NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
FOR IMMEDIATE RELEASE
22 April
2024
RECOMMENDED CASH and share OFFER
FOR
Tyman plc
("Tyman")
BY
Quanex BUILDING PRODUCTS
CORPORATION ("Quanex")
to be implemented by means of a Scheme of
Arrangement
under Part 26 of the Companies Act 2006
Summary
·
The boards of Quanex and Tyman are pleased to announce that
they have reached agreement on the terms of a recommended cash and
share offer pursuant to which Quanex will acquire the entire issued
and to be issued ordinary share capital of Tyman (the "Transaction"). The Transaction is
intended to be implemented by means of a court-sanctioned scheme of
arrangement under Part 26 of the Companies Act.
·
Under the terms of the Transaction, Tyman Shareholders will
be entitled to receive for each Tyman Share held at the Scheme
Record Time:
-
240.0 pence in cash; and
-
0.05715 of a New Quanex Share,
(the "Main
Offer").
·
The Main Offer comprises approximately 60 per cent. by value
in cash and approximately 40 per cent. by value in New Quanex
Shares.
·
As an alternative to the Main Offer, Tyman Shareholders will
be able to elect to receive the consideration in respect of their
entire holding of Tyman Shares in Quanex Shares at a ratio of
0.14288 of a New Quanex Share to every 1 Tyman Share held at the
Scheme Record Time (the "Capped
All-Share Alternative").
·
The Capped All-Share Alternative will be made available in
respect of up to 25 per cent. of the Tyman Shares outstanding on
the Effective Date. To the extent that valid elections for the
Capped All-Share Alternative received cannot be satisfied in full,
they will be scaled back as nearly as possible on a pro-rata basis
with the remaining consideration payable in cash and New Quanex
Shares in the proportions applicable to the Main Offer (with any
fractions of New Quanex Shares resulting from such scaling to be
dealt with as set out in the paragraph entitled "Structure of the Transaction"
below).
·
Based on Quanex's share price of US$34.64 on 19 April 2024
(being the Latest Practicable Date) and the Exchange
Rate:
-
0.05715 of a New Quanex Share (issued under the Main Offer)
is equivalent to 160.0 pence; and
-
0.14288 of a New Quanex Share (issued under the Capped
All-Share Alternative) is equivalent to 400.0 pence.
Accordingly, and on the above basis, the Main
Offer and the Capped All-Share Alternative value each Tyman Share
at 400.0 pence as at the Latest Practicable Date.
·
Further, based on Quanex's share price of US$34.64 on 19
April 2024 (being the Latest Practicable Date) and the Exchange
Rate, the Transaction:
-
values the entire issued and to be issued share capital of
Tyman at approximately £788 million;
-
represents a premium of approximately 35.1 per cent. to the
Closing Price of 296.0 pence per Tyman Share on the Latest
Practicable Date;
-
represents a premium of approximately 39.6 per cent. to the
Closing ex Dividend Price of 286.5 pence per Tyman Share on the
Latest Practicable Date;
-
represents a premium of approximately 36.0 per cent. to the
one-month volume weighted average price of 294.2 pence per Tyman
Share during the one-month period ended on the Latest Practicable
Date; and
-
represents a premium of approximately 40.5 per cent. to the
six-month volume weighted average price of 284.8 pence per Tyman
Share during the six-month period ended on the Latest Practicable
Date.
·
Each of the Tyman Directors who holds Tyman Shares has
irrevocably undertaken to vote or procure votes in favour of the
Scheme (or, if the Transaction is to be implemented by way of a
Takeover Offer, accept or procure the acceptance of the Takeover
Offer), in respect of their entire beneficial holdings of Tyman
Shares.
·
In addition to the irrevocable undertakings from the Tyman
Directors, Quanex has also received an irrevocable undertaking from
Teleios Global Opportunities Master Fund, Ltd acting through its
manager Teleios Capital Partners LLC ("Teleios") to vote (or procure the
votes) in favour of the Scheme in respect of 16.4 per cent. of the
Tyman Shares and to accept the Capped All-Share Alternative in
respect of its entire holding of Tyman Shares.
·
Upon completion of the Transaction, and subject to the
elections made by Tyman Shareholders, Tyman Shareholders will own
between approximately 30 per cent. (if all Tyman Shareholders,
other than Teleios, receive the Main Offer) and approximately 32
per cent. (if all Tyman Shareholders elect to receive the Capped
All-Share Alternative) of the Enlarged Group as at the Latest
Practicable Date. Pursuant to the Transaction, Tyman will become a
wholly-owned subsidiary of Quanex. The transmission of New Quanex
Shares by the transfer agent shall be subject to any applicable
legal or regulatory conditions required in connection with such
transmission.
·
Tyman Shareholders who do not positively elect
to receive the Capped All-Share Alternative will automatically
receive the Main Offer. Each Tyman Shareholder shall only be
entitled to elect to receive the Capped All-Share Alternative in
respect of all (and not some) of the Tyman Shares held by
them.
·
Quanex has agreed to provide an observer right on the Quanex
board to any person who: (i) is beneficially interested in 16 per
cent. or more of the fully diluted ordinary share capital of Tyman
when the Transaction is Effective; (ii) will, following the issue
of the New Quanex Shares to Tyman Shareholders pursuant to the
terms of the Transaction, be beneficially interested in 5 per cent.
or more of the issued Quanex Shares when such New Quanex Shares are
listed on the NYSE, taking into account only (x) those New Quanex
Shares which are issued to Tyman Shareholders pursuant to the terms
of the Transaction (and no other Quanex Shares, howsoever acquired
or received by them) as the numerator for such calculation and (y)
only the aggregated number of all New Quanex Shares and Quanex
Shares (excluding shares held in treasury) in issue as at the date
of this Announcement as the denominator for such calculation; and
(iii) has obtained any required regulatory or legal approvals
necessary for such person to take up such right. Quanex will be
entitled to terminate this observer right on the date of Quanex's
2026 annual general meeting. Further details will be set out in the
Scheme Document.
·
Tyman Shareholders will continue to be entitled to receive
the final dividend of 9.5 pence per Tyman Share announced by Tyman
on 7 March 2024 for the financial year ended 31 December 2023 (the
"FY23 Dividend"). If any
other dividend, distribution and/or other return of value is
proposed, authorised, declared, made or paid or becomes payable in
respect of Tyman Shares on or after the date of this Announcement
and before the Effective Date (other than, or in excess of, the
FY23 Dividend), Quanex reserves the right to reduce the
consideration (and, accordingly, the Main Offer and the Capped
All-Share Alternative) by the amount of any such dividend,
distribution and/or other return of value.
Compelling
Strategic and Financial Rationale for the
Transaction
The Quanex Directors believe that the
acquisition of Tyman offers compelling industrial logic and
strategic rationale, while offering a significant value creation
opportunity for stockholders in the Enlarged Group, as
it:
·
presents a unique opportunity to create a larger, more
diversified supplier of components and access solutions to
customers in the building products sector, particularly across the
fenestration portfolio in North America;
·
strengthens brand leadership with the addition of Tyman's
highly regarded family of brands and complementary product
portfolio;
·
aligns with Quanex's "BIGGER" strategic roadmap for growth
and value creation; and
·
unlocks substantial value creation for both Quanex and Tyman
shareholders through a material cost synergy
opportunity.
In addition, the Enlarged Group
will benefit from an enhanced financial profile:
·
increased scale with combined fiscal year 2023 revenues of
approximately US$2 billion and attractive profitability driven by
significant synergy potential with a higher EBITDA margin (based on
financial year ended 31 October 2023 for Quanex and 31 December
2023 for Tyman and after taking into account the impact of run-rate
cost synergies of US$30 million expected to be fully achieved by
the second year following completion of the
Transaction);
·
meaningfully earnings accretive in the first full financial
year following completion of the Transaction, taking into account
the full impact of expected cost synergies; and
·
strong cash flow generation which will support further
investment in growth opportunities as well as rapid
deleveraging.
The Quanex Directors have approved the
Transaction and intend to recommend unanimously that Quanex
Stockholders vote in favour of the Quanex Share
Proposal.
Unanimous
Recommendation by the Tyman Directors
·
The Tyman Directors, who have been so advised by Greenhill as
to the financial terms of the Transaction, consider the terms of
the Main Offer and Capped All-Share Alternative to be fair and
reasonable. In providing advice to the Tyman Directors, Greenhill
has taken into account the commercial assessments of the Tyman
Directors. Greenhill is providing independent financial advice to
the Tyman Directors for the purposes of Rule 3 of the Takeover
Code.
·
Accordingly, the Tyman Directors intend to recommend
unanimously that Tyman Shareholders vote or procure votes to
approve the Scheme at the Court Meeting and to vote or procure
votes in favour of the Tyman Resolutions at the General Meeting as
the Tyman Directors who hold Tyman Shares at the date of this
Announcement have irrevocably undertaken to do (or procure to be
done) in respect of their own beneficial holdings, totalling
446,094 Tyman Shares, representing approximately 0.23 per cent. of
the issued share capital of Tyman as at the Latest Practicable
Date.
·
However, the Tyman Directors are not able to and do not give
any advice or recommendation to Tyman Shareholders as to whether
they should elect to receive the Capped All-Share Alternative as
its benefits will depend on each Tyman Shareholder's individual tax
and financial situation. Tyman Shareholders should consider whether
the Capped All-Share Alternative is suitable in light of their own
personal circumstances and investment objectives and are,
therefore, strongly recommended to seek their own independent
financial, tax and legal advice and to read in full this
Announcement and the Scheme Document (when published) before
deciding whether to elect to receive the Capped All-Share
Alternative.
Irrevocable
Undertakings
·
In addition to the irrevocable undertakings from the Tyman
Directors who hold Tyman Shares at the date of this Announcement,
Quanex has also received an irrevocable undertaking from Teleios to
vote (or procure the votes) to approve the Scheme at the Court
Meeting and to vote (or procure the votes) in favour of the Tyman
Resolutions at the General Meeting in respect of a total of
32,347,981 Tyman Shares representing approximately 16.4 per cent.
of the issued share capital of Tyman as at the Latest Practicable
Date.
·
Therefore, as at the date of this Announcement, Quanex has
received irrevocable undertakings in respect of a total of
32,794,075 Tyman Shares representing approximately 16.7 per cent.
of the issued share capital of Tyman as at the Latest Practicable
Date. Full details of the irrevocable undertakings are set out
in Appendix 3 to this
Announcement.
Transaction
Structure
·
It is intended that the Transaction will be implemented by
way of a court-sanctioned scheme of arrangement under Part 26 of
the Companies Act. However, Quanex reserves the right to elect to
implement the Transaction by way of a Takeover Offer, subject to
the consent of the Panel and the terms of the Co-operation
Agreement.
·
The terms of the Transaction will be put to Tyman
Shareholders at the Court Meeting and at the General Meeting. In
order to become Effective, the Scheme must be approved by a
majority in number of the Scheme Shareholders voting at the Court
Meeting, either in person or by proxy, representing at least 75 per
cent. in value of the Scheme Shares voted. In addition, the Tyman
Resolutions must be passed by the requisite majority or majorities
at the General Meeting. The Scheme will also need to be sanctioned
by the Court. Finally, a copy of the Court Order must be delivered
to the Registrar of Companies for registration, upon which the
Scheme will become Effective.
·
The Transaction, Main Offer and Capped All-Share Alternative
will be made in accordance with the Takeover Code and on the terms
and subject to the Conditions which are set out in
Appendix 1 to this Announcement and on the
further terms and conditions that will be set out in the Scheme
Document. The Conditions include (amongst others):
-
the receipt or waiver of any applicable antitrust approvals
or clearances in the United States and the United
Kingdom;
-
approval of Tyman Shareholders at the Court Meeting and the
General Meeting;
-
the issuance of the New Quanex Shares in connection with the
Transaction having been approved by Quanex Stockholders at the
Quanex Stockholder Meeting;
-
confirmation having been received by Quanex that the New
Quanex Shares have been approved for listing, subject to official
notice of issuance, on the NYSE;
-
the sanction of the Scheme by the Court; and
-
the delivery of a copy of the Court Order to the Registrar of
Companies for registration.
·
It is expected that the Scheme Document, containing further
information about the Transaction and notices of the Court Meeting
and the General Meeting, will be posted to Tyman Shareholders
(other than those resident in Restricted Jurisdictions) along with
the Forms of Proxy and Form of Election in May 2024. However, this
timing may be delayed dependent on the timing of the filing of the
Proxy Statement and the Panel has agreed to the request of Tyman
and Quanex that, to the extent required, the publication of the
Scheme Document may be delayed beyond the 28 day period required
under paragraph 3(a) of Appendix 7 of the Takeover Code by Tyman in
order that shareholder materials are published to Tyman
Shareholders on or around the same date as the Proxy Statement is
posted to Quanex Stockholders. To the extent a delay in publication
is required, it is expected that shareholder materials would be
published by the end of Q2 2024.
·
It is also expected that a Proxy Statement, containing
details of the Transaction, notice of the Quanex Stockholder
Meeting, information on the New Quanex Shares and a proposal for
the Quanex Share Proposal, will be mailed to Quanex Stockholders
around the same time as the Scheme Document is posted to Tyman
Shareholders, provided that the SEC has completed its review or
confirmed no review of the Proxy Statement, with the Quanex
Stockholder Meeting being held as soon as possible
thereafter.
·
Quanex may also file additional documents with the SEC in
relation to the Transaction. Quanex urges Quanex Stockholders to
read these materials and the Proxy Statement carefully when they
become available.
·
Quanex intends prior to completion of the Transaction to
establish a CREST depositary interest dealing facility for the
benefit of Tyman Shareholders to facilitate the trading of Quanex
Shares from outside the USA. Details of how UK shareholders can
hold, access, and trade the New Quanex Shares will be set out in
the Scheme Document.
·
The Transaction is currently expected to become Effective in
the second half of calendar year 2024, subject to the satisfaction
or waiver of the Conditions and certain further terms set out
in Appendix 1 to this Announcement and to
the full terms and conditions of the Transaction which will be set
out in the Scheme Document. An expected timetable of principal
events will be included in the Scheme Document.
Commenting on the Transaction, Mr. George L.
Wilson, the Chairman of the Board, President and Chief Executive
Officer of Quanex, said:
"This
transformative acquisition accelerates our journey to becoming
"BIGGER", creating a leading supplier of building products with a
more diverse geographic footprint, product offering and customer
base. With significantly enhanced scale, we are looking forward to
fully optimizing our portfolio of products and assets to
position Quanex as a
comprehensive solutions provider for our customers. Importantly, we
expect employees of both companies to also benefit from increased
opportunities as part of a larger organization with expanded
engineering, design and manufacturing
capabilities.
As one
company, we will have an enhanced financial profile grounded in
attractive margins, strong free cash flow and a healthy balance
sheet, that will enable us to invest in organic and inorganic
growth opportunities to deliver superior returns for investors. The
industrial logic and strategic rationale of bringing Quanex and
Tyman together are clear and compelling, and we are confident in
our ability to drive meaningful value creation for both Quanex and
Tyman shareholders and enhanced market offerings for our customer
base."
Commenting on the Transaction, Nicky Hartery,
Non-Executive Chair of Tyman, said:
"This
transformative and complementary transaction will strengthen the
enlarged business for the benefit of all our customers, employees
and other stakeholders. In the context of a rapidly evolving North
American marketplace, our Board ultimately determined that this
transaction is the best path to maximising value for
Tyman Shareholders, who will be able to realise a meaningful
portion of their holding in cash at a significant premium to the
prevailing share price while also participating in the future
upside of the enlarged group. Today marks the beginning of an
exciting next chapter for Tyman and our talented employees, and we
look forward to joining with Quanex to deliver future growth and
success."
This summary should be read in
conjunction with, and is subject to, the full text of this
Announcement. The Transaction will be subject to the Conditions and
further terms set out in Appendix 1 to this Announcement and to
the full terms and conditions which will be set out in the Scheme
Document. Appendix 2 to this Announcement contains
the sources of information and bases of calculations of certain
information contained in this Announcement.
Appendix
3 to this Announcement contains a summary
of the irrevocable undertakings received in relation to this
Transaction. Appendix 4 to this Announcement contains the
Quantified Financial Benefits Statement, together with the reports
from KPMG, Quanex's reporting accountants and UBS, Quanex's sole
financial adviser as required under Rule 28.1(a) of the Takeover
Code. Appendix 5 to this Announcement contains
definitions of certain expressions used in this summary and in this
Announcement.
Quanex will
host a conference call today at 8:30 a.m. ET / 7:30 a.m. CT / 1:30
p.m. BST to discuss this transaction. Participants can pre-register
for the conference call using the following link:
https://register.vevent.com/register/BI5b79d00466184ba4ae6b79930f67dd32.
Registered
participants will receive an email containing conference call
details for dial-in options. To avoid delays, it is recommended
that participants dial into the conference call ten minutes ahead
of the scheduled start time.
A link to the
live audio webcast will be available on Quanex's website at
http://www.quanex.com in the Investors section under Presentations
& Events. A replay will be available for a limited time on
Quanex's website at http://www.quanex.com in the Investors section
under Presentations & Events.
Enquiries:
Quanex
Scott Zuehlke - Senior Vice President, Chief Financial Officer and
Treasurer
+1 713 877 5327
UBS
(Sole Financial adviser to Quanex)
London: Joe Hannon, Romine Hakme, Josh
Chauhan
+44 20 7567 8000
New York: Simon Smith, Jane Zovak, Vijay Kumra
+1 212 713 2000
Joele Frank, Wilkinson Brimmer
Katcher
(PR adviser to Quanex)
Arielle
Rothstein
+1 212 355 4449
Andrew Siegel
Lyle Weston
Tyman
Rutger Helbing - Chief Executive
Officer
+44 207 976 8000
Jason Ashton - Chief Financial Officer
Greenhill
(Lead Financial adviser to Tyman)
Charles Montgomerie
+44 207 198 7400
David Wyles
Charles Spencer
Deutsche Numis
(Financial adviser and Corporate broker to
Tyman)
Jonathan
Wilcox
+44 207 260 1000
Richard Thomas
MHP Group
(PR adviser to
Tyman)
Reg Hoare
+44 7801 894577 /
tyman@mhpgroup.com
Rachel
Farrington
Matthew Taylor
Travers Smith LLP is acting as English legal
adviser to Quanex and Foley & Lardner LLP is acting as US legal
adviser to Quanex in connection with the Transaction.
Latham and Watkins (London) LLP is acting as
legal adviser to Tyman in connection with the
Transaction.
This Announcement contains inside information
in relation to Tyman. The
person responsible for arranging the release of this Announcement
on behalf of Tyman is Peter Ho, Tyman General Counsel and Company
Secretary.
Important notices about financial
advisers
UBS AG London
Branch ("UBS") is
authorised and regulated by the Financial Market Supervisory
Authority in Switzerland. It is authorised by the Prudential
Regulation Authority ("PRA") and subject to regulation in the
United Kingdom by the Financial Conduct Authority ("FCA") and limited regulation in the
United Kingdom by the PRA. UBS is acting exclusively as sole
financial adviser to Quanex and for no one else in connection with
the Transaction and will not be responsible to anyone other than
Quanex for providing the protections afforded to its clients nor
for providing advice in relation to the Transaction, the contents
of this Announcement or any other matters referred to in this
Announcement. Neither UBS nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of UBS in connection with the Transaction, this Announcement and
any statement contained herein or otherwise.
Greenhill
& Co. International LLP ("Greenhill"), an affiliate of Mizuho,
which is authorised and regulated in the United Kingdom by the FCA,
is acting as lead financial adviser to Tyman and for no one else in
connection with the Transaction and will not be responsible to
anyone other than Tyman for providing the protections afforded to
its clients nor for providing advice in relation to the
Transaction, the contents of this Announcement or any other matters
referred to in this Announcement.
Numis
Securities Limited (trading for these purposes as Deutsche Numis)
("Deutsche Numis"), which
is authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting as exclusively for Tyman and no one
else in connection with the matters described in this Announcement
and will not be responsible to anyone other than Tyman for
providing the protections afforded to clients of Deutsche Numis, or
for providing advice in connection with the matters referred to
herein. Neither Deutsche Numis nor any of its group undertakings or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of Deutsche Numis in connection with this Announcement or any
matter referred to herein.
No
Offer or Solicitation
This
Announcement is for informational purposes only and is not intended
to and does not constitute an offer to sell or the solicitation of
an offer to subscribe for or buy or an invitation to purchase or
subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
In particular, this Announcement is not an offer of securities for
sale into the United States or in any other jurisdiction. No offer
of securities shall be made in the United States absent
registration under the US Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, such
registration requirements. Any securities issued in the Transaction
are anticipated to be issued in reliance upon an exemption from
such registration requirements pursuant to Section 3(a)(10) of the
US Securities Act.
The
Transaction will be made solely by means of the Scheme Document to
be published by Tyman in due course, or (if applicable) pursuant to
an Offer Document to be published by Quanex, which (as applicable)
would contain the full terms and conditions of the Transaction. Any
decision in respect of, or other response to, the Transaction,
should be made only on the basis of the information contained in
such document(s). As explained below, if Quanex ultimately seeks to
implement the Transaction by way of a Takeover Offer, that offer
will be made in compliance with applicable US laws and
regulations.
This
Announcement does not constitute a prospectus or a prospectus
exempted document.
This
Announcement has been prepared for the purpose of complying with
English law and the Takeover Code and the information disclosed may
not be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions other than England and Wales.
In accordance with
normal United Kingdom practice and pursuant to Rule 14e-5(b) of the
US Exchange Act, Quanex or its nominees, or its brokers (acting as
agents), may from time to time make certain purchases of, or
arrangements
to purchase, shares or other
securities of Tyman outside of the US, other than pursuant to the
Transaction, until the date on which the Transaction and/or Scheme
becomes Effective, lapses or is otherwise withdrawn. These
purchases may occur either in the open market at prevailing prices
or in private transactions at negotiated prices. Any information
about such purchases or arrangements to purchase will be disclosed
as required in the UK, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at
www.londonstockexchange.com.
Important Additional Information will be
Filed with the SEC
This
Announcement may not be deemed to be solicitation material in
respect of the Transaction, including the issuance of the New
Quanex Shares. In connection with the Transaction, Quanex is
expected to file with the Proxy Statement with the SEC. To the
extent Quanex effects the Transaction as a Scheme under English
law, the issuance of New Quanex Shares would not be expected to
require registration under the US Securities Act in reliance upon
an exemption pursuant to Section 3(a)(10) of the US Securities Act.
If, in the future, Quanex exercises its right to implement the
Transaction by way of a Takeover Offer or otherwise in a manner
that is not exempt from the registration requirements of the US
Securities Act, it will file a registration statement on Form S-4
with the SEC that will contain a prospectus with respect to the
issuance of New Quanex Shares. BEFORE MAKING ANY VOTING DECISION,
QUANEX'S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT,
INCLUDING THE SCHEME DOCUMENT (OR, IF APPLICABLE, THE OFFER
DOCUMENT), AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH
THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY
REFERENCE IN THE PROXY STATEMENT (IF ANY) CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE
TRANSACTION. Quanex's Stockholders and investors will be able to
obtain, without charge, a copy of the Proxy Statement (or, if
applicable, the registration statement on Form S-4), including the
scheme document and/or offer document (as referred to above), and
other relevant documents filed with the SEC (when available) from
the SEC's website at http://www.sec.gov. Quanex's stockholders and
investors will also be able to obtain, without charge, a copy of
the Proxy Statement, including the scheme document and/or offer
document (as referred to above), and other relevant documents (when
available) by directing a written request to Quanex (Attention:
Investor Relations), or from Quanex's website at
https://investors.quanex.com/.
Participants in the
Solicitation
Quanex and
certain of its directors and executive officers and employees may
be considered participants in the solicitation of proxies from the
Quanex Stockholders in respect of the Transaction. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of Quanex Stockholders in
connection with the Transaction, including a description of their
direct or indirect interests, by security holdings or otherwise,
will be set out in the Proxy Statement when it is filed with the
SEC. Information regarding Quanex's directors and executive
officers is contained in Quanex's Annual Report on Form 10-K for
the fiscal year ended October 31, 2023 and its annual meeting proxy
statement on Schedule 14A, dated January 25, 2024, which are filed
with the SEC.
