Spring Group PLC
26 June 2007
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN OR INTO AUSTRALIA, CANADA OR
JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.
26 June 2007
For immediate release
Recommended Cash Offer
by
Spring (Corporate) Limited (a wholly owned subsidiary of Spring Group plc)
for the entire issued and to be issued share capital of
Glotel plc
• The Spring Board and the Glotel Independent Directors are
pleased to announce that they have reached agreement on the terms of a
recommended cash offer to be made by Spring (Corporate) Limited for the entire
issued and to be issued share capital of Glotel. Spring (Corporate) Limited is
a wholly owned subsidiary of Spring, newly established for the purpose of
making the Offer.
• The Offer values each Glotel Share at 70 pence and the existing
issued share capital and in the money options of Glotel at approximately £27.2
million.
• The Glotel Independent Directors unanimously recommend that the
Glotel Shareholders accept the Offer as they have irrevocably undertaken to
accept or procure the acceptance of the Offer in respect of their entire
beneficial holdings of 9,766,928 Glotel Shares, representing, in aggregate,
approximately 25.1 per cent. of Glotel's existing issued share capital.
• Spring has also received an irrevocable undertaking from Andy
Baker, Chief Executive Officer of Glotel, to accept or procure the acceptance
of the Offer in respect of his entire beneficial holding of 9,336,064 Glotel
Shares, representing, in aggregate, approximately 24.0 per cent. of Glotel's
existing issued share capital.
• Spring has also received letters of intent to accept or procure
the acceptance of the Offer from certain Glotel institutional shareholders
who hold, in aggregate, 6,882,910 Glotel Shares, representing approximately
17.7 per cent. of Glotel's existing issued share capital.
• Accordingly, irrevocable undertakings and letters of intent to
accept or procure the acceptance of the Offer have been received by Spring in
respect of, in aggregate, 25,985,902 Glotel Shares representing approximately
66.9 per cent. of Glotel's existing issued share capital.
• The Offer represents a premium of approximately:
• 26.7 per cent. to the Closing Price of 55.25 pence per Glotel
Share on 25 June 2007, being the latest practicable date prior to the
Announcement; and
• 20.0 per cent. to 58.33 pence, being the average Closing Price
of a Glotel Share for the six months ended on 25 June 2007, being the
latest practicable date prior to the Announcement.
• Pursuant to the Share Subscription Agreement, upon the Offer
becoming unconditional, Andy Baker, Chief Executive of Glotel, has agreed to
apply £2.0 million of the proceeds receivable by him under the Offer to
subscribe for 2,849,002 new Spring Shares, representing approximately 1.7 per
cent. of the enlarged Spring issued share capital following his subscription,
at 70.2 pence each, being the average closing middle market quotation of a
Spring Share for the last five days up to the close of business on 25 June
2007, the last Business Day prior to this Announcement.
• In view of the interests that Andy Baker will have in Spring, the Glotel
Independent Directors (Les Clark, Jonathan Brooks, Glyn Hirsch and Sir Robin
Saxby) alone have considered the approach from Spring and the terms of the
Offer.
• The Glotel Independent Directors, who have been so advised by
Baird, consider the terms of the Offer to be fair and reasonable. In
providing advice to the Glotel Independent Directors, Baird has taken into
account the commercial assessments of the Glotel Independent Directors.
• The Acquisition constitutes a Class 1 Transaction (as defined in the Listing
Rules) for Spring. Accordingly the Offer is conditional, inter alia, on the
approval of Spring Shareholders at the Spring EGM. It is expected that the
Circular containing the Notice of Spring EGM will be sent to Spring
Shareholders as soon as is reasonably practicable.
• Altium is acting as Financial Adviser and Broker to Spring.
Baird is acting as Rule 3 Financial Adviser to Glotel.
Commenting on the Offer, Peter Searle, Chief Executive Officer of the Spring
Group, said:
'The acquisition of Glotel advances Spring's growth strategy by extending
Spring's geographic and vertical market presence. Glotel provides Spring with a
strong telecoms recruitment business, a profitable and sizeable business in the
United States, and a platform for growth in Europe and Australia. The
acquisition is a good strategic fit and will be earnings enhancing in the first
full year of ownership*'
Commenting on the Offer, Les Clark, Chairman of Glotel said:
'The two businesses combined will benefit from increased scale, market presence
and synergies and will be a powerful force in IT and telecoms recruitment in
Europe the United States and Australia.'
There will be a presentation for analysts at 11.15am this morning at Financial
Dynamics. For further details, please contact Claire Rowell on +44 (0)20 7831
3113.
Enquiries:
Spring
--------
Amir Eilon (Chairman) Tel: +44 (0)20 7300 9000
Peter Searle (Chief Executive Officer)
Peter Darraugh (Finance Director)
Glotel
--------
Les Clark (Chairman) Tel: +44 (0)20 7484 3000
Jonathan Brooks (Finance Director)
Altium (Financial Adviser and Broker to Spring)
-------------------------------------------------
Ben Thorne Tel: +44 (0)20 7484 4040
Marc Milmo
Sam Fuller
Financial Dynamics (Public Relations adviser to Spring)
---------------------------------------------------------
Ben Atwell Tel: +44 (0)20 7831 3113
John Gilbert
Baird (Rule 3 and Financial Adviser to Glotel)
------------------------------------------------
David Silver Tel: +44 (0)20 7488 1212
*This statement regarding earnings enhancement does not constitute a profit
forecast nor should it be taken to mean that the earnings per share of Spring
for the current or future years will necessarily match or exceed the historical
reported earnings per share of Spring and no forecast is intended or implied.
This summary should be read in conjunction with the full text of the attached
Announcement. The Offer will be subject to the conditions set out in Appendix I
to the attached Announcement and the full conditions and further terms which
will be set out in the Offer Document, which is expected to be issued shortly.
Appendix II contains the sources and bases of information used in the attached
Announcement and details of the irrevocable undertakings and letters of intent
to accept the Offer received by Spring.
Appendix III contains the definitions of certain expressions used in this
summary and the attached Announcement.
Altium, which is authorised and regulated by the Financial Services Authority in
the United Kingdom, is acting exclusively for Spring and no one else in
connection with the Offer and will not be responsible to anyone other than
Spring for providing the protections afforded to clients of Altium nor for
providing advice in relation to the Offer, the content of this summary and the
attached Announcement or any other matter or arrangement referred to herein.
Baird, which is authorised and regulated by the Financial Services Authority in
the United Kingdom, is acting exclusively for Glotel and no one else in
connection with the Offer and will not be responsible to anyone other than
Glotel for providing the protections afforded to clients of Baird nor for
providing advice in relation to the Offer, the content of this summary and the
attached Announcement or any other matter or arrangement referred to herein.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES NOR THE SOLICITATION OF ANY VOTE OR
APPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUE OR TRANSFER OF
THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF ANY APPLICABLE LAW. THE OFFER WILL BE MADE SOLELY BY MEANS OF
THE OFFER DOCUMENT AND THE FORM OF ACCEPTANCE ACCOMPANYING THE OFFER DOCUMENT.
The Offer in the United States will be made pursuant to an exemption from
certain US tender offer rules provided by Rule 14d-1(c) under the Exchange Act.
The availability of the Offer to Glotel Shareholders who are citizens or
residents of jurisdictions outside the United Kingdom may be affected by the
laws of their relevant jurisdiction. Such persons should inform themselves of,
and observe, any applicable legal or regulatory requirements of their
jurisdiction. If you remain in any doubt, you should consult your professional
adviser in the relevant jurisdiction without delay.
Any acceptance or other response to the Offer should be made only on the basis
of information referred to in the Offer Document which Spring (Corporate)
Limited intends to despatch as soon as is reasonably practicable to Glotel
Shareholders and, for information only, to participants in the Glotel Share
Option Schemes.
Spring will prepare the Circular which will be sent to Spring Shareholders as
soon as is reasonably practicable. Spring Shareholders may obtain a further free
copy of the Circular, when it becomes available, from the offices of Norton
Rose, 3 More London Riverside, London, SE1 2AQ.
The Directors of Spring accept responsibility for the information contained in
this summary and the attached Announcement other than information relating to
the Glotel Group, the Glotel Directors and their immediate families, related
trusts and controlled companies. To the best of the knowledge and belief of the
Spring Board (who have taken all reasonable care to ensure that such is the
case), the information contained in this summary and the attached Announcement
for which they accept responsibility is in accordance with the facts and does
not omit anything likely to affect the import of such information.
