TIDMTFC
RNS Number : 9177M
Vector Capital Corporation
02 June 2010
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 THAT JURISDICTION
For immediate release
2 June 2010
RECOMMENDED CASH ACQUISITION OF
TRAFFICMASTER PLC
BY VECTOR CAPITAL LIMITED
to be effected by means of a scheme of arrangement
under Part 26 of the
Companies Act 2006
The boards of Vector Capital Limited ("Vector UK") and Trafficmaster Plc
("Trafficmaster") are pleased to announce that they have reached agreement on
the terms of the recommended acquisition by Vector UK, a wholly-owned subsidiary
of Vector Capital, of the entire issued and to be issued share capital of
Trafficmaster.
Summary and highlights
· Under the terms of the Acquisition, Trafficmaster Shareholders will
receive 47 pence in cash for each Trafficmaster Share held at the Scheme Record
Time, valuing the entire existing issued share capital (fully diluted by the
exercise of all outstanding options in the money and capable of exercise) of
Trafficmaster at approximately GBP73.27 million.
· The Acquisition represents a premium of approximately:
· 19.75 per cent. to the closing price of 39.25 pence per Trafficmaster
Share on 27 April 2010, being the last dealing day prior to the commencement of
the Offer Period;
· 40.13 per cent. to the average closing price of 33.54 pence per
Trafficmaster Share for the three month period up to and including 27 April
2010, being the last dealing day prior to the commencement of the Offer Period;
and
· 45.89 per cent. to the average closing price of 32.22 pence per
Trafficmaster Share for the twelve month period up to and including 27 April
2010, being the last dealing day prior to the commencement of the Offer Period.
· The Acquisition will be effected by way of a scheme of arrangement
between Trafficmaster and Trafficmaster Shareholders under Part 26 of the Act.
This procedure involves an application by Trafficmaster to the Court to sanction
the Scheme and to confirm the Reduction comprised in the Scheme.
· It is expected that the Scheme Document will be posted no later than
11 June 2010 and that the Scheme will become effective and the Acquisition
completed by the end of July 2010, subject to the satisfaction or (if
applicable) waiver of all relevant conditions.
· Upon the Scheme becoming effective, it will be binding on all
Trafficmaster Shareholders irrespective of whether they attended or voted at the
Court Meeting or the General Meeting (and if they attended and voted, whether or
not they voted in favour).
· The Independent Directors of Trafficmaster, who have been so advised
by Canaccord Genuity Limited, consider the terms of the Acquisition to be fair
and reasonable. In providing such advice, Canaccord Genuity Limited has taken
into account the commercial assessments of the Independent Directors of
Trafficmaster. Accordingly, the Independent Directors of Trafficmaster will
unanimously recommend that Trafficmaster Shareholders vote in favour of the
resolutions to be proposed to Trafficmaster Shareholders at the Court Meeting
and the General Meeting.
· Vector UK has received irrevocable undertakings:
(i) to vote in favour of the resolutions to be proposed to Trafficmaster
Shareholders at the Court Meeting and the General Meeting or, in the case of
members of the Management Team, to be bound by the Scheme; and
(ii) if the Acquisition is subsequently structured as a takeover offer,
to accept any potential recommended takeover offer made by Vector UK,
from (i) all of the Directors of Trafficmaster who have a beneficial holding of
Trafficmaster Shares, in respect of their entire beneficial interest amounting
to an aggregate of 600,000 Trafficmaster Shares, which represents approximately
0.40 per cent. of the entire existing issued share capital of Trafficmaster; and
(ii) other Trafficmaster Shareholders in respect of their entire beneficial
interest, amounting to an aggregate of 42,164,569 Trafficmaster Shares, which
represents approximately 28.05 per cent. of the entire issued share capital of
Trafficmaster.
The undertakings from the Directors of Trafficmaster will continue to be binding
even in the event of a higher competing offer for Trafficmaster being announced,
unless Vector UK's offer lapses or is withdrawn.
The undertakings received from the Trafficmaster Shareholders (other than the
undertakings received from the Directors of Trafficmaster) cease to be binding
in certain circumstances including if a third party makes a higher offer for
Trafficmaster which (in such shareholder's opinion) represents an improvement of
10 per cent. or more on the value of the Cash Consideration.
· Trafficmaster is principally engaged in providing intelligent
vehicle services to enhance driving experience and improve business performance
by saving companies and drivers time and money.
· Vector UK is a wholly-owned subsidiary of Vector Capital, a leading
global technology-focused private equity firm specialising in buyouts, spinouts
and recapitalisations of established technology businesses. Vector Capital has
a significant track record of making acquisitions in the technology sector.
· Vector Capital believes that it can enable Trafficmaster to maintain
and grow its worldwide telematics platform and fleet management business. As a
result of private ownership by the Vector Funds, the management of Vector
Capital believe Trafficmaster will have the financial and operational
flexibility necessary in order to grow and transition its business both
organically and through continued acquisitions.
Commenting on the Acquisition, David Fishman, Partner of Vector Capital, said:
"Vector Capital looks forward to working with Trafficmaster's management and
employees to further strengthen the company's long-time leadership in telematics
and fleet management solutions. We believe Trafficmaster and Teletrac will
significantly benefit from the company being a private company, and will be in a
better position to take advantage of the opportunities in its core markets as
well as deliver lasting value for its customers."
Commenting on the Acquisition, Alan McWalter, Chairman of Trafficmaster, said:
"The Independent Directors believe that this transaction secures significant
value now for Trafficmaster shareholders, and outweighs the alternative that
could be derived should the Company continue to remain publicly quoted and to
pursue its own growth and acquisition strategy. We anticipate that both our
customers and employees will also benefit as Trafficmaster continues to grow
under private ownership."
Commenting on the Acquisition, Tony Eales, Chief Executive of Trafficmaster,
said:
"We are delighted to be working with Vector Capital. This transaction will
increase our financial and operational flexibility and will enable us to
accelerate our development. Having a significant, long-term investor of Vector
Capital's stature will allow us to further increase our capabilities and enhance
the services we provide our customers. We believe this is a good deal for our
shareholders, customers and employees and we look forward to working with the
team at Vector to deliver our potential."
The Acquisition and the Scheme will be subject to the conditions and further
terms set out in the following announcement (including those in Appendix 1) and
the terms and conditions set out in the Scheme Document when issued. Appendix 2
contains definitions of certain terms used in this summary and the following
announcement. Appendix 3 contains the sources of certain information and bases
of certain calculations contained in the following announcement.
This summary should be read in conjunction with, and is subject to, the full
text of the following announcement (including the Appendices).
Enquiries:
Vector Capital
David Fishman, Partner 001 415
293 5000
Andy Fishman, Vice President
Panmure Gordon (UK) Limited
(Financial adviser to Vector Capital)
Dominic Morley 0044
207 459 3600
Stuart Gledhill
Trafficmaster
Tony Eales, Chief Executive 0044 1234
759300
Tim Coleman, Finance Director
Canaccord Genuity Limited
(Financial and Rule 3 Adviser to Trafficmaster)
Rory O'Sullivan 0044
207 050 6500
Simon Bridges
Henry Fitzgerald O'Connor
City Profile
(PR Adviser to Trafficmaster)
Simon Courtenay 0044
207 448 3244
This announcement does not constitute, or form part of, an offer or invitation
to purchase or subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction. The full terms and conditions of the Scheme will
be set out in the Scheme Document. Trafficmaster Shareholders are advised to
read carefully and in its entirety the Scheme Document in relation to the
Acquisition, once it has been issued, before making any decision with respect to
the Acquisition. Any response in relation to the Acquisition should be made
only on the basis of the information referred to in the Scheme Document.