Overseas
jurisdictions
The release,
publication or distribution of this Announcement in or into
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves about,
and observe, such restrictions. In particular, the ability of
persons who are not resident in the United Kingdom to vote their
Tyman Shares at the Court Meeting or General Meeting, or to appoint
another person as proxy to vote at the Court Meeting or General
Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Further details
in relation to the Overseas Shareholders will be contained in the
Scheme Document (or, if the Transaction is to be implemented by a
Takeover Offer, the Offer Document). Any failure to comply with any
such restrictions may constitute a violation of the securities laws
of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Transaction disclaim any responsibility or liability for the
violation of such restrictions by any person.
Unless
otherwise determined by Quanex or required by the Takeover Code,
and permitted by applicable law and regulation, the Transaction
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 such means from within a Restricted Jurisdiction or
any other jurisdiction if to do so would constitute a violation of
the laws of that jurisdiction and no person may vote in favour of
the Transaction by use of mail or any other means of
instrumentality (including, without limitation, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted
Jurisdiction.
Accordingly,
copies of this Announcement and all documents relating to the
Transaction 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
documents relating to the Transaction (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. Doing so may render invalid
any related purported vote in respect of the Transaction. If the
Transaction is implemented by way of a Takeover Offer (unless
otherwise permitted by applicable law or regulation), the
Transaction may not be made, directly or indirectly, in or into, or
by use of mail or any other means or instrumentality (including,
without limitation, facsimile, email or other electronic
transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction and the Transaction will
not be capable of acceptance by any such use, means,
instrumentality or facilities from within any Restricted
Jurisdiction.
The
availability of the Transaction or of New Quanex Shares pursuant to
the Transaction to Tyman Shareholders who are not resident in the
United Kingdom or the ability of those persons to hold such shares
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.
The
Transaction shall be subject to English law and the jurisdiction of
the Court and to the applicable requirements of the Takeover Code,
the Panel, the London Stock Exchange, the FCA, the Listing Rules
and the Registrar of Companies.
Additional
information for US investors in Tyman
Tyman
Shareholders in the United States should note that the Transaction
relates to the securities of a UK company and is proposed to be
effected by means of a scheme of arrangement under English law.
This Announcement, the Scheme Document and certain other documents
relating to the Transaction have been or will be prepared in
accordance with English law, the Takeover Code and UK disclosure
requirements, format and style, all of which differ from those in
the United States. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer rules under the US
Exchange Act. Accordingly, the Transaction is subject to the
disclosure requirements of and practices applicable in the United
Kingdom to schemes of arrangement, which differ from the disclosure
requirements of the United States tender offer rules. If, in the
future, Quanex exercises the right to implement the Transaction by
way of a Takeover Offer and determines to extend the offer into the
United States, the Transaction will be made in compliance with
applicable United States laws and regulations, including any
applicable exemptions under the US Securities Act or US Exchange
Act.
Tyman's
financial statements, and all financial information that is
included in this Announcement or that may be included in the Scheme
Document, or any other documents relating to the Transaction, have
been or will be prepared in accordance with International Financial
Reporting Standards and may not be comparable to financial
statements of companies in the United States or other companies
whose financial statements are prepared in accordance with US
generally accepted accounting principles ("US GAAP"). The financial information
included in this Announcement and the Scheme documentation in
relation to Quanex has been or will have been prepared in
accordance with US GAAP, except as otherwise specified
therein.
It may be
difficult for US holders to enforce their rights and claims arising
out of the US federal securities laws, since Tyman is located
outside of the US, and some or all of its officers and directors
may be residents of countries other than the US. US holders may not
be able to sue a non-US company or its officers or directors in a
non-US court for violations of US securities laws. Further, it may
be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or
judgment.
The New
Quanex Shares to be issued pursuant to the Transaction have not
been registered under the US Securities Act, and may not be offered
or sold in the United States absent registration or an applicable
exemption from the registration requirements of the US Securities
Act. The New Quanex Shares to be issued pursuant to the Transaction
will be issued in reliance upon an exemption from such registration
requirements pursuant to Section 3(a)(10) under the US Securities
Act. If, in the future, Quanex exercises its right to implement the
Transaction by way of a Takeover Offer or otherwise in a manner
that is not exempt from the registration requirements of the US
Securities Act, it will file a registration statement with the SEC
that will contain a prospectus with respect to the issuance of New
Quanex Shares. In this event, Tyman Shareholders are urged to read
these documents and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information. Such documents
will be available free of charge at the SEC's website at
www.sec.gov or by directing a request to Quanex's Investor
Relations team identified above.
New Quanex
Shares issued to persons other than "affiliates" of Quanex (defined
as certain control persons, within the meaning of Rule 144 under
the US Securities Act) will be freely transferable under US federal
securities laws and regulations following the Transaction. Persons
(whether or not US persons) who are or will be "affiliates" of
Quanex within 90 days prior to, or after, the Effective Date will
be subject to certain transfer restrictions relating to the New
Quanex Shares under US federal securities laws and
regulations.
Forward-looking
statements
This
Announcement contains "forward-looking statements" with respect to
the Quanex Group and the Tyman Group. These statements are based on
the current expectations of the management of Quanex and/or Tyman
and are naturally subject to uncertainty and changes in
circumstances. The forward-looking statements contained in this
document include statements relating to the expected effects of the
Transaction on Tyman and/or Quanex, the expected timing and scope
of the Transaction, and other statements other than historical
facts. Forward-looking statements include statements typically
containing words such as "will", "may", "should", "believe",
"intends", "expects", "anticipates", "targets", "estimates" and
words of similar import and including statements relating to future
capital expenditures, expenses, revenues, economic performance,
financial conditions, dividend policy, losses and future prospects
and business and management strategies and the expansion and growth
of the operations of Quanex or Tyman. Although Tyman and/or Quanex
believes that the expectations reflected in such forward-looking
statements are reasonable, Tyman and/or Quanex can give no
assurance that such expectations will prove to be correct. 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. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward looking statements. These
factors include: the possibility that the Transaction will not be
completed on a timely basis or at all, whether due to the failure
to satisfy the conditions of the Transaction (including approvals
or clearances from regulatory and other agencies and bodies) or
otherwise, general business and economic conditions globally,
industry trends, competition, changes in government and other
regulation, changes in political and economic stability,
disruptions in business operations due to reorganization
activities, interest rate and currency fluctuations, the inability
of the combined company to realize successfully any anticipated
synergy benefits when (and if) the Transaction is implemented, the
inability of the Enlarged Group to integrate successfully Quanex's
and Tyman's operations when (and if) the Transaction is implemented
and the Enlarged Group incurring and/or experiencing unanticipated
costs and/or delays or difficulties relating to the Transaction
when (and if) it is implemented. Additional information concerning
these and other risk factors is contained in the Risk Factors
sections of Quanex's most recent reports on Form 10-K and Form
10-Q, the contents of which are not incorporated by reference into,
nor do they form part of, this Announcement.
These
forward-looking statements are based on numerous assumptions
regarding the present and future business strategies of such
persons and the environment in which each will operate in the
future. By their nature, these forward-looking statements involve
known and unknown risks, as well as uncertainties because they
relate to events and depend on circumstances that will occur in the
future. The factors described in the context of such
forward-looking statements in this Announcement may cause the
actual results, performance or achievements of any such person, or
industry results and developments, to be materially different from
any results, performance or achievements expressed or implied by
such forward-looking statements. No assurance can be given that
such expectations will prove to have been correct and persons
reading this Announcement are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this Announcement. All subsequent oral or written
forward-looking statements attributable to Quanex or Tyman or any
persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. Neither of Quanex or
Tyman undertakes any obligation to update publicly or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent required by
applicable law, regulation or stock exchange
rules.
Use of
Non-GAAP financial information
Quanex uses
the non-GAAP measures of adjusted EBITDA and net debt in this
Announcement. These non-GAAP financial measures are provided to
enhance the user's understanding of Quanex's past financial
performance and its prospects for the future. Quanex's management
team uses these non-GAAP financial measures in assessing Quanex's
performance, as well as in planning and forecasting future periods.
These non-GAAP financial measures are not computed according to
U.S. GAAP and the methods used by Quanex to compute them may differ
from the methods used by other companies. Non-GAAP financial
measures are supplemental, should not be considered a substitute
for financial information presented in accordance with U.S. GAAP
and should be read only in conjunction with Quanex's consolidated
financial statements prepared in accordance with U.S.
GAAP.
Quanex is
unable to provide a reconciliation of these forward-looking
non-GAAP financial measures to the most comparable U.S. GAAP
financial measures because certain information is dependent on
future events, some of which are outside the control of Quanex.
Moreover, estimating such U.S. GAAP financial measures with the
required precision necessary to provide a meaningful reconciliation
is extremely difficult and could not be accomplished without
unreasonable effort.
No profit
forecasts or estimates
No statement
in this Announcement is intended as a profit forecast or estimate
for any period and no statement in this Announcement should be
interpreted to mean that earnings or earnings per share for Tyman
or Quanex for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per share for Tyman or Quanex.
Quantified Financial Benefits
Statement
The
statements in the Quantified Financial Benefits Statement relate to
future actions and circumstances which by their nature, involve
risks, uncertainties and contingencies. The synergies and cost
savings referred to may not be achieved, or may be achieved later
or sooner than estimated, or those achieved could be materially
different from those estimated. No statement in the Quantified
Financial Benefits Statement, or this Announcement generally,
should be construed as a profit forecast or interpreted to mean
that the Enlarged Group's earnings in the first full year following
the Effective Date, or in any subsequent period, would necessarily
match or be greater than or be less than those of Quanex and/or
Tyman for the relevant preceding financial period or any other
period. For the purposes of Rule 28 of the Takeover Code, the
Quantified Financial Benefits Statement is the responsibility of
Quanex and the Quanex Directors.
Disclosure
requirements of the Takeover Code
Under Rule
8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (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 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (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 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the business day following the date of the
relevant dealing.
If two or
more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
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.
Right to
switch to a Takeover Offer
Quanex
reserves the right to elect, with the consent of the Panel, and
subject to the terms of the Co-operation Agreement, to implement
the Transaction by way of a Takeover Offer for the entire issued
and to be issued ordinary share capital of Tyman as an alternative
to the Scheme. In such an event, the Takeover Offer will be
implemented on the same terms or, if Quanex so decides, on such
other terms being no less favourable (subject to appropriate
amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to
in Appendix
1 to this Announcement.
Upon sufficient acceptances being received in respect of such
Takeover Offer, Quanex intends to exercise its rights to apply the
provisions of Chapter 3 of Part 28 of the Companies Act so as to
acquire compulsorily the remaining Tyman Shares in respect of which
the Takeover Offer has not been accepted.
Publication
of this Announcement on website
A copy of
this Announcement and the documents required to be published
pursuant to Rule 26.1 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions on Quanex's website
at https://www.roadto2b.com/
and Tyman's website at
https://www.tymanplc.com/investor-relations
by no later than 12:00 p.m.
(London time) on the Business Day following this
Announcement.
For the
avoidance of doubt, the contents of these websites and any websites
accessible from hyperlinks on these websites are not incorporated
into, and do not form part of, this Announcement.
Information
relating to Tyman
Shareholders
Please be
aware that addresses, electronic addresses and certain information
provided by Tyman Shareholders, persons with information rights and
other relevant persons for the receipt of communications from Tyman
may be provided to Quanex during the Offer Period as required under
Section 4 of Appendix 4 of the Takeover Code to comply with Rule
2.11(c) of the Takeover Code.
Right to
receive documents in hard copy form
Any person
entitled to receive a copy of documents, announcements and
information relating to the Transaction is entitled to receive such
documents in hard copy form free of charge. For persons who receive
a copy of this Announcement in electronic form or via a website
notification, a hard copy of this Announcement will not be sent
unless so requested. A person may also request that all future
documents, announcements and information in relation to the
Transaction are sent to them in hard copy form.
In accordance
with Rule 30.3 of the Takeover Code, Tyman Shareholders, persons
with information rights and participants in Tyman Share Plans may
request a hard copy of this Announcement by contacting Tyman's
registrars, Link Group, on +44 (0) 371 277 1020. Lines are open
from 9 a.m. to 5.30 p.m. (London time) Monday to Friday. Calls are
charged at the standard geographical rate and will vary by
provider. Calls from outside the United Kingdom will be charged at
the applicable international rate.
Please note
the Shareholder Helpline cannot provide advice on the merits of the
Transaction or the Scheme nor give any financial, investment, legal
or tax advice.
Rounding
Certain
figures included in this Announcement have been subjected to
rounding adjustments. Accordingly, figures shown for the same
category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures that precede them.
General
If you are in
any doubt about the contents of this Announcement or the action you
should take, you are recommended to seek your own independent
financial advice immediately from your stockbroker, bank manager,
solicitor or independent financial adviser duly authorised under
FSMA if you are resident in the United Kingdom or, if not, from
another appropriate authorised independent financial
adviser.
Rule
2.9
For the
purposes of Rule 2.9 of the Takeover Code, Tyman confirms that, as
at the Latest Practicable Date, it had in issue 196,322,249
ordinary shares of £0.05 each (excluding 439,810 ordinary shares
held in treasury). The International Securities Identification
Number ("ISIN") of the
Tyman Shares is GB00B29H4253.
For the
purposes of Rule 2.9 of the Takeover Code, Quanex confirms that, as
at the Latest Practicable Date, it had in issue 33,111,593 shares
of common stock (excluding 4,015,431 shares of common stock held in
treasury). The ISIN of the Quanex Shares is
US7476191041.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY
JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
FOR IMMEDIATE
RELEASE
22 April
2024
RECOMMENDED CASH And Share OFFER
FOR
Tyman PLC
("Tyman")
BY
Quanex cORPORATION
("Quanex")
to be implemented by means of a Scheme
of Arrangement
under Part 26 of the Companies Act 2006
Introduction
The boards of Quanex and Tyman are pleased to
announce that they have reached agreement on the terms of a
recommended cash and share offer pursuant to which Quanex will
acquire the entire issued and to be issued ordinary share capital
of Tyman (the "Transaction"). The Transaction is to be
implemented by means of a court-sanctioned scheme of arrangement
under Part 26 of the Companies Act.
1.
The Transaction
Under the terms of the Transaction, which will
be subject to the Conditions and further terms set out in
Appendix 1 to this Announcement and to be set
out in the Scheme Document, Tyman Shareholders will be entitled to
receive for each Tyman Share held at the Scheme Record
Time:
·
240.0 pence in cash; and
·
0.05715 of a New Quanex Share,
(the "Main
Offer").
The Main Offer comprises approximately 60 per
cent. by value in cash and approximately 40 per cent. by value in
New Quanex Shares.
As an alternative to the Main Offer, Tyman
Shareholders will be able to elect to receive the consideration in
respect of their entire holding of Tyman Shares in Quanex Shares at
a ratio of 0.14288 of a New Quanex Share to every 1 Tyman Share
held at the Scheme Record Time (the "Capped All-Share
Alternative").
The Capped All-Share Alternative will be made
available in respect of up to 25 per cent. of the Tyman Shares
outstanding on the Effective Date. To the extent that valid
elections for the Capped All-Share Alternative received cannot be
satisfied in full, they will be scaled back as nearly as possible
on a pro-rata basis with the remaining consideration payable in
cash and New Quanex Shares in the proportions applicable to the
Main Offer (with any fractions of New Quanex Shares resulting from
such scaling to be dealt with as set out in paragraph 14
below).
Based on Quanex's share price of US$34.64 on 19
April 2024 (being the Latest Practicable Date) and the Exchange
Rate:
·
0.05715 of a New Quanex Share (issued under the Main Offer)
is equivalent to 160.0 pence; and
·
0.14288 of a New Quanex Share (issued under the Capped
All-Share Alternative) is equivalent to 400.0 pence.
Accordingly, and on the above basis, the Main
Offer and the Capped All-Share Alternative value each Tyman Share
at 400.0 pence as at the Latest Practicable Date.
Further, based on Quanex's share price of
US$34.64 on 19 April 2024 (being the Latest Practicable Date) and
the Exchange Rate, the Transaction:
·
values the entire issued and to be issued share capital of
Tyman at approximately £788 million;
·
represents a premium of approximately 35.1 per cent. to the
Closing Price of 296.0 pence per Tyman Share on the Latest
Practicable Date;
·
represents a premium of approximately 39.6 per cent. to the
Closing ex Dividend Price of 286.5 pence per Tyman Share on the
Latest Practicable Date;
·
represents a premium of approximately 36.0 per cent. to the
one-month volume weighted average price of 294.2 pence per Tyman
Share during the one-month period ended on the Latest Practicable
Date; and
·
represents a premium of approximately 40.5 per cent. to the
six-month volume weighted average price of 284.8 pence per Tyman
Share during the six-month period ended on the Latest Practicable
Date.
Each of the Tyman Directors who
holds Tyman Shares has irrevocably undertaken to vote or procure
votes in favour of the Scheme (or, in the event that the
Transaction is to be implemented by way of a Takeover Offer, accept
or procure the acceptance of the Takeover Offer), in respect of
their entire beneficial holdings of Tyman Shares.
In addition to the irrevocable undertakings
from the Tyman Directors, Quanex has also received an irrevocable
undertaking from Teleios to vote (or procure the votes) in favour
of the Scheme in respect of 16.4 per cent. of the Tyman Shares and
to accept the Capped All-Share Alternative in respect of its entire
holding of Tyman Shares.
Upon completion of the Transaction, and subject
to the elections made by Tyman Shareholders, Tyman Shareholders
will own between approximately 30 per cent. (if all
Tyman Shareholders, other than Teleios, receive the Main
Offer) and approximately 32 per cent. (if all Tyman Shareholders
elect to receive the Capped All-Share Alternative) of the Enlarged
Group as at the Latest Practicable Date. Pursuant to the
Transaction, Tyman will become a wholly-owned subsidiary of Quanex.
The transmission of New Quanex Shares by the transfer agent shall
be subject to any applicable legal or regulatory conditions
required in connection with such transmission.
Tyman Shareholders who do not positively elect
to receive the Capped All-Share Alternative will automatically
receive the Main Offer. Each Tyman Shareholder shall only be
entitled to elect to receive the Capped All-Share Alternative in
respect of all (and not some) of the Tyman Shares held by them.
Further details in relation to making an election for the Capped
All-Share Alternative will be contained in the Scheme Document and
the Forms of Proxy and Form of Election.
Quanex has agreed to provide an observer right
on the Quanex board to any person who: (i) is beneficially
interested in 16 per cent. or more of the fully diluted ordinary
share capital of Tyman when the Transaction is Effective; (ii)
will, following the issue of the New Quanex Shares to Tyman
Shareholders pursuant to the terms of the Transaction, be
beneficially interested in 5 per cent. or more of the issued Quanex
Shares when such New Quanex Shares are listed on the NYSE, taking
into account only (x) those New Quanex Shares which are issued to
Tyman Shareholders pursuant to the terms of the Transaction (and no
other Quanex Shares, howsoever acquired or received by them) as the
numerator for such calculation and (y) only the aggregated number
of all New Quanex Shares and Quanex Shares (excluding shares held
in treasury) in issue as at the date of this Announcement as the
denominator for such calculation; and (iii) has obtained any
required regulatory or legal approvals necessary for such person to
take up such right. Quanex will be entitled to terminate this
observer right on the date of Quanex's 2026 annual general meeting.
Further details will be set out in the Scheme Document.
Tyman Shareholders will continue to be entitled
to receive the final dividend of 9.5 pence per Tyman Share
announced by Tyman on 7 March 2024 for the financial year ended 31
December 2023 (the "FY23
Dividend"). If any other dividend, distribution and/or other
return of value is proposed, authorised, declared, made or paid or
becomes payable in respect of Tyman Shares on or after the date of
this Announcement and before the Effective Date (other than, or in
excess of, the FY23 Dividend), Quanex reserves the right to reduce
the consideration (and, accordingly, the Main Offer and the Capped
All-Share Alternative) by the amount of any such dividend,
distribution and/or other return of value.
It is expected that the Scheme Document,
containing further information about the Transaction and notices of
the Court Meeting and the General Meeting, will be posted to Tyman
Shareholders (other than those resident in Restricted
Jurisdictions) along with the Forms of Proxy and Form of Election
in May 2024. However, this timing may be delayed dependent on the
timing of the filing of the Proxy Statement and the Panel has
agreed to the request of Tyman and Quanex that, to the extent
required, the publication of the Scheme Document may be delayed
beyond the 28 day period required under paragraph 3(a) of Appendix
7 of the Takeover Code by Tyman in order that shareholder materials
are published to Tyman Shareholders on or around the same date as
the Proxy Statement is posted to Quanex Stockholders. To the extent
a delay in publication is required, it is expected that shareholder
materials would be published by the end of Q2 2024.
It is also expected that a Proxy Statement,
containing details of the Transaction, notice of the Quanex
Stockholder Meeting, information on the New Quanex Shares and a
proposal for the Quanex Share Proposal, will be mailed to Quanex
Stockholders around the same time as the Scheme Document is posted
to Tyman Shareholders, provided the SEC has completed its review or
confirmed no review of the Proxy Statement, with the Quanex
Stockholder Meeting being held as soon as possible
thereafter.
2.
Background to and reasons for the
Transaction
Quanex has been following Tyman for a number of
years and has been impressed with the strategy employed by the
Tyman Directors and the Tyman management team in creating a
well-balanced and diversified business with a growing global
presence.
Tyman's product offering is highly
complementary and synergistic to Quanex's existing portfolio, which
will enable the Enlarged Group to better serve its customers.
Quanex also believes that Tyman's existing business would benefit
from the opportunity to market a broader product offering and range
of services to existing and new customers.
Critically, based on discussions with Tyman's
senior management team, Quanex believes there is a high degree of
alignment between the Quanex and Tyman internal cultural identities
and a shared understanding of how people work together to execute
the business strategies.
Overall, the Quanex Directors believe that the
acquisition of Tyman offers compelling industrial logic and
strategic rationale, while offering a significant value creation
opportunity for stockholders in the Enlarged Group, as
it:
·
presents a unique opportunity to create a larger, more
diversified supplier of components and access solutions to
customers in the building products sector, particularly across the
fenestration portfolio in North America;
·
aligns with Quanex's "BIGGER" strategic roadmap, including
its "Bold" acquisition strategy, for growth and value
creation;
·
strengthens brand leadership with the addition of Tyman's
highly regarded family of brands and complementary product
portfolio;
·
enhances the financial profile of the Enlarged Group by
accelerating growth, and increasing profitability and cash
generation; and
·
unlocks substantial value creation for both Quanex and Tyman
shareholders through a material cost synergy
opportunity.
Aligns with Quanex's "BIGGER" strategic
roadmap for growth and value creation
·
Bold
acquisition strategy targeting new lines of
business: The Transaction enhances product
offering with a complementary portfolio, offering opportunity to
capture additional market opportunities, while moving Quanex close
to its US$2 billion revenue target.
·
Innovative product development driving consistent
growth in core segments: The Transaction will
bring further new product development capabilities while enhancing
customer reach.
·
Growth-focused strategy incorporating technology
across the platform: The Transaction will
bolster global growth potential, supporting the ability to deliver
'above market' growth.
·
Globally-oriented approach that expands reach
while supporting international divisions: The
Transaction enhances Quanex's manufacturing footprint in the US, UK
and Germany, while adding exposure into Southern Europe, Middle
East, Australasia and Latin America with Tyman's existing
presence.
·
Engaged to maximize positive impact for all
stakeholders: Both Quanex and Tyman have strong
mutual commitment to a sustainability framework, while helping
customers drive a sustainable business model through more energy
efficient operations.