The Directors of Glotel accept responsibility for the information in this
summary and the attached Announcement relating to them and their immediate
families, related trusts and controlled companies and the Glotel Group.
Further Information on the Offer
The availability of the Offer to Glotel Shareholders who are not resident in the
United Kingdom may be affected by the laws of relevant jurisdictions. Glotel
Shareholders who are not resident in the United Kingdom will need to inform
themselves about and observe any applicable requirements.
This summary and the attached Announcement have been prepared for the purposes
of complying with English law, the City Code and the Listing Rules and
information disclosed may not be the same as that which would have been
disclosed if this summary and the attached Announcement had been prepared in
accordance with the laws of jurisdictions outside England.
The Offer will be subject to the applicable rules and regulations of the
Financial Services Authority, the London Stock Exchange and the City Code.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1% or more of any class of 'relevant
securities' of Glotel, all 'dealings' in any 'relevant securities' of that
company (including by means of an option in respect of, or a derivative
referenced to, any such 'relevant securities') must be publicly disclosed by no
later than 3.30 p.m. (London time) on the Business Day following the date of the
relevant transaction. This requirement will continue until the date on which the
Offer becomes, or is declared, unconditional as to acceptances, lapses or is
otherwise withdrawn or on which the 'offer period' otherwise ends. If two or
more persons act together pursuant to an agreement or understanding, whether
formal or informal, to acquire an 'interest' in 'relevant securities' of Glotel,
they will be deemed to be a single person for the purpose of Rule 8.3 of the
Code.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Glotel by Spring or Glotel, or by any of their respective
'associates', must be disclosed by no later than 12.00 noon (London time) on the
Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in price of securities. In
particular, a person will be treated as having an 'interest' by virtue of the
ownership or control of securities, or by virtue of any option in respect of, or
derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8 of the Code, you should contact an
independent financial adviser authorised under the Financial Services and
Markets Act 2000 or consult the Panel's website or contact the Panel on
telephone number +44 (0)20 7638 0129.
In accordance with Rule 2.10 of the Code, Glotel confirms that it has 38,856,398
ordinary shares of 5 pence each in issue and admitted to trading on the Official
List under the UK ISIN code GB0006782147.
NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN OR INTO AUSTRALIA, CANADA OR
JAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO.
26 June 2007
Recommended Cash Offer
by
Spring (Corporate) Limited (a wholly owned subsidiary of Spring Group plc)
For the entire issued and to be issued share capital of
Glotel plc
1. INTRODUCTION
The Spring Board and the Glotel Independent Directors are pleased to announce
that they have reached agreement on the terms of a recommended cash offer to be
made by Spring (Corporate) Limited for the entire issued and to be issued share
capital of Glotel.
The Glotel Independent Directors, who have been so advised by Baird, consider
the terms of the Offer to be fair and reasonable and unanimously recommend that
the Glotel Shareholders accept the Offer and they have irrevocably undertaken to
accept or procure the acceptance of the Offer in respect of their entire
beneficial holdings of 9,766,928 Glotel Shares, which, in aggregate, represent
approximately 25.1 per cent. of the existing issued share capital of Glotel. In
providing advice to the Glotel Independent Directors, Baird has taken into
account the commercial assessments of the Glotel Independent Directors.
In view of his continuing involvement in the business and prospective interest
in Spring, Andy Baker has not taken part in the Glotel Independent Directors'
decision to recommend that Glotel Shareholders accept the Offer. The Glotel
Independent Directors are Les Clark, Jonathan Brooks, Glyn Hirsch and Sir Robin
Saxby.
Andy Baker has also irrevocably undertaken to accept or procure the acceptance
of the Offer in respect of his entire beneficial holding of 9,336,064 Glotel
Shares, representing, in aggregate, approximately 24.0 per cent. of Glotel's
existing issued share capital.
Spring has received letters of intent to accept the offer from Glotel
Shareholders in respect of, in aggregate, 6,882,910 Glotel Shares, representing
approximately 17.7 per cent. of Glotel's existing issued share capital. Further
details of these irrevocable undertakings and letters of intent are given in
paragraph 3 below and in Appendix II of this Announcement.
The Offer Document will be posted to Glotel Shareholders as soon as is
reasonably practicable.
2. SUMMARY OF THE TERMS OF THE OFFER
The Offer, which will be subject to the terms and conditions set out in Appendix
I to this Announcement and the further terms and conditions to be set out in the
Offer Document and, in respect of certificated Glotel Shares, the Form of
Acceptance, will be made on the following basis:
For each Glotel Share 70 pence in cash
The Offer values the existing issued share capital of Glotel at approximately
£27.2 million and represents a premium of:
• 26.7 per cent. to the Closing Price of 55.25 pence per Glotel Share on 25 June
2007, being the latest practicable date prior to the Announcement; and
• 20.0 per cent. to 58.33 pence, being the average Closing Price of a Glotel
Share for the six months ended on 25 June 2007, being the latest practicable
date prior to the Announcement.
The Glotel Shares will be acquired pursuant to the Offer fully paid and free
from all liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other third party rights or rights of any nature whatsoever
and together with all rights now and hereafter attaching to them, including,
without limitation, the right to receive in full and retain all dividends and
other distributions (if any) declared, made or paid in respect of Glotel Shares
on or after 25 June 2007.
Full acceptance of the Offer, assuming the exercise of all outstanding options
with an exercise price of less than 70 pence per share under the Glotel Share
Option Schemes before the Offer closes, will result in the payment to Glotel
Shareholders of approximately £27.2 million in cash.
3. IRREVOCABLE UNDERTAKINGS TO ACCEPT THE OFFER
Spring has received irrevocable undertakings to accept, or procure the
acceptance of, the Offer from the Independent Glotel Directors (and their
connected persons) who hold, in aggregate, 9,766,928 Glotel Shares representing
approximately 25.1 per cent. of the existing issued share capital of Glotel.
These undertakings will remain binding even if a higher competing offer is made
for Glotel, unless the Offer lapses or is withdrawn.
Spring has also received an irrevocable undertaking from Andy Baker to accept or
procure the acceptance of the Offer in respect of his entire beneficial holding
of 9,336,064 Glotel Shares, representing, in aggregate, approximately 24.0 per
cent. of Glotel's existing issued share capital.
Spring has also received letters of intent from certain Glotel institutional
shareholders who hold, in aggregate, 6,882,910 Glotel Shares representing 17.7
per cent. of the existing issued share capital of Glotel.
Accordingly, irrevocable undertakings and letters of intent to accept the Offer
have been received by Spring in respect of, in aggregate, 25,985,902 Glotel
Shares representing approximately 66.9 per cent. of Glotel's existing issued
share capital.
Further details of these irrevocable undertakings and letters of intent are set
out in Appendix II to this Announcement.
4. BACKGROUND TO AND REASONS FOR THE OFFER
In March 2007, Spring outlined its strategy of expanding into new vertical and
geographical markets through both organic and acquisitive growth.
This strategy consisted of three primary business changes. Firstly, in order to
achieve a stable platform for growth, key hires were targeted with a view to
strengthening the management team. Secondly, Spring aimed to grow each of its
three business lines either organically or through acquisition by investing in
high margin, high value, mainly niche businesses. Key target sectors include
Finance, Engineering and Speciality IT. The final aim was to expand
geographically and establish a worldwide platform for growth. Key target
geographies were the US, as the largest professional services market in the
world, mainland Europe, followed by Central Europe's new economies and the
emerging markets of Asia-Pacific and Indochina.
The Spring Board believe that the acquisition of Glotel advances Spring's growth
strategy. Glotel is a niche, high-margin recruitment business servicing the
telecoms industry with established operations in both the US and Europe.
In the US, Spring will gain a successful management team run by Andy Baker
(co-founder of Glotel) with a complete back office and compliance team and a
footprint of 11 offices with a blue chip client base. Spring aims to import
Glotel's sophisticated US 'hybrid solutions' model into the UK in order to help
increase Spring's margins in Europe. The Spring Board envisage that the UK
operation will work alongside Spring's own telecoms business, Triage, giving the
Enlarged Group cost savings whilst acquiring a skilled technical sales team and
customer and contractor base. In Northern Europe, Spring will gain access to
operations in Holland, Belgium and Germany to add to Italy which Spring started
organically in April 2007. This will expand Spring's European capabilities.
Spring will also benefit from Glotel's knowledge and experience of international
taxation compliance issues which will assist the Enlarged Group's international
growth strategy.
