Offer for Norkom Group plc
For immediate release
Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction
14 January 2011
PRE-CONDITIONAL RECOMMENDED CASH OFFER
BY
BAE SYSTEMS (HOLDINGS) LIMITED,
A WHOLLY-OWNED SUBSIDIARY OF BAE SYSTEMS PLC
FOR
NORKOM GROUP PLC
Summary
· The boards of BAE Systems plc ("BAE Systems"), BAE Systems (Holdings) Limited ("BAE Systems Holdings") and Norkom Group plc ("Norkom") are pleased to announce that they have reached agreement on the terms of a recommended cash offer by BAE Systems Holdings, a wholly owned subsidiary of BAE Systems, for the entire issued and to be issued share capital of Norkom.
· Norkom is a market-leading provider of innovative solutions to counter financial crime to the global financial services industry.
· BAE Systems is a global defence and security company.
· Under the terms of the Offer, Norkom Shareholders will be entitled to receive €2.10 in cash for each Norkom Share they own.
· The Offer values the entire issued and to be issued share capital of Norkom at approximately €217million.
· As at 14 January 2011, the Offer represents:
• a premium of approximately 36 per cent. to the Closing Price of €1.54 per Norkom Share on 13 January 2011, being the last Business Day prior to the date of this announcement;
· a premium of approximately 121 per cent. to the Closing Price per Norkom Share on 25 November 2010 being the last Business Day prior to the commencement of the Offer Period, being €0.95; and
• a premium of approximately 82 per cent. to the average daily Closing Price per Norkom Share for the six months up to the commencement of the Offer Period, being €1.15.
· The making of the Offer is conditional upon satisfaction of the pre-condition set out in Appendix III to this announcement. The pre-condition requires BAE Systems Holdings to receive by 12 noon on the date of this announcement irrevocable undertakings in a form satisfactory to BAE Systems Holdings from all Norkom Directors, all members of the Norkom Senior Management Team, TVC Holdings plc and the TVC Connected Person to accept (or procure the acceptance of) the Offer in respect of 46,394,320 Norkom Shares, in aggregate representing approximately 44.9 per cent. of the entire issued share capital of Norkom (on a fully diluted basis) at the date of this announcement.
· The Board of Norkom, which has been so advised by Jefferies, considers the terms of the Offer to be fair and reasonable. In providing its advice, Jefferies has taken into account the commercial assessments of the Board of Norkom.
· Accordingly, the Board of Norkom unanimously recommends that Norkom Shareholders accept the Offer.
Commenting on the Offer, Paul Kerley, Chief Executive Officer of Norkom, said:
"In completing this transaction Norkom will be further strengthened by the scale, reputation and resources of BAE Systems. I am delighted that within BAE Systems we have found a home for Norkom that shares the same enthusiasm and ambition to build a truly great company in a growing market space. Norkom's technology platform together with BAE Systems' complementary technology and rich knowledge of the security space will create a fantastic opportunity to bring additional offerings to the market. BAE Systems has an enviable record in how it values and respects the people that make it successful. It gives me great pleasure to see Norkom become part of BAE Systems' family and I look forward to our continued success together."
Commenting on the Offer, Ian King, Chief Executive Officer of BAE Systems, said:
"Countering financial crime is a priority for governments and financial institutions. There is a compelling logic to the combination of Detica's NetReveal® product and the complementary capabilities and customer reach of Norkom. The combination will result in a significantly enhanced offering for customers and present an opportunity for accelerated growth for the BAE Systems Group in the fast growing cyber and intelligence services sector."
This summary should be read in conjunction with the full text of the following announcement and appendices.
The Offer will be subject to the conditions and further terms set out in Appendix I of this announcement, which will also be set out in the Offer Document and the Form of Acceptance. Appendix II contains the bases of calculation and sources of certain information contained in this announcement. Appendix III sets out the pre-condition to the making of the Offer. Appendix IV sets out definitions of certain terms used in this announcement (including in this summary).
Jefferies is acting as financial adviser to Norkom. Goodbody Corporate Finance is also acting as financial adviser to Norkom. William Fry is acting as legal adviser to Norkom.
Merrill Lynch International ("BofA Merrill Lynch"), a subsidiary of Bank of America Corporation, is acting as financial adviser to BAE Systems and BAE Systems Holdings. McCann FitzGerald is acting as legal adviser to BAE Systems and BAE Systems Holdings.