·
Responsive to ideas and opportunities identified
across the organization: Integration will aim
to further streamline and transform operations, working towards a
more efficient manufacturing footprint and a more flexible
operating model.
Creates a larger, more diversified
supplier of components and access solutions to customers in the
building products sector
The acquisition by Quanex of Tyman offers a
unique opportunity to create a leading supplier of components to
OEMs in the building products sector globally. The Enlarged Group
will:
·
have complementary product portfolios of trusted brands,
routes to market and manufacturing processes, as well as a highly
complementary customer base offering significant cross-selling
opportunities;
·
benefit from a strong business franchise in North America,
with increased global reach for Quanex due to Tyman's international
footprint coupled with Quanex's existing presence in the UK and
Germany;
·
take advantage of the significantly enhanced scale to fully
optimize its portfolio of products and assets, moving Quanex closer
to becoming a comprehensive solutions provider;
·
be well-positioned from a strategic and financial perspective
to grow in attractive categories with value-added positioning,
driven by secular growth (e.g., more energy efficiency product
offering); and
·
capitalize on expanded engineering, design and manufacturing
capabilities.
Strengthens brand leadership with the
addition of Tyman's highly regarded family of brands
and complementary product portfolio
·
Tyman's family of brands includes highly-regarded names in
their respective business segments, which boast wide customer
bases. These brands offer product solutions in the window and door
hardware, commercial access solutions, and seals and extrusions
verticals, for residential and commercial users across its North
America, UK and Ireland, and International divisions.
·
The Enlarged Group will utilise Tyman's leading brands,
including Amesbury Truth, Lawrence and Bilco in North America; ERA,
Zoo and Access 360 in the UK and Ireland; and Schlegel, Giesse and
Reguitti internationally, implementing a multi-brand strategy to
allow increased access to the combined customer base and drive
cross-selling opportunities.
Enhances financial profile of the
Enlarged Group by accelerating growth and increasing
profitability
The Enlarged Group is expected to have an
enhanced financial profile with increased scale, greater long-term
growth potential, higher profitability, and strong free cash flow
generation supported by a healthy balance sheet position. The
Enlarged Group will be well-positioned to pursue organic growth and
further acquisitions that fit within Quanex's stated "Bold"
acquisition framework.
·
Enhanced scale and
attractive margins: The Transaction is expected
to result in significantly enhanced scale and reach for the
Enlarged Group with combined 2023 fiscal year revenues of
approximately US$2 billion, with approximately 73 per cent. of
combined sales coming from North America:
-
the Enlarged Group is expected to benefit from an improved
margin profile, driven in part by significant cost synergy
potential, with a higher adjusted EBITDA margin (based on financial
year ended 31 October 2023 for Quanex and 31 December 2023 for
Tyman and after taking into account the impact of run-rate cost
synergies of US$30 million expected to be fully achieved by the
second year following completion of the Transaction);
-
the Quanex Directors believe that the Enlarged Group will
attract a larger universe of shareholders and as a result increase
the trading liquidity of the shares in the Enlarged
Group.
·
Earnings
accretive: The Transaction is expected to be
significantly earnings enhancing after the first full financial
year following completion of the Transaction taking into account
full cost synergies.
·
Attractive
valuation: The Transaction implies an
attractive value multiple when factoring in full annual run-rate
cost synergies in the context of Quanex's and Tyman's long-term
average trading multiples.
·
Strong cash flows and
opportunity to invest in growth: The increased
scale is expected to result in operational benefits which will
support more rapid delivery of each of Quanex's and Tyman's
business plans. The Enlarged Group will benefit from a healthy
balance sheet, strong liquidity and an improved cash flow
profile.
·
Prudent financing
structure: At the end of fiscal year 2024
(assuming completion of the Transaction has occurred), the Enlarged
Group is expected to have a net leverage ratio (being net debt to
pro-forma adjusted EBITDA) of approximately 2.1x. The Quanex
Directors believe that based on strong expected free cash flow
generation, the Enlarged Group would achieve net leverage of
approximately 1.5x in the medium-term following completion of the
Transaction. In particular:
-
given its prudent capital structure, the Enlarged Group would
be well-positioned to accelerate future growth both organically and
through a joint strategy of value accretive acquisitions, to
generate further returns for shareholders;
-
the Enlarged Group will continue to be focused on total
shareholder returns, while exploring capital allocation options,
through stock repurchases, M&A activity and dividend
distribution where prudent and once deleveraging is achieved;
and
-
the Enlarged Group will continue to review and optimize its
portfolio, including investing in organic and inorganic growth, and
may consider the potential divestiture of non-core assets that, if
completed, would help accelerate debt reduction.
Substantial value creation unlocked for
both Tyman and Quanex shareholders through a
material synergy opportunity
The Quanex Directors believe that the Enlarged
Group will generate significant synergies which will provide
further value upside to its shareholders. The Quanex management
team has a strong track record of successfully integrating
businesses from previous M&A activity and delivering synergies,
including the acquisitions of Liniar, Woodcraft LMI Custom Mixing,
LLC.
Significant recurring cost synergies
opportunity
The Quanex Directors, having reviewed and
analysed the potential cost synergies of the Transaction, and
taking into account the factors they can influence, believe that
the Enlarged Group can deliver approximately US$30 million of
pre-tax recurring cost synergies on an annual run-rate basis,
expected to be realised by the end of the second full year
following completion of the Transaction.
The quantified cost synergies, which are
expected to originate from the cost bases of both Quanex and Tyman,
are expected to be realised primarily from:
·
approximately 30 per cent. in corporate and listing related
costs, generated from de-duplication and rationalisation of public
company costs and of executive leadership;
·
approximately 30 per cent. in procurement savings from scale
economies and consolidation of overlapping spend categories;
and
·
approximately 40 per cent. in savings from consolidation and
de-duplication of overlapping administrative and commercial
functions and activities.
The Quanex Directors expect approximately 50
per cent. of these cost synergies to be achieved by the end of the
first 12-month period following completion of the Transaction and
the full run-rate by the second anniversary of completion of the
Transaction.
The Quanex Directors estimate that the
realisation of the identified cost synergies will result in one-off
costs to achieve of approximately US$35 million in aggregate over
the first two years post completion of the Transaction.
Potential areas of dis-synergy expected to
arise in connection with the Transaction have been considered and
were determined by the Quanex Directors to be immaterial for the
analysis.
The identified cost synergies will occur as a
direct result of the success of the Transaction and would not be
achieved on a standalone basis. The identified cost synergies
reflect both the beneficial elements and relevant costs.
Further information on the bases of belief
supporting the Quantified Financial Benefits Statement, including
the principal assumptions and sources of information, is set out in
Appendix 4 to this Announcement. These estimated synergies have
been reported on for the purposes of Rule 28 of the Takeover Code
by KPMG. References to estimated cost savings should always be read
in conjunction with Appendix 4 to this Announcement.
Revenue synergies
opportunity
In addition to the quantified cost synergies
set out above, Quanex believes that there are several potential
revenue opportunities for the Enlarged Group, including additional
revenue growth through capitalising on the cross-selling
opportunities arising from Quanex's and Tyman's complementary
customer bases. Although the Quanex Directors are confident of
realising value via the delivery of revenue synergies, these have
not been quantified for public reporting under the Takeover Code at
this stage.
3.
Tyman Recommendation
The Tyman Directors, who have been so advised
by Greenhill as to the financial terms of the Transaction, consider
the terms of the Main Offer and the Capped All-Share Alternative to
be fair and reasonable. In providing advice to the Tyman Directors,
Greenhill has taken into account the commercial assessments of the
Tyman Directors. Greenhill is providing independent financial
advice to the Tyman Directors for the purposes of Rule 3 of the
Takeover Code.
Accordingly, the Tyman Directors intend to
recommend unanimously that Tyman Shareholders vote or procure votes
to approve the Scheme at the Court Meeting and to vote or procure
votes in favour of the Tyman Resolutions at the General Meeting as
the Tyman Directors who hold Tyman Shares at the date of this
Announcement have irrevocably undertaken to do (or procure to be
done) in respect of their own beneficial holdings, totalling
446,094 Tyman Shares, representing approximately 0.23 per cent. of
the issued share capital of Tyman as at the Latest Practicable
Date.
However, the Tyman Directors are not able to
and do not give any advice or recommendation to Tyman Shareholders
as to whether they should elect to receive the Capped All-Share
Alternative as its benefits will depend on each Tyman Shareholder's
individual tax and financial situation. Tyman Shareholders should
consider whether the Capped All-Share Alternative is suitable in
light of their own personal circumstances and investment objectives
and are, therefore, strongly recommended to seek their own
independent financial, tax and legal advice and to read in full
this Announcement and the Scheme Document (when published) before
deciding whether to elect to receive the Capped All-Share
Alternative.
4.
Background to and reasons for the
recommendation
Tyman has, through a series of transformational
transactions over the past decade, become one of the largest global
providers of highly-engineered door and window hardware, seals,
extrusions and access solutions, with strategic positions across
North America, UK and Ireland and Europe. This position is
underpinned by its recognized and leading brands, including
Amesbury Truth, Lawrence, Bilco, ERA, Zoo, Giesse, Schlegel and
others. A combination of organic and inorganic growth combined with
a range of operational initiatives have driven revenue and adjusted
operating profit to £657.6m and £84.4m for the year ended December
2023.
Tyman Group's Focus, Define, Grow strategy has
been instrumental in transforming the financial profile, geographic
footprint, performance and culture of the Company. Since its
inception, Tyman have rationalized their facility network and
product portfolio, optimized processes and established the Tyman
Excellence System and "One Tyman" culture, which has created a
platform capable of delivering growth through new product
development, market expansion, enhanced customer experience and
targeted M&A. Management have embedded sustainability at the
core of this strategy, across products, operations, culture and
solutions with 23 per cent. of revenues now generated from products
that positively impact one or more of the UN SDG goals,
predominantly in energy saving products.
Whilst market conditions have been challenging,
the long-term fundamentals across the business are strong in all of
Tyman's main geographies, in particular in North America, where
Tyman generated 72 per cent. of its adjusted operating profit
(before central costs) during the financial year ended 31 December
2023. Tyman has a leading position in North America and the large
undersupply of housing, positive demographic trends and the
expected step-up in the proportion of homes reaching prime
remodelling age in the coming years will underpin future market
growth rates.
Whilst Tyman standalone will benefit from these
North American growth opportunities, the timing of achieving them
is partially dependent on uncertain macro-economic factors which
brings a degree of risk. At this time, the Tyman Directors believe
that it may take some years before the benefits of the potential
growth opportunities in North America in particular are realized
and for their value to be reflected in Tyman's share price and
rating.
Furthermore, scale is becoming increasingly
important in the fenestration industry as evidenced both by the
step-up in the pace of consolidation within our larger North
American customers and the acquisitions of some of our competitors
by larger multinationals. In the context of this changing market
dynamic, Tyman's current scale could limit management's ability to
capitalize on market growth opportunities, as well as create
challenges in executing on larger acquisition targets in the North
American market in the future.
While the Tyman Directors remain confident that
Tyman's strategy can deliver attractive returns for Tyman
Shareholders as an independent company, they recognise that there
are risks to, as well as uncertainty as to the timing and the
delivery of, these returns.
The Tyman Directors therefore believe that a
combination with Quanex strengthens Tyman's strategic positioning
in the North America marketplace immediately. The Tyman Directors
believe that the Transaction would offer further compelling
strategic and operational benefits to all stakeholders,
including:
·
bringing together leading brands in the building products
components market, particularly across the fenestration segment in
North America, and creating a broad product portfolio with
geographic and product complementarity;
·
creating a significant opportunity to cross-sell existing and
new products and promote the value proposition to the combined
customer base, via strategically aligned routes to
market;
·
providing added scale to accelerate product innovation and
development initiatives to sustain long term growth;
·
offering greater capacity to pursue value-creating
acquisitions supported by a healthy balance sheet position with
modest pro forma leverage post Completion;
·
bringing together two respected and highly experienced
customer-focused management teams with a common culture of
excellence and innovation; and
·
unlocking substantial value creation for both Tyman and
Quanex shareholders via a significant and tangible cost and
potential future revenue synergy opportunity.
The Tyman Directors recognise that the Main
Offer provides the opportunity to realise a meaningful proportion
of Tyman Shareholders' investment at a compelling valuation in
cash, whilst also having the opportunity to benefit in the
potential future upside of the Enlarged Group through the New
Quanex Share component. Similarly, the Capped All-Share Alternative
provides an increased opportunity to benefit in that potential
future upside in lieu of the cash consideration.
Based on the offer value of 400.0 pence per
Tyman Share, the Main Offer and the Capped All-Share Alternative
represent:
·
a premium of approximately 35.1 per cent. to the Closing
Price of 296.0 pence per Tyman Share on the Latest Practicable
Date;
·
a premium of approximately 39.6 per cent. to the Closing ex
Dividend Price of 286.5 pence per Tyman Share on the Latest
Practicable Date;
·
a premium of approximately 36.0 per cent. to the one-month
volume weighted average price of 294.2 pence per Tyman Share during
the one-month period ended on the Latest Practicable Date;
and
·
a premium of approximately 40.5 per cent. to the six-month
volume weighted average price of 284.8 pence per Tyman Share during
the six-month period ended on the Latest Practicable
Date.
For the avoidance of doubt, in addition to the
consideration payable in connection with the Transaction, eligible
Tyman Shareholders will continue to be entitled to receive the FY23
Dividend of 9.5 pence per Tyman Share for the financial year ended
31 December 2023, which would be paid on 29 May 2024 to eligible
Tyman Shareholders on the register at 26 April 2024.
To the extent that elections for Capped
All-Share Offer cannot be satisfied in full, they will be scaled
down as nearly as reasonably practicable on a pro-rata basis with
the remaining consideration payable in cash and New Quanex shares
in the proportions set out in the Main Offer.
The Tyman Directors note that the implied value
multiple is at an attractive level when compared to other relevant
comparable transactions in the building materials
sector.
In addition to the financial terms of the
Transaction, in its evaluation of Quanex as a suitable owner of
Tyman from the perspective of all stakeholders, the Tyman Directors
have also taken into account Quanex's intentions for the business,
management and employees and other stakeholders of Tyman, as
outlined in paragraph 10 of this Announcement. The Tyman Directors
welcome Quanex's intention that, following completion of the
Transaction, it intends to safeguard the existing contractual and
statutory employment rights of the employees Tyman in accordance
with applicable law upon completion of the Transaction, and does
not intend to make any changes to the agreed employer contributions
into Tyman's existing defined contribution pension scheme or the
admission of new members to such pension scheme following
completion of the Transaction other than to harmonise the Tyman
employee 401k plans in the United States with the equivalent Quanex
plans. The Board of Tyman further welcome Quanex's intention to
maintain the existing Tyman manufacturing sites and the fact that
it does not intend to redeploy any of Tyman's material fixed assets
or alter its R&D function.
The Tyman Board notes that Quanex has stated
that the Enlarged Group is expected to fully realise pre-tax
run-rate cost synergies of approximately US$30 million by the end
of the second year post completion of the Transaction. The Tyman
Directors are reassured that Quanex will be adopting a "best of
both" approach in several areas including in operations, and
believe that the Enlarged Group will provide existing Tyman
management and employees with opportunities to continue their
career and personal development as part of a significantly larger
and stronger global business.
Given that detailed information to formulate
comprehensive plans or intentions regarding the impact of the
Transaction on Tyman is not yet available, the Tyman Directors are
unable to express a more detailed opinion on the impact of the
Transaction on Tyman management, employees and offices, save for as
set out in paragraph 10 of this Announcement.
Accordingly, following careful consideration of
the above factors, the Tyman Directors, who have been so advised by
Greenhill as to the financial terms of the Main Offer and the
Capped All-Share Alternative, unanimously consider the terms of the
Main Offer and the Capped All-Share Alternative to be fair and
reasonable. In providing their financial advice to the Tyman
Directors, Greenhill have taken into account the commercial
assessments of the Tyman Directors. Greenhill is providing
independent financial advice to the Tyman Directors for the
purposes of Rule 3 of the Takeover Code.
Accordingly, the Tyman Directors intend to
recommend unanimously that Tyman Shareholders vote or procure votes
in favour of the resolutions relating to the Scheme at the
Meetings, as each of the Tyman Directors who own Tyman Shares has
irrevocably undertaken to do in respect of their entire beneficial
holdings of Tyman Shares. Further details of those irrevocable
undertakings are set out below and in Appendix 3 of this
Announcement.
5.
Quanex Recommendation
The Quanex Directors consider the Transaction
to be advisable and in the best interests of Quanex and the Quanex
Stockholders and intends to recommend unanimously that Quanex
Stockholders vote in favour of the Quanex Share Proposal at the
Quanex Stockholder Meeting which will be convened in connection
with the Transaction.
6.
Irrevocable undertakings
In addition to the irrevocable undertakings
from the Tyman Directors who hold Tyman Shares at the
date of this Announcement, Quanex has also received an irrevocable
undertaking from Teleios to vote (or procure the votes) to approve
the Scheme at the Court Meeting and to vote (or procure the votes)
in favour of the Tyman Resolutions at the General Meeting in
respect of a total of 32,347,981 Tyman Shares representing
approximately 16.4 per cent. Of the issued share capital of Tyman
as at the Latest Practicable Date.
Quanex has therefore received irrevocable
undertakings in respect of a total of 32,794,075 Tyman Shares
representing approximately 16.7 per cent. of the issued share
capital of Tyman as at the Latest Practicable Date.
Further details of these irrevocable
undertakings, including the circumstances in which they may lapse,
are set out in Appendix 3 to this
Announcement.
7.
Information on Quanex
Quanex is a global manufacturer of components
and a key partner to OEMs for fenestration, cabinetry, solar,
refrigeration and outdoor products. Quanex's solutions include
insulating glass spacers, vinyl profiles, window and door screens,
cabinet components, fenestration components, vinyl extrusions,
rubber extrusions, kitchen components, bathroom components and
millwork.
Quanex, through its 'Part of Something Bigger'
strategy is dedicated to:
·
improving the performance, sustainability and aesthetics of
end products through continuous innovation;
·
helping customers achieve greater production
efficiencies;
·
giving back to communities in which it operates;
·
enhancing shareholder value; and
·
helping its employees learn, grow and thrive.
Quanex serves a primary customer base in North
America and the United Kingdom, but also serves customers globally
through operating plants in the United Kingdom and Germany as well
as through sales and marketing activities in other
countries.
8.
Information on Tyman
Tyman is a leading international supplier of
engineered fenestration components and access solutions to the
construction industry. The Group designs and manufactures products
that enhance the comfort, sustainability, security,
safety and aesthetics of residential homes and commercial
buildings. Tyman's portfolio of leading brands serve their markets
through three regional divisions (North America, UK and Ireland and
Europe) and cover all aspects of the hardware and sealing solutions
required for doors and windows, and a full suite of solutions for
roof, wall and floor access in residential and commercial
buildings.
9.
Synergies
The Quanex Directors, having reviewed and
analysed the potential cost synergies of the Transaction, and
taking into account the factors they can influence, believe that
the Enlarged Group can deliver approximately US$30 million of
pre-tax recurring cost synergies on an annual run-rate basis,
expected to be realised by the end of the second full year
following completion of the Transaction.
The quantified cost synergies, which are
expected to originate from the cost bases of both Quanex and Tyman,
are expected to be realised primarily from:
·
approximately 30 per cent. in corporate and listing related
costs, generated from de-duplication and rationalisation of public
company costs and of executive leadership;
·
approximately 30 per cent. in procurement savings from scale
economies and consolidation of overlapping spend categories;
and
·
approximately 40 per cent. in savings from consolidation and
de-duplication of overlapping administrative and commercial
functions and activities.
The Quanex Directors expect approximately 50
per cent. of these cost synergies to be achieved by the end of the
first 12-month period following completion of the Transaction and
the full run-rate by the second anniversary of completion of the
Transaction.
The Quanex Directors estimate that the
realisation of the identified cost synergies will result in one-off
costs to achieve of approximately US$35 million in aggregate over
the first two years post completion of the Transaction.
Potential areas of dis-synergy expected to
arise in connection with the Transaction have been considered and
were determined by the Quanex Directors to be immaterial for the
analysis.
The identified cost synergies will occur as a
direct result of the success of the Transaction and would not be
achieved on a standalone basis. The identified cost synergies
reflect both the beneficial elements and relevant costs.
Appendix 4 to this
Announcement includes a copy of the statements of anticipated cost
savings and synergies arising out of the Transaction and provides
underlying information and bases of belief. Appendix
4 to this Announcement also includes
reports from Quanex's reporting accountant, KPMG, and its sole
financial adviser, UBS, in connection with the anticipated
quantified financial benefits statements, as required pursuant to
Rule 28.1(a) of the Takeover Code, and provides underlying
information and bases for the accountant's and adviser's respective
reports. Each of KPMG and UBS has given and not withdrawn its
consent to the publication of its report in this announcement in
the form and context in which it is included.
10.
Strategic plans for Tyman, its directors, management,
employees, pensions, research and development and
locations
Quanex believes that the Transaction has a
compelling strategic rationale, will create significant value for
all stakeholders, and is consistent with Quanex's long-term growth
strategy. Quanex believes that there is a strong strategic fit
between Tyman's and Quanex's businesses based on highly
complementary product offerings, customer portfolios, and
geographic footprints in North America, Europe and the rest of the
world. The Enlarged Group will benefit from significant
cross-selling opportunities, increased presence in various
geographies as well as an enhanced offering. Quanex is confident in
the overall prospects of Tyman's business and its long-term
value.
Quanex's intentions and strategic plans
for Tyman
Prior to this Announcement, consistent with
market practice, Quanex has been granted due diligence access to
targeted information and Tyman's senior management for the purposes
of confirmatory due diligence and to conduct its synergy
assessment. This process has informed Quanex's view on the
prospects of the Enlarged Group, the synergies described in
paragraph 9 above and Quanex's initial plans for the integration of
Tyman.
Based on the work described above, Quanex's
management, following discussions with the senior leadership of
Tyman has undertaken a preliminary operational and strategic review
of and developed an initial integration plan for the Enlarged
Group. Quanex will continue to review Tyman's business and intends
to undertake a full evaluation of Tyman in the 12 months following
completion of the Transaction in order to formulate a detailed
strategic and integration plan for the Enlarged Group.
Key areas of focus in the operational review
and development of the integration plan include:
·
retaining the best talent from each of Quanex and Tyman to
ensure a best-in-class offering for customers, partners and
stakeholders;
·
building upon the synergy assessment undertaken to date to
consider additional potential synergy benefits that might be
possible, including with access to additional Tyman
data;
·
improving the performance of key parts of Tyman's operations
in the context of the Enlarged Group;
·
optimising the geographical footprint for the Enlarged Group
while retaining rigorous central oversight; and
·
continuing to run the business with a prudent balance sheet
approach to provide financial flexibility to pursue further
inorganic growth opportunities in line with Quanex's clearly
articulated long-term strategy.
During the implementation of the integration
plan, Quanex will place a strong focus on maintaining operational
excellence and minimising any disruption to customers. A key
objective of integration will be the delivery of the cost synergies
and other benefits of the Transaction. Quanex believes the
integration planning and execution will be assisted by the strong
experience of Quanex's management team in integrating previous
acquisitions including LMI Custom Mixing, LLC, Liniar and Woodcraft
Industries. Quanex intends to complete the implementation of the
integration plan, and fully realise the expected synergies, within
two years following completion of the Transaction.
Board and executive leadership of the
Enlarged Group
The Enlarged Group will be led by Quanex's
Chairman of the Board, President and Chief Executive Officer, Mr.
George L. Wilson.
The board of directors of the Enlarged Group
will comprise the existing non-executive directors of Quanex. All
non-executive directors of Tyman will resign as directors of Tyman,
with payment to be made in lieu of their contractual notice
periods, on the Effective Date.