5. RECOMMENDATION
In view of the interest that Andy Baker will have in Spring pursuant to the
Share Purchase Agreement, the Glotel Independent Directors alone have considered
the approach from Spring and the terms of the Offer.
The Glotel Independent Directors, who have been so advised by Baird, consider
the terms of the Offer to be fair and reasonable. In providing its advice to the
Glotel Independent Directors, Baird has taken into account the commercial
assessments of the Glotel Independent Directors.
Accordingly, the Glotel Independent Directors unanimously recommend that the
Glotel Shareholders accept the Offer. The Glotel Independent Directors have
irrevocably undertaken to accept or procure the acceptance of the Offer in
respect of their entire beneficial holdings of 9,766,928 Glotel Shares, which,
in aggregate, represent approximately 25.1 per cent. of the existing issued
share capital of Glotel.
6. INFORMATION ON SPRING AND SPRING (CORPORATE) LIMITED
Spring is a technology staffing and workforce management company operating in
three business streams through seven brands.
IT Staffing - contracting services and Permanent recruitment
The core Spring business, and the largest business in the Spring Group, remains
its IT staffing business. Through brands such as 'Best', 'Spring Technology' and
'Spring Telecoms' it provides a range of comprehensive and scalable technology
staffing solutions designed to meet its clients' contingent, permanent, national
and international technology staffing needs. It offers a wide range of
specialist and managed IT services across a broad spectrum of market sectors in
three practice areas: development; testing and application; and infrastructure
support.
IT Staffing - hy-phen RPO and Spring IT solutions
Under its hy-phen brand, Spring offers services that are tailored to its
client's specific needs through a managed service programme that provides
central co-ordination for the entire recruitment process. This often encompasses
advice to hiring managers on their requirements, pay rates and ongoing
benchmarking together with supply chain management and campaign management.
In addition, Spring has created a solutions business which has involved the
company moving from its traditional transaction based service relationship with
its clients into a more strategic and consulting capacity to help its clients
understand their potential future skill requirements.
General Staffing
Spring operates a national network of general temporary and permanent offices
through its 'Spring Personnel' and 'Elizabeth Hunt' brands. The general staffing
business provides staff into a broad range of industries from clerical and
secretarial staff through to engineering and industrial staff.
Spring (Corporate) Limited is a newly incorporated company specifically formed
for the purpose of implementing the Offer. Spring (Corporate) Limited, which is
incorporated in England, is a wholly owned subsidiary of Spring. The Directors
of Spring (Corporate) Limited are Peter Searle and Peter Darraugh (both
executive directors of Spring).
7. INFORMATION ON GLOTEL
Glotel, which is listed on the Official List, was founded in 1989 by Andy Baker
and Les Clark and has grown to become a specialist provider of telecom,
networking and information technology consultants with a network of 16 offices
throughout Europe, the US and the Asia-Pacific region. Its client base includes
major telecoms equipment suppliers and operators, large users of international
networks as well as many other companies who need temporary staff for their
information technology departments.
Glotel's service offerings are split into three core business streams; contract
staffing; permanent placements and 'Hybrid' staffing solutions.
Contract Staffing
Glotel's core business remains its contract staffing business whereby
contractors are hired out to customers on a time and materials basis and is
predominantly focused on the telecommunications market; both fixed line,
wireless operators and wireless vendors. Contractors are typically engaged at
client sites for three to twelve months although for certain project based
contracts, the period can be longer.
Permanent Staffing
Glotel has grown its permanent staffing presence by utilizing its legacy
relationships from its contract staffing teams as well as by trying to access a
new client base.
'Hybrid' Staffing solutions
As well as pure staff provision, Glotel has expanded into the provision of
solutions for its clients which incorporates certain levels of project
management with contract staffing. This added value offering is currently
focused on Glotel's US operations where there is demand for the management of
larger teams of temporary contractors working on specific projects. Contractors
are supplied on a time basis but there are delivery criteria with specific
solutions being tailored to the clients' requirements.
A cornerstone of Glotel's strategy is to differentiate itself from its
competitors by offering a global service so as to enable companies that operate
internationally to deal with one supplier. To this end, Glotel has adopted a
regional structure consisting of Europe, the Middle East and Africa ('EMEA'),
North America and Asia-Pacific, each with their own local management teams.
EMEA represents approximately 12.6 per cent. of the Glotel Group's operating
profit for the year ended 31 March 2007. The majority of the EMEA business is
derived from the UK where the company provides contractors into the telecoms and
public sector sectors as well as a small but expanding permanent placement
business into the telecoms industry. The company has also made progress
internationally by supplying engineers to telecommunications infrastructure
projects in several countries in Eastern Europe, the Middle East (including
Saudi Arabia, the Yemen, Kuwait and Pakistan) and Africa.
The US business is the most profitable division with Glotel US representing
approximately 85.8 per cent. of the Glotel Group's operating profit in the year
ended 31 March 2007. The US business operates out of 11 office locations
throughout the US and is divided into three core units: telecommunications
contract staffing, IT contract staffing and the Hybrid solutions business, which
has been steadily increasing its contribution to this part of the Glotel
operations.
The Asia-Pacific region is based in Australia but also has operations in New
Zealand and India. This business provides contract and permanent staff into the
telecoms and IT space. In the year ended 31 March 2007, the Asia-Pacific
business contributed approximately 1.6 per cent. of the Glotel Group's operating
profit.
In the results announced today by Glotel for its financial year ended 31 March
2007, Glotel had revenues of £120.3 million, gross profit of £23.0 million,
profit before tax of £2.1 million, gross assets of £34.0 million and net assets
of £21.0 million.
8. CURRENT TRADING AND PROSPECTS
Glotel
In the audited financial results for the year ended 31 March 2007, announced by
Glotel on 26 June 2007, it was stated:
'The last financial year was disappointing but is now well behind us. We have
adjusted our cost base in the UK and Australia so that these businesses will be
better able to cope with the lower margin market conditions of these countries
and we remain committed to developing our US business which remains by far the
most profitable region for the group. We have had a good start to the year and
look forward to being part of a larger group which will give us much-needed
scale, especially in the UK'
Spring
In the first half of 2007 Spring has made good progress in executing its stated
growth strategy. The Company has completed the reorganisation of the business
into three distinct operating units, with managing directors appointed to run
each area. Furthermore, investment has been made into each of these business
lines through the recruitment of over 70 additional sales headcount, and
geographic growth plans have commenced through the opening of an office in Rome.
The Spring Board expects that these factors will combine to deliver increased
volumes in the second half of 2007.
The acquisition of Glotel advances Spring's strategy of opening up new
geographies and expanding into other high value market opportunities.
Despite the significant amount of change and investment involved in executing
its growth strategy, Spring's trading in the first half of the year has been in
line with the Spring Board's expectations.
Enlarged Group
The Spring Directors believe that a combination of Spring and Glotel provides an
excellent opportunity for both groups to capitalise on the benefits of being
part of the Enlarged Group. The Spring Directors believe that the Acquisition
will be earnings neutral for Spring in the current financial year and earnings
enhancing for Spring in the first full financial year following Completion
(before amortisation of intangible assets and one-off integration costs)* and
in view of the benefits outlined above the Spring Board is confident of the
financial and trading prospects of the Enlarged Group.
9. MANAGEMENT, EMPLOYEES AND LOCATIONS
The Boards of Spring and Glotel have had detailed discussions with regard to
integrating their respective businesses. Both Boards believe that synergies
exist between the two companies which, once realised, will enable the Enlarged
Group to be more competitive on a global stage through a combination of its
increased size and economies of scale.
To maximise the benefits of operational gearing and to create the best career
opportunities for staff in both companies, best practices will be adopted across
the Enlarged Group. This process will likely result in a degree of back office
rationalisation and will also include the departure of the Glotel Independent
Directors who have, pursuant to the appropriate letters of resignation and/or
compromise agreements, undertaken to resign (without compensation) upon the
Offer becoming, or being declared, wholly unconditional.
For Glotel employees in the US and Asia-Pacific there will be minimal changes in
management and company structure. In the UK, there will be a number of changes
due to the relative sizes of Glotel and Spring, but this will also make
available to Glotel employees the significant career opportunities associated
with being part of a much larger group.
Any restructuring or redundancies that may take place will be subject to all
applicable consultation obligations under relevant laws.