The Acquisition relates to the shares of a United Kingdom public limited company
and is proposed to be made by means of a scheme of arrangement under English
company law and the City Code. The Scheme is not subject to the tender offer or
proxy rules under the United States Securities Exchange Act of 1934, as amended.
Accordingly, the Scheme is subject to the disclosure requirements, rules and
practices applicable in schemes of arrangements in the United Kingdom, which
differ from the requirements of United States tender offer and proxy rules.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by the law of those
jurisdictions and therefore any persons in such jurisdictions into whose
possession this document comes should inform themselves about and observe any
such restrictions. Failure to comply with any such restrictions may constitute
a violation of the securities laws of any such jurisdiction.
Panmure Gordon (UK) Limited, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Vector Capital and Vector UK and
no one else in connection with the Acquisition and will not be responsible to
anyone other than Vector Capital and Vector UK for providing the protections
afforded to clients of Panmure Gordon (UK) Limited or for providing advice in
relation to the Acquisition or any matter referred to herein.
Canaccord Genuity Limited is authorised and regulated in the United Kingdom by
the FSA, is acting exclusively for Trafficmaster and for no one else in
connection with the Acquisition and will not be responsible to anyone other than
Trafficmaster for providing the protections afforded to clients of Canaccord
Genuity Limited or for providing advice in relation to the Acquisition or any
matter referred to herein.
This announcement has been prepared for the purposes of complying with English
law, the Listing Rules and the City Code and the information disclosed may not
be the same as that which would have been disclosed if this announcement had
been prepared in accordance with laws and regulations of any jurisdiction
outside the United Kingdom.
Forward-Looking Statements
This announcement contains certain statements that are or may be
forward-looking. These statements typically contain words such as "anticipate",
"target", "estimate", "will", "may", "intend", "expect", "believe", "should" and
words of similar import. By their nature, forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that will occur in the future. These statements are based on assumptions and
assessments made by the boards of Trafficmaster and Vector UK in light of their
experience and their perception of historical trends, current conditions,
expected future developments and other factors they believe appropriate. By
their nature, forward-looking statements involve risk and uncertainty and the
factors described in the context of such forward-looking statements in this
document could cause actual results and developments to differ materially from
those expressed in or implied by such forward-looking statements.
Although the boards of Vector UK and Trafficmaster believe the expectations in
such forward-looking statements are reasonable, should one or more of these
risks or uncertainties materialise, or should underlying assumptions prove
incorrect, overall results may vary materially from those described in this
announcement. The boards of Vector UK and Trafficmaster assume no obligation to
update or correct the information contained in this document.
Disclosure Requirements of the City Code
Under Rule 8.3(a) of the City Code, any person who is interested in 1% or more
of any class of relevant securities of Trafficmaster or of any paper 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 paper 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) Trafficmaster; and (ii) any paper 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
paper offeror is first identified. Relevant persons who deal in the relevant
securities of Trafficmaster or of a paper offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in
1% or more of any class of relevant securities of Trafficmaster or of any paper
offeror must make a Dealing Disclosure if the person deals in any relevant
securities of Trafficmaster or of any paper 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) Trafficmaster; and (ii) any paper 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.
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 Trafficmaster or a paper 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 Trafficmaster and by any
offeror and Dealing Disclosures must also be made by Trafficmaster, 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 Trafficmaster and the 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. If you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure, you should contact
the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Publication on website
In accordance with Rule 19.11 of the City Code, a copy of this announcement will
be available on Trafficmaster's website at www.Trafficmaster.co.uk by no later
than 12 noon London time on 3 June 2010.
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 THAT JURISDICTION
For immediate release
2 June 2010
RECOMMENDED CASH ACQUISITION OF
TRAFFICMASTER PLC
BY VECTOR CAPITAL LIMITED
to be effected by means of a scheme of arrangement
under Part 26 of the
Companies Act 2006
1. Introduction
The boards of Vector UK and Trafficmaster are pleased to announce that they have
reached agreement on the terms of the recommended Acquisition by Vector UK, a
wholly-owned subsidiary of Vector Capital, of the entire issued and to be issued
share capital of Trafficmaster.
2. The Offer
The Acquisition will be effected by way of a scheme of arrangement between
Trafficmaster and Trafficmaster Shareholders under Part 26 of the Act. This
procedure involves an application by Trafficmaster to the Court to sanction the
Scheme and to confirm the Reduction comprised in the Scheme. The Scheme, which
will be subject to the conditions and further terms set out in Appendix 1 and
which will be further detailed in the Scheme Document, will be made on the
following basis:
for each Trafficmaster Share 47 pence in cash
The consideration to be received under the Acquisition represents a premium of
approximately:
· 19.75 per cent. to the closing price of 39.25 pence per
Trafficmaster Share on 27 April 2010, being the last dealing day prior to the
commencement of the Offer Period;
· 40.13 per cent. to the average closing price of 33.54 pence per
Trafficmaster Share for the three month period up to and including 27 April
2010, being the last dealing day prior to the commencement of the Offer Period;
and
· 45.89 per cent. to the average closing price of 32.22 pence per
Trafficmaster Share for the twelve month period up to and including 27 April
2010, being the last dealing day prior to the commencement of the Offer Period.
The terms of the Acquisition value the entire issued ordinary share capital of
Trafficmaster (fully diluted by the exercise of all outstanding options in the
money and capable of exercise) at approximately GBP73.27 million.
3. Recommendation of the Independent Directors of Trafficmaster
The Independent Directors of Trafficmaster, who have been so advised by
Canaccord Genuity Limited, consider the terms of the Acquisition to be fair and
reasonable. In providing advice to the Independent Directors of Trafficmaster,
Canaccord Genuity Limited has taken into account the commercial assessments of
the Independent Directors of Trafficmaster.
Accordingly, the Independent Directors of Trafficmaster will unanimously
recommend that Trafficmaster Shareholders vote in favour of the resolutions to
be proposed to Trafficmaster Shareholders at the Court Meeting and the General
Meeting as they have irrevocably agreed to do (or direct to be done) in respect
of their entire beneficial holding of Trafficmaster Shares, amounting to an
aggregate of 300,000 Trafficmaster Shares, which represents approximately 0.20
per cent. of the entire existing issued share capital of Trafficmaster.
4. Background to and reasons for the recommendation by the Independent
Directors of Trafficmaster
The Independent Directors of Trafficmaster are aware that the proportion of
Trafficmaster's revenue and profits generated from its US operations has been
steadily increasing over time and the Company's US fleet tracking business now
represents the largest component of the Group's results. The Independent
Directors of Trafficmaster also believe that the opportunity for future growth
lies predominately in the US and accordingly an increasing amount of the
Company's management time and effort is focused there.
The Independent Directors of Trafficmaster have noted the increased level of
consolidation now occurring across the sector but specifically in the US market.
The Independent Directors of Trafficmaster believe that this consolidation is
set to continue and, in order to safeguard value for all Trafficmaster
Shareholders, Trafficmaster should be in a position to actively participate in
this process.
The Company currently does not possess the balance sheet strength or ready
access to additional capital to take advantage of some of the growth
opportunities in the sector. Accordingly, in order to be able to execute some
of these more significant transactions, the Company is likely to require
significant additional equity funding from its existing shareholder base as well
as potentially attracting new shareholders to the Company.
Following an approach by Vector Capital and discussions with other potentially
interested parties the Independent Directors of Trafficmaster were faced with a
decision as to whether it was believed to be in Trafficmaster Shareholders' best
interests for the Company to continue to pursue a growth strategy in the US
markets via participation in a wider consolidation process or to allow
Trafficmaster Shareholders to crystallise fully the value of their entire
investment in cash at this time.