Enquiries:
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Norkom Group plc |
Tel: +353 1 873 9600 |
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Paul Kerley, CEO |
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Liam Davis, CFO |
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Jefferies International Limited |
Tel: +44 20 7029 8000 |
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Rule 3 and financial adviser to Norkom |
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Mark Fisher |
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Sarah McNicholas |
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BofA Merrill Lynch |
Tel: +44 20 7996 1000 |
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Financial adviser to BAE Systems and BAE Systems Holdings |
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Philip Noblet |
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Simon Gorringe |
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Chris Squire |
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Goodbody Corporate Finance/ Goodbody Stockbrokers |
Tel: +353 1 667 0420
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Financial adviser, ESM adviser and broker to Norkom |
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Simon Howley (Corporate Finance) |
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David Kearney (Corporate Finance) |
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Linda Hickey (Corporate Broking) |
Tel: +353 1 641 6017 |
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Cenkos Securities |
Tel: +44 20 7397 8900 |
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Nominated adviser and broker to Norkom |
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Stephen Keys |
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Camilla Hume |
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Threadneedle Communications |
Tel: +44 20 7653 9850 |
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Financial PR adviser to Norkom |
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Caroline Evans-Jones Fiona Conroy |
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Responsibility Statements
The directors of Norkom accept responsibility for the information contained in this announcement relating to Norkom, the Norkom Group, the directors of Norkom and members of their immediate families, related trusts and persons connected with them, and for the recommendation and related opinions of the directors of Norkom contained in this announcement. To the best of the knowledge and belief of the directors of Norkom (who have taken all reasonable care to ensure that such is the case), the information contained in this 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 BAE Systems and BAE Systems Holdings accept responsibility for the information contained in this announcement; other than that relating to Norkom, the Norkom Group, the directors of Norkom and members of their immediate families, related trusts and persons connected with them, and any recommendation and related opinions of the directors of Norkom. To the best of the knowledge and belief of the directors of BAE Systems and BAE Systems Holdings (who have taken all reasonable care to ensure that such is the case), the information contained in this 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.
Financial Advisers
Jefferies, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Norkom and no one else in connection with the Offer and will not be responsible to anyone other than Norkom for providing the protections afforded to clients of Jefferies or for providing advice in relation to the Offer or any other matters referred to in this announcement.
Goodbody Corporate Finance and Goodbody Stockbrokers, which are regulated by the Central Bank of Ireland, are acting exclusively for Norkom and no one else in connection with the Offer and will not be responsible to anyone other than Norkom for providing the protections afforded to customers of Goodbody Corporate Finance and/ or Goodbody Stockbrokers, or for providing advice in relation to the Offer or any other matters referred to in this announcement.
BofA Merrill Lynch, a subsidiary of Bank of America Corporation, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for BAE Systems and BAE Systems Holdings and no one else in connection with the Offer and accordingly will not be responsible to anyone other than BAE Systems and BAE Systems Holdings for providing the protections afforded to clients of BofA Merrill Lynch nor for providing advice in relation to the Offer or any other matter referred to in this announcement.
General
This announcement does not constitute an offer to purchase, sell, subscribe for or exchange or the solicitation of an offer to purchase, sell, subscribe for or exchange any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise.
The distribution of this announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this announcement and all other documents relating to the Offer are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws
of any such jurisdiction.
Any response in relation to the Offer should be made only on the basis of the information contained in the Offer Document or any document by which the Offer are made.
This announcement is made pursuant to Rule 2.5 of the Takeover Rules.
Pursuant to Rule 2.6(c) of the Takeover Rules, this announcement will be available to Norkom and BAE Systems Holdings employees on Norkom's website (www.norkom.com) and BAE Systems' website (www.baesystems.com).
Forward-looking Statements
This announcement may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Norkom Group and/or the BAE Systems Group and certain plans and objectives of the Board of Norkom and/or the Boards of BAE Systems and BAE Systems Holdings. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Board of Norkom and/or the Boards of BAE Systems and/ or BAE Systems Holdings in light of their respective experience and their respective perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results or developments to differ materially from those expressed in or implied by such forward-looking statements.
Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. None of Norkom, BAE Systems or BAE Systems Holdings assumes any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.
The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and publication of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Norkom, BAE Systems or BAE Systems Holdings except where expressly stated.