Employees and
management
Quanex attaches great importance to the skill
and experience of Tyman's management and recognises their
contribution to the success that has been achieved by Tyman to
date. Quanex recognises that the active participation and continued
commitment of Tyman's management and employees will be key to the
success of the Enlarged Group. The Enlarged Group will aim to
retain the best talent of Quanex and Tyman across the Enlarged
Group and does not intend to change the overall balance of skills
and functions of employees and management across the Enlarged
Group. Quanex expects that Tyman management and employees will
benefit from the greater opportunities and enhanced scale of the
Enlarged Group as well as utilising the collective know-how and
talents of the enlarged workforce across all
geographies.
Quanex's preliminary evaluation work to
identify potential synergies arising from the Transaction suggests
that there will be some duplication between the two businesses'
management, administrative, functional support and other central
areas. It has also confirmed the benefits from consolidating
operations, including as a result of Tyman ceasing to be a
standalone publicly listed company. Whilst the steps for any
restructuring are not yet known, based on the work undertaken to
date, Quanex recognises that there will be a reduction in the total
number of roles by approximately two per cent. of the Enlarged
Group's total number of employees (on a full-time equivalent basis)
as a result of the Transaction, some of which will take place via
natural attrition. The Enlarged Group will aim to retain the best
talent from each of Quanex and Tyman, and any such proposals will
be carried out through a fair and transparent process in accordance
with applicable legal requirements.
Quanex expects that any restructuring referred
to above would be phased over 24 months following completion of the
Transaction. The detailed steps for such restructuring are subject
to further review and would be subject to comprehensive and
detailed planning, appropriate engagement and consultation with
representatives and other stakeholders, including affected
employees and any appropriate employee representative bodies in
accordance with the legal obligations of the Enlarged Group. Quanex
intends to commence this engagement process long enough before any
final decisions are taken so as to ensure that relevant legal
obligations are complied with.
Other than as described above, Quanex does not
anticipate that there will be any material change to the balance of
skills and functions of the management and employees in the
Enlarged Group. Furthermore, Quanex intends to safeguard the
existing contractual and statutory employment rights of the
employees of Quanex and Tyman in accordance with applicable law
upon completion of the Transaction. Quanex's plans for Tyman do not
involve any material change in the employment of, or in the
conditions of employment of, Tyman employees, unless otherwise
agreed with the relevant employee.
Following completion of the Transaction and as
part of integration planning, Quanex may review the alignment of
the remuneration and incentivisation arrangements as between
employees and management of the Quanex Group and the Enlarged
Group, as well as redundancy and other policies operated within the
Enlarged Group, with a view to harmonising the position for
employees and management across the Enlarged Group (in particular,
those in equivalent positions) over time as is
appropriate.
However, at the time of this Announcement,
Quanex does not have any detailed plans or intentions in this
regard and Quanex has not entered into, and has not discussed, any
form of incentivisation arrangements with members of Tyman's
management team.
Pension schemes
Quanex intends to harmonise the Tyman employee
401k plans in the United States with the equivalent Quanex plans
following completion of the Transaction.
Other than as referred to above, Quanex does
not intend to make any changes to the agreed employer contributions
into Tyman's existing defined contribution pension scheme or the
admission of new members to such pension scheme following
completion of the Transaction.
Headquarters and locations, business,
assets, research and development
The Enlarged Group intends to consolidate the
head office functions of Quanex and Tyman so that they can operate
from a single location. The Enlarged Group headquarters will be
located at Quanex's current head office in Houston, Texas. Subject
to further review and appropriate engagement and consultation with
affected employees in accordance with the legal obligations of the
Enlarged Group, the intention is that the Tyman head office in
London will be closed. Following completion of the Transaction,
Quanex will review the expanded office and production facility
footprint, and consider, where the Enlarged Group has co-located
offices or production facilities, whether there is scope for
consolidation to optimise rental and lease expenses, and to enable
colleagues to work together more closely and enhance the corporate
culture.
Quanex does not intend to close any of Tyman's
manufacturing facilities as a result of the Transaction.
Quanex does not intend to redeploy any of
Tyman's material fixed assets as a result of the
Transaction.
Quanex understands the importance of R&D to
Tyman's business. It does
not intend to make any changes to the R&D function of either
Tyman or Quanex.
Brands
Following completion of the Transaction, it is
intended that the name of the Enlarged Group will be Quanex
Building Products Corporation. Both Quanex and Tyman own a number
of recognised and successful brands, and following completion of
the Transaction Quanex will perform a review of all brands to
identify any potential opportunities for consolidation and
simplification of the brand portfolio.
Trading Facilities
The Tyman Shares are currently admitted to the
premium listing segment of the Official List and to trading on the
Main Market, and it is intended that applications will be made to
the FCA and the London Stock Exchange to cancel such admissions to
listing and trading shortly following the Effective Date. Tyman
will be re-registered as a private company following the Effective
Date. It is also proposed that, following the Effective Date and
after its shares are delisted, Tyman's financial year end is
changed to 31 October to align with the financial year end for the
Quanex Group.
The Enlarged Group will be listed on the
NYSE.
Quanex intends prior to completion of the
Transaction to establish a CREST depositary interest dealing
facility for the benefit of the Tyman Shareholders who hold their
Tyman Shares in uncertificated form so as to facilitate the trading
of the New Quanex Shares from outside the United States.
Details of how UK shareholders can hold, access and trade the
New Quanex Shares will be set out in the Scheme
Document.
Statements
None of the statements in this paragraph 10 are
"post-offer undertakings" for the purposes of Rule 19.5 of the
Takeover Code.
11.
Tyman Share Plans
Participants in the Tyman Share Plans will be
contacted regarding the effect of the Transaction on their rights
under the Tyman Share Plans and any action they may need to take.
An appropriate proposal will be made to such participants in due
course, and such proposal will reflect their rights under the Tyman
Share Plans.
Details of the impact of the Scheme on each of
the Tyman Share Plans will be set out in the Scheme
Document.
12.
Financing
The cash consideration payable to Tyman
Shareholders pursuant to the terms of the Transaction will be
funded by a combination of Quanex's existing cash resources as well
as third-party debt incurred by Quanex. Such third-party debt is
financed, inter alia, by a
US$750 million term loan (the "Facility") provided pursuant to an
interim facilities agreement entered into between, among others,
Quanex (as the company), Wells Fargo Bank, N.A., Bank of America
Securities and TD Bank.
In accordance with Rule 2.7(d) of the Takeover
Code, UBS, in its capacity as the sole financial adviser to Quanex,
is satisfied that sufficient resources are available to Quanex to
enable it to satisfy in full the cash consideration payable to
Tyman Shareholders under the terms of the Transaction.
Further information on the financing of the
Transaction will be set out in the Scheme Document.
13.
Offer-related arrangements
Quanex Confidentiality
Agreement
Quanex and Tyman entered into a confidentiality
agreement on 18 March 2024 (the "Quanex Confidentiality Agreement") pursuant to
which each of Quanex and Tyman has undertaken to keep, and to
procure that certain of their respective authorised representatives
keep, confidential information relating to the other party and/or
to the Transaction confidential, to use such information solely in
connection with the Transaction, and not to disclose such
information to any third party (with certain exceptions). These
confidentiality obligations will remain in force until 18 March
2026, save for: (i) any confidential information retained by either
party (and/or their respective authorised recipient(s)) in
accordance the terms of the Quanex Confidentiality Agreement and
(ii) any information relating specifically to the Transaction, in
respect of which the parties' obligations shall remain in full
force and effect without limit in time.
The Confidentiality Agreement also contains
undertakings from each of Quanex and Tyman that, for a period of 18
months from the date of the Quanex Confidentiality Agreement, they
shall not, and they shall procure that certain of their respective
authorised representatives shall not, solicit, engage or employ any
of the other party's key employees, save where a person contacts
Quanex or Tyman (as applicable) on their own initiative or
responds, without any approach or solicitation, to a general public
advertisements made in the ordinary course of business and which
was not specifically targeted at such person.
Quanex has also agreed to standstill
arrangements pursuant to which Quanex has agreed, amongst other
things, that, without the prior written consent of Tyman, Quanex
will not, and will procure that certain connected persons of it
shall not, acquire Tyman Shares or any interest in Tyman Shares.
These restrictions fall away immediately following the making of
this Announcement.
Teleios Confidentiality
Agreement
Teleios Capital Partners LLC,
Quanex and Tyman entered into a confidentiality agreement on
19 March 2024 (the "Teleios
Confidentiality Agreement") pursuant to which each of
Teleios Capital Partners LLC, Quanex and Tyman has undertaken to
keep, and to procure that certain of their respective authorised
representatives keep, confidential information relating to the
other parties and/or to the Transaction confidential, to use such
information solely in connection with discussions relating to the
Transaction, and not to disclose such information to any third
party (with certain exceptions). These confidentiality obligations
will remain in force until 19 March 2025.
Co-operation Agreement
Quanex and Tyman entered into a co-operation
agreement on 22 April 2024 (the "Co-operation Agreement") pursuant to
which:
a.
Quanex has agreed to use all reasonable endeavours to secure all
regulatory clearances and authorisations as soon as reasonably
practicable following the date of this Announcement and in any
event in sufficient time to enable the Effective Date to occur by
the Long Stop Date;
b.
Quanex shall be responsible for determining the strategy for
obtaining such regulatory clearances and authorisations after prior
consultation with Tyman and after having taken into account Tyman's
reasonable comments;
c.
Tyman and Quanex have agreed to certain customary undertakings to
co-operate in relation to such regulatory clearances and
authorisations;
d.
Quanex has agreed to provide Tyman with certain information for the
purposes of the Scheme Document and to otherwise assist with the
preparation of the Scheme Document;
e.
Quanex has provided certain undertakings in connection with the
preparation and filing of the Proxy Statement (including
undertaking to use its best endeavours to resolve comments received
from the SEC) and obtaining the approval to the Quanex Share
Proposal (including undertaking to use all reasonable endeavours to
obtain approval to the Quanex Share Proposal); and
f.
Quanex has a right to switch to a Takeover Offer in specified
circumstances and Quanex has agreed to certain provisions if the
Scheme should switch to a Takeover Offer.
The Co-operation Agreement also contains
provisions relating to the Tyman Share plans and other
employee-related matters (and proposals to be implemented by
Quanex) and directors' and officers' liability
insurance.
The Co-operation Agreement will terminate with
immediate effect:
a.
if Quanex and Tyman so agree in writing;
b.
Quanex invokes a Condition (in circumstances where invocation of
the relevant Condition is permitted by the Panel) and the Scheme
has been withdrawn (otherwise than as a result of a switch to a
Takeover Offer) or, following such a switch, the Takeover Offer
lapses;
c.
upon service of written notice by Quanex to Tyman if: (i) the Tyman
Directors change their recommendation in respect of the
Transaction; (ii) a competing offer (z) is recommended in whole or
in part by the Tyman Directors, or (y) becomes effective or is
declared or becomes unconditional; (iii) the Transaction is
implemented by way of a Scheme and (x) the Court Meeting and
General Meeting are not held on or before the 22nd day after the
expected date of the Court Meeting and the General Meeting (as
applicable) to be set out in the Scheme Document (or subsequent
announcement of the timetable) (or such later date as may be agreed
in writing between the parties with the consent of the Panel and
the approval of the Court (if such approval(s) are required)), or
(w) the Sanction Hearing is not held on or before the later of (A)
the 22nd day after the expected day of the Sanction
Hearing as set out in the Scheme Document (or subsequent
announcement of the timetable); and (B) thirty days after all the
Conditions have been satisfied or waived (or such later date as may
be agreed in writing between the parties with the consent of the
Panel and the approval of the Court (if such approval(s) are
required));
d.
upon service of written notice by either Quanex or Tyman to the
other if, prior to the Long Stop Date, any Condition which has not
been waived is (or has become) incapable of satisfaction by the
Long Stop Date (in circumstances where invocation of the relevant
Condition (or confirmation that the Condition is incapable of
satisfaction, as appropriate) is permitted by the
Panel);
e.
if the Transaction is (with the consent of the Panel) withdrawn,
terminates or lapses in accordance with its terms prior to the Long
Stop Date (other than where (i) such lapse or withdrawal is as a
result of the exercise of Quanex's right to effect a switch to a
Takeover Offer or (ii) it is otherwise to be followed within five
Business Days (or such other period as Quanex and Tyman may agree
in writing) by a firm offer announcement made by Quanex (or a
person acting in concert with Quanex) to implement the Transaction
by a different offer or scheme on substantially the same or
improved terms and which is (or is intended to be) recommended by
the Tyman Directors; or
f.
unless otherwise agreed by Quanex and Tyman in writing or required
by the Panel, if the Effective Date has not occurred by the Long
Stop Date.
Clean Team and Joint Defence
Agreement
Quanex, Tyman and certain of their respective
external regulatory counsel entered into a clean team and joint
defence agreement on 27 March 2024, to ensure that the exchange
and/or disclosure of certain materials relating to the parties only
takes place between their respective external regulatory counsel
and external experts, and does not diminish in any way the
confidentiality of such materials and does not result in a waiver
of privilege, right or immunity that might otherwise be
available.
14.
Structure of the Transaction
It is intended that the Transaction will be
implemented by means of a Court-approved scheme of arrangement
between Tyman and Tyman Shareholders under Part 26 of the Companies
Act. The purpose of the Scheme is to provide for Quanex to become
the holder of the entire issued and to be issued ordinary share
capital of Tyman. This is to be achieved by the transfer of the
Tyman Shares to Quanex, in consideration for which the Tyman
Shareholders will receive the cash and share consideration pursuant
to the Main Offer, or if applicable the Capped All-Share
Alternative, on the basis set out in paragraph 1 of this
Announcement.
The Transaction will be put to Tyman
Shareholders at the Court Meeting and at the General Meeting. In
order to become Effective, the Scheme must be approved by a
majority in number of the Scheme Shareholders voting at the Court
Meeting, either in person or by proxy, representing at least 75 per
cent. in value of the Scheme Shares voted. In addition, the Tyman
Resolutions must be approved by the requisite majority or
majorities at the General Meeting. The General Meeting will be held
immediately after the Court Meeting.
The Scheme will also be subject to the
Conditions and further terms set out in Appendix
1 to this Announcement and to be set out in the Scheme
Document.
Once the necessary approvals from Tyman
Shareholders have been obtained and the other Conditions have been
satisfied or (where applicable) waived, the Scheme must be
sanctioned by the Court. The Scheme will only become Effective upon
delivery of the Court Order to the Registrar of Companies for
registration. Upon the Scheme becoming Effective, it will be
binding on all Tyman Shareholders, irrespective of whether or not
they attended or voted at the Court Meeting or the General
Meeting.
The Transaction will lapse if:
·
the Court Meeting and the General Meeting are not held by the
22nd day after the expected date of such meetings as set out in the
Scheme Document (or such later date as may be agreed between Quanex
and Tyman);
·
the Quanex Stockholder Meeting is not held by the 22nd day
after the expected date or such meeting as set out in the Scheme
Document (or such later date as may be agreed between Quanex and
Tyman);
·
the Sanction Hearing is not held by the 22nd day after the
expected date of such hearing as set out in the Scheme Document (or
such later date as may be agreed between Quanex and Tyman);
or
·
the Scheme does not become Effective by the Long Stop Date
(or such later date as may be agreed between Quanex and
Tyman).
Further details of the Scheme, including an
indicative timetable for its implementation, will be set out in the
Scheme Document, which, together with the Forms of Proxy and Form
of Election, is expected to be despatched to Tyman Shareholders
around May 2024. However, this timing may be delayed dependent on
the timing of the filing of the Proxy Statement and the Panel has
agreed to the request of Tyman and Quanex that, to the extent
required, the publication of the Scheme Document may be delayed
beyond the 28 day period required under paragraph 3(a) of Appendix
7 of the Takeover Code by Tyman in order that shareholder materials
are published to Tyman Shareholders on or around the same date as
the Proxy Statement is posted to Quanex Stockholders. To the extent
a delay in publication is required, it is expected that shareholder
materials would be published by the end of Q2 2024.
Quanex Stockholder
Approval
In connection with the Transaction, Quanex
intends to file a Proxy Statement with the SEC. Quanex may also
file additional documents with the SEC in relation to the
Transaction. Quanex urges Quanex Stockholders to read these
materials carefully when they become available.
Quanex will be required to obtain approval of
the Quanex Share Proposal by a majority of Quanex Shares present in
person or represented by proxy at the Quanex Stockholder Meeting
and entitled to vote on the Quanex Share Proposal. The Quanex
Directors intend unanimously to recommend that Quanex Stockholders
vote in favour of the Quanex Share Proposal.
Quanex will send Quanex Stockholders the Proxy
Statement, which will include a notice convening the Quanex
Stockholder Meeting. The Transaction is conditional on, amongst
other things, the Quanex Share Proposal being approved by a
majority of Quanex Shares present in person or represented by proxy
at the Quanex Stockholder Meeting and entitled to vote on the
Quanex Share Proposal.
It is expected that the Proxy Statement will be
mailed to Quanex Stockholders once the SEC has completed its review
or confirmed no review of the Proxy Statement, with the Quanex
Stockholder Meeting being held as soon as possible
thereafter.
Fractions of New Quanex Shares will not be
issued to Tyman Shareholders. Instead, Tyman Shareholders who
otherwise would have received a fraction of a New Quanex Share will
receive an additional amount in cash, rounded down to the nearest
cent, based on the amount obtained by multiplying such fraction by
the closing sale price of Quanex Shares on the trading day
immediately prior to the Effective Date. Any fractional
entitlements of a Tyman Shareholder to New Quanex Shares under the
Capped All-Share Alternative will be rounded down to the nearest
whole number of New Quanex Shares per Tyman Shareholder. Fractional
entitlements to New Quanex Shares will not be allotted or issued to
such Tyman Shareholder but will be disregarded.
Details of how Tyman Shareholders can hold,
access and trade the New Quanex Shares will be set out in the
Scheme Document.
Right to switch to a Takeover
Offer
Quanex reserves the right to elect to implement
the Transaction by way of a Takeover Offer (with the consent of the
Panel and subject to the terms of the Co-operation Agreement). If,
in the future, Quanex exercises its right to implement the
Transaction by way of a Takeover Offer, the New Quanex Shares may
be registered under the US Securities Act if no exemption from
registration is available. If the Transaction is implemented by way
of a Takeover Offer, it will be done in compliance with the
applicable tender offer rules under the US Exchange Act, including
any applicable exemptions provided thereunder.
15.
Conditions to the Transaction
The Transaction will be subject to the
Conditions and further terms set out in Appendix
1 to this Announcement and to be set out in the Scheme
Document.
As set out in Appendix 1
to this Announcement, the Transaction is conditional on the
receipt or waiver of any applicable antitrust approvals or
clearances in the United States and the United Kingdom.
Further, as also set out in
Appendix 1 to this Announcement, the Transaction
is conditional on, amongst other things, the following
conditions:
·
approval of Tyman Shareholders at the Court Meeting and the
General Meeting;
·
the issuance of the New Quanex Shares in connection with the
Transaction having been approved by Quanex Stockholders at the
Quanex Stockholder Meeting;
·
NYSE having approved, and not withdrawn such approval, the
listing of the New Quanex Shares to be issued, subject to official
notice of issuance;
·
the satisfaction or, where applicable, waiver of all other
Conditions prior to the sanction of the Scheme by the Court (which
are capable of satisfaction or waiver prior to the sanction
hearing);
·
the sanction of the Scheme by the Court; and
·
the delivery of a copy of the Court Order to the Registrar of
Companies for registration.
16.
De-listing and re-registration
Before the Scheme becoming Effective, it is
intended that applications will be made to the London Stock
Exchange to cancel trading in Tyman Shares on the Main Market and
to the FCA to cancel the listing of the Tyman Shares from the
Official List, in each case with effect from or shortly following
the Effective Date. The last day of dealings in, and registration
of transfers of, Tyman Shares on the London Stock Exchange is
expected to be the Business Day immediately prior to the Sanction
Hearing and no transfers will be registered after 6.00 p.m. (London
time) on that date. No dealings in Tyman Shares will be registered
after this date.
On the Effective Date, share certificates in
respect of Tyman Shares will cease to be valid and entitlements to
Tyman Shares held within the CREST system will be
cancelled.
It is also proposed that, following the
Effective Date and after its shares are delisted, Tyman will be
re-registered as a private limited company under the relevant
provisions of the Companies Act. It is also proposed that,
following the Effective Date and after its shares are delisted,
Tyman's financial year end is changed to 31 October to align with
the financial year end for the Quanex Group.
17.
Listing and dealing of New Quanex Shares
An application will be made to NYSE for the New
Quanex Shares to be listed on the NYSE. It is expected that listing
of the New Quanex Shares will become effective and that dealings
for normal settlement will commence at 9.30 a.m. (New
York time) on the first Business Day after the Effective
Date.
The Quanex Shares are already listed on the
NYSE and enabled for electronic settlement through the Depository
Trust Company ("DTC"). It
is expected that the New Quanex Shares, when issued and fully paid,
will be capable of being held and transferred electronically
through DTC. The New Quanex Shares will trade under Quanex's
current trading symbol NX.
Quanex intends prior to completion of the
Transaction to establish a CREST depositary interest dealing
facility for the benefit of Tyman Shareholders so as to facilitate
the trading of Quanex Shares from outside the USA. Details of how
UK shareholders can hold, access and trade the New Quanex Shares
will be set out in the Scheme Document.
18.
Disclosure of Interests in Tyman
As at the close of business on the Latest
Practicable Date, save for the irrevocable undertakings referred to
in paragraph 5 of this Announcement, neither Quanex, nor any of its
directors, nor, so far as Quanex is aware, any person acting in
concert (within the meaning of the Takeover Code) with it
had:
(i)
any interest in or right to subscribe for any relevant securities
of Tyman;
(ii)
any short positions in respect of relevant Tyman Shares (whether
conditional or absolute and whether in the money or otherwise),
including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person
to purchase or take delivery;
(iii)
borrowed or lent any relevant Tyman Shares (including, for these
purposes, any financial collateral arrangements of the kind
referred to in Note 4 on Rule 4.6 of the Takeover Code), save for
any borrowed shares which had been either on-lent or
sold;
(iv)
entered into any dealing arrangement of the kind referred to in
Note 11 on the definition of acting in concert in the Takeover
Code.
"interests in securities" for these purposes
arise, in summary, when a person has long economic exposure,
whether absolute or conditional, to changes in the price of
securities (and a person who only has a short position in
securities is not treated as interested in those securities). In
particular, a person will be treated as having an 'interest' by
virtue of the ownership, voting rights or control of securities, or
by virtue of any agreement to purchase, option in respect of, or
derivative referenced to, securities.
19.
General
The Transaction will be made subject to the
Conditions and further terms set out in Appendix
1 to this Announcement and to be set out in the Scheme
Document. The bases and sources of certain financial information
contained in this Announcement are set out in Appendix
2 to this Announcement. A summary of the irrevocable
undertakings given in relation to the Transaction is contained
in Appendix 3 to this Announcement. The
Quantified Financial Benefits Statement, together with the reports
from KPMG, Quanex's
reporting accountants and UBS, Quanex's sole financial adviser as
required under Rule 28.1(a) of the Takeover Code is contained in
Appendix 4 to this Announcement. Certain terms used in this
Announcement are defined in Appendix 5 to
this Announcement.
UBS, Greenhill, Deutsche Numis and KPMG have
each given and not withdrawn their consent to the publication of
this Announcement with the inclusion herein of the references to
their names in the form and context in which they
appear.
20.
Documents available on website
Copies of the following documents will be made
available on Quanex's and Tyman's websites at https://www.roadto2b.com/ and
https://www.tymanplc.com/investor-relations
respectively until the end of the Transaction:
·
a copy of this Announcement;
·
documents relating to Quanex's financing of the
Transaction;
·
the irrevocable undertakings referred to in paragraph 5 above
and summarised in Appendix 3 to this
Announcement;
·
the Quanex Confidentiality Agreement and the Teleios
Confidentiality Agreement referred to in paragraph 13
above;
·
the Co-operation Agreement referred to in paragraph 13
above;
·
the Clean Team and Joint Defence Agreement referred to in
paragraph 13 above; and
·
the written consent letter from each of UBS, Greenhill,
Deutsche Numis and KPMG as referred to in paragraph 19
above.