The Independent Directors of Trafficmaster have concluded that the certainty of
securing significant value for Trafficmaster Shareholders through this
Acquisition outweighs the future potential benefit that could be derived to
Trafficmaster Shareholders should the Company continue to remain independent and
to pursue its own growth and acquisition strategy.
The consideration offered under the Acquisition represents a premium of 19.75
per cent. to the closing price of Trafficmaster Shares of 39.25 pence on 27
April 2010 (being the last Business Day prior to the commencement of the Offer
Period) and a premium of 45.89 per cent to the average closing price of
Trafficmaster Shares of 32.22 pence for the 12 months prior to 27 April 2010.
Accordingly, the Independent Directors of Trafficmaster believe that the
Acquisition is in the best interests of Trafficmaster Shareholders, and
unanimously recommend that Trafficmaster Shareholders vote in favour of the
Acquisition, as they have irrevocably undertaken to do in respect of their
entire beneficial holdings comprising, in aggregate, 0.20 per cent. of
Trafficmaster's existing issued ordinary share capital.
5. Background to and reasons for the Acquisition by Vector Capital
Vector UK is a wholly-owned subsidiary of Vector Capital, a leading global
technology-focused private equity firm specialising in buyouts, spinouts and
recapitalisations of established technology businesses. Vector Capital has a
significant track record of making acquisitions in the technology sector.
Vector Capital believes that it can enable Trafficmaster to maintain and grow
its worldwide telematics platform and fleet management business. As a result of
private ownership by the Vector Funds, the management of Vector Capital believe
Trafficmaster will have the financial and operational flexibility necessary in
order to grow and transition its business both organically and through continued
acquisitions.
Vector Capital has identified a number of factors that it believes support
engaging in the Acquisition which would contribute to the success and the future
performance of Trafficmaster, including:
(a) greater financial, operational and technical resources for
Trafficmaster to use to develop innovative new products for Trafficmaster's
customers;
(b) Vector Capital's experience in investing in companies facing
transformational situations and helping management teams overcome them will
enable Trafficmaster to attain greater success; and
(c) Vector Capital's presence in the United States to assist
Trafficmaster in its expansion and growth plans in its largest market.
6. Information on Trafficmaster
The Trafficmaster group is principally engaged in providing intelligent vehicle
services to enhance driving experience and improve business performance by
saving companies and drivers time and money. It operates through two core
businesses: Business Services, providing the award winning Fleet Director
service which operates principally in the United States through Trafficmaster's
Teletrac business, and Consumer Services, providing traffic, stolen vehicle
tracking, navigation and other telematics services which operates predominantly
in the UK. In addition, Trafficmaster also conducts innovative activities and
invests in new development through its Emerging Products area, focusing
principally on project-led activities.
7. Information on Vector Capital
Vector Capital is a leading global private equity firm specialising in spinouts,
buyouts and recapitalisations of established technology businesses. With over
US$2 billion in equity capital, Vector Capital identifies and pursues these
complex investments in both the private and public markets. Vector Capital
actively partners with management teams to devise and execute new financial and
business strategies that materially improve the competitive standing of these
businesses and enhance their value for employees, customers and shareholders.
Among Vector Capital's notable investments are SafeNet, Aladdin Knowledge
Systems, LANDesk Software, Savi Technology, Corel Corporation, Precise Software
Solutions, Printronix, Register.com, Certara, WinZip and Watchguard
Technologies.
8. Financing of the Acquisition
Vector UK will fund the Cash Consideration from: (i) the cash proceeds of an
equity subscription in Vector UK by the Vector Funds; and (ii) drawdown by
Vector UK under the Acquisition Facility.
Panmure Gordon (UK) Limited is satisfied that sufficient financial resources are
available to Vector UK to satisfy in full the Cash Consideration.
9. Trafficmaster Share Plans
The terms of the Scheme, if it becomes effective, will bind all Trafficmaster
Shareholders, including persons acquiring Trafficmaster Shares prior to the
record time in respect of the Reduction under the terms of the Trafficmaster
Share Plans.
An appropriate offer or proposal will be made in due course to participants in
the Trafficmaster Share Plans. Details of that offer or proposal will be set
out in the Scheme Document and in separate letters to be sent to participants in
the Trafficmaster Share Plans.
Impact of the Scheme on the Trafficmaster Share Plans
All Trafficmaster Shares issued on the exercise of options prior to the
Reduction Record Time will be subject to the Scheme. The Scheme will not extend
to Trafficmaster Shares issued after the Reduction Record Time. However, an
amendment to the Trafficmaster Articles will be proposed to be made at the
General Meeting to enable Vector UK to automatically acquire any such
Trafficmaster Shares on the same terms as the Acquisition.
10. Amendments to the Trafficmaster Articles
It is proposed, as part of the special resolution to be proposed at the General
Meeting relating to the Scheme, to amend the Trafficmaster Articles so as to
ensure that any Trafficmaster Shares issued or transferred between the date of
adoption of the amendment and the Reduction Record Time will be subject to the
terms of the Scheme.
It is also proposed to amend the Trafficmaster Articles so that any
Trafficmaster Shares issued or transferred to any person other than Vector UK,
or a nominee of Vector UK, after the Reduction Record Time will be automatically
transferred to Vector UK (or as it may direct) in exchange for the Cash
Consideration that would have been payable were such shares held at the Scheme
Record Time. This will avoid any person (other than Vector UK or its
nominee(s)) being left with Trafficmaster Shares after completion of the
Acquisition.
11. Management and employees
Vector UK has stated that it attaches great importance to the skills and
experience of the existing management and employees of Trafficmaster. Vector UK
has given assurances to the Directors that, following the completion of the
Acquisition, the existing contractual employment rights, including pension
rights, of all senior management and employees of the Trafficmaster Group will
be fully safeguarded.
12. New Senior Management Arrangements
In view of the Management Team's extensive experience in the telematics
industry, Vector Capital believes that the ongoing participation of the
Management Team in the Trafficmaster Group is a very important element of the
Acquisition.
Vector Capital has therefore agreed with the Management Team that, subject to
completion of the Acquisition:
(a) as soon as practicable following the Effective Date, they will be
granted equity-based awards over a number of ordinary shares or similar
interests in Vector UK the total aggregate value of which shall equal 6.9 per
cent. of the increase in value of Vector UK shares between the date of grant and
a relevant liquidity event. The award will vest over a period of 4 years,
subject to certain conditions relating to continued employment;
(b) in addition, Vector UK may, in its sole discretion, grant to members
of the Management Team a second equity-based "kicker" award, which shall vest
only upon the achievement of defined hurdle rates on multiples of capital to be
set out in definitive award agreements to be entered into with the Management
Team in due course; and
(c) on or as soon as practicable following the Effective Date, the
Management Team shall subscribe for Vector UK shares of a total aggregate value
of US$180,000, such subscription to be made on the same terms and price as the
basis upon which the Vector Funds shall invest in Vector UK. The details of
such arrangements shall be set out in subscription agreements to be entered into
between Vector UK and the members of the Management Team in due course.
Certain other amendments will also be made to the terms and conditions of
employment of each member of the Management Team, with effect from the Effective
Date.
Aside from the Management Team, it is the intention to grant equity-based awards
to other members of the broader management team with such amounts to be
determined in due course.
Independent Shareholders will be asked at the General Meeting to approve the
Management Arrangements described in this paragraph 12 by voting on the Ordinary
Resolution. Pursuant to Rule 16 of the City Code, none of the Management Team
(or their connected persons who are holders of Trafficmaster Shares) will be
entitled to vote on the Ordinary Resolution and voting on this resolution will
be by way of a poll.