Furthermore, Spring has indicated that it does not currently intend to effect a
material change in any conditions of employment for Glotel employees and has
given assurances to the Glotel Independent Directors that the existing
employment rights, including pension rights, of all Glotel employees will be
fully safeguarded upon the Offer becoming, or being declared, wholly
unconditional.
Andy Baker, Chief Executive of Glotel, will become Chief Executive Officer USA
operations upon the Offer becoming, or being declared, wholly unconditional.
10. MANAGEMENT ARRANGEMENTS
The Spring Board would like Andy Baker to remain financially involved in the
business and as a result Andy Baker has entered into the Share Subscription
Agreement with Spring. Under the terms of the Share Subscription Agreement, Andy
Baker has agreed to apply £2.0 million of the proceeds receivable by him under
the Offer (representing an estimated 30.6 per cent. of the gross proceeds
receivable by him under the Offer) to subscribe for 2,849,002 new Spring Shares
at 70.2p each, being the average closing middle market quotation for a Spring
Share for the last five days up to the close of business on 25 June 2007, the
last Business Day prior to the Announcement. On completion of the Share
Subscription Agreement, it is expected that Andy Baker will beneficially own
approximately 1.7 per cent. of the enlarged issued share capital of Spring. The
Spring Shares acquired by Andy Baker will be subject to a two year lock in
period. Andy Baker has irrevocably undertaken to accept the Offer in relation to
his entire holding of Glotel Shares.
Further details of the Share Subscription Agreement will be set out in the Offer
Document.
11. GLOTEL SHARE OPTION SCHEMES
The Offer will extend to any Glotel Shares issued or unconditionally allotted or
issued fully paid (or credited as fully paid) whilst the Offer remains open for
acceptance (or until such earlier date as, subject to the City Code, Spring
(Corporate) Limited may decide, being not earlier than the date on which the
Offer becomes or is declared unconditional as to acceptances, or if later, the
final closing date of the Offer), including those allotted or issued as a result
of the exercise of options under the Glotel Share Option Schemes.
Spring (Corporate) Limited intends to make appropriate proposals to the holders
of options under the Glotel Share Option Schemes upon the Offer becoming or
being declared unconditional in all respects, to the extent that such options
have not been exercised.
12. INTERESTS IN GLOTEL SHARES
Save for the irrevocable undertakings referred to in paragraph 3 above, neither
Spring nor any of its directors nor, so far as the directors of Spring are
aware, any person acting in concert with Spring for the purposes of the Offer,
owns or controls or holds any option to purchase, or has any arrangement in
relation to Glotel Shares or securities convertible or exchangeable into Glotel
Shares or options (including traded options) in respect of, or has entered into
any derivative referenced to, any such shares. For these purposes, 'arrangement'
includes any indemnity or option arrangement, any agreement or understanding,
formal or informal, of whatever nature, relating to Glotel Shares which may be
an inducement to deal or refrain from dealing in such shares.
13. FINANCING THE OFFER
Full acceptance of the Offer, assuming the exercise of all outstanding options
with an exercise price of less than 70p per Glotel Share under the Glotel Share
Option Schemes and the acceptance of the Offer by the resultant shareholders
before the Offer closes, will result in the payment of approximately £27.2
million in cash.
The cash consideration payable under the terms of the Offer is to be financed
from the internal cash resources of the Spring Group. Altium is satisfied that
sufficient financial resources are available to Spring (Corporate) Limited to
satisfy the consideration payable as a result of full acceptance of the Offer.
14. INDUCEMENT FEE
Pursuant to the Inducement Fee Agreement, Glotel has agreed to pay an inducement
fee to Spring of £271,994, (representing approximately 1 per cent. of the Offer
Price based on the fully diluted equity share capital of Glotel) (excluding VAT
to the extent recoverable) if:
(a) any member of the Glotel Board or the Glotel Board withdraws or
adversely modifies, or makes subject to conditions or qualification the
unanimous recommendation of the Offer;
(b) the Offer lapses or is withdrawn and before the lapse or
withdrawal of the Offer a third party offer is announced and is publicly
recommended by the Glotel Directors; or
(c) following the Announcement, Glotel causes the non-fulfilment or
non-satisfaction of any of the conditions of the Offer (subject to the Panel
permitting Spring (Corporate) Limited to invoke such non-fulfilment or
non-satisfaction of the conditions to cause the Offer to lapse).
Pursuant to Rule 21.2 of the City Code, Baird and Glotel have confirmed to the
Panel that they consider the inducement fee to be in the best interests of
Glotel Shareholders.
15. SPRING SHAREHOLDER APPROVAL
The Acquisition constitutes a Class 1 Transaction (as defined in the Listing
Rules) for Spring. Accordingly Spring will be required to seek the approval of
the Spring Shareholders for the Acquisition at the Spring EGM. It is expected
that the Circular containing the Notice of Spring EGM will be sent to Spring
Shareholders as soon as is reasonably practicable.
The Spring Board have irrevocably undertaken to vote in favour of the Resolution
(s) to be proposed at the Spring EGM in respect of its own beneficial holdings
of, in aggregate, 1,299,035 Spring Shares, representing approximately 0.8 per
cent. of the existing issued share capital of the Company as at 25 June 2007,
being the last practicable day before this Announcement.
Spring has also received an irrevocable undertaking from ET Training LLC to vote
in favour of the Resolution(s) in respect of its own beneficial holdings of, in
aggregate, 59,757,868 Spring Shares, representing approximately 37.1 per cent.
of the existing issued share capital of the Company as at 25 June 2007, being
the last practicable day before this Announcement.
16. COMPULSORY ACQUISITION AND DELISTING
If Spring (Corporate) Limited receives acceptances under the Offer in respect
of, and/or otherwise acquires 90 per cent. or more in value of the Glotel Shares
to which the Offer relates (and not less than 90 per cent. of the voting rights
carried by Glotel Shares), and if all other conditions of the Offer have been
satisfied or waived (to the extent that they are capable of being waived),
Spring (Corporate) Limited intends to exercise its rights pursuant to the
provisions of Part 28 of the Companies Act 2006 to acquire compulsorily any
remaining Glotel Shares in respect of which acceptances have not then been
received on the same terms as the Offer.
If the Offer becomes or is declared unconditional in all respects, and
sufficient acceptances under the Offer are received and subject to any
applicable requirements of the UK Listing Authority, Spring (Corporate) Limited
intends to procure that Glotel makes applications to cancel the listing of
Glotel Shares on the Official List and to cancel admission to trading in Glotel
Shares on the London Stock Exchange's market for listed securities. De-listing
would significantly reduce the liquidity and marketability of any Glotel Shares
not assented to the Offer at that time and the value of any such Glotel Shares
may be affected as a consequence.
It is anticipated that cancellation of the listing on the Official List and of
admission to trading on the London Stock Exchange's market for listed securities
will take effect no earlier than 20 Business Days after the earlier of (i) the
date on which Spring (Corporate) Limited has, by virtue of its shareholdings and
acceptances of the Offer, acquired or agreed to acquire issued share capital
carrying 75 per cent. of the voting rights of Glotel and (ii) the first date of
issue of compulsory acquisition notices under Chapter 3 Part 28 of the Companies
Act 2006. Spring (Corporate) Limited will notify Glotel Shareholders when the
required threshold has been attained and confirm that the notice period has
commenced and the anticipated date of cancellation.
It is also intended that, following the Offer becoming or being declared
unconditional in all respects and after the de-listing and cancellation referred
to above becoming effective, Glotel will be re-registered as a private company
under the relevant provisions of the Act.
17. GENERAL
The Offer Document will be sent to Glotel Shareholders as soon as is reasonably
practicable. The Circular and Notice of Spring EGM will also be sent to Spring
Shareholders as soon as is reasonably practicable.
The Offer will be subject to the conditions set out in Appendix I. The bases and
sources of certain financial information contained in this Announcement are set
out in Appendix II. Certain terms used in this Announcement are defined in
Appendix III.
Enquiries:
Spring
--------
Amir Eilon (Chairman) Tel: + 44 (0) 20 7300 9000
Peter Searle (Chief Executive Officer)
Peter Darraugh (Finance Director)
Glotel
--------
Les Clark (Chairman) Tel: +44 (0)20 7484 3000
Jonathan Brooks (Finance Director)
Altium (Financial Adviser and Broker to Spring)
-------------------------------------------------
Ben Thorne Tel: +44 (0)20 7484 4040
Marc Milmo
Sam Fuller
Financial Dynamics (Public Relations adviser to Spring)
---------------------------------------------------------
Ben Atwell Tel: +44 (0)20 7831 3113
John Gilbert
Baird (Rule 3 and Financial Adviser to Glotel)
------------------------------------------------
David Silver Tel: +44 (0)20 7488 1212
*This statement regarding earnings enhancement does not constitute a profit
forecast nor should it be taken to mean that the earnings per share of Spring
for the current or future years will necessarily match or exceed the historical
reported earnings per share of Spring and no forecast is intended or implied.
