares Schemes, being 4,060,668 Pilat Shares should all options granted under the Pilat Share Schemes vest, less the 14,210,782 Pilat Shares already owned by SintecMedia. The ISIN number for Pilat Shares is GB0031172751.

b) Unless otherwise stated, financial information about Pilat has been extracted from the audited consolidated financial statements of the Pilat Group for the financial year ended 31 December 2012, prepared in accordance with International Financial and Reporting Standards as adopted by the European Union, and the unaudited financial statements of the Pilat Group for the nine month period ended 30 September 2013.

c) Unless otherwise stated, financial information relating to SintecMedia has been extracted from the audited annual report and accounts of the SintecMedia Group for the financial period ended 31 December 2012.

d) Pilat Share prices have been derived from the Daily Official List and represent closing middle market prices on the relevant date and from the TASE and represent the closing price on the relevant date.

e) References to a percentage of Pilat Shares are based on the 62,533,506 Pilat Shares in issue on 15 January 2014 (being the latest practicable date prior to the date of this announcement).

f) The value of the Acquisition is calculated on the basis of the number of Pilat Shares in issue referred to in paragraph (e) above and the number of outstanding options under the Pilat Share Schemes referred to in paragraph (a) above.

   g)    All references to times in this announcement are to London times.

Appendix III

Definitions

The following definitions apply throughout this announcement, unless the context requires otherwise:

 
 "Acquisition"                the proposed recommended acquisition of the 
                               entire issued and to be issued ordinary share 
                               capital of Pilat not already owned by SintecMedia 
                               by SintecMedia and SMS to be effected by the 
                               Scheme 
 "AIM"                        a market operated by the London Stock Exchange 
 "AIM Rules"                  the rules for AIM companies as published by 
                               the London Stock Exchange from time to time 
 "Board"                      the board of directors of SMS or SintecMedia 
                               or Pilat (as the case 
                               may be) 
 "business day"               any day, other than a Saturday, Sunday or public 
                               or bank holiday, on which banks are generally 
                               open for business in the City of London and 
                               Israel 
 "Cairn"                      Cairn Financial Advisers LLP 
 "Capital Reduction"          the proposed reduction of the share capital 
                               of Pilat provided for by the Scheme under section 
                               641 of the Companies Act 
 "Capital Reduction           the hearing by the Court to confirm the Capital 
  Court Hearing"               Reduction 
 "Code" or "Takeover          the UK City Code on Takeovers and Mergers, as 
  Code"                        amended from time to time 
 "Companies Act"              the Companies Act 2006 (as amended, modified, 
                               consolidated, re-enacted or replaced from time 
                               to time) 
 "Conditions"                 the conditions of the Scheme set out in Appendix 
                               I to this announcement and to be set out in 
                               the Scheme Document and a "Condition" shall 
                               mean any one of them 
 "control"                    a holding or aggregate holdings of shares carrying 
                               30 per cent. or more of the voting rights attributable 
                               to the share capital of a company which are 
                               currently exercisable at a general meeting, 
                               irrespective as to whether the holding or aggregate 
                               holdings gives de facto control (and "controlling" 
                               and "controlled by" shall be construed accordingly) 
 "Court"                      the High Court of Justice in England and Wales 
 "Court Meeting"              the meeting (or any adjournments thereof) of 
                               the Scheme Shareholders to be convened pursuant 
                               to an order of the Court under section 896 of 
                               the Companies Act to consider and, if thought 
                               fit, approve the Scheme (with or without modification) 
 "Court Orders"               the Scheme Court Order and the Reduction Court 
                               Order or, where the context requires, either 
                               of them 
 "CREST"                      the relevant system (as defined in the CREST 
                               Regulations) in respect of which Euroclear UK 
                               & Ireland Limited is the operator (as defined 
                               in the CREST Regulations) 
 "CREST Regulations"          the Uncertificated Securities Regulations 2001 
                               (SI 2001 No. 3755) (as amended, modified, consolidated, 
                               re-enacted or replaced from time to time) 
 "Daily Official              the AIM Appendix of the daily official list 
  List"                        of the London Stock Exchange 
 "Dealing Disclosure"         has the same meaning as in Rule 8 of the Code 
 "Effective Date"             the date on which the Scheme and Capital Reduction 
                               become effective 
 "Enlarged Group"             the SintecMedia Group including, from the date 
                               on which the Scheme becomes effective, the Pilat 
                               Group 
 "Excluded Shares"            any Pilat Shares of which SintecMedia is the 
                               holder or in which SintecMedia is beneficially 
                               interested 
 "Fairly Disclosed"           the information which has been fairly disclosed: 
                               (i) in writing prior to 
                               the date of this announcement by or on behalf 
                               of Pilat to SMS or SintecMedia or SMS' or SintecMedia's 
                               financial, accounting, tax or legal advisers 
                               (specifically as SMS' and/or SintecMedia's advisers 
                               in relation to the Acquisition); (ii) in Pilat's 
                               published annual and/or quarterly report for 
                               the relevant financial period or periods referred 
                               to in the relevant Condition; (iii) in a public 
                               announcement made in accordance with the AIM 
                               Rules or the UK's Disclosure and Transparency 
                               Rules by Pilat prior to the date of this announcement; 
                               or (iv) in this announcement 
 "Forms of Proxy"             the forms of proxy to be enclosed with the Scheme 
                               Document for use at the Court Meeting and the 
                               General Meeting 
 "General Meeting"            the general meeting (or any adjournment thereof) 
                               of the Pilat Shareholders to be convened in 
                               connection with, amongst other things, the Scheme 
                               and expected to be held as soon as the preceding 
                               Court Meeting has been concluded or adjourned 
 "holder"                     a registered holder and includes any person 
                               entitled by transmission 
 "Independent Directors"      the Pilat Directors, excluding Samuel Sattath, 
                               Avi Engel, Michael Rosenberg and Martin Blair 
                               who are not considered to be independent in 
                               relation to the Payments for the purposes of 
                               Rule 16 of the Code 
 "Independent Shareholders"   Pilat Shareholders other than SintecMedia, SMS, 
                               Avi Engel, Michael Rosenberg, Martin Blair, 
                               Samuel Sattath, Michael Zuckerman, Benjamin 
                               Moneta and Ronnie Erlichman, their connected 
                               persons and (in respect of Pilat Shares held 
                               on behalf such persons and/or their connected 
                               persons only) persons holding Pilat Shares on 
                               behalf of such persons and/or their connected 
                               persons 
 "Israeli dealing             a day on which trading takes place on the TASE 
  day" 
 "Israeli Tax Declaration     the declaration form in relation to the Israeli 
  Form"                        Withholding Tax which will accompany the Scheme 
                               Document 
 "Israeli Withholding         as applicable under the Israeli Income Tax Ordinance 
  Tax"                         (New Version) - 1961 and the Israeli Income 
                               Tax Regulations (withholding from consideration, 
                               payment or capital gain upon the sale of securities, 
                               sale of a unit in a mutual fund or future transaction) 
                               - 2002 
 "London Stock Exchange"      London Stock Exchange plc 
 "Long Stop Date"             30 April 2014 or such earlier or later date 
                               as Pilat, SintecMedia and SMS may agree and 
                               the Panel and/or the Court may allow, being 
                               the latest date by which the Scheme must be 
                               effective 
 "NIS"                        New Israeli Shekels, the lawful currency of 
                               the State of Israel 
 "Offeror"                    SintecMedia and SMS 
 "Opening Position            has the same meaning as in Rule 8 of the Code 
  Disclosure" 
 "Overseas Shareholders"      Pilat Shareholders (not being holders of Pilat 
                               Shares traded through the TASE) who are resident 
                               in, or nationals or citizens of, jurisdictions 
                               outside the UK or who are nominees of, or custodians 
                               or trustees for, residents, citizens or nationals 
                               of other countries 
 "Panel"                      the UK Panel on Takeovers and Mergers 
 "Payments"                   has the meaning given in paragraph 8 of Part 
                               2 of this announcement 
 "Pilat"                      Pilat Media Global plc, a company incorporated 
                               in England and Wales with registered number 
                               04132467 
 "Pilat Directors"            the directors of Pilat 
 "Pilat Group"                Pilat, its subsidiaries and its subsidiary undertakings 
 "Pilat Shares"               ordinary shares of 5p each in the capital of 
                               Pilat 
 "Pilat Share Options"        share options granted pursuant to the Pilat 
                               Share Schemes 
 "Pilat Shareholders"         holders of Pilat Shares from time to time 
 "Pilat Share Schemes"        the share option schemes of Pilat 
 "Pounds Sterling",           the lawful currency of the UK (and references 
  "GBP", or "sterling"         to "pence" shall be construed accordingly) 
 "Reduction Court             the order of the Court confirming the Capital 
  Order"                       Reduction under section 641 of the Companies 
                               Act 
 "Registrar"                  the Registrar of Companies in England and Wales 
 "Restricted Jurisdiction"    any jurisdiction where local laws or regulations 
                               may result in significant risk of civil, regulatory 
                               or criminal exposure if information concerning 
                               the Scheme is sent or made available to Pilat 
                               Shareholders in that jurisdiction (in accordance 
                               with Rule 23.2 of the Takeover Code) 
 "RIS" or "Regulatory         any of the services approved by the London Stock 
  Information Service"         Exchange and included in the list maintained 
                               on the London Stock Exchange's website 
 "Riverwood Funds"            Riverwood Capital L.P., Riverwood Capital Partners 
                               (Parallel A) L.P. and Riverwood Capital Partners 
                               (Parallel B) L.P. 
 "Scheme"                     the proposed scheme of arrangement made under 
                               Part 26 of the Companies Act between Pilat and 
                               the Scheme Shareholders (with or subject to 
                               any modification, addition or condition approved 
                               or imposed by the Court and agreed to by SintecMedia, 
                               SMS and Pilat) for the acquisition of the entire 
                               issued and to be issued share capital of Pilat 
                               by SintecMedia and SMS, particulars of which 
                               will be set out in the Scheme Document 
 "Scheme Court Order"         the order of the Court sanctioning the Scheme 
                               under Part 26 of the Companies Act 
 "Scheme Document"            the document to be sent to Pilat Shareholders 
                               (other than those in Restricted Jurisdictions) 
                               on or around 10 February 2014 which will, among 
                               other things, contain details of the Scheme, 
                               the terms and conditions of the Scheme and notices 
                               convening the Court Meeting and the General 
                               Meeting 
 "Scheme Price"               95 pence for each Scheme Share 
 "Scheme Record Time"         anticipated to be 6.00pm on the Business Day 
                               before the Capital Reduction Court Hearing 
 "Scheme Shareholders"        the registered holders of Scheme Shares 
 "Scheme Shares"              the Pilat Shares: 
 