Furthermore, as a result of their interest in the Acquisition, members of the
Management Team are precluded from voting on the resolutions to be proposed to
Independent Shareholders at the Court Meeting and, therefore, the Management
Held Shares will not count towards the majority required to approve such
resolutions.
Canaccord Genuity Limited considers that the terms of the Management
Arrangements are fair and reasonable, so far as the Independent Shareholders are
concerned.
Further information on the arrangements between Vector UK, the Trafficmaster
Group and the Management Team will be set out in the Scheme Document.
13. Arrangements with Mr Henley
Mr Clifford Henley is the Chief Executive Officer of FMS, a subsidiary of the
Company.
On 17 January 2010, an agreement was entered into between Mr Henley, Teletrac
Holdings Inc., Teletrac FMS Inc. and FMS relating to the merger of Teletrac FMS
Inc and FMS. The initial consideration payable under that agreement comprised a
payment of US$6,900,000 in cash (subject to adjustment) and US$350,000 by way of
a conditional allotment of ordinary shares of 5 pence each in the Company to Mr
Henley pursuant to his employment agreement. The allotment of these shares was
deferred for a period of one year. Pursuant to the initial agreement, contingent
consideration based on certain performance metrics being met in the calendar
years 2010 and 2011 may also become payable, up to a maximum aggregate amount of
US$6,000,000. Conditional upon completion of the Acquisition, Mr Henley, who
has the right to receive approximately 82 per cent. of this payment, has agreed:
(a) to modify the terms of such payment as it relates to him only, such
that a maximum aggregate amount of approximately US$2,425,000 (payable in a
combination of cash and Vector UK ordinary shares) may be paid to him; and
(b) that his conditional allotment shall be cancelled in exchange for the
payment to him on or as soon as practicable following the Effective Date, of
US$285,000 (which reflects the value of the conditional allotment described
above, after allowance for certain working capital adjustments).
14. Implementation Agreement and inducement fee
Trafficmaster and Vector UK have entered into an Implementation Agreement which
provides, among other things, for the implementation of the Scheme and contains
certain assurances and confirmations between the parties, including with respect
to the implementation of the Scheme and regarding the conduct of the business of
Trafficmaster in the period prior to the Effective Date. Trafficmaster has also
undertaken not to solicit any other potential alternative offers.
Inducement fee
Pursuant to the Implementation Agreement, as an inducement to Vector UK to
commit time and personnel to effecting the Acquisition, Trafficmaster has agreed
to pay to Vector UK an amount equal to one per cent. of the fully diluted value
of the Acquisition (as calculated by reference to the above offer price), on the
first to occur of any of the following circumstances:
(a) the Scheme Document not being posted by Trafficmaster within
twenty-eight days of the date of release of this announcement, or such later
date as the Panel may permit (unless solely due to the default of Vector UK or
its advisers);
(b) a Third Party Announcement being made and the Third Party Transaction
referred to in such announcement, or any other Third Party Transaction announced
within the existing offer period of the Acquisition, becoming or being declared
unconditional in all respects, completing or becoming effective;
(c) the Independent Directors (or any committee thereof) withdrawing, or
adversely modifying or qualifying, their recommendation of the Acquisition and
thereafter either: (i) the Scheme Document is not issued within the period
required by the City Code (with the consent of the Panel); or (ii) the
Acquisition lapses or is withdrawn.
The inducement fee shall not be payable in the event that the Acquisition does
not become effective or lapses or is withdrawn solely because Vector UK has
failed to comply with its obligations under the City Code (unless with the prior
consent of, or pursuant to a waiver granted by, the Panel).
Alternatively, in circumstances where the inducement fee is not otherwise
payable, the Company has agreed to pay to Vector UK the amount of US$500,000 if
the Acquisition lapses or is withdrawn because either:
(i) the Scheme is not sanctioned by the Trafficmaster Shareholders at
the Court Meeting;
(ii) the resolutions are not passed at the General Meeting; or
(iii) the condition described at paragraph 5 of Appendix 1 (if applicable)
is not satisfied.
For the purposes of this paragraph the "existing offer period" shall include any
extension to the Offer Period of the Acquisition caused by a Third Party
Transaction being announced in the original Offer Period of the Acquisition or
any further extension caused by the announcement of any further Third Party
Transaction during such extended Offer Period.
Pursuant to Rule 21.2 of the City Code, the Directors of Trafficmaster and
Canaccord Genuity Limited have confirmed to the Panel in writing that they
consider the inducement fee and circumstances in which it may become payable to
be in the best interests of Trafficmaster and Trafficmaster Shareholders. The
fee is not payable to the extent to which the Panel determines that it would not
be permitted under Rule 21.2 of the City Code.
Non-solicitation
Trafficmaster has undertaken that it shall not, and shall procure that no member
of the Trafficmaster Group, no director, employee, adviser or agent of
Trafficmaster, or any member of the Trafficmaster Group, shall, from the date of
this announcement until the earlier of the date on which the Implementation
Agreement is terminated in accordance with its terms, and the date upon which
the Scheme becomes effective, directly or indirectly:
(i) solicit, initiate, encourage, negotiate, discuss or otherwise seek
to procure any initial or further approach to or from any other person with a
view to a Third Party Transaction taking place; or
(ii) entertain any approach from, or enter into or continue discussions
and/or negotiations with, any other person with a view to a Third Party
Transaction taking place,
provided that Trafficmaster is not prohibited from complying with its
obligations under the City Code and the Directors may respond to unsolicited
enquiries to the extent that the Directors conclude, acting reasonably and in
good faith and having taken appropriate legal and financial advice, that not to
do so would constitute a breach of their statutory and fiduciary duties as
Directors of the Company or a breach of the City Code.
If any other person does make such an unsolicited offer or approach, save to the
extent required under the City Code and to the extent consistent with the
Directors' statutory and fiduciary duties, Trafficmaster will promptly notify
Vector UK and shall inform Vector UK of the material terms of such approach and
keep Vector UK promptly informed of any material changes to the terms of such
approach. Trafficmaster shall procure that, save as otherwise provided in the
Implementation Agreement, the Directors do not withdraw, qualify or modify their
recommendation of the Acquisition.
15. Irrevocable Undertakings
Vector UK has received irrevocable undertakings:
(i) to vote in favour of the resolutions to be proposed to Trafficmaster
Shareholders at the Court Meeting and the General Meeting, or, in the case of
members of the Management Team, to be bound by the Scheme; and
(ii) if the Acquisition is subsequently structured as a City Code Offer,
to accept any potential recommended City Code Offer made by Vector UK.