The content of the websites referred to in this
Announcement is not incorporated into and does not form part of
this Announcement.
Enquiries:
Quanex
Scott Zuehlke - Senior Vice President, Chief Financial Officer and
Treasurer
+1 713 877 5327
UBS
(Sole Financial adviser to Quanex)
London: Joe Hannon, Romine Hakme, Josh
Chauhan
+44 20 7567 8000
New York: Simon Smith, Jane Zovak, Vijay Kumra
+1 212 713 2000
Joele Frank, Wilkinson Brimmer
Katcher
(PR adviser to Quanex)
Arielle
Rothstein
+1 212 355 4449
Andrew Siegel
Lyle Weston
Tyman
Rutger Helbing - Chief Executive
Officer
+44 207 976 8000
Jason Ashton - Chief Financial Officer
Greenhill
(Lead Financial adviser to Tyman)
Charles Montgomerie
+44 207 198 7400
David Wyles
Charles Spencer
Deutsche Numis
(Financial adviser and Corporate broker to
Tyman)
Jonathan
Wilcox
+44 207 260 1000
Richard Thomas
MHP Group
(PR adviser to
Tyman)
Reg Hoare
+44 7801 894577 /
tyman@mhpgroup.com
Rachel
Farrington
Matthew Taylor
Travers
Smith LLP is acting as English legal adviser to Quanex and Foley
& Lardner LLP is acting as US legal adviser to Quanex in
connection with the Transaction.
Latham and
Watkins (London) LLP is acting as legal adviser to Tyman in
connection with the Transaction.
Important notices about financial
advisers
UBS AG London
Branch ("UBS") is
authorised and regulated by the Financial Market Supervisory
Authority in Switzerland. It is authorised by the Prudential
Regulation Authority ("PRA") and subject to regulation in the
United Kingdom by the Financial Conduct Authority ("FCA") and limited regulation in the
United Kingdom by the PRA. UBS is acting exclusively as sole
financial adviser to Quanex and for no one else in connection with
the Transaction and will not be responsible to anyone other than
Quanex for providing the protections afforded to its clients nor
for providing advice in relation to the Transaction, the contents
of this Announcement or any other matters referred to in this
Announcement. Neither UBS nor any of its subsidiaries, branches or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of UBS in connection with the Transaction, this Announcement and
any statement contained herein or otherwise.
Greenhill
& Co. International LLP ("Greenhill"), an affiliate of Mizuho,
which is authorised and regulated in the United Kingdom by the FCA,
is acting as lead financial adviser to Tyman and for no one else in
connection with the Transaction and will not be responsible to
anyone other than Tyman for providing the protections afforded to
its clients nor for providing advice in relation to the
Transaction, the contents of this Announcement or any other matters
referred to in this Announcement.
Numis
Securities Limited (trading for these purposes as Deutsche Numis)
("Deutsche Numis"), which
is authorised and regulated in the United Kingdom by the Financial
Conduct Authority, is acting as exclusively for Tyman and no one
else in connection with the matters described in this Announcement
and will not be responsible to anyone other than Tyman for
providing the protections afforded to clients of Deutsche Numis, or
for providing advice in connection with the matters referred to
herein. Neither Deutsche Numis nor any of its group undertakings or
affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in
tort, under statute or otherwise) to any person who is not a client
of Deutsche Numis in connection with this Announcement or any
matter referred to herein.
No
Offer or Solicitation
This
Announcement is for informational purposes only and is not intended
to and does not constitute an offer to sell or the solicitation of
an offer to subscribe for or buy or an invitation to purchase or
subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the transaction or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
In particular, this Announcement is not an offer of securities for
sale into the United States or in any other jurisdiction. No offer
of securities shall be made in the United States absent
registration under the US Securities Act, or pursuant to an
exemption from, or in a transaction not subject to, such
registration requirements. Any securities issued in the Transaction
are anticipated to be issued in reliance upon an exemption from
such registration requirements pursuant to Section 3(a)(10) of the
US Securities Act.
The
Transaction will be made solely by means of the Scheme Document to
be published by Tyman in due course, or (if applicable) pursuant to
an Offer Document to be published by Quanex, which (as applicable)
would contain the full terms and conditions of the Transaction. Any
decision in respect of, or other response to, the Transaction,
should be made only on the basis of the information contained in
such document(s). As explained below, if Quanex ultimately seeks to
implement the Transaction by way of a Takeover Offer, that offer
will be made in compliance with applicable US laws and
regulations.
This
Announcement does not constitute a prospectus or a prospectus
exempted document.
This
Announcement has been prepared for the purpose of complying with
English law and the Takeover Code and the information disclosed may
not be the same as that which would have been disclosed if this
Announcement had been prepared in accordance with the laws of
jurisdictions other than England and Wales.
In accordance with
normal United Kingdom practice and pursuant to Rule 14e-5(b) of the
US Exchange Act, Quanex or its nominees, or its brokers (acting as
agents), may from time to time make certain purchases of, or
arrangements
to purchase, shares or other
securities of Tyman outside of the US, other than pursuant to the
Transaction, until the date on which the Transaction and/or Scheme
becomes Effective, lapses or is otherwise withdrawn. These
purchases may occur either in the open market at prevailing prices
or in private transactions at negotiated prices. Any information
about such purchases or arrangements to purchase will be disclosed
as required in the UK, will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at
www.londonstockexchange.com.
Important Additional Information will be
Filed with the SEC
This
Announcement may not be deemed to be solicitation material in
respect of the Transaction, including the issuance of the New
Quanex Shares. In connection with the Transaction, Quanex is
expected to file with the Proxy Statement with the SEC. To the
extent Quanex effects the Transaction as a Scheme under English
law, the issuance of New Quanex Shares would not be expected to
require registration under the US Securities Act in reliance upon
an exemption pursuant to Section 3(a)(10) of the US Securities Act.
If, in the future, Quanex exercises its right to implement the
Transaction by way of a Takeover Offer or otherwise in a manner
that is not exempt from the registration requirements of the US
Securities Act, it will file a registration statement on Form S-4
with the SEC that will contain a prospectus with respect to the
issuance of New Quanex Shares. BEFORE MAKING ANY VOTING DECISION,
QUANEX'S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT,
INCLUDING THE SCHEME DOCUMENT (OR, IF APPLICABLE, THE OFFER
DOCUMENT), AND OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH
THE SEC IN CONNECTION WITH THE TRANSACTION OR INCORPORATED BY
REFERENCE IN THE PROXY STATEMENT (IF ANY) CAREFULLY AND IN THEIR
ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE TRANSACTION AND THE PARTIES TO THE
TRANSACTION. Quanex's Stockholders and investors will be able to
obtain, without charge, a copy of the Proxy Statement (or, if
applicable, the registration statement on Form S-4), including the
scheme document and/or offer document (as referred to above), and
other relevant documents filed with the SEC (when available) from
the SEC's website at http://www.sec.gov. Quanex's stockholders and
investors will also be able to obtain, without charge, a copy of
the Proxy Statement, including the scheme document and/or offer
document (as referred to above), and other relevant documents (when
available) by directing a written request to Quanex (Attention:
Investor Relations), or from Quanex's website at
https://investors.quanex.com/.
Participants in the
Solicitation
Quanex and
certain of its directors and executive officers and employees may
be considered participants in the solicitation of proxies from the
Quanex Stockholders in respect of the Transaction. Information
regarding the persons who may, under the rules of the SEC, be
deemed participants in the solicitation of Quanex Stockholders in
connection with the Transaction, including a description of their
direct or indirect interests, by security holdings or otherwise,
will be set out in the Proxy Statement when it is filed with the
SEC. Information regarding Quanex's directors and executive
officers is contained in Quanex's Annual Report on Form 10-K for
the fiscal year ended October 31, 2023 and its annual meeting proxy
statement on Schedule 14A, dated January 25, 2024, which are filed
with the SEC.
Overseas
jurisdictions
The release,
publication or distribution of this Announcement in or into
jurisdictions other than the United Kingdom may be restricted by
the laws of those jurisdictions and therefore persons into whose
possession this Announcement comes should inform themselves about,
and observe, such restrictions. In particular, the ability of
persons who are not resident in the United Kingdom to vote their
Tyman Shares at the Court Meeting or General Meeting, or to appoint
another person as proxy to vote at the Court Meeting or General
Meeting on their behalf, may be affected by the laws of the
relevant jurisdictions in which they are located. Further details
in relation to the Overseas Shareholders will be contained in the
Scheme Document (or, if the Transaction is to be implemented by a
Takeover Offer, the Offer Document). Any failure to comply with any
such restrictions may constitute a violation of the securities laws
of any such jurisdiction. To the fullest extent permitted by
applicable law, the companies and persons involved in the
Transaction disclaim any responsibility or liability for the
violation of such restrictions by any person.
Unless
otherwise determined by Quanex or required by the Takeover Code,
and permitted by applicable law and regulation, the Transaction
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 such means from within a Restricted Jurisdiction or
any other jurisdiction if to do so would constitute a violation of
the laws of that jurisdiction and no person may vote in favour of
the Transaction by use of mail or any other means of
instrumentality (including, without limitation, facsimile, email or
other electronic transmission, telex or telephone) of interstate or
foreign commerce of, or any facility of a national, state or other
securities exchange of, any Restricted
Jurisdiction.
Accordingly,
copies of this Announcement and all documents relating to the
Transaction 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
documents relating to the Transaction (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. Doing so may render invalid
any related purported vote in respect of the Transaction. If the
Transaction is implemented by way of a Takeover Offer (unless
otherwise permitted by applicable law or regulation), the
Transaction may not be made, directly or indirectly, in or into, or
by use of mail or any other means or instrumentality (including,
without limitation, facsimile, email or other electronic
transmission, telex or telephone) of interstate or foreign commerce
of, or any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction and the Transaction will
not be capable of acceptance by any such use, means,
instrumentality or facilities from within any Restricted
Jurisdiction.
The
availability of the Transaction or of New Quanex Shares pursuant to
the Transaction to Tyman Shareholders who are not resident in the
United Kingdom or the ability of those persons to hold such shares
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.
The
Transaction shall be subject to English law and the jurisdiction of
the Court and to the applicable requirements of the Takeover Code,
the Panel, the London Stock Exchange, the FCA, the Listing Rules
and the Registrar of Companies.
Additional
information for US investors in Tyman
Tyman
Shareholders in the United States should note that the Transaction
relates to the securities of a UK company and is proposed to be
effected by means of a scheme of arrangement under English law.
This Announcement, the Scheme Document and certain other documents
relating to the Transaction have been or will be prepared in
accordance with English law, the Takeover Code and UK disclosure
requirements, format and style, all of which differ from those in
the United States. A transaction effected by means of a scheme of
arrangement is not subject to the tender offer rules under the US
Exchange Act. Accordingly, the Transaction is subject to the
disclosure requirements of and practices applicable in the United
Kingdom to schemes of arrangement, which differ from the disclosure
requirements of the United States tender offer rules. If, in the
future, Quanex exercises the right to implement the Transaction by
way of a Takeover Offer and determines to extend the offer into the
United States, the Transaction will be made in compliance with
applicable United States laws and regulations, including any
applicable exemptions under the US Securities Act or US Exchange
Act.
Tyman's
financial statements, and all financial information that is
included in this Announcement or that may be included in the Scheme
Document, or any other documents relating to the Transaction, have
been or will be prepared in accordance with International Financial
Reporting Standards and may not be comparable to financial
statements of companies in the United States or other companies
whose financial statements are prepared in accordance with US
generally accepted accounting principles ("US GAAP"). The financial information
included in this Announcement and the Scheme documentation in
relation to Quanex has been or will have been prepared in
accordance with US GAAP, except as otherwise specified
therein.
It may be
difficult for US holders to enforce their rights and claims arising
out of the US federal securities laws, since Tyman is located
outside of the US, and some or all of its officers and directors
may be residents of countries other than the US. US holders may not
be able to sue a non-US company or its officers or directors in a
non-US court for violations of US securities laws. Further, it may
be difficult to compel a non-US company and its affiliates to
subject themselves to a US court's jurisdiction or
judgment.
The New
Quanex Shares to be issued pursuant to the Transaction have not
been registered under the US Securities Act, and may not be offered
or sold in the United States absent registration or an applicable
exemption from the registration requirements of the US Securities
Act. The New Quanex Shares to be issued pursuant to the Transaction
will be issued in reliance upon an exemption from such registration
requirements pursuant to Section 3(a)(10) under the US Securities
Act. If, in the future, Quanex exercises its right to implement the
Transaction by way of a Takeover Offer or otherwise in a manner
that is not exempt from the registration requirements of the US
Securities Act, it will file a registration statement with the SEC
that will contain a prospectus with respect to the issuance of New
Quanex Shares. In this event, Tyman Shareholders are urged to read
these documents and any other relevant documents filed with the
SEC, as well as any amendments or supplements to those documents,
because they will contain important information. Such documents
will be available free of charge at the SEC's website at
www.sec.gov or by directing a request to Quanex's Investor
Relations team identified above.
New Quanex
Shares issued to persons other than "affiliates" of Quanex (defined
as certain control persons, within the meaning of Rule 144 under
the US Securities Act) will be freely transferable under US federal
securities laws and regulations following the Transaction. Persons
(whether or not US persons) who are or will be "affiliates" of
Quanex within 90 days prior to, or after, the Effective Date will
be subject to certain transfer restrictions relating to the New
Quanex Shares under US federal securities laws and
regulations.
Forward-looking
statements
This
Announcement contains "forward-looking statements" with respect to
the Quanex Group and the Tyman Group. These statements are based on
the current expectations of the management of Quanex and/or Tyman
and are naturally subject to uncertainty and changes in
circumstances. The forward-looking statements contained in this
document include statements relating to the expected effects of the
Transaction on Tyman and/or Quanex, the expected timing and scope
of the Transaction, and other statements other than historical
facts. Forward-looking statements include statements typically
containing words such as "will", "may", "should", "believe",
"intends", "expects", "anticipates", "targets", "estimates" and
words of similar import and including statements relating to future
capital expenditures, expenses, revenues, economic performance,
financial conditions, dividend policy, losses and future prospects
and business and management strategies and the expansion and growth
of the operations of Quanex or Tyman. Although Tyman and/or Quanex
believes that the expectations reflected in such forward-looking
statements are reasonable, Tyman and/or Quanex can give no
assurance that such expectations will prove to be correct. 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. There are a number of factors that could cause
actual results and developments to differ materially from those
expressed or implied by such forward looking statements. These
factors include: the possibility that the Transaction will not be
completed on a timely basis or at all, whether due to the failure
to satisfy the conditions of the Transaction (including approvals
or clearances from regulatory and other agencies and bodies) or
otherwise, general business and economic conditions globally,
industry trends, competition, changes in government and other
regulation, changes in political and economic stability,
disruptions in business operations due to reorganization
activities, interest rate and currency fluctuations, the inability
of the combined company to realize successfully any anticipated
synergy benefits when (and if) the Transaction is implemented, the
inability of the Enlarged Group to integrate successfully Quanex's
and Tyman's operations when (and if) the Transaction is implemented
and the Enlarged Group incurring and/or experiencing unanticipated
costs and/or delays or difficulties relating to the Transaction
when (and if) it is implemented. Additional information concerning
these and other risk factors is contained in the Risk Factors
sections of Quanex's most recent reports on Form 10-K and Form
10-Q, the contents of which are not incorporated by reference into,
nor do they form part of, this Announcement.
These
forward-looking statements are based on numerous assumptions
regarding the present and future business strategies of such
persons and the environment in which each will operate in the
future. By their nature, these forward-looking statements involve
known and unknown risks, as well as uncertainties because they
relate to events and depend on circumstances that will occur in the
future. The factors described in the context of such
forward-looking statements in this Announcement may cause the
actual results, performance or achievements of any such person, or
industry results and developments, to be materially different from
any results, performance or achievements expressed or implied by
such forward-looking statements. No assurance can be given that
such expectations will prove to have been correct and persons
reading this Announcement are therefore cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this Announcement. All subsequent oral or written
forward-looking statements attributable to Quanex or Tyman or any
persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. Neither of Quanex or
Tyman undertakes any obligation to update publicly or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent required by
applicable law, regulation or stock exchange
rules.
Use of
Non-GAAP financial information
Quanex uses
the non-GAAP measures of adjusted EBITDA and net debt in this
Announcement. These non-GAAP financial measures are provided to
enhance the user's understanding of Quanex's past financial
performance and its prospects for the future. Quanex's management
team uses these non-GAAP financial measures in assessing Quanex's
performance, as well as in planning and forecasting future periods.
These non-GAAP financial measures are not computed according to
U.S. GAAP and the methods used by Quanex to compute them may differ
from the methods used by other companies. Non-GAAP financial
measures are supplemental, should not be considered a substitute
for financial information presented in accordance with U.S. GAAP
and should be read only in conjunction with Quanex's consolidated
financial statements prepared in accordance with U.S.
GAAP.
Quanex is
unable to provide a reconciliation of these forward-looking
non-GAAP financial measures to the most comparable U.S. GAAP
financial measures because certain information is dependent on
future events, some of which are outside the control of Quanex.
Moreover, estimating such U.S. GAAP financial measures with the
required precision necessary to provide a meaningful reconciliation
is extremely difficult and could not be accomplished without
unreasonable effort.
No profit
forecasts or estimates
No statement
in this Announcement is intended as a profit forecast or estimate
for any period and no statement in this Announcement should be
interpreted to mean that earnings or earnings per share for Tyman
or Quanex for the current or future financial years would
necessarily match or exceed the historical published earnings or
earnings per share for Tyman or Quanex.
Quantified Financial Benefits
Statement
The
statements in the Quantified Financial Benefits Statement relate to
future actions and circumstances which by their nature, involve
risks, uncertainties and contingencies. The synergies and cost
savings referred to may not be achieved, or may be achieved later
or sooner than estimated, or those achieved could be materially
different from those estimated. No statement in the Quantified
Financial Benefits Statement, or this Announcement generally,
should be construed as a profit forecast or interpreted to mean
that the Enlarged Group's earnings in the first full year following
the Effective Date, or in any subsequent period, would necessarily
match or be greater than or be less than those of Quanex and/or
Tyman for the relevant preceding financial period or any other
period. For the purposes of Rule 28 of the Takeover Code, the
Quantified Financial Benefits Statement is the responsibility of
Quanex and the Quanex Directors.
Disclosure
requirements of the Takeover Code
Under Rule
8.3(a) of the Takeover Code, any person who is interested in 1 per
cent. or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (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 p.m. (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 p.m. (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 per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange
offeror(s), save to the extent that these details have previously
been disclosed under Rule 8. A Dealing Disclosure by a person to
whom Rule 8.3(b) applies must be made by no later than 3.30 p.m.
(London time) on the business day following the date of the
relevant dealing.
If two or
more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
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.
Right to
switch to a Takeover Offer
Quanex
reserves the right to elect, with the consent of the Panel, and
subject to the terms of the Co-operation Agreement, to implement
the Transaction by way of a Takeover Offer for the entire issued
and to be issued ordinary share capital of Tyman as an alternative
to the Scheme. In such an event, the Takeover Offer will be
implemented on the same terms or, if Quanex so decides, on such
other terms being no less favourable (subject to appropriate
amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to
in Appendix
1 to this Announcement.
Upon sufficient acceptances being received in respect of such
Takeover Offer, Quanex intends to exercise its rights to apply the
provisions of Chapter 3 of Part 28 of the Companies Act so as to
acquire compulsorily the remaining Tyman Shares in respect of which
the Takeover Offer has not been accepted.
Publication
of this Announcement on website
A copy of
this Announcement and the documents required to be published
pursuant to Rule 26.1 of the Takeover Code will be available, free
of charge, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions on Quanex's website
at https://www.roadto2b.com/
and Tyman's website at
https://www.tymanplc.com/investor-relations
by no later than 12:00 p.m.
(London time) on the Business Day following this
Announcement.
For the
avoidance of doubt, the contents of these websites and any websites
accessible from hyperlinks on these websites are not incorporated
into, and do not form part of, this Announcement.
Information
relating to Tyman
Shareholders
Please be
aware that addresses, electronic addresses and certain information
provided by Tyman Shareholders, persons with information rights and
other relevant persons for the receipt of communications from Tyman
may be provided to Quanex during the Offer Period as required under
Section 4 of Appendix 4 of the Takeover Code to comply with Rule
2.11(c) of the Takeover Code.
Right to
receive documents in hard copy form
Any person
entitled to receive a copy of documents, announcements and
information relating to the Transaction is entitled to receive such
documents in hard copy form free of charge. For persons who receive
a copy of this Announcement in electronic form or via a website
notification, a hard copy of this Announcement will not be sent
unless so requested. A person may also request that all future
documents, announcements and information in relation to the
Transaction are sent to them in hard copy form.
In accordance
with Rule 30.3 of the Takeover Code, Tyman Shareholders, persons
with information rights and participants in Tyman Share Plans may
request a hard copy of this Announcement by contacting Tyman's
registrars, Link Group, on +44 (0) 371 277 1020. Lines are open
from 9 a.m. to 5.30 p.m. (London time) Monday to Friday. Calls are
charged at the standard geographical rate and will vary by
provider. Calls from outside the United Kingdom will be charged at
the applicable international rate.
Please note
the Shareholder Helpline cannot provide advice on the merits of the
Transaction or the Scheme nor give any financial, investment, legal
or tax advice.
Rounding
Certain
figures included in this Announcement have been subjected to
rounding adjustments. Accordingly, figures shown for the same
category presented in different tables may vary slightly and
figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures that precede them.
General
If you are in
any doubt about the contents of this Announcement or the action you
should take, you are recommended to seek your own independent
financial advice immediately from your stockbroker, bank manager,
solicitor or independent financial adviser duly authorised under
FSMA if you are resident in the United Kingdom or, if not, from
another appropriate authorised independent financial
adviser.
Rule
2.9
For the
purposes of Rule 2.9 of the Takeover Code, Tyman confirms that, as
at the Latest Practicable Date, it had in issue 196,322,249
ordinary shares of £0.05 each (excluding 439,810 ordinary shares
held in treasury). The International Securities Identification
Number ("ISIN") of the
Tyman Shares is GB00B29H4253.
For the
purposes of Rule 2.9 of the Takeover Code, Quanex confirms that, as
at the Latest Practicable Date, it had in issue 33,111,593 shares
of common stock (excluding 4,015,431 shares of common stock held in
treasury). The ISIN of the Quanex Shares is
US7476191041.
Appendix 1
CONDITIONS TO AND FURTHER TERMS OF THE SCHEME AND THE
TRANSACTION
PART A:
CONDITIONS TO THE SCHEME AND THE TRANSACTION
Long Stop
Date
1.
The Transaction will be conditional upon the
Scheme becoming unconditional and being Effective, subject to the
provisions of the Takeover Code, by no later than the Long Stop
Date.
Scheme
approval
2.
The Scheme will be conditional upon:
(a)
(i)
its approval by a majority in number of the Scheme Shareholders (or
the relevant class or classes thereof, if applicable), present and
voting (and entitled to vote), either in person or by proxy, at the
Court Meeting (and at any separate class meeting which may be
required by the Court, if applicable), or at any adjournment of the
Court Meeting, and who represent at least 75 per cent. in value of
the Scheme Shares voted by those Scheme Shareholders;
and
(ii)
such Court Meeting (and any separate class meeting which may be
required by the Court, if applicable) being held on or before the
22nd day after the expected date of such meeting to be set out in
the Scheme Document (or such later date as may be agreed by Quanex
and Tyman, with the consent of the Panel, and the Court may approve
(if such approval is required));
(b)
(i)
the Tyman Resolutions being duly passed by the requisite majority
or majorities of Tyman Shareholders at the General Meeting (or any
adjournment of it); and
(ii)
such General Meeting being held on or before the 22nd day after the
expected date of such meeting to be set out in the Scheme Document
(or such later date as may be agreed by Quanex and Tyman, with the
consent of the Panel, and the Court may approve (if such approval
is required));
(c)
(i)
the sanction of the Scheme by the Court (with or without
modification, but subject to any modification being on terms
acceptable to Tyman and Quanex) and the delivery of a copy of the
Court Order to the Registrar of Companies; and
(ii)
the Sanction Hearing being held on or before the 22nd day after the
expected date of such hearing to be set out in the Scheme Document
(or such later date as may be agreed by Quanex and Tyman, with the
consent of the Panel, and the Court may approve (if such approval
is required)).