Rule 8 - Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Rules, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of "relevant securities" of Norkom, all "dealings" in any "relevant securities" of Norkom (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. (Dublin 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 lapses or is otherwise withdrawn or on which the Offer Period otherwise ends. If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an "interest" in "relevant securities" of Norkom, they will be deemed to be a single person for the purpose of Rule 8.3 of the Takeover Rules.
Under the provisions of Rule 8.1 of the Takeover Rules, all "dealings" in "relevant securities" of Norkom, by Norkom or BAE Systems Holdings, or by any of their respective "associates", during the Offer Period must be disclosed by no later than 12.00 noon (Dublin 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 can be found on the Panel's website at www.irishtakeoverpanel.ie.
'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks in this paragraph, Dealing Disclosure Requirements, are defined in the Takeover Rules, 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, you should consult the Panel's website at www.irishtakeoverpanel.ie or contact the Panel on telephone number +353 (0) 1 678 9020; fax number +353 (0) 1 678 9289
No Profit Forecast
No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statement be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for BAE Systems, BAE Systems Holdings or Norkom, as appropriate.
Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws or regulations of such jurisdiction
14 January 2011
PRE-CONDITIONAL RECOMMENDED CASH OFFER
BY
BAE SYSTEMS (HOLDINGS) LIMITED,
A WHOLLY-OWNED SUBSIDIARY OF BAE SYSTEMS PLC
FOR
NORKOM GROUP PLC
1. Introduction
The boards of BAE Systems plc ("BAE Systems"), BAE Systems (Holdings) Limited ("BAE Systems Holdings") and Norkom Group plc ("Norkom") are pleased to announce that they have reached agreement on the terms of a recommended cash offer by BAE Systems Holdings, a wholly owned subsidiary of BAE Systems, for the entire issued and to be issued share capital of Norkom.
2. The Offer
The Offer, which is on the terms and subject to the conditions set out in Appendix 1 to this announcement and is subject to the further terms to be set out in the Offer Document and the Form of Acceptance, is being made on the following basis:
for each Norkom Share €2.10 in cash
The Offer values the entire issued and to be issued share capital of Norkom at approximately €217 million.
As at 14 January 2011, the Offer represents:
• a premium of approximately 36 per cent. to the Closing Price of €1.54 per Norkom Share on 13 January 2011, being the last Business Day prior to the date of this announcement;
· a premium of approximately 121 per cent. to the Closing Price per Norkom Share on 25 November 2010 being the last Business Day prior to the commencement of the Offer Period, being €0.95; and
• a premium of approximately 82 per cent. to the average daily Closing Price per Norkom Share for the six months up to the commencement of the Offer Period, being €1.15.
3. Background to and Reasons for the Offer
Countering financial crime and the funding of organised crime and terrorism is a major element of national security. Government regulation increasingly requires financial institutions to adopt anti-money laundering and counter-fraud solutions. The provision of such capabilities has been identified by BAE Systems as an important part of the group's global security strategy and the acquisition of Norkom represents a significant step forward in this strategic objective.
Through BAE Systems Holdings' acquisition of Detica Group plc in 2008, including its Detica NetReveal® product, BAE Systems has an established position in the counter-fraud software business. Norkom will offer complementary technology with its anti-money laundering software and a global client base in financial services. Consequently, the combined business will be well positioned to address customer demand for more integrated financial crime and compliance solutions and will offer attractive cross-selling opportunities for Detica and Norkom's respective products.
Given the convergence in anti-money laundering and counter-fraud technology and customer demand for more integrated financial compliance solutions, the combination of Detica and Norkom will also provide cost benefits from shared investment in product development and sales and marketing.
4. Recommendation
The Board of Norkom, which has been so advised by Jefferies, considers the terms of the Offer to be fair and reasonable. In providing advice on the Offer to the Board of Norkom, Jefferies has taken into account the commercial assessments of the Board of Norkom.
Accordingly, the Board of Norkom unanimously recommends that Norkom Shareholders accept the Offer.
5. Background to and Reasons for the Recommendation
Following expressions of interest from certain parties in late 2010 and the subsequent commencement of the Offer Period, with a view to maximising shareholder value, the Board of Norkom undertook a number of discussions with various potential acquirers to explore a sale of the business to a strategic third party. Following those discussions, the Board of Norkom decided that the combination of BAE Systems and Norkom offered the most attractive strategic option for all stakeholders, including shareholders, customers and employees.
The Board of Norkom believes that the Offer recognises the inherent value of Norkom's technology, services and people, as well as delivering significant value to Norkom Shareholders. The Board of Norkom believes that Norkom and BAE Systems, specifically through Detica Group, are two highly complementary businesses and that the combined entity will possess the scale, market reach and technological strength to establish itself as a global leader in financial crime and compliance solutions.