Such undertakings have been received from:
(i) all of the Directors of Trafficmaster who have a beneficial holding
of Trafficmaster Shares in respect of their entire beneficial interest,
amounting to an aggregate of 600,000 Trafficmaster Shares, which represents
approximately 0.40 per cent. of the entire issued share capital of
Trafficmaster. Details of such Directors of Trafficmaster are listed below:
+---------------------------------+---------------------------------+
| Name | Shareholding |
+---------------------------------+---------------------------------+
| Alan McWalter | 100,000 |
+---------------------------------+---------------------------------+
| Tony Eales | 60,000 |
+---------------------------------+---------------------------------+
| Tim Coleman | 185,000 |
+---------------------------------+---------------------------------+
| Stuart Berman | 55,000 |
+---------------------------------+---------------------------------+
| Ian Coomber | 100,000 |
+---------------------------------+---------------------------------+
| Geoffrey Bicknell | 100,000 |
+---------------------------------+---------------------------------+
(ii) other Trafficmaster Shareholders in respect of their entire
beneficial interest, amounting to an aggregate of 42,164,569 Trafficmaster
Shares, which represents approximately 28.05 per cent. of the entire issued
share capital of Trafficmaster. Details of such Trafficmaster Shareholders are
listed below:
+----------------------+---------------------+--------------------+
| Name | Shareholding | Percentage of |
| | | issued share |
| | | capital |
+----------------------+---------------------+--------------------+
| Schroder Investment | 24,736,141 | 16.45 |
| Management Ltd | | |
+----------------------+---------------------+--------------------+
| Aberforth Partners | 17,428,428 | 11.59 |
| LLP | | |
+----------------------+---------------------+--------------------+
In the event that Vector UK elects to effect the Acquisition by means of a City
Code Offer, the undertakings provide that they will apply to acceptances of such
City Code Offer.
The undertakings from the Directors of Trafficmaster will continue to be binding
even in the event of a higher competing offer for Trafficmaster being announced,
unless Vector UK's offer lapses or is withdrawn. The undertakings received from
the Trafficmaster Shareholders (other than the undertakings received from the
Directors of Trafficmaster) cease to be binding in certain circumstances
including if a third party makes a higher offer for Trafficmaster which (in such
shareholder's opinion) represents an improvement of 10 per cent. or more on the
value of the Cash Consideration.
Further details of these irrevocable undertakings, including the circumstances
in which they will fall away, are set out in Vector UK's Opening Position
Disclosure.
16. Confirmation regarding Opening Position Disclosure
Vector UK confirms that it is on the date of this announcement making an Opening
Position Disclosure, which discloses the details required to be disclosed by it
under Rule 8.1(a) of the City Code.
17. Structure of the Scheme
Under the Scheme, each Trafficmaster Share held by the Trafficmaster
Shareholders will, pursuant to the Reduction, be cancelled and the reserve
arising from such cancellation will be applied to pay up in full an equal number
of New Trafficmaster Shares. The New Trafficmaster Shares will be issued to
Vector UK, and consequently, on the Scheme becoming effective, Trafficmaster
will be a wholly-owned subsidiary of Vector UK.
Section 593 Valuation
As at the latest practicable date prior to the publication of this announcement,
Vector UK neither owned nor controlled any Trafficmaster shares. It is intended
that, in the period after the General Meeting and before the Court hearing to
sanction the Scheme, Vector UK will acquire one Trafficmaster Share from Tim
Coleman which will mean that Vector UK will be a member of Trafficmaster on the
Effective Date and accordingly there will be no requirement under section 593 of
the Act for an independent valuation of the New Trafficmaster Shares to be
allotted to Vector UK under the Scheme.
The Acquisition and the Scheme will be subject to the conditions set out in
Appendix 1, including the sanction of the Scheme by the Court and satisfaction
of certain regulatory conditions.
To become effective, the Scheme requires, amongst other things:
(i) the approval of the Scheme by a majority in number of Trafficmaster
Shareholders representing 75 per cent. or more in value of Trafficmaster Shares
(or the relevant class or classes thereof) entitled to vote, either in person or
by proxy, at the relevant Court Meeting;
(ii) the special resolution in connection with and required to implement the
Scheme (including appropriate amendments to the Trafficmaster Articles) being
duly passed by Trafficmaster Shareholders representing not less than 75 per
cent. of the votes cast at the General Meeting (or at any adjournment thereof);
and
(iii) the Court sanctioning the Scheme and confirming the Reduction (in each
case, with or without modification, on terms agreed by Vector UK and
Trafficmaster) and office copies of the Court Order and the statement of capital
being delivered to the Registrar of Companies and registered by him.
Upon the Scheme becoming effective, it will be binding on all Trafficmaster
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the General Meeting. Share certificates in respect of the
Trafficmaster Shares will cease to be valid and entitlements held within CREST
will be cancelled.
If the Scheme does not become effective it will lapse and the Acquisition will
not proceed (unless the Panel otherwise consents).
The Scheme Document containing details of the Scheme and notices of the Court
Meeting and the General Meeting, together with the forms of proxy, will be
posted to Trafficmaster Shareholders, within 28 days of the date of this
announcement, unless otherwise agreed with the Panel. It is expected that the
Court Meeting and the General Meeting to approve the Acquisition will be held in
June 2010. Subject to the approval of Trafficmaster Shareholders and the
satisfaction or waiver of the other conditions, it is expected that the Scheme
will become effective by the end of July 2010.
18. Overseas Shareholders
The implications of the Scheme and the Acquisition for persons not resident in
the United Kingdom may be affected by the laws of other relevant jurisdictions.
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. It is the responsibility of each such person holding any
Trafficmaster Shares to satisfy himself or herself as to the laws of the
relevant jurisdiction. Further details in relation to overseas shareholders
will be set out in the Scheme Document.
19. General
It is expected that the formal Scheme Document setting out the details of the
Acquisition will be posted to Trafficmaster Shareholders no later than 11 June
2010, and, for information only, to holders of options under the Trafficmaster
Share Plans no later than 18 June 2010. It is expected that the Scheme will
become effective and the Acquisition completed by the end of July 2010, subject
to the satisfaction or (if applicable) waiver of all relevant conditions.
The Scheme Document will include full details of the Scheme, together with
notices of the Court Meeting and the General Meeting and the expected timetable,
and will specify the necessary action to be taken by Trafficmaster Shareholders.
Prior to (and conditional on) the Scheme becoming effective, Vector UK intends
to procure that Trafficmaster will make an application for the cancellation of
trading of the Trafficmaster Shares on the London Stock Exchange on the
Effective Date.
On the Effective Date, share certificates in respect of the Trafficmaster Shares
will cease to be valid and entitlements to Trafficmaster Shares held within the
CREST system will be cancelled. Trafficmaster will be re-registered as a private
company following completion of the Acquisition.
The Acquisition and the Scheme will be subject to the conditions and further
terms set out in this announcement (including those in Appendix 1) and the terms
and conditions set out in the Scheme Document when issued. Appendix 2 contains
definitions of certain terms used in this announcement. Appendix 3 contains the
sources of certain information and bases of certain calculations contained in
this announcement.
This announcement does not constitute, or form part of, an offer or invitation
to purchase or subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction. The full terms and conditions of the Scheme will
be set out in the Scheme Document. Trafficmaster Shareholders are advised to
read carefully and in its entirety the Scheme Document in relation to the
Acquisition, once it has been issued, before making any decision with respect to
the Acquisition. Any responses to the acquisition should be made only on the
basis of the information referred to in the Scheme Document.
The Acquisition relates to the shares of a United Kingdom public limited company
and is proposed to be made by means of a scheme of arrangement under English
company law and the City Code. The Scheme is not subject to the tender offer or
proxy rules under the United States Securities Exchange Act of 1934, as amended.
Accordingly, the Scheme is subject to the disclosure requirements, rules and
practices applicable in schemes of arrangements in the United Kingdom, which
differ from the requirements of United States tender offer and proxy rules.
The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by the law of those
jurisdictions and therefore any persons in such jurisdictions into whose
possession this document comes should inform themselves about and observe any
such restrictions. Failure to comply with any such restrictions may constitute
a violation of the securities laws of any such jurisdiction.
Panmure Gordon (UK) Limited, which is authorised and regulated in the United
Kingdom by the FSA, is acting exclusively for Vector Capital and Vector UK and
no one else in connection with the Acquisition and will not be responsible to
anyone other than Vector Capital and Vector UK for providing the protections
afforded to clients of Panmure Gordon (UK) Limited or for providing advice in
relation to the Acquisition or any matter referred to herein.