Altium, which is authorised and regulated by the Financial Services Authority in
the United Kingdom, is acting exclusively for Spring and no one else in
connection with the Offer and will not be responsible to anyone other than
Spring for providing the protections afforded to clients of Altium nor for
providing advice in relation to the Offer, the content of this Announcement or
any other matter or arrangement referred to herein.
Baird, which is authorised and regulated by the Financial Services Authority in
the United Kingdom, is acting exclusively for Glotel and no one else in
connection with the Offer and will not be responsible to anyone other than
Glotel for providing the protections afforded to clients of Baird nor for
providing advice in relation to the Offer, the content of this Announcement or
any other matter or arrangement referred to herein.
THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES NOR THE SOLICITATION OF ANY VOTE OR
APPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUE OR TRANSFER OF
THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION IN
CONTRAVENTION OF ANY APPLICABLE LAW. THE OFFER WILL BE MADE SOLELY BY MEANS OF
THE OFFER DOCUMENT AND THE FORM OF ACCEPTANCE ACCOMPANYING THE OFFER DOCUMENT.
The Offer in the United States will be made pursuant to an exemption from
certain US tender offer rules provided by Rule 14d-1(c) under the Exchange Act.
The availability of the Offer to Glotel Shareholders who are citizens or
residents of jurisdictions outside the United Kingdom may be affected by the
laws of their relevant jurisdiction. Such persons should inform themselves of,
and observe, any applicable legal or regulatory requirements of their
jurisdiction. If you remain in any doubt, you should consult your professional
adviser in the relevant jurisdiction without delay.
Any acceptance or other response to the Offer should be made only on the basis
of information referred to in the Offer Document which Spring (Corporate)
Limited intends to despatch as soon as is reasonably practicable to Glotel
Shareholders and, for information only, to participants in the Glotel Share
Option Schemes.
Spring will prepare the Circular which will be sent to Spring Shareholders as
soon as is reasonably practicable. Spring Shareholders may obtain a further free
copy of the Circular, when it becomes available, from the offices of Norton
Rose, 3 More London Riverside, London, SE1 2AQ.
The Directors of Spring accept responsibility for the information contained in
this summary and the attached Announcement other than information relating to
the Glotel Group, the Glotel Directors and their immediate families, related
trusts and controlled companies. To the best of the knowledge and belief of the
Spring Board (who have taken all reasonable care to ensure that such is the
case), the information contained in this summary and the attached Announcement
for which they accept responsibility is in accordance with the facts and does
not omit anything likely to affect the import of such information.
The Directors of Glotel accept responsibility for the information in this
summary and the attached Announcement relating to them and their immediate
families, related trusts and controlled companies and the Glotel Group.
Further Information on the Offer
The availability of the Offer to Glotel Shareholders who are not resident in the
United Kingdom may be affected by the laws of relevant jurisdictions. Glotel
Shareholders who are not resident in the United Kingdom will need to inform
themselves about and observe any applicable requirements.
This Announcement has been prepared for the purposes of complying with English
law, the City Code and the Listing Rules and 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 outside England.
The Offer will be subject to the applicable rules and regulations of the
Financial Services Authority, the London Stock Exchange and the City Code.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,
'interested' (directly or indirectly) in 1% or more of any class of 'relevant
securities' of Glotel, all 'dealings' in any 'relevant securities' of that
company (including by means of an option in respect of, or a derivative
referenced to, any such 'relevant securities') must be publicly disclosed by no
later than 3.30 p.m. (London time) on the Business Day following the date of the
relevant transaction. This requirement will continue until the date on which the
offer becomes, or is declared, unconditional as to acceptances or is otherwise
withdrawn or on which the 'offer period' otherwise ends. If two or more persons
act together pursuant to an agreement or understanding, whether formal or
informal, to acquire an 'interest' in 'relevant securities' of Glotel, they will
be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all 'dealings' in 'relevant
securities' of Glotel by Spring or Glotel, or by any of their respective
'associates', must be disclosed by no later than 12.00 noon (London time) on the
Business Day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose 'relevant
securities' 'dealings' should be disclosed, and the number of such securities in
issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
'Interests in securities' arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in price of securities. In
particular, a person will be treated as having an 'interest' by virtue of the
ownership or control of securities, or by virtue of any option in respect of, or
derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a 'dealing' under Rule 8 of the Code, you should contact an
independent financial adviser authorised under the Financial Services and
Markets Act 2000 or consult the Panel's website or contact the Panel on
telephone number +44 (0)20 7638 0129.
In accordance with Rule 2.10 of the Code, Glotel confirms that it has 38,856,398
ordinary shares of 5 pence each in issue and admitted to trading on the Official
List under the UK ISIN code GB0006782147.
APPENDIX I
Conditions and Further Terms of the Offer
The Offer will be subject to the following conditions:
(a) valid acceptances of the Offer being received (and not, where permitted,
withdrawn) by no later than 1.00 p.m. on the first closing date of the Offer
(or such later time(s) and/or date(s) as Spring (Corporate) Limited may,
subject to the rules of the Code, decide) in respect of not less than 90
per cent. of the Glotel Shares to which the Offer relates and not less than
90 per cent. of the voting rights carried by those Glotel Shares (or in each
case such lesser percentage as Spring (Corporate) Limited may decide),
provided that this condition shall not be satisfied unless Spring
(Corporate) Limited and/or its wholly-owned subsidiaries shall have acquired
or agreed to acquire, pursuant to the Offer or otherwise, Glotel Shares
carrying in aggregate more than 50 per cent. of the voting rights normally
exercisable at a general meeting of Glotel including for this purpose (to
the extent, if any, required by the Panel) any such voting rights attached
to any Glotel Shares unconditionally allotted or issued before the Offer
becomes or is declared unconditional as to acceptances, whether pursuant to
the exercise of conversion or subscription rights or otherwise and for the
purposes of this condition:
(i) the expression 'Glotel Shares to which the Offer relates' shall be
construed in accordance with sections 974 to 991 CA 2006;
(ii) Glotel Shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights which they will carry upon
issue; and
(iii)valid acceptances shall be deemed to have been received in respect of
Glotel Shares which are treated for the purposes of section 979(8) CA
2006 as having been acquired or contracted to be acquired by Spring
(Corporate)Limited by virtue of acceptances of the Offer;
(b) the passing at the Spring EGM (or at any adjournment thereof) of all such
resolutions as may be necessary to approve, implement and effect the Offer
and the acquisition by Spring (Corporate) Limited of Glotel pursuant
thereto;
(c) no central bank, government or governmental, quasi-governmental,
supranational, statutory, regulatory, environmental or investigative body,
court, trade agency, professional association, institution, employee
representative body, or any other such body or person whatsoever in any
jurisdiction (each a 'Third Party' and all collectively 'Third Parties')
having decided or given notice of a decision to take, institute or threaten
any material action, proceeding, suit, investigation, enquiry or reference,
or having required any action to be taken, or otherwise having done
anything, or having enacted, made or proposed and there not continuing to be
outstanding any statute, regulation, decision or order which would or might
reasonably be expected to:
(i) make the Offer or its implementation or the acquisition or proposed
acquisition by Spring (Corporate) Limited of all or any Glotel Shares,
or the acquisition or proposed acquisition of control of Glotel, by any
member of the Wider Spring Group, void, illegal or unenforceable under
the laws of any relevant jurisdiction, or otherwise, directly or
indirectly, restrain, restrict, prohibit, challenge, delay, hinder or
otherwise interfere with the same, or impose additional adverse
conditions or obligations with respect thereto, or otherwise challenge
or require amendment to the terms of the Offer or any such acquisition;
(ii) require, prevent or delay the divestiture, or alter the terms envisaged
for any proposed divestiture, by any member of the Wider Spring Group
or by any member of the Wider Glotel Group of all or any portion of
their respective businesses, assets or properties or impose any
limitation on the ability of any of them to conduct their respective
businesses (or any part of them) or to own or manage their respective
assets or properties or any part of them to an extent in any such case
which is material to Spring in the context of the Offer;
(iii)impose any limitation on, or result in a delay in, the ability of any
member of the Wider Spring Group, directly or indirectly, to acquire
or to hold or to exercise effectively all or any rights of ownership
in respect of shares, loans or other securities (or the equivalent) in
any member of the Wider Glotel Group or to exercise management control
over any such member to an extent which, is material in the context of