In addition, subject as stated in
Part B below, and to the requirements of the Panel, Quanex and
Tyman have agreed that the Transaction will be conditional upon the
following Conditions and, accordingly, the Court Order will not be
delivered to the Registrar of Companies unless such Conditions (as
amended if appropriate) have been satisfied (and continue to be
satisfied pending the commencement of the Sanction Hearing) or,
where relevant, waived:
New Quanex
Shares
3.
the approval of the Quanex Share Proposal by a
majority of Quanex Shares present in person or represented by proxy
at the Quanex Stockholder Meeting and entitled to vote on the
Quanex Share Proposal;
4.
NYSE having approved, and not withdrawn such
approval, the listing of the New Quanex Shares to be issued,
subject to official notice of issuance;
Anti-trust and
regulatory clearances
5.
all necessary notifications and filings having
been made and all applicable waiting periods (including any
extensions thereof) under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and regulations
made thereunder, having expired, lapsed or been terminated as
appropriate in each case in respect of the Transaction;
6.
one of the following having occurred:
(a)
the CMA having indicated in a response to a submission of a
briefing paper that it has no further questions at that stage in
relation to the Transaction; and as at the date on which all other
Conditions are satisfied or waived, the CMA has not: (i) requested
submission of a merger notice; (ii) given notice to either party
that it is commencing a Phase 1 investigation; (iii) indicated that
the statutory review period in which the CMA has to decide whether
to make a reference under section 34ZA Enterprise Act 2002 has
begun; or (iv) requested documents or attendance by witnesses under
section 109 of the Enterprise Act 2002 which may indicate that it
intends to commence the aforementioned statutory review period in
respect of the Transaction; or
(b)
where the CMA has commenced an investigation following the
submission of a merger notice or a briefing paper, the
CMA:
(i)
in accordance with section 33(1) of the Enterprise Act 2002,
announcing that it has decided not to refer the Transaction to the
chair of the CMA for the constitution of a group under Schedule 4
to the Enterprise and Regulatory Reform Act 2013 (a
"Referral");
or
(ii)
in accordance with section 73(2) of the Enterprise Act 2002,
formally accepting undertakings in lieu of a Referral offered by
Quanex, or a modified version of them;
7.
if and to the extent that any or all of Conditions
5 and 6 are waived or are not invoked by Quanex, all
authorisations, orders, grants, recognitions, determinations,
confirmations, consents, licences, clearances, permissions,
exemptions and approvals from the authorities referred to in or
relevant to Conditions 5 and 6 (for the purposes of this Condition
7 each a "Clearance") including, without limitation, any Clearance
in connection with a Referral and/or any "phase 2" or similar "in
depth" review by any of the authorities referred to in or relevant
to Conditions 5 and 6 having been obtained;
Notifications,
waiting periods and Authorisations
8.
all notifications, filings or applications which
are necessary or reasonably considered appropriate or desirable by
Quanex having been made in connection with the Transaction and all
necessary waiting periods (including any extensions thereof) under
any applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated (as appropriate) and all
statutory and regulatory obligations in any jurisdiction having
been complied with in each case in respect of the Transaction and
its implementation and all Authorisations reasonably necessary or
appropriate for or in respect of the Transaction and, except
pursuant to Chapter 3 of Part 28 of the Companies Act, the
acquisition of any shares or other securities in, or control or
management of, Tyman or any other member of the Wider Tyman Group
by any member of the Wider Quanex Group having been obtained in
terms and in a form reasonably satisfactory to Quanex from all
appropriate Third Parties or (without prejudice to the generality
of the foregoing) from any person or bodies with whom any member of
the Wider Tyman Group or the Wider Quanex Group has entered into
contractual arrangements and all such Authorisations necessary,
appropriate or desirable to carry on the business of any member of
the Wider Tyman Group in any jurisdiction having been obtained and
all such Authorisations remaining in full force and effect at the
time at which the Transaction becomes otherwise unconditional and
there being no notice or intimation of an intention to revoke,
suspend, restrict, modify or not to renew such
Authorisations;
General
antitrust and regulatory
9.
no antitrust regulator or Third Party having given
notice of a decision to take, institute, implement or threaten any
action, proceeding, suit, investigation, enquiry or reference (and
in each case, not having withdrawn the same), or having required
any action to be taken or otherwise having done anything, or having
enacted, made or proposed any statute, regulation, decision, order
or change to published practice (and in each case, not having
withdrawn the same) and there not continuing to be outstanding any
statute, regulation, decision or order which would or might
reasonably be expected to, in any case to an extent or in a manner
which is or would be material in the context of the Wider Tyman
Group taken as a whole or in the context of the
Transaction:
(a)
require, prevent or materially delay the divestiture or materially
alter the terms envisaged for such divestiture by any member of the
Wider Quanex Group or by any member of the Wider Tyman Group of all
or any material part of its businesses, assets or property or
impose any limitation on the ability of all or any of them to
conduct their businesses (or any part thereof) or to own, control
or manage any of their assets or properties (or any part
thereof);
(b)
except pursuant to Chapter 3 of Part 28 of the Companies Act,
require any member of the Wider Quanex Group or the Wider Tyman
Group to acquire or offer to acquire any shares, other securities
(or the equivalent) or interest in any member of the Wider Tyman
Group or any asset owned by any Third Party (other than in
connection with the implementation of the Transaction);
(c)
impose any material limitation on, or result in a material delay
in, the ability of any member of the Wider Quanex Group directly or
indirectly to acquire, hold or to exercise effectively all or any
rights of ownership in respect of shares, loans or securities
convertible into shares or any other securities (or the equivalent)
in Tyman or on the ability of any member of the Wider Tyman Group
or any member of the Wider Quanex Group directly or indirectly to
hold or exercise effectively all or any rights of ownership in
respect of shares, loans or securities convertible into shares or
any other securities (or the equivalent) in, or to exercise voting
or management control over, any member of the Wider Tyman
Group;
(d)
otherwise adversely affect any or all of the business, assets,
profits or prospects of any member of the Wider Tyman Group or the
Wider Quanex Group;
(e)
result in any member of the Wider Tyman Group or any member of the
Wider Quanex Group ceasing to be able to carry on business under
any name under which it presently carries on business;
(f)
make the Scheme or the Transaction, its implementation or the
acquisition of any shares or other securities in, or control or
management of, Tyman or any member of the Wider Tyman Group by any
member of the Wider Quanex Group void, unenforceable and/or illegal
under the laws of any relevant jurisdiction, or otherwise, directly
or indirectly prevent or prohibit, restrict, restrain, or delay or
otherwise materially interfere with the implementation of, or
impose additional conditions or obligations with respect to, or
otherwise challenge, impede, interfere or require material
amendment of the Scheme and/or the Transaction or the acquisition
of any shares or other securities in, or control or management of,
Tyman or any member of the Wider Tyman Group by any member of the
Wider Quanex Group;
(g)
require, prevent or delay a divestiture by any member of the Wider
Quanex Group of any shares or other securities (or the equivalent)
in any member of the Wider Tyman Group or any member of the Wider
Quanex Group;
(h)
impose any limitation on the ability of any member of the Wider
Quanex Group or any member of the Wider Tyman Group to conduct,
integrate or co-ordinate all or any part of its business with all
or any part of the business of any other member of the Wider Quanex
Group and/or the Wider Tyman Group;
(i)
require any member of the Wider Tyman Group or the Wider Quanex
Group to terminate or vary in any material way any material
contract to which any member of the Wider Tyman Group or the Wider
Quanex Group is a party;
(j)
require any member of the Wider Quanex Group or any member of the
Wider Tyman Group or any of their respective affiliates to: (i)
invest, contribute or loan any capital or assets to; (ii) guarantee
or pledge capital assets for the benefit of any member of the Wider
Quanex Group or any member of the Wider Tyman Group; or
(k)
otherwise materially adversely affect any or all of the business,
assets, profits or prospects of any member of the Wider Tyman Group
or any member of the Wider Quanex Group,
and all applicable waiting and other time
periods (including any extensions of them) during which any such
antitrust regulator or Third Party could decide to take, institute,
implement or threaten any such action, proceeding, suit,
investigation, enquiry or reference or take any other step under
the laws of any jurisdiction in respect of the Transaction or the
acquisition of any Tyman Shares or otherwise intervene having
expired, lapsed or been terminated;
Certain
matters arising as a result of any arrangement, agreement,
etc.
10.
except as Disclosed, there being no provision of
any arrangement, agreement, lease, licence, franchise, permit or
other instrument to which any member of the Wider Tyman Group is a
party or by or to which any such member or any of its assets is or
may be bound, entitled or subject to or any event or circumstance
which, as a consequence of the Transaction or the proposed
acquisition or the acquisition by any member of the Wider Quanex
Group of any shares or other securities (or the equivalent) in
Tyman or because of a change in the control or management of any
member of the Wider Tyman Group or otherwise, would or might
reasonably be expected to result in, in each case to an extent
which is material in the context of the Wider Tyman Group as a
whole:
(a)
any monies borrowed by, or any other indebtedness or liabilities,
actual or contingent, of, or any grant available to, any member of
the Wider Tyman Group being or becoming repayable, or capable of
being declared repayable, immediately or before its or their stated
maturity date or repayment date, or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(b)
save in the ordinary course of business, the creation or
enforcement of any mortgage, charge or other security interest over
the whole or any part of the business, property, assets or
interests of any member of the Wider Tyman Group or any such
mortgage, charge or other security interest (whenever created,
arising or having arisen) being enforced or becoming
enforceable;
(c)
any such arrangement, agreement, lease, licence, franchise, permit
or other instrument being terminated or becoming capable of being
terminated or adversely modified or the rights, liabilities,
obligations or interests of any member of the Wider Tyman Group
being terminated or adversely modified or adversely affected or any
obligation or liability arising or any adverse action being taken
or arising thereunder;
(d)
any liability of any member of the Wider Tyman Group to make any
severance, termination, bonus or other payment to any of its
directors, or other officers;
(e)
the rights, liabilities, obligations, interests or business of any
member of the Wider Tyman Group or any member of the Wider Quanex
Group under any such arrangement, agreement, licence, permit, lease
or instrument or the interests or business of any member of the
Wider Tyman Group or any member of the Wider Quanex Group in or
with any other person or body or firm or company (or any agreement
or arrangement relating to any such interests or business) being or
becoming capable of being terminated, or adversely modified or
affected or any onerous obligation or liability arising or any
adverse action being taken thereunder;
(f)
any member of the Wider Tyman Group ceasing to be able to carry on
business under any name under which it presently carries on
business;
(g)
the business, assets, profits, value of, or the financial or
trading position or prospects of, any member of the Wider Tyman
Group being prejudiced or adversely affected; or
(h)
the creation or acceleration of any material liability (actual or
contingent) by any member of the Wider Tyman Group other than trade
creditors or other liabilities incurred in the ordinary course of
business,
and, except as Disclosed, no event having
occurred which, under any provision of any arrangement, agreement,
licence, permit, franchise, lease or other instrument to which any
member of the Wider Tyman Group is a party or by or to which any
such member or any of its assets are bound, entitled or subject,
would or might result in any of the events or circumstances as are
referred to in Conditions 10(a) to (h).
Certain events
occurring since 31 December 2023
11.
Except as Disclosed, no member of the Wider Tyman
Group having since 31 December 2023:
(a)
issued or agreed to issue or authorised or proposed or announced
its intention to authorise or propose the issue, of additional
shares of any class, or securities or securities convertible into,
or exchangeable for, or rights, warrants or options to subscribe
for or acquire, any such shares, securities or convertible
securities or transferred or sold or agreed to transfer or sell or
authorised or proposed the transfer or sale of Tyman Shares out of
treasury (except, where relevant, as between Tyman and wholly-owned
subsidiaries of Tyman or between the wholly-owned subsidiaries of
Tyman and except for the issue or transfer out of treasury of Tyman
Shares on the exercise of employee share options or vesting of
employee share awards in the ordinary course under the Tyman Share
Plans);
(b)
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus, dividend or other distribution
(whether payable in cash or otherwise) other than: (i) the FY23
Dividend and (ii) dividends (or other distributions whether payable
in cash or otherwise) lawfully paid or made by any wholly-owned
subsidiary of Tyman to Tyman or any of its wholly-owned
subsidiaries;
(c)
other than pursuant to the Transaction (and except for transactions
between Tyman and its wholly-owned subsidiaries or between the
wholly-owned subsidiaries of Tyman and transactions in the ordinary
course of business) implemented, effected, authorised or proposed
or announced its intention to implement, effect, authorise or
propose any merger, demerger, reconstruction, amalgamation, scheme,
commitment or offer or disposal of assets or shares or loan capital
(or the equivalent thereof) in each case to an extent which is
material in the context of the Wider Tyman Group taken as a whole
or is material in the context of the Transaction;
(d)
except for: (i) transactions between Tyman and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Tyman and
(ii) transactions in the ordinary course of business, disposed of,
or transferred, mortgaged or created any security interest over any
material asset or any right, title or interest in any material
asset or authorised, proposed or announced any intention to do
so;
(e)
except for transactions between Tyman and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries of Tyman,
issued, authorised or proposed or announced an intention to
authorise or propose, the issue of or made any change in or to the
terms of any debentures or become subject to any contingent
liability or incurred or increased any indebtedness, in each case
to an extent which is material in the context of the Wider Tyman
Group taken as a whole or is material in the context of the
Transaction;
(f)
entered into any licence or other disposal of intellectual property
rights of any member of the Wider Tyman Group which are material in
the context of the Wider Tyman Group taken as a whole;
(g)
entered into or varied or authorised, proposed or announced its
intention to enter into or vary any contract, arrangement,
agreement, transaction or commitment (whether in respect of capital
expenditure or otherwise) which is of a long term, unusual or
onerous nature or magnitude or which is or which involves or could
involve an obligation of a nature or magnitude which is reasonably
likely to be restrictive on the business of any member of the Wider
Tyman Group;
(h)
entered into or varied the terms of, or made any offer (which
remains open for acceptance) to enter into or vary the terms of any
contract, service agreement, commitment or arrangement with any
director or senior executive of any member of the Wider Tyman
Group, except for salary increases, bonuses or variations of terms
in the ordinary course;
(i)
proposed, agreed to provide or modified the terms of any share
option scheme, incentive scheme or other benefit relating to the
employment or termination of employment of any employee of the
Wider Tyman Group;
(j)
purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, except in respect of the matters mentioned in
sub-paragraph (a) above, made any other change to any part of its
share capital;
(k)
except in the ordinary course of business, waived, compromised or
settled any claim which is material in the context of the Wider
Tyman Group as a whole;
(l)
terminated or varied the terms of any agreement or arrangement
between any member of the Wider Tyman Group and any other person in
a manner which would or might reasonably be expected to have a
material adverse effect on the financial position of the Wider
Tyman Group taken as a whole;
(m)
made any material alteration to its memorandum or articles of
association or other constitutional documents;
(n)
except in relation to changes made or agreed as a result of, or
arising from, changes to legislation, made or agreed or consented
to any change to:
(i)
the terms of the trust deeds and rules constituting the pension
scheme(s) established by any member of the Wider Tyman Group for
its directors, employees or their dependants;
(ii)
the contributions payable to any such scheme(s) or to the benefits
which accrue, or to the pensions which are payable,
thereunder;
(iii)
the basis on which qualification for, or accrual or entitlement to,
such benefits or pensions are calculated or determined;
or
(iv)
the basis upon which the liabilities (including pensions) of such
pension schemes are funded, valued, made, agreed or consented
to;
(o)
been unable, or admitted in writing that it is unable, to pay its
debts or commenced negotiations with one or more of its creditors
with a view to rescheduling or restructuring any of its
indebtedness, or having stopped or suspended (or threatened to stop
or suspend) payment of its debts generally or ceased or threatened
to cease carrying on all or a substantial part of its
business;
(p)
taken or proposed any steps, corporate action or had any legal
proceedings instituted or threatened against it in relation to the
suspension of payments, a moratorium of any indebtedness, its
winding-up (voluntary or otherwise), dissolution, reorganisation or
for the appointment of a receiver, administrator, manager,
administrative receiver, trustee or similar officer of all or any
of its material assets or revenues or any analogous or equivalent
steps or proceedings in any jurisdiction or appointed any analogous
person in any jurisdiction or had any such person
appointed;
(q)
except for transactions between Tyman and its wholly-owned
subsidiaries or between the wholly-owned subsidiaries, made,
authorised, proposed or announced an intention to propose any
change in its loan capital;
(r)
entered into, implemented or authorised the entry into, any joint
venture, asset or profit-sharing arrangement, partnership, merger
of business or corporate entities, composition, assignment,
reconstruction, amalgamation, commitment, scheme or other similar
transaction or arrangement (other than the Scheme) which is
material in the context of the Wider Tyman Group taken as a whole
or in the context of the Transaction;
(s)
having taken (or agreed or proposed to take) any action which
requires or would require, the consent of the Panel or the approval
of Tyman Shareholders in general meeting in accordance with, or as
contemplated by, Rule 21.1 of the Takeover Code; or
(t)
entered into any agreement, arrangement, commitment or contract or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced an intention to, or to
propose to, effect any of the transactions, matters or events
referred to in this Condition 11 which is material in the context
of the Wider Tyman Group taken as a whole;
No adverse
change, litigation, regulatory enquiry or similar
12.
except as Disclosed, since 31 December 2023 there
having been:
(a)
no adverse change and no circumstance having arisen which would or
might be expected to result in any adverse change or deterioration
in, the business, assets, value, financial or trading position or
profits or prospects or operational performance of any member of
the Wider Tyman Group which is material in the context of the Wider
Tyman Group taken as a whole or is material in the context of the
Transaction;
(b)
no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened, announced or instituted by or
against or remaining outstanding against or in respect of, any
member of the Wider Tyman Group or to which any member of the Wider
Tyman Group is or may become a party (whether as claimant,
defendant or otherwise) having been threatened, announced,
instituted or remaining outstanding by, against or in respect of,
any member of the Wider Tyman Group, in each case which is or might
reasonably be expected to be material in the context of the Wider
Tyman Group taken as a whole or is material in the context of the
Transaction;
(c)
no enquiry, review or investigation by, or complaint or reference
to, any Third Party against or in respect of any member of the
Wider Tyman Group having been threatened, announced or instituted
or remaining outstanding by, against or in respect of any member of
the Wider Tyman Group, in each case which might reasonably be
expected to have a material adverse effect on the Wider Tyman Group
taken as a whole or is material in the context of the
Transaction;
(d)
no contingent or other liability having arisen or become apparent
to Quanex or increased which is reasonably likely to affect
adversely the business, assets, financial or trading position or
profits or prospects or operational performance of any member of
the Wider Tyman Group to an extent which is material in the context
of the Wider Tyman Group taken as a whole or is material in the
context of the Transaction;
(e)
no steps having been taken and no omissions having been made which
are reasonably likely to result in the withdrawal, cancellation,
termination or modification of any licence held by any member of
the Wider Tyman Group which is necessary for the proper carrying on
of its business and the withdrawal, cancellation, termination or
modification of which might reasonably be expected to have a
material adverse effect on the Wider Tyman Group taken as a whole
or is material in the context of the Transaction; and
(f)
no member of the Wider Tyman Group having conducted its business in
breach of any applicable laws or regulations which might reasonably
be expected to have a material adverse effect on the Wider Tyman
Group taken as a whole or is material in the context of the
Transaction;
No discovery
of certain matters regarding information, liabilities and
environmental issues
13.
except as Disclosed, Quanex not having discovered
that:
(a)
any financial, business or other information concerning the Wider
Tyman Group publicly announced before the date of this Announcement
or disclosed at any time to any member of the Wider Quanex Group by
or on behalf of any member of the Wider Tyman Group before the date
of this Announcement is misleading, contains a material
misrepresentation of any fact, or omits to state a fact necessary
to make that information not misleading;
(b)
any member of the Wider Tyman Group or any partnership, company or
other entity in which any member of the Wider Tyman Group has a
significant economic interest and which is not a subsidiary
undertaking of Tyman is, otherwise than in the ordinary course of
business, subject to any liability, contingent or otherwise which
is material in the context of the Wider Tyman Group taken as a
whole or material in the context of the Transaction;
(c)
any past or present member of the Wider Tyman Group has not
complied with all applicable legislation, regulations or other
requirements of any jurisdiction or any Authorisations relating to
the use, treatment, storage, carriage, disposal, discharge,
spillage, release, leak or emission of any waste or hazardous
substance or any substance likely to impair the environment
(including property) or harm human or animal health or otherwise
relating to environmental matters or the health and safety of
humans, which non-compliance would be likely to give rise to any
material liability including any penalty for non-compliance
(whether actual or contingent) on the part of any member of the
Wider Tyman Group, in each case to an extent which is material in
the context of the Wider Tyman Group taken as a whole or material
in the context of the Transaction;
(d)
there has been a disposal, discharge, spillage, accumulation,
release, leak, emission or the migration, production, supply,
treatment, storage, transport or use of any waste or hazardous
substance or any substance likely to impair the environment
(including any property) or harm human or animal health which
(whether or not giving rise to non-compliance with any law or
regulation), would be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the
Wider Tyman Group, in each case to an extent which is material in
the context of the Wider Tyman Group taken as a whole or material
in the context of the Transaction;
(e)
there is or is reasonably likely to be any obligation or liability
(whether actual or contingent) or requirement to make good,
remediate, repair, reinstate or clean up any property, asset or any
controlled waters currently or previously owned, occupied, operated
or made use of or controlled by any past or present member of the
Wider Tyman Group (or on its behalf), or in which any such member
may have or previously have had or be deemed to have had an
interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation or order of any Third
Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation thereto;
or
(f)
circumstances exist (whether as a result of making the Transaction
or otherwise) which would be reasonably likely to lead to any Third
Party instituting (or whereby any member of the Wider Tyman Group
would be likely to be required to institute), an environmental
audit or take any steps which would in any such case be reasonably
likely to result in any actual or contingent liability to improve
or install new plant or equipment or to make good, repair,
reinstate or clean up any property of any description or any asset
now or previously owned, occupied or made use of by any past or
present member of the Wider Tyman Group (or on its behalf) or by
any person for which a member of the Wider Tyman Group is or has
been responsible, or in which any such member may have or
previously have had or be deemed to have had an interest, which is
material in the context of the Wider Tyman Group taken as a whole
or material in the context of the Transaction;
Intellectual
property
14.
no circumstance having arisen or event having
occurred in relation to any intellectual property owned or used by
any member of the Wider Tyman Group, including:
(a)
any member of the Wider Tyman Group losing its title to any
intellectual property used in its business, or any intellectual
property owned by the Wider Tyman Group being revoked, cancelled or
declared invalid, which is material in the context of the Wider
Tyman Group taken as a whole;
(b)
any claim being asserted in writing or threatened in writing by any
person challenging the ownership of any member of the Wider Tyman
Group to, or the validity or effectiveness of, any of its
intellectual property; or
(c)
any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider Tyman Group being
terminated or varied, which is material in the context of the Wider
Tyman Group taken as a whole; and
Anti-corruption, sanctions and criminal
property
15.
except as Disclosed, Quanex not having
discovered:
(a)
(i) any past or present member, director, officer or employee of
the Wider Tyman Group is or has at any time engaged in any
activity, practice or conduct would constitute an offence under the
Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, as
amended, or any other anti-corruption legislation applicable to the
Wider Tyman Group; or (ii) any person that performs or has
performed services for or on behalf of the Wider Tyman Group is or
has at any time engaged in any activity, practice or conduct in
connection with the performance of such services which would
constitute an offence under the Bribery Act 2010, the US Foreign
Corrupt Practices Act of 1977, as amended, or any other applicable
anti-corruption legislation;
(b)
any asset of any member of the Wider Tyman Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition)
or proceeds of crime under any other applicable law, rule, or
regulation concerning money laundering or proceeds of crime or any
member of the Wider Tyman Group is found to have engaged in
activities constituting money laundering under any applicable law,
rule, or regulation concerning money laundering;
(c)
any past or present member, director, officer or employee of the
Wider Tyman Group, or any other person for whom any such person may
be liable or responsible, has engaged in any business with, made
any investments in, made any funds or assets available to or
received any funds or assets from: (i) any government, entity or
individual in respect of which US or European Union persons, or
persons operating in those territories, are prohibited from
engaging in activities or doing business, or from receiving or
making available funds or economic resources, by applicable UK, US
or European Union laws or regulations, including the economic
sanctions administered by the United States Office of Foreign
Assets Control or HM Treasury & Customs; or (ii) any
government, entity or individual targeted by any of the economic
sanctions of the United Nations, the United Kingdom, the United
States, the European Union or any of its member states;
or
(d)
a member of the Wider Tyman Group has engaged in any transaction or
conduct which would cause any member of the Wider Quanex Group to
be in breach of any applicable law or regulation upon its
Transaction of Tyman, including the economic sanctions of the
United States Office of Foreign Assets Control or HM Treasury &
Customs, or any government, entity or individual targeted by any of
the economic sanctions of the United Nations, the United Kingdom,
the United States, the European Union or any of its member
states.