                               (a) in issue at the date of the Scheme Document; 
                               or 
 
                               (b) (if any) issued after the date of the Scheme 
                               Document and prior to the Voting Record Time; 
                               or 
 
                               (c) (if any) issued at or after the Voting Record 
                               Time and at or prior to the Scheme Record Time 
                               either on terms that the original or any subsequent 
                               holders thereof shall be bound by the Scheme 
                               and/or in respect of which the original or any 
                               subsequent holders thereof are, or shall have 
                               agreed in writing to be, bound by the Scheme, 
 
                               in each case, excluding any Excluded Shares 
 "Shore Capital"              Shore Capital and Corporate Limited 
 "SintecMedia"                SintecMedia Ltd., a company incorporated in 
                               Israel with registered number 512877986 
 "SintecMedia Directors"      the directors of SintecMedia 
 "SintecMedia Group"          SintecMedia, its subsidiaries and its subsidiary 
                               undertakings (including, for the avoidance of 
                               doubt, SMS) 
 "SMS"                        SintecMedia Software Ltd., a company incorporated 
                               in England and Wales with registered number 
                               5629887 
 "SMS Directors"              the directors of SMS 
 "TASE"                       Tel Aviv Stock Exchange 
 "UK dealing day"             a day on which dealings in domestic securities 
                               may take place on, and with the authority of, 
                               the London Stock Exchange 
 "United Kingdom"             the United Kingdom of Great Britain and Northern 
  or "UK"                      Ireland (and its dependant territories) 
 "Voting Record Time"         the time and date specified in the Scheme Document 
                               by reference to which entitlement to vote on 
                               the Scheme will be determined 
 "Wider SintecMedia           SintecMedia, its subsidiaries and its subsidiary 
  Group"                       undertakings, associated undertakings and any 
                               other undertakings, in which the SintecMedia 
                               Group and/or such undertakings (aggregating 
                               their interests), have a substantial interest 
 "Wider Pilat Group"          Pilat, its subsidiaries and its subsidiary undertakings, 
                               associated undertakings and any other undertakings, 
                               in which Pilat Group and/or such undertakings 
                               (aggregating their interests), have a substantial 
                               interest

All references to legislation in this announcement are to English legislation unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "associated undertaking", "undertaking" and "parent undertaking" have the respective meanings given to them by the Companies Act and "substantial interest" means a direct or indirect interest in twenty (20) per cent. or more of the equity share capital (as defined in the Companies Act) of any undertaking.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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