The Board of Norkom has decided to recommend the Offer and in arriving at its decision the Board of Norkom has considered, inter alia, that the Offer represents a premium:
• of approximately 36 per cent. to the Closing Price of €1.54 per Norkom Share on 13 January 2011, being the last Business Day prior to the date of this announcement;
· of approximately 121 per cent. to the Closing Price per Norkom Share on 25 November 2010 being the last Business Day prior to the commencement of the Offer Period, being €0.95; and
• of approximately 82 per cent. to the average daily Closing Price per Norkom Share for the six months up to the commencement of the Offer Period, being €1.15.
6. Pre-Condition
The making of the Offer is conditional upon satisfaction of the pre-condition set out in Appendix III to this announcement. The pre-condition requires BAE Systems Holdings to receive by 12 noon on the date of this announcement irrevocable undertakings in a form satisfactory to BAE Systems Holdings from all Norkom Directors, all members of the Norkom Senior Management Team, TVC Holdings plc and the TVC Connected Person to accept (or procure the acceptance of) the Offer in respect of 46,394,320 Norkom Shares, in aggregate representing approximately 44.9 per cent. of the entire issued share capital of Norkom (on a fully diluted basis) at the date of this announcement.
7. Information Relating to Norkom
Norkom is a market-leading provider of innovative solutions to counter financial crime to the global financial services industry. Norkom's software solutions enable financial organisations to detect and combat financial crime, control defences and evolve strategies against fraud, money laundering and other types of financial crime.
By combining a unique multi-channel fraud and compliance detection and investigative technology platform with deep domain expertise and extensive client experience, Norkom has established a solid track record of reducing financial losses, protecting users' reputations and improving operational efficiencies. It has won acclaim for being a leading solution provider by industry experts such Gartner and Chartis, ranking among the world's top 100 financial technology providers for the third consecutive year on the influential FinTech 100 list.
Norkom has a client base of over 100 customers which span over 100 countries, which includes six of the top ten financial services organisations in the world. It is headquartered in Dublin, Ireland, with operations and offices across Continental Europe, North America and Asia-Pacific with over 300 employees.
In June 2006, Norkom completed an initial public offering on the Irish Stock Exchange (ESM: NORK.IE) and London Stock Exchange (AIM: NORK:L), (ISIN: IE00B16PV578).
For the year ended 31 March 2010, Norkom reported profit on ordinary activities before taxation of €7.5 million (2009: €4.9 million) on revenue of €49.3 million (2009: €48.0 million). Reported earnings before interest, tax, depreciation and amortisation (before IFRS 2) for the year ended 31 March 2010 was €10.2 million (2009: €8.4). Cash generated from operations for the year ended 31 March 2010 was €15.2 million (2009: €6.8 million) and net assets were €65.7 million (2009: €58.2 million).
8. Information Relating to the BAE Systems Group
BAE Systems is a global defence and security company. A key segment of BAE Systems' business delivers a range of support and services for equipment, facilities, infrastructure and intelligence gathering.
BAE Systems Holdings is a wholly-owned UK subsidiary of BAE Systems.
9. Financing the Offer
The Cash Consideration payable by BAE Systems Holdings under the terms of the Offer is to be funded using BAE Systems' existing cash resources.
BofA Merrill Lynch, financial adviser to BAE Systems and BAE Systems Holdings, is satisfied that sufficient resources are available to BAE Systems Holdings to satisfy in full the Cash Consideration payable under the terms of the Offer.
10. Management, Directors and Employees
BAE Systems attaches great importance to the skills and experience of the existing management and employees of Norkom. BAE Systems intends to work with the existing management to structure the new combination of the Norkom business and Detica's NetReveal®business and to integrate them under that structure. BAE Systems intends that this structuring should offer opportunities to the existing management and employees of Norkom. Changes in responsibilities arising from this new structure should become clear when the new structure has been agreed and may result in a reduction in the number of people employed.
BAE Systems has no current intentions to change the main locations of Norkom's places of business, to re-deploy Norkom's fixed assets or to change materially the conditions of employment of Norkom's employees.
BAE Systems confirms that existing employment rights, including pension rights, of the employees of Norkom, will be fully safeguarded upon completion of the Offer.
Upon the Offer becoming or being declared unconditional in all respects, the non-executive directors of Norkom intend to resign from the Board of Norkom.