Canaccord Genuity Limited is authorised and regulated in the United Kingdom by
the FSA, is acting exclusively for Trafficmaster and for no one else in
connection with the Acquisition and will not be responsible to anyone other than
Trafficmaster for providing the protections afforded to clients of Canaccord
Genuity Limited or for providing advice in relation to the Acquisition or any
matter referred to herein.
This announcement has been prepared for the purposes of complying with English
law, the Listing Rules and the City Code and the information disclosed may not
be the same as that which would have been disclosed if this announcement had
been prepared in accordance with laws and regulations of any jurisdiction
outside the United Kingdom.
Vector UK reserves the right to elect to effect the Acquisition by means of a
City Code Offer. In such event, the Acquisition will be implemented on and
subject to the same terms and conditions to those that would apply to the
Scheme, subject to appropriate amendments, including (without limitation) an
acceptance condition set at 90 per cent. of the Trafficmaster Shares affected
(but capable of waiver in accordance with Rule 10 of the City Code) in
substitution for the conditions set out in paragraph 1 of Appendix 1, so far as
applicable. Further, if sufficient acceptances of such City Code Offer are
received and/or sufficient Trafficmaster Shares are otherwise acquired, it is
the intention of Vector UK to apply the provisions of section 979 of the Act to
acquire compulsorily any outstanding Trafficmaster Shares affected.
If Vector UK elects to effect the Acquisition by means of a City Code Offer,
then unless otherwise determined by Vector UK and permitted by applicable law
and regulation, the City Code Offer will not be made, directly or indirectly, in
or into, or by the use of the mail of, or by any means or instrumentality
(including without limitation, by mail, telephonically or electronically by way
of internet or otherwise) of interstate or foreign commerce of, or by any
facilities of a national, state or other securities exchange of, Canada,
Australia, Japan or any other jurisdiction if to do so would constitute a
violation of the relevant laws of such jurisdiction, and the City Code Offer
should not be accepted by any other such means, instrumentality or facility from
or within Canada, Australia, Japan or any such jurisdiction and doing so may
render invalid any purported acceptance of the City Code Offer. Accordingly,
unless otherwise determined by Vector UK and permitted by applicable law and
regulation, copies of any announcement and any other documents related to the
City Code Offer will not be sent in or into Canada, Australia, Japan or any such
other jurisdiction. All persons receiving any such announcement (including,
without limitation, custodians, nominees and trustees) should observe these
restrictions and should not mail or otherwise forward, send or distribute any
such announcement in, into or from Canada, Australia, Japan or any other such
jurisdiction.
This announcement does not constitute a prospectus or prospectus equivalent
document.
Forward-Looking Statements
This announcement contains certain statements that are or may be
forward-looking. These statements typically contain words such as "intend",
"expect", "believe", "should" and words of similar import. By their nature,
forward-looking statements involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. These
statements are based on assumptions and assessments made by the boards of
Trafficmaster and Vector UK in light of their experience and their perception of
historical trends, current conditions, expected future developments and other
factors they believe appropriate. By their nature, forward-looking statements
involve risk and uncertainty and the factors described in the context of such
forward-looking statements in this document could cause actual results and
developments to differ materially from those expressed in or implied by such
forward-looking statements.
Although the boards of Vector UK and Trafficmaster believe the expectations in
such forward-looking statements are reasonable, should one or more of these
risks or uncertainties materialise, or should underlying assumptions prove
incorrect, overall results may vary materially from those described in this
announcement. The boards of Vector UK and Trafficmaster assume no obligation to
update or correct the information contained in this document.
Disclosure Requirements of the City Code
Under Rule 8.3(a) of the City Code, any person who is interested in 1% or more
of any class of relevant securities of Trafficmaster or of any paper 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 paper 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) Trafficmaster; and (ii) any paper 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
paper offeror is first identified. Relevant persons who deal in the relevant
securities of Trafficmaster or of a paper offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the City Code, any person who is, or becomes, interested in
1% or more of any class of relevant securities of Trafficmaster or of any paper
offeror must make a Dealing Disclosure if the person deals in any relevant
securities of Trafficmaster or of any paper 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) Trafficmaster; and (ii) any paper 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.
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 Trafficmaster or a paper 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 Trafficmaster and by any
offeror and Dealing Disclosures must also be made by Trafficmaster, 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 Trafficmaster and the 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. If you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure, you should contact
the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
Publication on website
In accordance with Rule 19.11 of the City Code, a copy of this announcement will
be available on Trafficmaster's website at www.Trafficmaster.co.uk, by no later
than 12 noon London time on 3 June 2010.
Appendix 1
Conditions to the Implementation of the Scheme and the Acquisition
and
Further Terms of the Acquisition
The Acquisition will, if it is implemented by way of a scheme of arrangement, be
conditional upon the Scheme becoming effective by 17 September 2010 or such
later date as Vector UK and Trafficmaster may, with the consent of the Panel,
agree and (if required) the Court may approve.
Conditions to the implementation of the Scheme and the Acquisition
1. The Scheme will be subject to the following conditions:
2. Subject to the provisions of paragraph 3 of this Appendix 1 and the
requirements of the Panel in accordance with the City Code, the Acquisition will
be conditional upon, and accordingly the necessary actions to implement the
Acquisition will only be taken on, the satisfaction or, where relevant, waiver
of the following conditions:
and all applicable waiting and other time periods during which any such Relevant
Authority or other third party could decide to take, institute, implement or
threaten any such action, proceeding, suit, investigation, enquiry or reference
or any other step under the laws of any jurisdiction in respect of the
Acquisition or the proposed acquisition of any Trafficmaster Shares having
expired, lapsed or been terminated;
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit, lease or other instrument to which any member of
the Wider Trafficmaster Group is a party or by or to which any such member or
any of its assets may be bound or be subject, would or could reasonably be
expected to result in any of the events or circumstances as are referred to in
sub-paragraphs (i) to (ix) of this paragraph (d);
(A) the terms of the trust deeds constituting the pension scheme(s)
established by any member of the Wider Trafficmaster Group for its Directors
and/or employees and/or their dependants;
(B) the contributions payable to any such scheme(s) or to the benefits
which accrue or to the pensions which are payable thereunder;
(C) the basis on which qualification for, or accrual or entitlement to,
such benefits or pensions are calculated or determined;
(D) the basis upon which the liabilities (including pensions) of such
pension scheme(s) are funded, valued or met (including, without limitation, any
changes which relate to or result from any purchase of a bulk annuity or
longevity or financial hedging instrument in respect of some or all of those
liabilities); or
(E) agreed or consented to any change to the trustees or trustee directors
(except a simple replacement of a trustee or trustee director who has resigned);
(A) that the Wider Trafficmaster Group infringes any intellectual property
of any third party; or
(B) challenging the ownership of any member of the Wider Trafficmaster
Group to, or the validity or effectiveness of, any of its intellectual property,
and no such claims are material in the context of the Wider Trafficmaster Group
taken as a whole;
Further Terms of the Acquisition
3. Vector UK reserves the right to waive all or any of the conditions
set out in paragraph 2, in whole or in part. The conditions set out in paragraph
2 are inserted for the benefit of Vector UK and no Trafficmaster Shareholder
shall be entitled to waive any of the conditions without the prior consent of
Vector UK.
4. If Vector UK is required by the Panel to make an offer for any
Trafficmaster Shares under Rule 9 of the City Code, Vector UK may make such
alterations to the above conditions as are necessary to comply with the
provisions of that rule.