Spring Group taken as a whole or, as the case may be, the Glotel Group
taken as a whole;
(iv) otherwise adversely affect in any material respect any or all of the
businesses, assets, liabilities, profits or prospects of any member of
the Wider Spring Group or any member of the Wider Glotel Group;
(v) save pursuant to the Offer or sections 974 to 991 CA 2006 require any
member of the Wider Spring Group or the Wider Glotel Group to acquire,
or offer to acquire, any shares or other securities (or the equivalent)
in, or any asset owned by, any member of the Wider Glotel Group or the
Wider Spring Group to an extent which is material in the context of the
Spring Group taken as a whole or, as the case may be, the Glotel Group
taken as a whole;
(vi) result in a material delay in the ability of Spring (Corporate)
Limited, or render it unable, to acquire some or all of the Glotel
Shares or require a divestiture by Spring (Corporate) Limited or any
member of the Wider Spring Group of any shares or other securities (or
the equivalent) in Glotel;
(vii)limit the ability of any member of the Wider Spring Group or the Wider
Glotel Group to coordinate or integrate its business, or any part of
it, with the business or any part of the business of any other member
of the Wider Spring Group or of the Wider Glotel Group; or
(viii)result in any member of the Wider Glotel Group or the Wider Spring
Group ceasing to be able to carry on business under any name which it
presently does so, and all applicable waiting and other time periods
during which any such Third Party could decide to take, institute,
implement or threaten any action, proceeding, suit, investigation,
enquiry or reference under the laws of any mrelevant jurisdiction or
enact any such statute, regulation, order or decision or take any steps
having expired,lapsed or been terminated;
(d) all authorisations, orders, recognitions, grants, consents,licences,
confirmations, clearances, certificates, exemptions, permissions and
approvals ('Authorisations') necessary or reasonably appropriate in any
jurisdiction for or in respect of the Offer or the proposed acquisition of
all or any Glotel Shares or other securities in, or control of, Glotel by
any member of the Wider Spring Group having been obtained on terms and in a
form reasonably satisfactory to Spring (Corporate) Limited from all
appropriate Third Parties or persons with whom any member of the Wider
Glotel Group has entered into contractual arrangements and all such
Authorisations, together with all Authorisations necessary or reasonably
appropriate to carry on the business of any member of the Wider Glotel Group
remaining in full force and effect at the time at which the Offer becomes
otherwise unconditional and there being no indication of any intention to
revoke, withdraw, suspend, restrict, withhold or modify or not to grant or
renew any of the same;
(e) all filings or applications having been made in connection with the Offer,
and all appropriate waiting periods (including extensions thereof) in
respect of the Offer or its implementation under any applicable legislation
or regulations in any jurisdiction having expired, lapsed or been terminated
(as appropriate) and all statutory or regulatory obligations in any
jurisdiction having been complied with in connection with the Offer or the
acquisition by any member of the Wider Spring Group of any shares or other
securities in, or control of, Glotel;
(f) save as fairly disclosed in writing to Spring or as publicly announced
to a Regulatory Information Service prior to 25 June 2007, there being no
provision of any agreement, authorisation, arrangement, lease, licence,
permit or other instrument to which any member of the Wider Glotel Group is
a party or by or to which any such member or any of its assets may be bound,
entitled or subject, which in consequence of the Offer or the proposed
acquisition by Spring (Corporate) Limited or any member of the Wider Spring
Group of any shares or other securities (or the equivalent) in Glotel or
because of a change in the control or management of Glotel or any member of
the Wider Glotel Group, would or might reasonably be expected to result in:
(i) any monies borrowed by or any other indebtedness (actual or contingent)
of, or grant available to, any member of the Wider Glotel Group, being
or becoming repayable or being capable of being declared repayable
immediately or prior to their or its stated maturity date or repayment
date or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn, prohibited or inhibited or becoming
capable of being withdrawn, prohibited or inhibited;
(ii) any such agreement, authorisation, arrangement, licence, permit or
other instrument or the rights, liabilities, obligations or interests
of any member of the Wider Glotel Group thereunder being terminated or
adversely modified or affected or any obligation or liability arising
or any adverse action being taken or arising thereunder;
(iii)any assets or interests of any member of the Wider Glotel Group being
or falling to be disposed of or charged or ceasing to be available to
any such member or any right arising under which any such asset or
interest could be required to be disposed of or charged otherwise than,
in any such case, in the ordinary course of business;
(iv) the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property or assets
of any member of the Wider Glotel Group, or any such mortgage, charge
or other security interest (whenever arising or having arisen) becoming
enforceable or being enforced;
(v) the rights, liabilities, obligations or interests of any member of the
Wider Glotel Group in, or the business of any such member with, any
person, company, firm or body (or any agreements relating to any such
interest or business) being terminated, or adversely modified or
adversely affected;
(vi) the value of any member of the Wider Glotel Group or its financial or
trading position or profits or prospects being prejudiced or adversely
affected; or
(vii)the creation or assumption of any liability, actual or contingent, by
any member of the Wider Glotel Group, and no event having occurred
which, under any provision of any agreement, authorisation,
arrangement, lease, licence, permit or other instrument to which any
member of the Wider Glotel Group is a party or by or to which any such
member or any of its assets are bound, entitled or subject, would be
reasonably likely to result in any of the events referred to in
sub-paragraph (i) to (vii) of this paragraph (f) and in each case, to
an extent which is material in the context of the Wider Glotel Group
taken as a whole;
(g) save as fairly disclosed in writing to Spring or as otherwise publicly
announced to a Regulatory Information Service prior to 25 June 2007 no
member of the Wider Glotel Group having, since 31 March 2007:
(i) (save as between Glotel and wholly-owned subsidiaries of Glotel,
or for Glotel Shares issued pursuant to the exercise of options granted
under the Glotel Share Option Schemes prior to 25 June 2007) 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 convertible into or exchangeable for, shares of any class or
rights, warrants or options to subscribe for, or acquire, any such
shares or convertible securities;
(ii) (save for Glotel Shares held in treasury and sold or transferred
pursuant to the exercise of options granted under the Glotel Share
Option Schemes prior to 25 June 2007, sold or transferred or agreed to
sell or transfer any Glotel Shares held in treasury;
(iii)recommended, declared, paid or made or proposed to recommend, declare,
pay or make any bonus issue, dividend or other distribution whether
payable in cash or otherwise other than dividends (or other
distributions whether payable in cash or otherwise) lawfully paid or
made by any wholly-owned subsidiary of Glotel to Glotel or any of its
wholly-owned subsidiaries;
(iv) other than pursuant to the Offer (and save for transactions between
Glotel and its wholly-owned subsidiaries or other than 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
acquisition or disposal of assets or shares or loan capital (or the
equivalent thereof) in any undertaking or undertakings in any such
case;
(v) (save for transactions between Glotel and its wholly-owned subsidiaries
or other than in the ordinary course of business) disposed of, or
transferred, mortgaged or created any security interest over any asset
or any right, title or interest in any asset or authorised, proposed or
announced any intention to do so;
(vi) (save as between Glotel and its wholly-owned subsidiaries) made or
authorised or proposed or announced an intention to propose any
change in its loan capital;
(vii)(save as between Glotel and its wholly-owned subsidiaries) 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 other than in the ordinary course of
business;
(viii)purchased, redeemed or repaid, or announced any proposal to purchase,
redeem or repay, any of its own shares or other securities or reduced
or made any other change to or proposed the reduction or other change
to any part of its share capital;
(ix) entered into, implemented, effected, varied, authorised, proposed or
announced its intention to enter into, any reconstruction,
amalgamation, scheme, commitment or other transaction or arrangement
otherwise than in the ordinary course of business;
(x) entered into or varied or terminated 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, onerous or
unusual nature or magnitude or which is or is likely to be restrictive
on the business of any member of the Wider Glotel Group or the Wider
Spring Group or which involves or is likely to involve an obligation
of such a nature or magnitude or which is other than in the ordinary
course of business;
(xi) 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 or arrangement with any director or senior executive
of any member of the Wider Glotel Group save for salary increases,
bonuses or variations of terms in the ordinary course of business;
(xii)terminated or varied the terms of any agreement or arrangement between
any member of the Wider Glotel 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 or prospects of the Wider Glotel Group
taken as a whole;
(xiii)proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme or other benefit relating to the employment or
termination of employment of any person employed in the Wider Glotel
Group;