11. Expenses Reimbursement Agreement
Norkom has entered into an expenses reimbursement agreement dated 14 January 2011 with BAE Systems Holdings (the "Expenses Reimbursement Agreement"), the terms of which have been approved by the Panel. Under the Expenses Reimbursement Agreement, Norkom has agreed to pay specific, quantifiable third party costs and expenses incurred by BAE Systems Holdings in connection with the Offer (including vouched out of pocket expenses incurred by third party advisers to BAE Systems Holdings) in the circumstances outlined below. The liability of Norkom to pay these amounts is limited to a maximum amount equal to 1 per cent. of the total value of the entire issued share capital of Norkom (excluding any interest in such share capital of Norkom held by BAE Systems Holdings or any Associate of BAE Systems Holdings but including all Norkom Shares which are issued or unconditionally allotted before the time at which any Competing Offer closes or becomes effective) at the Offer price per Norkom Share. The circumstances in which such payment will be made are if:
• the Board of Norkom withdraws or adversely modifies or adversely qualifies its recommendation to Norkom Shareholders to accept the Offer or agrees or resolves to recommend a Competing Offer, in each case prior to the Offer being withdrawn or lapsing in accordance with its terms and the Offer lapses or does not become unconditional in all respects or effective within 6 months of such withdrawal, adverse modification or adverse qualification; or
• prior to the Offer being withdrawn or lapsing in accordance with its terms, a higher Competing Offer is announced (whether as a proposed or possible offer) and is not withdrawn (during the currency of the Offer) and that Competing Offer or another Competing Offer subsequently becomes effective or unconditional within the period of 9 months after the date the Offer lapses or is withdrawn in accordance with its terms.
Jefferies, the independent financial adviser to the Board, has confirmed in writing to the Panel that, in the opinion of the Board of Norkom and Jefferies, in the context of the Offer, the Expenses Reimbursement Agreement is in the best interests of Norkom and Norkom Shareholders.
12. Transaction Agreement
BAE Systems Holdings and Norkom have entered into an agreement dated 14 January 2011 (the "Transaction Agreement") setting out, among other things, various matters in relation to the conduct of the Offer.
In particular, under the Transaction Agreement Norkom has agreed:
• to terminate all current discussions and negotiations with any person other than BAE Systems Holdings, any Associate of BAE Systems Holdings or any person acting in concert with BAE Systems Holdings (a "Third Party") in respect of or in connection with the acquisition of control (as defined in the Takeover Rules) of Norkom (a "Third Party Transaction Proposal");
• that neither it nor any of its subsidiaries shall directly or indirectly, solicit, initiate (or initiate the recommencement of) any discussions with, or enquiries or proposals from, any Third Party in respect of or in connection with a Third Party Transaction Proposal during the period commencing on the date of this Agreement and ending on the earlier of (i) 31 July 2011, (ii) the date on which the Transaction Agreement is terminated in accordance with its provisions, (iii) the date on which the Offer is withdrawn by BAE Systems Holdings or lapses and (iv) the date that the Offer becomes unconditional in all respects or becomes effective (the "Exclusivity Period");
• to inform BAE Systems Holdings in writing of receipt of any Third Party Transaction Proposal (setting out details of the material terms and conditions of the Third Party Transaction Proposal); and
• for the duration of the Exclusivity Period, that in the event that Norkom receives a Third Party Transaction Proposal which is determined by the Board of Norkom to be in an amount which exceeds the value of the Offer, Norkom shall inform BAE Systems Holdings immediately in writing of such approach and the terms of the Third Party Transaction Proposal (an "Alternative Proposal Notice") and BAE Systems Holdings shall have 72 hours following the time it receives the Alternative Proposal Notice to communicate to Norkom a revision of the terms of the Offer, such that they are at least the same as, or more favourable than, the terms offered under such Third Party Transaction Proposal failing which Norkom may recommend such Third Party Transaction Proposal.
Further details of the Transaction Agreement will be set out in the Offer Document.
13. Norkom Share Option Plans and Norkom Share Awards
Appropriate proposals will be made to holders of Norkom Share Options and Norkom Share Awards in due course. Details of these proposals will be outlined in the Offer Document and set out in separate letters to be sent to holders of Norkom Share Options and Norkom Share Awards.