5. Vector UK reserves the right to elect (with the consent of the Panel
(where necessary)) to effect the Acquisition by means of a City Code Offer. In
such event, such Acquisition will be implemented on and subject to the same
terms and conditions to those that would apply to the Scheme, subject to
appropriate amendments to reflect the change in method of effecting the
Acquisition, so far as applicable. In particular, the conditions set out in
paragraph 1 above would not apply. The City Code Offer would, however, be
subject to the following further condition:
"valid acceptances being received (and not, where permitted, withdrawn) by not
later than 1.00 pm (London time) on the first closing date of the City Code
Offer (or such later time(s) and/or date(s) as Vector UK may, subject to the
rules of the City Code and with the consent of the Panel, decide) in respect of
not less than 90 per cent. (or such lower percentage as Vector UK may decide):
(i) in value of the Trafficmaster Shares to which the City Code Offer relates;
and (ii) of the voting rights attached to those shares, provided that this
condition will not be satisfied unless Vector UK (together with its wholly-owned
subsidiaries) shall have acquired or agreed to acquire (whether pursuant to the
City Code Offer or otherwise) Trafficmaster Shares carrying in aggregate more
than 50 per cent. of the voting rights normally exercisable at a general meeting
of Trafficmaster, including for this purpose (except to the extent otherwise
agreed by the Panel) any such voting rights attaching to Trafficmaster Shares
that are unconditionally allotted or issued before the City Code Offer becomes
or is declared unconditional as to acceptances whether pursuant to the exercise
of any outstanding subscription or conversion rights or otherwise. For the
purposes of this condition:
(i) Trafficmaster Shares which have been unconditionally allotted shall
be deemed to carry the voting rights they will carry upon issue; and
(ii) the expression "Trafficmaster Shares to which the offer relates"
shall be construed in accordance with section 979 of the Act."
Further, if sufficient acceptances of such City Code Offer are received and/or
sufficient Trafficmaster Shares are otherwise acquired, it is the intention of
Vector UK to apply the provisions of section 979 of the Act to acquire
compulsorily any outstanding Trafficmaster Shares affected.
6. The Acquisition will be subject to the terms and conditions set out
in paragraphs 1 and 2 of this Appendix 1 and in the Scheme Document and such
further terms as may be required to comply with the Listing Rules, the City Code
and the Act. The Scheme will be governed by the laws of England and Wales.
Appendix 2
Definitions
+--------------------+---------------------------------------------+
| "Acquisition" | means the proposed acquisition of |
| | Trafficmaster by Vector UK, to be effected |
| | by the Scheme as described in the Scheme |
| | Document (or, should Vector UK so elect, by |
| | means of a City Code Offer) |
+--------------------+---------------------------------------------+
| "Acquisition | means a US$20 million acquisition term loan |
| Facility" | facility to be provided to Vector UK for |
| | the purposes of part funding the |
| | Acquisition pursuant to a credit agreement |
| | between Vector UK, Wells Fargo Capital |
| | Finance, LLC and Silicon Valley Bank dated |
| | 2 June 2010 |
+--------------------+---------------------------------------------+
| "Act" | means the Companies Act 2006 (as amended) |
+--------------------+---------------------------------------------+
| "Australia" | means the Commonwealth of Australia and its |
| | dependent territories |
+--------------------+---------------------------------------------+
| "Board" or | means the board of directors of |
| "Directors" | Trafficmaster |
+--------------------+---------------------------------------------+
| "Business Day" | means a day on which the London Stock |
| | Exchange is open for the transaction of |
| | business |
+--------------------+---------------------------------------------+
| "Canada" | means Canada, its provinces and territories |
| | and all areas subject to its jurisdiction |
| | or any political sub-division thereof |
+--------------------+---------------------------------------------+
| "Cash | means the cash consideration due to |
| Consideration" | Trafficmaster Shareholders under the |
| | Acquisition pursuant to the Scheme Document |
+--------------------+---------------------------------------------+
| "City Code" | means The City Code on Takeovers and |
| | Mergers |
+--------------------+---------------------------------------------+
| "City Code Offer" | means the implementation of the Acquisition |
| | through a takeover offer under the City |
| | Code (at the election of Vector UK) |
+--------------------+---------------------------------------------+
| "Court" | means the High Court of Justice in England |
| | and Wales |
+--------------------+---------------------------------------------+
| "Court Meeting" | means the meeting of Trafficmaster |
| | Shareholders convened by order of the Court |
| | (or any adjournment thereof) |
+--------------------+---------------------------------------------+
| "Court Order" | means the order of the Court sanctioning |
| | the Scheme under section 899 of the Act |
+--------------------+---------------------------------------------+
| "CREST" | means the relevant system (as defined in |
| | the Regulations) in respect of which |
| | Euroclear is the Operator (as defined in |
| | the Regulations) |
+--------------------+---------------------------------------------+
| "Dealing | means an announcement pursuant to Rule 8 of |
| Disclosure" | the City Code containing details of |
| | interests or short positions in, or rights |
| | to subscribe for, any relevant securities |
| | of a party to an offer in whose securities |
| | the person disclosing has dealt as well as |
| | the person's positions (if any) in the |
| | relevant securities of any other party to |
| | the offer |
+--------------------+---------------------------------------------+
| "Effective Date" | means the date on which the Scheme becomes |
| | effective in accordance with its terms |
+--------------------+---------------------------------------------+
| "Euroclear" | means Euroclear UK & Ireland Limited |
+--------------------+---------------------------------------------+
| "FMS" | means Fleet Management Solutions, Inc. |
+--------------------+---------------------------------------------+
| "FSA" | means the Financial Services Authority |
+--------------------+---------------------------------------------+
| "General Meeting" | means the general meeting of Trafficmaster |
| | Shareholders (and any adjournment thereof) |
| | convened in connection with the Scheme for |
| | the purpose of considering and, if thought |
| | fit, approving certain resolutions in |
| | relation to the Scheme and the Acquisition |
+--------------------+---------------------------------------------+
| "Implementation | means the agreement entered into between |
| Agreement" | Trafficmaster and Vector UK in respect of |
| | the Acquisition |
+--------------------+---------------------------------------------+
| "Independent | means each of Alan McWalter, Geoffrey |
| Directors" | Bicknell, Phil Cartmell and Ian Coomber, |
| | the independent non executive directors of |
| | Trafficmaster |
+--------------------+---------------------------------------------+
| "Independent | means Trafficmaster Shareholders, other |
| Shareholders" | than the members of the Management Team and |
| | any person acting or deemed to be acting in |
| | concert with Vector UK or the Management |
| | Team |
+--------------------+---------------------------------------------+
| "Japan" | means Japan, its cities, prefectures, |
| | territories and possessions |
+--------------------+---------------------------------------------+
| "Listing Rules" | means the listing rules made by the UK |
| | Listing Authority |
+--------------------+---------------------------------------------+
| "London Stock | means London Stock Exchange plc |
| Exchange" | |
+--------------------+---------------------------------------------+
| "Management | means the arrangements between the |
| Arrangements" | Trafficmaster Group, Vector UK and the |
| | Management Team described in paragraph 11 |
| | of this Announcement |
+--------------------+---------------------------------------------+
| "Management Held | means the 245,000 Trafficmaster Shares |
| Shares" | beneficially owned by the Management Team |
+--------------------+---------------------------------------------+
| "Management Team" | means each of Tony Eales, Tim Coleman and |
| | Andrew Hamilton |
+--------------------+---------------------------------------------+
| "New Trafficmaster | means the new ordinary shares of GBP0.05 |