(xiv)save in relation to changes made or agreed as a result of, or arising
from, changes to legislation made or agreed or consented to any
significant change to the terms of the trust deeds and rules
constituting the pension scheme(s) established for its directors,
employees or their dependants or to the benefits which accrue, or to
the pensions which are payable, thereunder, or to the basis on which
qualification for, or accrual or entitlement to, such benefits or
pensions are calculated or determined or to the basis upon which the
liabilities (including pensions) of such pension schemes are funded or
made, or agreed or consented to, any change to the trustees, including
the appointment of a trust corporation;
(xv) been unable, or admitted in writing that it is unable, to pay its
debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or ceased or threatened to
cease to carry on all or a substantial part of its business;
(xvi)(other than in respect of a member of the Wider Glotel Group which is
dormant and was solvent at the relevant time) taken or proposed any
corporate action, or had any legal proceedings threatened or instituted
against it for its winding-up (voluntarily or otherwise), dissolution
or reorganisation or for the appointment of a receiver, administrative
receiver, administrator, trustee or similar officer of all or any part
of its assets or revenues or any analogous or equivalent steps or
proceedings in any relevant jurisdiction having been taken or had any
such person appointed;
(xvii)waived or compromised or settled any claim otherwise than in the
ordinary course of business;
(xviii)made any alteration to its memorandum or articles of association or
other constitutional documents; or
(xix)entered into any contract, agreement, commitment or arrangement or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to
propose to, effect any of the transactions, matters or events referred
to in this condition;
(h) save as fairly disclosed in writing to Spring or as otherwise publicly
announced to a Regulatory Information Service prior to 25 June 2007, since
31 March 2007:
(i) no adverse change or deterioration having occurred in the business,
assets, financial or trading position or profits or prospects of any
member of the Wider Glotel Group;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings or investigations having been threatened in writing,
announced, instituted or remaining outstanding by, against or in
respect of any member of the Wider Glotel Group or to which any member
of the Wider Glotel Group is or may become a party (whether as a
claimant, defendant or otherwise) and no enquiry or investigation by
any Third Party against or in respect of any member of the Wider Glotel
Group having been commenced, announced or threatened in writing by or
against or remaining outstanding in respect of any member of the Wider
Glotel Group;
(iii)no contingent or other liability having arisen or become apparent to
any member of the Wider Spring Group which would or might reasonably be
expected to adversely affect any member of the Wider Glotel Group and
which is material in the context of the Wider Glotel Group taken as a
whole; and
(iv) no steps having been taken and no omissions having been made which are
likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Wider Glotel
Group, which is necessary or reasonably appropriate for the proper
carrying on of its business and the withdrawal, cancellation,
termination or modification of which is likely to adversely affect and
which is material in the context of the Wider Glotel Group taken as a
whole;
(i) save as fairly disclosed in writing to Spring or as otherwise publicly
announced to a Regulatory information Service prior to 25 June 2007
Spring not having discovered after 25 June 2007:
(i) that any financial, business or other information concerning the Wider
Glotel Group publicly announced or disclosed at any time by or on
behalf of any member of the Wider Glotel Group to the Wider Spring
Group, is materially misleading, contains a material misrepresentation
of any fact or omits to state a fact necessary to make that information
not materially misleading and which is, in any case material in the
context of the Wider Glotel Group;
(ii) that any present member of the Wider Glotel Group or any partnership,
company or other entity in which any member of the Wider Glotel Group
has a significant economic interest and which is not a subsidiary
undertaking of Glotel, is subject to any material liability, contingent
or otherwise, which is not disclosed in the annual accounts for Glotel
for the year ending 31 March 2007 and which is, in any case material
in the context of the Wider Glotel Group;
(iii)that any past or present member of the Wider Glotel Group has not
complied with all applicable legislation, regulations or other
requirements of any relevant jurisdiction with regard to the use,
treatment, storage, disposal, discharge, spillage, leak or emission of
any waste or hazardous substance or any substance likely to impair the
environment or harm human health, or otherwise relating to
environmental matters or that there has otherwise been a material
emission, discharge, disposal, spillage or leak of waste or hazardous
substance or any substance likely to impair the environment or harm
human health (whether or not the same constituted a non-compliance by
any person with any such legislation or regulations, and wherever the
same may have taken place) on or from any land or property of any
description or other asset now or previously owned, occupied or made
use of by any past or present member of the Wider Glotel Group which
would, in any case, be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the Wider
Glotel Group and which is, in any case material in the context of the
Wider Glotel Group; or
(iv) that there is or is likely to be any material liability (whether actual
or contingent) on the part of any member of the Wider Glotel Group to
make good, repair, reinstate or clean up any property of any
description or other asset now or previously owned, occupied or made
use of by any past or present member of the Wider Glotel Group, under
any environmental legislation, regulation, notice, circular or order of
any Third Party and which is, in any case material in the context of
the Wider Glotel Group.
For the purposes of these conditions the 'Wider Glotel Group' means Glotel and
its subsidiary undertakings, associated undertakings and any other undertaking
in which Glotel and/or such undertakings (aggregating their interests) have a
significant interest and the 'Wider Spring Group' means Spring and its
subsidiary undertakings, associated undertakings and any other undertaking in
which Spring and/or such undertakings (aggregating their interests) have a
significant interest and for these purposes 'subsidiary undertaking',
'associated undertaking' and 'undertaking' have the meanings given by the Act,
other than paragraph 20(1)(b) of Schedule 4A to that Act which shall be excluded
for this purpose, and 'significant interest' means a direct or indirect interest
in more than twenty per cent. of the equity share capital (as defined in the
Act).
Spring (Corporate) Limited reserves the right to waive, in whole or in part, all
or any of conditions (c) to (i) inclusive. Conditions (c) to (i) must be
satisfied as at, or waived on or before midnight (London time), on the twenty
first day after the later of the first closing date of the Offer and the date on
which condition (a) is fulfilled (or in each case such later date as the Panel
may agree).
Spring (Corporate) Limited shall be under no obligation to waive (if capable of
waiver) or treat as fulfilled any of conditions (c) to (i) inclusive by a date
earlier than the latest date specified above for the fulfilment thereof,
notwithstanding that the other conditions of the Offer may at such earlier date
have been fulfilled and that there are, at such earlier date, no circumstances
indicating that any of such conditions may be incapable of fulfilment.
If Spring (Corporate) Limited is required by the Panel to make an offer for
Glotel Shares under the provisions of Rule 9 of the Code, Spring (Corporate)
Limited may make such alterations to the above conditions of the Offer,
including condition (a), as are necessary to comply with the provisions of that
Rule.
The Offer will lapse if it is referred to the Competition Commission or the
European Commission initiates proceedings under Article 6(1)(c) of the Merger
Regulation, or following a referral under Article 9(1) of the Merger Regulation,
there is a subsequent reference to the Competition Commission before 1.00 p.m.
(London time) on the first closing date of the Offer or the time and date on
which the Offer becomes or is declared unconditional as to acceptances,
whichever is the later. In such circumstances, the Offer will cease to be
capable of further acceptance and persons accepting the Offer and Spring
(Corporate) Limited shall thereupon cease to be bound by Forms of Acceptance
delivered on or before the date on which the Offer so lapses.
APPENDIX II
Bases and Sources
(a) Unless otherwise stated, the financial information relating to Glotel has
been extracted or derived, without material adjustment, from the Glotel
Audited Accounts and the audited consolidated financial statements for
Glotel for the year ended 31 March 2007.
(b) References to existing issued share capital are references to Glotel Shares
in issue on 25 June 2007 (being the last practicable business date prior to
the date of the Announcement), being 38,856,398 Glotel Shares.
(c) The value attributed to the existing issued and to be issued share capital
of Glotel is based upon the 38,856,398 Glotel Shares being in issue on 25
June 2007 (being the latest practicable date prior to the release of this
Announcement) and on options under the Glotel Share Option Schemes which
have an exercise price lower than the Offer Price per Glotel Share having
been exercised.
(d) Glotel Share prices have been derived from the London Stock Exchange and
represent the Closing Price on the relevant date.
(e) The Offer premium of 20.0 per cent. to the average Closing Price of 58.33
pence over the six month period from 27 December 2006 to 25 June 2007
inclusive, as stated in this Announcement, has been calculated using Closing
Prices on each Business Day over the relevant period.