PART B:
CERTAIN FURTHER TERMS OF THE TRANSACTION
1.
The Transaction will be subject to the
satisfaction (or waiver, if capable of waiver) of the Conditions,
and to the full terms and conditions which will be set out in the
Scheme Document.
2.
Conditions 2(a), 2(b) and 3 to 15 (inclusive) of
Part A above must each be fulfilled, determined by Quanex to be or
to remain satisfied or (if capable of waiver) be waived by Quanex
by no later than 11.59 p.m. (London time) on the date immediately
preceding the date of the Sanction Hearing, failing which the
Scheme will, with the consent of the Panel (if required),
lapse.
3.
Notwithstanding the paragraph above, subject to
the requirements of the Panel and the Takeover Code, Quanex
reserves the right in its sole discretion to waive:
(a)
the deadline set out in Condition 1 of Part A above, and any
deadlines set out in Condition 2 of Part
A above for the timing of the Court Meeting, the General Meeting
and the Sanction Hearing. If any such deadline is not met, Quanex
will make an announcement by 8.00 a.m. (London time) on the
Business Day following such deadline confirming whether it has
invoked or waived the relevant Condition or agreed with Tyman to
extend the deadline in relation to the relevant Condition. In all
other respects, Conditions 1 and
2 of Part A above cannot be waived;
and
(b)
in whole or in part, all or any of Conditions 8 to 15 (inclusive)
of Part A above.
4.
Quanex will be under no obligation to waive (if
capable of waiver) or to treat as fulfilled any of the Conditions
by a date earlier than the latest date for the fulfilment of that
Condition, notwithstanding that the other Conditions may at such
earlier date have been waived or fulfilled and that there are at
such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
5.
If Quanex is required by the Panel to make an
offer for Tyman Shares under the provisions of Rule 9 of the
Takeover Code, Quanex may make such alterations to any of the above
Conditions and terms of the Transaction as are necessary to comply
with the provisions of that Rule.
6.
Under Rule 13.5(a) of the Takeover Code, Quanex
may only invoke a Condition that is subject to Rule 13.5(a) of the
Takeover Code so as to cause the Transaction not to proceed, to
lapse or to be withdrawn with the consent of the Panel. The Panel
will normally only give its consent if the circumstances which give
rise to the right to invoke the Condition are of material
significance to Quanex in the context of the Transaction. This will
be judged by reference to the facts of each case at the time that
the relevant circumstances arrive.
7.
Any condition that is subject to Rule 13.5(a) may
be waived by Quanex.
8.
Conditions 1, 2, 3 and 4 of Part A above (and, if
applicable, any acceptance condition if the Transaction is
implemented by means of a Takeover Offer) are not subject to Rule
13.5(a) of the Takeover Code.
9.
Each of the Conditions will be regarded as a
separate Condition and will not be limited by reference to any
other Condition.
10.
The Tyman Shares to be acquired under the
Transaction will be acquired with full title guarantee, fully paid
and free from all liens, equities, charges, encumbrances, options,
rights of pre-emption and any other third party rights and
interests of any nature and together with all rights now or
hereafter attaching or accruing to them, including, without
limitation, voting rights and the right to receive and retain in
full all dividends and other distributions (if any) declared, made
or paid, or any other return of value (whether by reduction of
share capital or share premium account or otherwise) made, on or
after the Effective Date (other than the FY23 Dividend or any
dividend in respect of which a corresponding reduction in the
consideration payable in respect of each Tyman Share has been made
as described in paragraph 11 below).
11.
Subject to the terms of the Scheme, if, on or
after the date of this Announcement, any dividend, distribution
and/or other return of value is announced (other than the FY23
Dividend), Quanex reserves the right (without prejudice to any
right of Quanex, with the consent of the Panel, to invoke Condition
11(b) of Part A above) to reduce the consideration by the amount of
any such dividend, distribution or other return of value (other
than, or in excess of, the FY23 Dividend), in which case: (a) any
reference in this Announcement or in the Scheme Document to the
consideration for the Tyman Shares will be deemed to be a reference
to the consideration as so reduced (and accordingly, the Main Offer
and the Capped All-Share Alternative); and (b) the relevant
eligible Tyman Shareholders will be entitled to receive and retain
such dividend or distribution. To the extent that any such dividend
or other distribution announced, declared or paid is: (i)
transferred pursuant to the Transaction on a basis which entitles
Quanex to receive the dividend or distribution and to retain it; or
(ii) cancelled, the consideration will not be subject to change in
accordance with this paragraph 11. Any exercise by Quanex of its
rights referred to in this paragraph 11 shall be the subject of an
announcement and the consent of the Panel and, for the avoidance of
doubt, shall not be regarded as constituting any revision or
variation of the Transaction.
12.
Fractions of New Quanex Shares will not be issued
to Tyman Shareholders. Instead, Tyman Shareholders who otherwise
would have received a fraction of a New Quanex Share will receive
an additional amount in cash, rounded to the nearest cent, based on
the amount obtained by multiplying such fraction by the closing
sale price of Quanex Shares on the trading day immediately prior to
the Effective Date. Any fractional entitlements of a Tyman
Shareholder to New Quanex Shares under the Capped All-Share
Alternative will be rounded down to the nearest whole number of New
Quanex Shares per Tyman Shareholder. Fractional entitlements to New
Quanex Shares will not be allotted or issued to such Tyman
Shareholder but will be disregarded. The transmission of New Quanex
Shares by the transfer agent shall be subject to any applicable
legal or regulatory conditions required in connection with such
transmission.
13.
The New Quanex Shares will be issued credited as
fully paid and will rank pari passu in all respects with Quanex
Shares in issue at the time that the New Quanex Shares are issued
pursuant to the Transaction, including the right to receive and
retain dividends and other distributions declared, made or paid by
reference to a record date falling on or after the Effective Date.
Application will be made to the NYSE for the New Quanex Shares to
be listed on the NYSE on completion of the Transaction.
14.
Quanex reserves the right to elect (with the
consent of the Panel and subject to the terms of the Co-operation
Agreement) to implement the Transaction by way of a Takeover Offer
as an alternative to the Scheme. In such event, the Transaction
will be implemented on substantially the same terms (subject to
appropriate amendments including (without limitation) the inclusion
of an acceptance condition which will be set at 90 per cent. (or
such lesser percentage, being more than 50 per cent. of the voting
rights attaching to Quanex Shares, as Quanex may decide) of shares
to which the Transaction relates and those required by, or deemed
appropriate by, Quanex under applicable law, so far as applicable)
as those which would apply to the Scheme. Further, if sufficient
acceptances of the Takeover Offer are received and/or sufficient
Tyman Shares are otherwise acquired, it is the intention of Quanex
to apply the provisions of the Companies Act to compulsorily
acquire any outstanding Tyman Shares to which such Takeover Offer
relates.
15.
The availability of the Transaction to persons not
resident in the United Kingdom may be affected by the laws of the
relevant jurisdictions. Persons who are not resident in the United
Kingdom should inform themselves about and observe any applicable
requirements.
16.
The Scheme will be governed by English law and is
subject to the jurisdiction of the English courts and to the
Conditions and further terms set out in this Appendix 1 and to be set out in the
Scheme Document. The Transaction will be subject to the applicable
requirements of the Takeover Code, the Panel, the Listing Rules,
the London Stock Exchange, the NYSE, the Registrar of Companies and
the FCA.
Appendix 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement, unless otherwise stated
or the context otherwise requires, the following sources and bases
have been used:
1.
The Latest Practicable Date is close of business
on 19 April 2024 (being the last Business Day prior to the date of
this Announcement).
2.
The existing issued and to be issued ordinary
share capital of Tyman on a fully diluted basis
comprises:
(a)
196,762,059 Tyman Shares in issue as at the Latest Practicable Date
including 439,810 Tyman Shares held in treasury and 1,567,155 Tyman
shares held by the employee benefit trust as at 31 March 2024;
and
(b)
Tyman expects that a total of 2,329,248 shares will be required as
a result of the exercising of options and granting of awards, of
which 439,810 shares will be satisfied from the shares held in
treasury and 1,567,155 shares will be satisfied by shares held by
the employee benefit trust. As a result, Tyman expects 322,283 new
Tyman Shares to be issued on or after the date of this
Announcement, resulting in an aggregate fully diluted share capital
of 197,084,342 Tyman Shares.
3.
The value of Tyman's entire issued and to be
issued ordinary share capital of £788 million, implied by the terms
of the Transaction, is based on the consideration of 400.0 pence
per Tyman Share multiplied by the issued and to be issued share
capital of Tyman (as referred to at paragraph 2 above).
4.
The maximum number of New Quanex Shares to be
issued pursuant to the Transaction is calculated as:
(a)
Tyman's issued and to be issued ordinary share capital of
197,084,342 (as referred to in paragraph 2 above);
(b)
multiplied by a ratio of:
(i)
0.05715 of a New Quanex Share for every 1 Tyman Share in respect of
the Main Offer;
(ii)
0.14288 of a New Quanex Share for every 1 Tyman Share in respect of the Capped
All-Share Alternative; and
(c)
assumes valid acceptances for the Capped All-Share Alternative are
received in respect of 25 per cent. of the Tyman Share capital in
issue (being the maximum amount of acceptances to be accepted by
Quanex in respect of the Capped All-Share Alternative).
5.
The minimum number of New Quanex Shares to be
issued pursuant to the Transaction is calculated as:
(a)
Tyman's issued and to be issued ordinary share capital of
197,084,342 (as referred to in paragraph 2 above);
(b)
multiplied by a ratio of:
(i)
0.05715 of a New Quanex Share for every 1 Tyman Share in respect of the Main
Offer;
(ii)
0.14288 of a New Quanex Share for every 1 Tyman Share in respect of
the Capped All-Share Alternative; and
(c)
assumes valid acceptances for the Capped All-Share Alternative are
received in respect of 16 per cent. of the Tyman Share capital in
issue (being the amount of Tyman Shares held by Teleios in respect
of which Teleios has agreed to accept the Capped All-Share
Alternative).
6.
As of 19 April 2024, Quanex had 33,111,593 shares
of common stock outstanding excluding 4,015,431 Quanex Shares held
in treasury.
7.
The maximum enlarged issued share capital of the
Enlarged Group (being 48,598,758 Quanex Shares) has been calculated
based on:
(a)
33,111,593 Quanex shares of common stock outstanding (as referred
to in paragraph 6 above); and
(b)
15,487,165 New Quanex Shares which would be issued under the terms
of the Transaction if the maximum amount of the Capped All-Share
Alternative are accepted by Quanex (as referred to in paragraph 4
above).
8.
The minimum enlarged issued share capital of the
Enlarged Group (being 47,148,022 Quanex Shares) has been calculated
based on:
(a)
33,111,593 Quanex shares of common stock outstanding (as referred
to in paragraph 6 above); and
(b)
14,036,429 New Quanex Shares which would be issued under the terms
of the Transaction if the minimum amount of the Capped All-Share
Alternative are accepted by Quanex (as referred to in paragraph 5
above).
9.
The percentage range of the enlarged issued share
capital of the Enlarged Group that will be owned by Tyman
Shareholders is calculated by dividing the maximum and minimum
number of New Quanex Shares to be issued pursuant to the terms of
the Transaction (as set out in paragraphs 4 and 5 above,
respectively) by the maximum and minimum enlarged issued share
capital of the Enlarged Group (as set out in paragraphs 7 and 8
above, respectively) and multiplying the resulting amount by 100 to
produce a percentage.
10.
The percentage range of the enlarged issued share
capital of the Enlarged Group that will be owned by Quanex
Stockholders is calculated by dividing the 33,111,593 existing
Quanex Shares (as set out in paragraph 5 above) by the maximum and
minimum enlarged issued share capital of the Enlarged Group (as set
out in paragraphs 7 and 8 above, respectively) and multiplying the
resulting amount by 100 to produce a percentage.
11.
The Closing Price on 19 April 2024 is taken from
the Daily Official List.
12.
Volume-weighted average prices have been derived
from Bloomberg and have been rounded to the nearest single decimal
place.
13.
The premium calculations to the price per Tyman
Share have been made by reference to the offer price of 400.0 pence
per Tyman Share referred to in paragraph 3 above and:
(a)
the Closing Price of 296.0 pence per Tyman Share,
which represents a Closing ex Dividend Price of 286.5 pence on the
Latest Practicable Date;
(b)
the one-month volume weighted average price of 294.2 pence per
Tyman Share from 20 March 2024 to the Latest Practicable Date;
and
(c)
the six-month volume weighted average price of 284.8 pence per
Tyman Share from 20 October 2023 to the Latest Practicable
Date.
14.
The GBP:USD exchange rate of 1.2373 (the
"Exchange Rate") has been
derived from Bloomberg and is based on the exchange rate as at 4:00
p.m. (New York time) on 19 April 2024 (being the Latest Practicable
Date).
15.
Unless otherwise stated, the financial information
relating to Tyman is extracted from the audited consolidated
financial statements of Tyman for the financial year to 31 December
2023, prepared in accordance with IFRS, assuming an average
exchange rate of 1.2439 GBP:USD.
16.
The financial information relating to Quanex is
extracted from the audited consolidated financial statements of
Quanex for the financial year to 31 October 2023, prepared in
accordance with US GAAP.
17.
The combined 2023 revenue referred to in this
Announcement has been calculated based on 2023 financial figures
using October 31 year end for Quanex and December 31 year end for
Tyman, assuming an exchange rate of 1.2439
GBP:USD.
18.
Net leverage at end of fiscal year 2024 based on
expected pro-forma net debt and Enlarged Group adjusted EBITDA at
October 31, 2024 (assuming the Transaction has completed) after
taking into account the full impact of run rate cost
synergies.
19.
Certain figures included in this Announcement have
been subject to rounding adjustments.
Appendix 3
IRREVOCABLE UNDERTAKINGS
1.
Tyman Directors
The following Tyman Directors have given
irrevocable undertakings to vote in favour of the Scheme at the
Court Meeting and the Tyman Resolutions to be proposed at the
General Meeting and, if Quanex exercises its right to implement the
Transaction by way of a Takeover Offer (subject to the consent of
the Panel and the terms of the Co-operation Agreement), to accept
or procure acceptance of such Takeover Offer, in each case in
respect of their own legal and/or beneficial holdings (or those
Tyman Shares over which they have control and are held by their
close relatives and related trusts) of Tyman Shares as well as any
further Tyman Shares of which they may become the legal and/or
beneficial holder (whether as a result of the vesting of awards
under the Tyman Share Plans or otherwise):
Name
|
Number of
Tyman Shares
|
Percentage of
Tyman existing issued share capital
|
Jason Ashton
|
109,579
|
0.06%
|
Pamela Bingham
|
11,718
|
0.01%
|
Nicky Hartery
|
159,797
|
0.08%
|
Dave Randich
|
50,000
|
0.03%
|
Paul Withers
|
115,000
|
0.06%
|
Total
|
446,094
|
0.23%
|
These irrevocable undertakings remain binding
in the event a higher competing offer is made for Tyman and will
only cease to be binding if:
·
Quanex publicly announces, with the consent of the Panel,
that it does not intend to proceed with the Transaction and no new,
revised or replacement offer is announced by Quanex in accordance
with Rule 2.7 of the Takeover Code at the same time;
·
the Scheme Document or Offer Document (if applicable) has not
been posted to Tyman Shareholders within 28 days (or such longer
period as Quanex and Tyman may agree, with the consent of the Panel
if required) of this Announcement;
·
Quanex has elected (in accordance with and subject to the
terms of the Co-operation Agreement and with the consent of the
Panel) to proceed with the implementation of the Transaction by way
of Takeover Offer in accordance with the terms of the undertaking
and the requirements of paragraph 8 of Appendix 7 to the Takeover
Code;
·
Tyman publicly announces that its board acting in its
absolute fiduciary discretion has withdrawn its recommendation of
the Transaction as a result of a reduction in the value of the
consideration to be received by Tyman Shareholders (and provided
that announcement expressly refers to such reduction in value as
the reason for its withdrawn recommendation);
·
on the date upon which any competing third party offer or
scheme of arrangement becomes or is declared unconditional in all
respects or otherwise becomes effective;
·
the Scheme becomes effective in accordance with its terms or
an offer (made pursuant to the terms of the undertaking) is
declared unconditional in accordance with the requirements of the
Takeover Code; or
·
the Transaction lapses, is withdrawn or if no new, revised or
replacement offer or scheme has then been announced by Quanex in
accordance with Rule 2.7 of the Takeover Code at the same
time.
2.
Teleios
Teleios has given an irrevocable
undertaking in respect of its beneficial holdings of Tyman Shares
(or those Tyman Shares over which it has control), being
32,347,981 Tyman Shares representing 16.4 per
cent. of the Tyman Shares in issue. Pursuant to this undertaking,
Teleios has agreed to accept the Capped All-Share Alternative in
respect of its entire holding of Tyman Shares.
This irrevocable undertaking remains binding in
the event a higher competing offer is made for Tyman and will only
cease to be binding if:
·
Quanex publicly announces, with the consent of
the Panel, that it does not intend to proceed with the Transaction
and no new, revised or replacement offer is announced by Quanex in
accordance with Rule 2.7 of the Takeover Code at the same
time;
·
the Scheme Document or Offer Document (if applicable) has not
been posted to Tyman Shareholders within 28 days (or such longer
period as Quanex and Tyman may agree, with the consent of the Panel
if required) of this;
·
Quanex has elected (in accordance with and subject to the
terms of the Co-operation Agreement and with the consent of the
Panel) to proceed with the implementation of the Transaction by way
of Takeover Offer in accordance with the terms of the undertaking
and the requirements of paragraph 8 of Appendix 7 to the Takeover
Code;
·
Tyman publicly announces that its board has withdrawn its
recommendation of the Transaction as a result of a reduction in the
value of the consideration to be received by Tyman Shareholders
(and provided that announcement expressly refers to such reduction
in value as a reason for its withdrawn recommendation);
·
on the date upon which any competing third party offer or
scheme of arrangement becomes or is declared unconditional in all
respects or otherwise becomes effective;
·
the Scheme becomes effective in accordance with its terms or
an offer (made pursuant to the terms of the undertaking) is
declared unconditional in accordance with the requirements of the
Takeover Code; or
·
the Transaction lapses, is withdrawn or if no new, revised or
replacement offer or scheme has then been announced by Quanex in
accordance with Rule 2.7 of the Takeover Code at the same
time.
Notwithstanding any other terms of the
irrevocable undertaking, Teleios is expressly permitted to accept
or exercise its voting rights in favour of a competing offer,
provided that such offer:
·
is not subject to the satisfaction of any
pre-conditions;
·
has been publicly recommended by the Tyman Board;
and
·
represents a greater than 12.5 per cent. increase in value to
the consideration to be received by Tyman Shareholders who elect
for the Capped All-Share Alternative.
Appendix 4
PART A
QUANTIFIED FINANCIAL
BENEFITS STATEMENT
The Quanex Directors, having reviewed and
analysed the potential cost synergies of the Transaction, and
taking into account the factors they can influence, believe that
the Enlarged Group can deliver approximately US$30 million of
pre-tax recurring cost synergies on an annual run-rate basis,
expected to be realised by the end of the second full year
following completion of the Transaction.
The quantified cost synergies, which are
expected to originate from the cost bases of both Quanex and Tyman,
are expected to be realised primarily from:
·
approximately 30 per cent. in corporate and listing related
costs, generated from de-duplication and rationalisation of public
company costs and of executive leadership;
·
approximately 30 per cent. in procurement savings from scale
economies and consolidation of overlapping spend categories;
and
·
approximately 40 per cent. in savings from consolidation and
de-duplication of overlapping administrative and commercial
functions and activities.
The Quanex Directors expect approximately 50
per cent. of these cost synergies to be achieved by the end of the
first 12-month period following completion of the Transaction and
the full run-rate by the second anniversary of completion of the
Transaction.
The Quanex Directors estimate that the
realisation of the identified cost synergies will result in one-off
costs to achieve of approximately US$35 million in aggregate over
the first two years post completion of the Transaction.
Potential areas of dis-synergy expected to
arise in connection with the Transaction have been considered and
were determined by the Quanex Directors to be immaterial for the
analysis.
The identified cost synergies will occur as a
direct result of the success of the Transaction and would not be
achieved on a standalone basis. The identified cost synergies
reflect both the beneficial elements and relevant costs.
Bases of Belief and Principal Assumptions for
the Quantified Financial Benefits Statement
In preparing the Quantified Financial Benefits
Statement, Tyman has provided Quanex with certain operating and
financial information to facilitate a detailed analysis in support
of evaluating the potential synergies available from the
Transaction. Where possible, estimated benefits and costs have been
calculated on a bottom-up basis. In circumstances where data has
been limited for commercial, regulatory, or other reasons, Quanex
management has made estimates and assumptions to aid its
development of individual synergy initiatives. The assessment and
quantification of the potential synergies have, in turn, been
informed by Quanex management's industry experience and knowledge
of the existing businesses, together with consultation with
Tyman.
The synergy assumptions have been
risk-adjusted.
The cost bases used as the basis for the
Quantified Financial Benefits Statement are Quanex last twelve
months to 31 January 2024 (with adjustments made to reflect
non-recurring items) and manpower costs and headcount data as of 25
March 2024, and Tyman audited financial results and headcount data
for the year ending 31 December 2023 (with adjustments made to
reflect non-recurring items and expected future changes in certain
costs).
In arriving at the Quantified Financial
Benefits Statement, the Quanex Directors have assumed:
·
No material change to macroeconomic, political, legal, or
regulatory conditions in the markets or regions in which Quanex and
Tyman operate;
·
No material change in accounting standards;
·
No material change in the underlying operations of either
business from the Transaction;
·
No material impact from divestments from either the Quanex or
Tyman existing businesses;
·
No material change in tax legislation, tax rates, or other
legislation in the UK or US that could materially impact the
ability to achieve any benefits;
·
No material change in current foreign exchange
rates;
·
Foreign exchange conversions based on 3 April 2024 spot
rates;
·
The Enlarged Group will be publicly listed in the United
States.
In addition, the Quanex Directors have assumed
that the cost synergies are substantively within Quanex's control,
albeit that certain elements are dependent in part on negotiations
with third parties.