| Shares" | each in the capital of Trafficmaster to be |
| | allotted and issued to Vector UK |
+--------------------+---------------------------------------------+
| "Offer Period" | means the period commencing on 28 April |
| | 2010 (being the date the announcement of a |
| | possible offer for Trafficmaster was made) |
| | and ending on the Effective Date (or such |
| | other date as the Panel may decide) |
+--------------------+---------------------------------------------+
| "Opening Position | means an announcement pursuant to Rule 8 of |
| Disclosure" | the City Code containing details of |
| | interests or short positions in, or rights |
| | to subscribe for, any relevant securities |
| | of a party to an offer |
+--------------------+---------------------------------------------+
| "Ordinary | means the ordinary resolution to be |
| Resolution" | proposed at the General Meeting in |
| | connection with the approval of the |
| | Management Arrangements described in |
| | paragraph 12 of this announcement |
+--------------------+---------------------------------------------+
| "Panel" | means the Panel on Takeovers and Mergers |
+--------------------+---------------------------------------------+
| "Reduction" | means the reduction of capital pursuant to |
| | section 641 of the Act, involving the |
| | cancellation and extinguishing of the |
| | Scheme Shares (as defined in the Scheme) |
+--------------------+---------------------------------------------+
| "Reduction | means the hearing at which the Court's |
| Hearing" | order confirming the Reduction is made |
+--------------------+---------------------------------------------+
| "Reduction Record | means 6.00 pm on the Business Day |
| Time" | immediately prior to the Reduction Hearing |
+--------------------+---------------------------------------------+
| "Registrar of | means the Registrar of Companies of England |
| Companies" | and Wales |
+--------------------+---------------------------------------------+
| "Regulations" | means the Uncertificated Securities |
| | Regulations 2001 (SI 2001/3755) |
+--------------------+---------------------------------------------+
| "Regulatory | means any information services authorised |
| Information | from time to time by the Financial Services |
| Service" | Authority for the purpose of disseminating |
| | regulatory announcements |
+--------------------+---------------------------------------------+
| "Scheme" | means the proposed scheme of arrangement |
| | under Part 26 of the Act between |
| | Trafficmaster and Trafficmaster |
| | Shareholders, the full terms of which will |
| | be set out in the Scheme Document |
+--------------------+---------------------------------------------+
| "Scheme Document" | means the document to be dispatched to |
| | (amongst others) Trafficmaster |
| | Shareholders, including (amongst other |
| | things) the full terms of the Scheme and |
| | the particulars required by the Act and |
| | containing notices convening the Court |
| | Meeting and the General Meeting |
+--------------------+---------------------------------------------+
| "Scheme Record | means 6.00 pm on the Business Day |
| Time" | immediately preceding the date which the |
| | order of the Court under section 899 of the |
| | Act sanctioning the Scheme is made |
+--------------------+---------------------------------------------+
| "Third Party | means an announcement made by a third |
| Announcement" | party, which is not acting in concert with |
| | Vector UK, pursuant to Rule 2.4 or Rule 2.5 |
| | of the City Code of a Third Party |
| | Transaction |
+--------------------+---------------------------------------------+
| "Third Party | means (a) any offer (construed in |
| Transaction" | accordance with the City Code and whether |
| | or not subject to pre-conditions), possible |
| | offer, proposal or indication of interest |
| | from, or on behalf of, any person other |
| | than Vector UK or any person acting in |
| | concert with Vector UK, with a view to such |
| | person, directly or indirectly, acquiring |
| | (in one transaction or a series of |
| | transactions) (i) 30 per cent. or more of |
| | the issued share capital of the Company or |
| | (ii) a material part of Trafficmaster's |
| | business or assets or (b) the entering |
| | into, by any member of the Trafficmaster |
| | Group, of any transaction or arrangement or |
| | series of transactions or arrangements |
| | (except in the ordinary course of business |
| | unless intended by the Trafficmaster to |
| | have the effect hereinafter described) |
| | howsoever implemented that, in the case of |
| | (a)(ii) or (b) above, would be reasonably |
| | likely to preclude, impede, delay or |
| | prejudice the implementation of the |
| | Acquisition in any material respect |
+--------------------+---------------------------------------------+
| "Trafficmaster" or | means Trafficmaster plc |
| the "Company" | |
+--------------------+---------------------------------------------+
| "Trafficmaster | means the articles of association of |
| Articles" | Trafficmaster Plc |
+--------------------+---------------------------------------------+
| "Trafficmaster | means Trafficmaster and its subsidiaries |
| Group" | and subsidiary undertakings |
+--------------------+---------------------------------------------+
| "Trafficmaster | means holders of Trafficmaster Shares |
| Shareholders" | |
+--------------------+---------------------------------------------+
| "Trafficmaster | means The Trafficmaster PLC 2007 Save as |
| Share Plans" | You Earn Share Option Plan, the |
| | Trafficmaster PLC Executive Share Option |
| | Scheme, the Trafficmaster PLC 1996 Employee |
| | Share Scheme and the Trafficmaster PLC 2006 |
| | Non HM Revenue & Customs Approved Company |
| | Share Option Plan |
+--------------------+---------------------------------------------+
| "Trafficmaster | means ordinary shares of GBP0.05 each in |
| Shares" | the capital of Trafficmaster |
+--------------------+---------------------------------------------+
| "US$" | means United States dollars, or the lawful |
| | currency of the United States from time to |
| | time |
+--------------------+---------------------------------------------+
| "Vector Capital" | means Vector Capital Corporation |
+--------------------+---------------------------------------------+
| "Vector Capital | means Vector Capital, Vector UK and the |
| Group" | Vector Funds |
+--------------------+---------------------------------------------+
| "Vector Funds" | means Vector Capital III International, LP, |
| | a Cayman Islands exempted limited |
| | partnership, Vector Capital IV, LP, a |
| | Delaware limited partnership and any funds |
| | controlled by or under common control with |
| | such funds |
+--------------------+---------------------------------------------+
| "Vector UK" | means Vector Capital Limited, a private |
| | company with limited liability incorporated |
| | in England and Wales, with registered |
| | number 7267676 |
+--------------------+---------------------------------------------+
| "Voting Record | means 6.00 pm on the day which is two days |
| Time" | before the date of the Court Meeting and |
| | the General Meeting or the date of any |
| | adjournment thereof (as the case may be) |
+--------------------+---------------------------------------------+
| "Wider | means Trafficmaster and its subsidiary |
| Trafficmaster | undertakings and any other undertaking, |
| Group" | body corporate, partnership, joint venture |
| | or person in which Trafficmaster and/or |
| | such entities (aggregating their interests) |
| | has or together have a direct or indirect |
| | interest of more than 20 per cent. of the |
| | voting or equity share capital or the |
| | equivalent |
+--------------------+---------------------------------------------+
For the purposes of this announcement, subsidiary, subsidiary undertaking and
undertaking have the meanings given to them by the Act.
Appendix 3
Sources of Information and Bases of Calculation
In this announcement:
(a) The terms of the Acquisition value the entire fully diluted issued
ordinary share capital of Trafficmaster at GBP73.27 million, based on an offer
price of 47 pence and 150,339,632 Trafficmaster Shares being in issue as at 1
June 2010 and 5,549,135 Trafficmaster outstanding share options being in the
money and being capable of exercise by reason of the Acquisition as at 1 June
2010;
(b) Other statements (including the size of shareholdings) made by
reference to the existing issued ordinary share capital are based on 150,339,632
Trafficmaster shares being in issue as at 1 June 2010; and
(c) Unless otherwise stated, all prices quoted for Trafficmaster Shares
have been derived from Bloomberg and represent closing middle market prices on
the relevant date.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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