(f) The Glotel Directors have given irrevocable undertakings to accept or
procure the acceptance of the Offer in respect of the following Glotel
Shares owned by them or their connected persons:
Name Number of Percentage of
Glotel existing
Shares issued share
capital
Les Clark 9,716,680 25.0%
Glyn Hirsch 10,124 0.03%
Sir Robin Saxby 40,124 0.1%
Andy Baker 9,336,064 24.0%
---------------- ---------------- ----------------
Total 19,102,992 49.2%
These undertakings shall lapse if the Offer is withdrawn or lapses. These
undertakings will, however, remain binding even if a higher offer is made by a
third party.
In addition, Spring has received non-binding letters of intent to accept or
procure the acceptance of the Offer from Henderson Global Investors in respect
of 4,116,774 Glotel Shares representing, in aggregate, 10.6 per cent. of the
existing issued share capital of Glotel Shares and Unicorn Asset Management in
respect of 2,766,136 Glotel Shares, representing, in aggregate, 7.1 per cent. of
the existing issued share capital of Glotel.
APPENDIX III
Definitions
The following definitions apply throughout this Announcement, unless the context
otherwise requires:
'Acquisition' the proposed acquisition of the whole of the issued and to
be issued share capital of Glotel by Spring (Corporate)
Limited by means of the Offer;
'Act' or 'Companies the Companies Act 1985 (as amended);
Act'
'Altium' Altium Capital Limited, being the financial adviser to
Spring;
'Andy Baker' Andrew Arthur Edward Baker, the Chief Executive Officer of
Glotel;
'Announcement' this announcement made by Spring under Rule 2.5 of the
City Code regarding the proposed acquisition of Glotel by
means of the Offer;
'authorisations' authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and
approvals;
'Baird' Robert W. Baird Limited;
'Board' the board of the Spring Directors or the Glotel Directors
as the context requires;
'Business Day' a day on which the London Stock Exchange is open for
normal business;
'CA 2006' the Companies Act 2006;
'certificated' or a share or other security which is not in uncertificated
'in certificated form (that is not held in CREST);
form'
'Circular' the document to be sent to Spring Shareholders containing
the Notice of the Spring EGM;
'Closing Price' the closing middle market quotation of a Glotel Share for
the day to which such price relates, as derived from the
Daily Official List of the London Stock Exchange for that
day;
'Code' or 'City Code' the City Code on Takeovers and Mergers;
'Completion' the completion of the Acquisition;
'Enlarged Group' the Spring Group as enlarged by the Acquisition;
'Exchange Act' the US Securities Exchange Act of 1934, as amended;
'Form of Acceptance' the form of acceptance, election and authority (in respect
of certificated Glotel Shares) relating to the Offer which
accompanies the Offer Document;
'FSA' Financial Services Authority;
'FSMA' the Financial Services and Markets Act 2000 (as amended);
'Inducement Fee the agreement dated 29 May 2007 between Spring and Glotel
Agreement' pursuant to which, inter alia, Glotel has agreed to pay an
inducement fee to Spring in an amount of 1 per cent. of
the Offer Price in certain circumstances as more fully set
out in paragraph 14 of Part II of this Announcement;
'Listing Rules' the listing rules and regulations of the UK Listing
Authority (as amended);
'London Stock the London Stock Exchange plc, together with any
Exchange' successors thereto;
'Offer' the recommended cash offer to be made by Spring
(Corporate) Limited to acquire the entire issued and to be
issued share capital of Glotel, on and subject to the
terms and conditions set out in the Offer Document and
(in respect of certificated Glotel Shares) in the Form of
Acceptance and (where the context permits) any subsequent
revision, variation, extension or renewal thereof;
'Offer Document' the document containing the Offer to Glotel Shareholders
by Spring (Corporate) Limited which will be posted as soon
as is reasonably practicable;
'Offer Period' the period commencing on 26 June 2007 (the date of this
Announcement), and ending on the date which is the latest
of (i) the first closing date of the Offer, (ii) the date
on which the Offer becomes or is declared unconditional as
to acceptances and (iii) the date on which the Offer
lapses or is withdrawn;
'Offer Price' 70 pence per Glotel Share;
'Official List' the official list of the UK Listing Authority;
'Overseas Glotel Shareholders resident in, or nationals or citizens
Shareholders' of, jurisdictions outside the UK or who are custodians,
nominees and trustees for, citizens or nationals of such
other jurisdictions;
'Panel' the Panel on Takeover and Mergers;
'Glotel' Glotel plc;
'Glotel Director' a director of Glotel;
'Glotel Group' Glotel, its subsidiaries and subsidiary undertakings;
'Glotel Independent the Glotel Directors other than Andy Baker;
Directors'
'Glotel Shareholders' holders of Glotel Shares;
'Glotel Share Option the Glotel Group plc Performance Related Share Scheme and
Schemes' the Glotel Group plc Sharesave Scheme;
'Glotel Shares' ordinary shares of five pence each in the capital of
Glotel;
'Regulatory any of the services on the list of Regulatory Information
Information Service' Services maintained by the FSA;
'Relevant Securities' Glotel Shares or any other securities conferring voting
rights and any other securities convertible into or
exchangeable for rights to subscribe for, or options in
respect of, or derivatives referenced to, any of the
foregoing;
'Resolution(s)' the resolution(s) to be put to the Spring Shareholders at
the Spring EGM and set out in the Notice of the Spring
EGM;
'Restricted Canada, Australia, Japan or any other jurisdiction where
Jurisdiction' extension or acceptance of the Offer would violate the law
of that jurisdiction;
'Share Subscription the subscription agreement dated 25 June 2007 and entered
Agreement' into between Andy Baker and Spring in relation to the
subscription by Andy Baker for the Spring Subscription
Shares, further details of which will be contained in the
Offer Document;
'Spring' or 'Company' Spring Group plc;
'Spring (Corporate) a wholly owned subsidiary of Spring, newly established for
Limited' the purpose of making the Offer;
'Spring Director' a director of Spring;
'Spring EGM' the extraordinary general meeting of Spring to be held at
Norton Rose, 3 More London Riverside, London SE1 2AQ to
approve the proposed acquisition by Spring (Corporate)
Limited of the entire issued and to be issued share
capital of Glotel and to authorise the Spring Directors to
take all necessary or appropriate steps and do all
necessary or appropriate things to implement, complete or
to procure the implementation or completion of the Offer
and/or Acquisition;
'Spring Group' Spring, its subsidiaries and subsidiary undertakings;
'Spring Shareholders' holder of Spring Shares;
'Spring Subscription the 2,849,002 new Spring Shares to be issued to Andy Baker
Shares' pursuant to the terms of the Share Subscription Agreement;
'Spring Shares' ordinary shares of ten pence each in the capital of
Spring;
'subsidiary', have the meanings given to them by the Companies Act (but
'subsidiary for these purposes ignoring paragraph 20(1)(b) of Schedule
undertaking', 4A to the Companies Act) and 'substantial interest' means
associated a direct or indirect interest in 20 per cent. or more of
undertaking' and the equity capital of an undertaking;
'undertaking'
'third party' person, firm, company or body;
'UK' or 'United the United Kingdom of Great Britain and Northern Ireland;
Kingdom'
'UK Listing the FSA acting in its capacity as competent authority for
Authority' or 'UKLA' the purpose of Part VI of FSMA;
'uncertificated' or means recorded on the register of members of Glotel as
'in uncertificated being held in uncertificated form;
form'
'United States' or the United States of America, its territories and
'US' possessions, any state of the United States and the
District of Columbia;
'Wider Glotel Group' Glotel and its subsidiary undertakings, associated
undertakings and any other undertaking in which Glotel and
/or such undertakings (aggregating their interest) have a
significant interest; and
'Wider Spring Group' Spring and its subsidiary undertakings, associated
undertakings and any other undertaking in which Spring and
/or such undertakings (aggregating their interest) have a
significant interest.
All references to legislation in this Announcement are to English legislation,
unless the contrary is indicated. Any reference to any provision of any
legislation should include any amendment, modification, re-enactment or
extension thereof.
The singular shall include the plural and vice versa, and words importing the
masculine gender shall include the feminine or neutral gender.
References to '£', 'Sterling', 'p', 'penny' and 'pence' are to the lawful
currency of the United Kingdom.
References to time are to London time.
This information is provided by RNS
The company news service from the London Stock Exchange