PART B
REPORT FROM KPMG
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Private & Confidential
The Directors
Quanex Building Products
Corporation
1800 West Loop South
Houston
Texas 77027
UBS AG London Branch
5 Broadgate
London
EC2M 2QS
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22 April 2024
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Ladies and Gentlemen
Quanex Building Products Corporation
We report on the statement ('the
Statement') made by the directors of Quanex Building Products
Corporation ('the Directors') on page 73 of the Announcement
entitled "RECOMMENDED CASH AND SHARE OFFER FOR TYMAN PLC ("TYMAN")
BY QUANEX BUILDING PRODUCTS CORPORATION ("QUANEX")" ('the
Announcement') to the effect that:
"The Quanex Directors, having
reviewed and analysed the potential cost synergies of the
Transaction, and taking into account the factors they can
influence, believe that the Enlarged Group can deliver
approximately US$30 million of pre-tax recurring cost synergies on
an annual run-rate basis, expected to be realised by the end of the
second full year following completion of the
Transaction.
The quantified cost synergies, which
are expected to originate from the cost bases of both Quanex and
Tyman, are expected to be realised primarily from:
·
approximately 30 per cent. in corporate and
listing related costs, generated from de-duplication and
rationalisation of public company costs and of executive
leadership;
·
approximately 30 per cent. in procurement savings
from scale economies and consolidation of overlapping spend
categories; and
·
approximately 40 per cent. in savings from
consolidation and de-duplication of overlapping administrative and
commercial functions and activities.
The Quanex Directors expect
approximately 50 per cent. of these cost synergies to be achieved
by the end of the first 12-month period following completion of the
Transaction and the full run-rate by the second anniversary of
completion of the Transaction.
The Quanex Directors estimate that
the realisation of the identified cost synergies will result in
one-off costs to achieve of approximately US$35 million in
aggregate over the first two years post completion of the
Transaction.
Potential areas of dis-synergy
expected to arise in connection with the Transaction have been
considered and were determined by the Quanex Directors to be
immaterial for the analysis.
The identified cost synergies will
occur as a direct result of the success of the Transaction and
would not be achieved on a standalone basis. The identified cost
synergies reflect both the beneficial elements and relevant
costs."
This report is required by Rule
28.1(a) of the City Code on Takeovers and Mergers ('the City Code')
and is given for the purpose of complying with that requirement and
for no other purpose.
Opinion
In our opinion, the Statement has
been properly compiled on the basis stated.
The Statement has been made in the
context of the disclosures on pages 73 to 74 of the Announcement
setting out, inter alia, the basis of the Directors' belief
(including the principal assumptions and sources of information)
supporting the Statement and their analysis and explanation of the
underlying constituent elements.
Responsibilities
It is the responsibility of the
Directors to prepare the Statement in accordance with the
requirements of Rule 28 of the City Code.
It is our responsibility to form an
opinion, as required by Rule 28.1(a) of the City Code as to whether
the Statement has been properly compiled on the basis stated and to
report that opinion to you.
Save for any responsibility which we
may have to those persons to whom this report is expressly
addressed, to the fullest extent permitted
by law we do not assume any responsibility and will not accept any
liability to any other person for any loss suffered by any such
other person as a result of, arising out of, or in connection with
this report or our statement, required by and given solely for the
purposes of complying with Rule 23.2 of the City Code, consenting
to its inclusion in the Announcement.
Basis of preparation of the Statement
The Statement has been prepared on
the basis stated on page 74 of the Announcement.
Basis of
opinion
We conducted our work in accordance
with Standards for Investment Reporting issued by the Financial
Reporting Council in the United Kingdom (the 'FRC').
We are independent, and have
fulfilled our other ethical responsibilities, in accordance with
the relevant ethical requirements of the FRC's Ethical Standard as
applied to Investment Circular Reporting Engagements.
We have discussed the Statement,
together with the underlying plans, with the Directors and UBS AG,
London branch. Our work did not involve any independent examination
of any of the financial or other information underlying the
Statement.
We planned and performed our work so
as to obtain the information and explanations we considered
necessary in order to provide us with reasonable assurance that the
Statement has been properly compiled on the basis
stated.
Our work has not been carried out in
accordance with auditing or other standards and practices generally
accepted in the United States of America and accordingly should not
be relied upon as if it had been carried out in accordance with
those standards and practices.
We do not express any opinion as to
the achievability of the benefits identified by the Directors in
the Statement. The Statement is subject to uncertainty as described
in Appendix 4 to the Announcement. Since the Statement relates to
the future and may therefore be affected by unforeseen events, we
express no opinion as to whether the actual benefits achieved will
correspond to those anticipated in the Statement and the
differences may be material.
Yours faithfully
KPMG LLP
KPMG LLP
15 Canada Square, Canary
Wharf
London
E14 5GL
United Kingdom
PART C
REPORT FROM UBS AG LONDON
BRANCH
The Directors
Quanex Building Products
Corporation
945 Bunker Hill Road, Suite
900
Houston, Texas 77024
22 April 2024
Dear Ladies and Gentlemen
Recommended merger of Quanex
("Quanex") with Tyman Plc ("Tyman") - Report on Quantified
Financial Benefits Statement of
Quanex
We refer to the Quantified Financial
Benefits Statement, the bases of belief thereof and the notes
thereto (together, the "Statement") made by
Quanex, as set out in Part A of Appendix 4 to the announcement
dated 22 April 2024 of which this report forms part (the
"Announcement"), for which the directors of Quanex
(the "Directors") are solely responsible under
Rule 28.3 of the City Code on Takeovers and Mergers (the
"Code").
We have discussed the Statement
(including the bases of belief, assumptions and sources of
information referred to therein) with the Directors and those
officers and employees of Quanex who developed the underlying
plans, as well as with KPMG LLP. The Statement is subject to
uncertainty as described in the Announcement and our work did not
involve an independent examination or verification of any of the
financial or other information underlying the Statement.
We have relied upon the accuracy and
completeness of all the financial and other information provided to
us by or on behalf of Quanex, or otherwise discussed with or
reviewed by us, and we have assumed such accuracy and completeness
for the purposes of providing this report.
We have also reviewed the work
carried out by KPMG LLP and have discussed with them their opinion
set out in Part B of Appendix 4 to the Announcement addressed to
you and us on this matter and the accounting policies and bases of
calculation for the Statement.
We do not express any view or
opinion as to the achievability of the quantified financial
benefits, whether on the basis identified by the Directors in the
Statement or otherwise.
This report is provided pursuant to
our engagement letter with Quanex solely to the Directors of Quanex
in connection with Rule 28.1(a)(ii) of the Code and for no other
purpose. We accept no responsibility to Quanex or its shareholders
or any person (including, without limitation, the board of
directors and shareholders of Tyman) other than the Directors in
respect of the contents of this report. We are acting exclusively
as financial adviser to Quanex and no one else in connection with
the merger of Tyman with Quanex referred to in the Announcement and
it is for the purpose of complying with Rule 28.1(a)(ii) of the
Code that Quanex has requested UBS AG London Branch to prepare this
report relating to the Statement. No person other than the
Directors can rely on the contents of this report, or on the work
undertaken in connection with this report, and, to the fullest
extent permitted by law, we expressly exclude all liability
(whether in contract, tort or otherwise) to any other person, in
respect of this report, its contents, its results, or the work
undertaken in connection with this report or any of the results or
conclusions that may be derived from this report or any written or
oral information provided in connection with this report, and any
such liability is expressly disclaimed except to the extent that
such liability cannot be excluded by law.
On the basis of the foregoing, we
consider that the Statement, for which you as the Directors are
solely responsible, for the purposes of the Code, has been prepared
with due care and consideration.
Yours faithfully,
UBS AG London
Branch
Appendix 5
DEFINITIONS
The following definitions apply throughout this
Announcement unless the context requires otherwise:
"Announcement"
this announcement (including the summary and Appendices to
it);
"Authorisations"
authorisations, orders, recognitions, grants, consents, clearances,
confirmations, certificates, licences, permissions, determinations,
exemptions or approvals;
"Business
Day"
a day, other than a Saturday, Sunday, public holiday or bank
holiday, on which clearing banks are generally open for business in
the City of London and New York;
"Capped
All-Share Alternative"
the alternative to the Main Offer whereby Tyman Shareholders (other
than Tyman Shareholders resident or located in a Restricted
Jurisdiction) may elect to receive the consideration applicable to
their entire holding of Tyman Shares in New Quanex Shares at a
ratio of 0.14288 of a New Quanex Share to every 1 Tyman Share held
as at the Scheme Record Date;
"Clean Team
and Joint Defence Agreement" clean team
and joint defence agreement entered into between Tyman, Quanex and
their respective external regulatory counsel dated 27 March
2024;
"Closing ex
Dividend
Price"
the Closing Price of a Tyman Share on the Latest Practicable Date
of 296.0 pence deducting the amount of the FY23
Dividend;
"Closing
Price"
closing middle market price of a Tyman Share on a particular
trading day as derived from the Daily Official List;
"CMA"
Competition and Markets Authority, a UK statutory body established
under the Enterprise and Regulatory Reform Act 2013;
"Co-operation
Agreement"
co-operation agreement entered into between Quanex and Tyman dated
22 April 2024;
"Companies
Act"
Companies Act 2006, as amended;
"Conditions"
the conditions to the Transaction, as set out in
Appendix 1 to this Announcement and to be set
out in the Scheme Document;
"Court"
High Court of Justice in England and Wales;
"Court
Meeting"
the meeting of Tyman Shareholders to be convened at the direction
of the Court pursuant to Part 26 of the Companies Act to consider
and, if thought fit, to approve the Scheme (with or without
amendment), and including any adjournment, postponement or
reconvening of it;
"Court
Order"
order of the Court sanctioning the Scheme under Part 26 of the
Companies Act;
"CREST"
the relevant system (as defined in the CREST Regulations) in
respect of which Euroclear is the operator (as defined in the CREST
Regulations) in accordance with which securities may be held and
transferred in uncertificated form;
"CREST
Regulations"
the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755)
(including as it forms part of domestic law of the United Kingdom
by virtue of the European Union (Withdrawal) Act 2018), as amended
from time to time;
"Daily
Official
List"
Daily Official List published by the London Stock
Exchange;
"Dealing
Disclosure"
an announcement pursuant to Rule 8 of the Takeover Code containing
details of dealings in interests in relevant securities of a party
to an offer;
"Deutsche
Numis"
Numis Securities Limited (trading as Deutsche Numis);
"Disclosed"
the information fairly disclosed by, or on behalf of, Tyman: (i) in
the annual report and accounts of the Tyman Group for the financial
year ended 31 December 2023; (ii) in this Announcement; or (iii) in
any other announcement to a Regulatory Information Service by, or
on behalf of, Tyman before the publication of this
Announcement;
"EBITDA"
means earnings before interest, tax, depreciation, intangible
amortisation, exceptional items, share option costs and acquisition
costs;
"Effective"
in the context of the Transaction: (i) if the Transaction is
implemented by way of the Scheme, the Scheme having become
effective pursuant to its terms or (ii) if the Transaction is
implemented by way of a Takeover Offer, the Takeover Offer having
been declared or having become unconditional in accordance with the
requirements of the Takeover Code;
"Effective
Date"
the date on which the Transaction becomes Effective;
"Enlarged
Group"
the enlarged group following completion of the Transaction,
comprising the Quanex Group and the Tyman Group;
"Euroclear"
Euroclear UK & International Limited;
"Exchange
Rate"
has the meaning given at paragraph 14 of Appendix 2;
"Excluded
Shares"
any Tyman Shares at the Scheme Record Time which (if
any):
(a) are owned or controlled by the
Quanex Group;
or
(b) are held by Tyman as treasury shares (within the meaning of the
Companies Act);
"FCA"
Financial Conduct Authority of the United Kingdom or its successor
from time to time, acting in its capacity as the competent
authority for the purposes of Part VI of FSMA;
"FCA
Handbook"
the FCA's Handbook of rules and guidance as amended from time to
time;
"Form of
Election"
the form by which Scheme Shareholders (other than those resident in
a Restricted Jurisdiction) may elect to receive the Capped
All-Share Alternative which will accompany the Scheme
Document;
"Forms of
Proxy"
forms of proxy for use at the Court Meeting and the General Meeting
which will accompany the Scheme Document;
"FSMA"
the Financial Services and Markets Act 2000, as amended from time
to time;
"FY"
a financial year ending 31 October;
"FY23
Dividend"
final dividend of 9.5 pence per Tyman Share announced by Tyman on 7
March 2024;
"General
Meeting"
the general meeting of Tyman Shareholders to be convened in
connection with the Scheme to consider and, if thought fit, to
approve the Resolutions (with or without amendment), which is
expected to be held as soon as the preceding Court Meeting shall
have concluded and including any adjournment, postponement or
reconvening of it;
"Greenhill"
Greenhill & Co. International LLP;
"IFRS"
International Financial Reporting Standards;
"Latest
Practicable
Date"
19 April 2024, being the last Business Day prior to the date of
this Announcement;
"Listing
Rules"
the rules and regulations made by the FCA under FSMA, and contained
in the FCA's publication of the same name;
"London Stock
Exchange"
London Stock Exchange plc or its successor;
"Long Stop
Date"
11.59 p.m. on 22 January 2025, or such later date as may be agreed
by Tyman and Quanex (with the consent of the Panel and, if
required, as the Court may approve);
"Main
Market"
the main market for trading in listed securities operated by the
London Stock Exchange;
"Main
Offer"
the main offer being made by Quanex to Tyman Shareholders in
connection with the Transaction, being:
·
240.0 pence in cash; and
·
0.05715 of a New Quanex Share,
for every 1 Tyman Share held as at the Scheme
Record Time;
"Meetings"
the Court Meeting and/or the General Meeting, as the case may
be;
"New
Quanex Shares"
shares of Quanex common stock with a par value of US$0.01 per share
proposed to be issued in connection with the
Transaction;
"NYSE"
New York Stock Exchange LLC;
"OEM"
original equipment manufacturer;
"Offer
Document"
should the Transaction be implemented by way of a Takeover Offer,
the document which would be sent to Tyman Shareholders containing,
amongst other things, the terms and conditions of the Takeover
Offer;
"Offer
Period"
the offer period (as defined by the Takeover Code) relating to
Tyman, which commenced on the date of this Announcement and ending
on the earlier of: (i) the Effective Date and (ii) the date on
which the Scheme lapses or is withdrawn (or such other date as the
Takeover Code may provide or the Panel may decide);
"Official
List"
Official List of the FCA;
"Opening
Position
Disclosure"
has the same meaning given to it in Rule 8 of the Takeover
Code;
"Overseas
Shareholders"
Tyman Shareholders (or nominees of, or custodians or trustees for
Tyman Shareholders) who are resident in, ordinarily resident in, or
citizens of, jurisdictions outside the United Kingdom;
"Panel"
Panel on Takeovers and Mergers;
"PRA"
Prudential Regulation Authority, or any successor regulatory
body;
"Proxy
Statement"
the definitive proxy statement on Schedule 14A, which includes a
notice convening the Quanex Stockholder Meeting to be sent by
Quanex to Quanex Stockholders, requesting approval of the Quanex
Share Proposal;
"Quanex"
Quanex Building Products Corporation, a corporation organised and
existing under the laws of the State of Delaware;
"Quanex
Confidentiality
Agreement"
confidentiality agreement entered into between Quanex and Tyman
dated 18 March 2024;
"Quanex
Directors"
directors of Quanex at the date of this Announcement or, where the
context so requires, the directors of Quanex from time to
time;
"Quanex
Group"
Quanex and its subsidiaries and subsidiary undertakings from time
to time and, where the context so requires or admits, each of
them;
"Quanex Share
Proposal"
a proposal for the approval of the issuance of the New Quanex
Shares in relation to the Transaction by a majority of Quanex
Shares present in person or represented by proxy at the Quanex
Stockholder Meeting and entitled to vote on the Quanex Share
Proposal;
"Quanex
Shares"
shares of Quanex common stock with a par value of US$0.01 per
share;
"Quanex
Stockholder
Meeting"
special meeting of Quanex Stockholders to be convened in connection
with the Transaction, notice of which will be sent to the Quanex
Stockholders (including any adjournment, postponement and
reconvening of it);
"Quanex
Stockholders"
holders of Quanex Shares;
"Quantified
Financial Benefits
Statement"
quantified financial benefits statement set out in Appendix 4 to
this Announcement;
"Registrar of
Companies"
the Registrar of Companies in England and Wales;
"Regulatory
Information
Service"
a regulatory information service as defined in the FCA
Handbook;
"Restricted
Jurisdiction"
any jurisdiction where local laws or regulations may result in a
significant risk of civil, regulatory or criminal exposure if
information concerning the Transaction were made available in that
jurisdiction, or if the Transaction (including details regarding
any election that may be made for the Capped All-Share Alternative)
is or were extended or made available in that jurisdiction, or
where to do so would result in a requirement to comply with any
governmental or other consent or any registration, filing or other
formality which Quanex or Tyman regards as unduly
onerous;
"Sanction
Hearing"
the hearing by the Court to sanction the Scheme pursuant to section
899 of the Companies Act, and any adjournment, postponement or
reconvening thereof;
"Scheme"
the proposed scheme of arrangement under Part 26 of the Companies
Act between Tyman and the Scheme Shareholders, with or subject to
any modification, addition or condition approved or imposed by the
Court and agreed by Tyman and Quanex, to implement the
Transaction;
"Scheme
Document"
the document to be sent to Tyman Shareholders containing, amongst
other things, the Scheme and notices convening the Court Meeting
and General Meeting;
"Scheme Record
Time"
the time and date specified in the Scheme Document, expected to be
6.00 p.m. (London time) on the Business Day immediately before the
Effective Date, or such later time as Quanex and Tyman may
agree;
"Scheme
Shareholder"
a holder of Scheme Shares;
"Scheme
Shares"
all Tyman Shares which remain in issue at the Scheme Record Time
and are:
(a) in issue at the date of the Scheme Document;
(b) (if any) issued after the date of the Scheme Document but
before the Scheme Voting Record Time; and/or
(c) (if any) issued at or after the Scheme Voting Record Time
but on or before the Scheme Record Time, either on terms that the
original or any subsequent holders thereof shall be bound by the
Scheme or in respect of which such holders are, or shall have
agreed in writing to be, so bound,
excluding, in each case, any Excluded Shares;
"Scheme Voting
Record
Time"
the date and time to be specified in the Scheme Document by
reference to which entitlement to vote at the Court Meeting and the
General Meeting will be determined, expected to be 6.00 p.m.
(London time) on the day which is two days (excluding non-working
days) before the date of the Court Meeting or, if the Court Meeting
is adjourned, postponed or reconvened, 6.00 p.m. (London time) on
the day which is two days (excluding non-working days) before the
date of such adjourned, postponed or reconvened Meeting;
"SEC"
US Securities and Exchange Commission;
"Significant
Interest"
in relation to an undertaking, a direct or indirect interest of 20
per cent. or more of the total voting rights or equity share
capital (as defined in section 548 of the Companies Act) of such
undertaking;
"Takeover
Code"
City Code on Takeovers and Mergers, as amended from time to
time;
"Takeover
Offer"
subject to the consent of the Panel and the terms of the
Co-operation Agreement, should the Transaction be implemented by
way of a takeover offer as defined in Chapter 3 of Part 28 of the
Companies Act, the offer to be made by or on behalf of Quanex to
acquire the entire issued and to be issued share capital of Quanex,
other than any Excluded Shares and, where the context admits, any
subsequent revision, variation, extension or renewal of such
offer;
"Teleios"
Teleios Global Opportunities Master Fund, Ltd acting through its
manager Teleios Capital Partners LLC;
"Teleios Confidentiality
Agreement"
confidentiality agreement entered into between Teleios Capital
Partners LLC, Quanex and Tyman dated 19 March 2024;
"Third
Party"
any relevant central bank, government or governmental,
quasi-governmental, supranational, statutory, regulatory,
environmental, administrative, fiscal or investigative body, court,
trade agency, association, institution, environmental body,
employee representative body, any entity owned or controlled by any
relevant government or state, or any other body or person
whatsoever in any jurisdiction;
"Transaction"
the direct or indirect acquisition by Quanex of the entire issued
and to be issued ordinary share capital of Tyman, other than
Excluded Shares, to be implemented by means of the Scheme (or,
should Quanex elect, subject to the consent of the Panel and the
terms of the Co-operation Agreement, by means of a Takeover Offer)
and, where the context requires, any subsequent revision,
variation, extension or renewal of it;
"Tyman"
Tyman plc;
"Tyman
Articles"
articles of association of Tyman as amended from time to
time;
"Tyman
Directors"
directors of Tyman at the date of this Announcement or, where the
context so requires, the directors of Tyman from time to
time;
"Tyman
DSBP"
Tyman deferred share bonus plan 2020, approved by Tyman
Shareholders and adopted by the Tyman Directors on 20 May
2020;
"Tyman
Group"
Tyman and its subsidiaries and subsidiary undertakings from time to
time and, where the context so requires or admits, each of
them;
"Tyman
International Sharesave
Plan"
Tyman international sharesave plan (established as a sub-plan of
the Tyman UK Sharesave Plan without prior Tyman Shareholder
approval), adopted by the Tyman Directors on 21 July 2017 and
amended by the Tyman Directors on 23 July 2018;
"Tyman
LTIP"
Tyman long term incentive plan 2020, approved by the Tyman
Shareholders and adopted by the Tyman Directors on 20 May
2020;
"Tyman
Resolutions"
shareholder resolution(s) to be proposed at the General Meeting
necessary to facilitate the implementation of the Scheme,
including, without limitation, a resolution to amend the Tyman
Articles by the adoption and inclusion of a new article (in terms
approved by Quanex);
"Tyman
Share
Plans"
(a) the Tyman DSBP;
(b) the Tyman LTIP; and
(c) the Tyman Sharesave Plans;
"Tyman
Shareholders"
holders of Tyman Shares;
"Tyman
Sharesave
Plans"
(a) the Tyman International Sharesave Plan;
(b) the Tyman UK Sharesave Plan; and
(c) the Tyman US Sharesave Plan;
"Tyman
Shares"
ordinary shares of 5 pence each in the capital of Tyman from time
to time;
"Tyman
UK Sharesave
Plan"
Tyman sharesave plan, approved by the Tyman Shareholders on 15 May
2015, approved by the Tyman Directors on 28 July 2015 and amended
by the Tyman Directors on 23 July 2018;
"Tyman
US Sharesave
Plan"
Tyman US sharesave plan, approved by the Tyman Shareholders on 15
May 2015 and approved by the directors of Tyman on 28 July
2015;
"UBS"
UBS AG London Branch;
"UK" or
"United
Kingdom"
United Kingdom of Great Britain and Northern Ireland;
"United
States" or "US" or
"USA"
United States of America, its territories and possessions, any
state of the United States of America, the District of Columbia and
all other areas subject to its jurisdiction and any political
sub-division thereof;
"US Exchange
Act"
United States Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder;
"US Securities
Act"
United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder;
"Wider Quanex
Group"
Quanex and its subsidiary undertakings, associated undertakings and
any other undertaking (including any body corporate, partnership,
joint venture or firm) in which Quanex and/or all such undertakings
(aggregating their interests) have a Significant Interest;
and
"Wider Tyman
Group"
Tyman and its subsidiary undertakings, associated undertakings and
any other undertaking (including any body corporate, partnership,
joint venture or firm) in which Tyman and/or all such undertakings
(aggregating their interests) have a Significant
Interest.
For the purposes of this Announcement,
"subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the
respective meanings given to them by the Companies Act.
All references to "pounds", "pounds Sterling", "Sterling", "£", "pence", "penny" and "p" are to the lawful currency of the
United Kingdom.
All references to "dollars", "USD", "US$", "cents" or "c" are to the lawful currency of the
USA.
All the times referred to in this Announcement
are London times unless otherwise stated.
References to the singular include the plural
and vice versa.
All references to statutory provisions or law
or to any order or regulation shall be construed as a reference to
that provision, law, order or regulation as extended, modified,
replaced or re-enacted from time to time and all statutory
instruments, regulations and orders from time to time thereunder or
deriving validity therefrom.