14. Disclosure of Interests in Norkom
As at 13 January 2011, being the latest practicable date prior to the date of this announcement, neither BAE Systems Holdings nor, so far as the directors of BAE Systems Holdings are aware, any person acting in concert with BAE Systems Holdings, has any interest in or holds any short position in any class of relevant securities of Norkom.
Neither BAE Systems Holdings nor any person acting in concert with BAE Systems Holdings has any arrangement in relation to Norkom Shares, or any securities convertible or exchangeable into Norkom Shares or options (including traded options) in respect of, or derivatives referenced to, Norkom Shares. For these purposes, 'arrangement' includes an indemnity or option arrangement, any agreement or understanding, formal or informal, of whatever nature, relating to relevant securities which is, or may be, an inducement to deal or refrain from dealing in such securities.
In view of the requirement of confidentiality and therefore the availability to BAE Systems Holdings of all relevant persons who are presumed to be acting in concert with BAE Systems Holdings to provide information, it has not been possible to ascertain all of the interest and dealings in relevant securities of Norkom of all relevant persons who are presumed to be acting in concert with BAE Systems Holdings for the purposes of the Offer. Any such additional interest(s) or dealing(s) will be discussed with the Panel and, as necessary, will be disclosed to Norkom Shareholders in the Offer Document or announced if requested by the Panel.
15. Compulsory Acquisition, Delisting and Cancellation of Trading
Upon the Offer becoming or being declared unconditional in all respects and sufficient acceptances having been received, it is the intention of BAE Systems Holdings to apply the provisions of Section 204 of the Act to acquire compulsorily any remaining Norkom Shares on the same terms as the Offer.
It is intended that, subject to and following the Offer becoming or being declared unconditional in all respects and sufficient acceptances having been received, BAE Systems Holdings will procure that Norkom applies for cancellation of the listing and trading of the Norkom Shares on ESM and on AIM. Cancellation of admission of the Norkom Shares to trading on ESM and AIM is likely to significantly reduce the liquidity and marketability of any Norkom Shares with respect to which the Offer has not been accepted. It is anticipated that, subject to any applicable requirements of the Irish Stock Exchange and the London Stock Exchange, cancellation of admission to trading on ESM and AIM will take effect no earlier than 20 Business Days after either (i) the date on which BAE Systems Holdings has, by virtue of shareholdings and acceptances of the Offer, acquired or agreed to acquire issued share capital carrying 75 per cent. of the voting rights of Norkom; or (ii) the first date of issue of compulsory acquisition notices under Section 204 of the Act, as applicable. BAE Systems Holdings will notify Norkom Shareholders when the required 75 per cent. acceptance threshold has been attained and will confirm that the notice period has commenced and the anticipated date of cancellation. Following such cancellation, BAE Systems Holdings intends to procure that Norkom is re-registered from a public limited company to a private limited company.
16. Overseas Shareholders
The availability of the Offer to persons not resident in Ireland or the United Kingdom may be affected by the laws of the jurisdiction in which they are resident. Persons who are resident in any jurisdiction or territory other than Ireland or the United Kingdom should obtain professional advice and observe any applicable requirements. Further details in relation to overseas shareholder will be contained in the Offer Document.
17. General
The Offer will be made subject to the conditions and further terms set out in Appendix I and to be set out in the Offer Document. The Offer Document will include full details of the Offer and the expected timetable and will be accompanied by the Form of Acceptance.
The Offer Document and the Form of Acceptance will be despatched to Norkom Shareholders and, for information only, to holders of Norkom Share Options and Norkom Share Awards, in due course. The Offer will be governed by the laws of Ireland and will be subject to the applicable requirements of the Takeover Rules, the Irish Stock Exchange, the London Stock Exchange, the UK Listing Authority and applicable laws.
Details of the bases of calculation and sources of certain information set out in this announcement are included in Appendix II. Certain terms used in this announcement are defined in Appendix IV.
This announcement is being made pursuant to Rule 2.5 of the Takeover Rules.
Responsibility Statements
The directors of Norkom accept responsibility for the information contained in this announcement relating to Norkom, the Norkom Group, the directors of Norkom and members of their immediate families, related trusts and persons connected with them, and for the recommendation and related opinions of the directors of Norkom contained in this announcement. To the best of the knowledge and belief of the directors of Norkom (who have taken all reasonable care to ensure that such is the case), the information contained in this 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 BAE Systems and BAE Systems Holdings accept responsibility for the information contained in this announcement; other than that relating to Norkom, the Norkom Group, the directors of Norkom and members of their immediate families, related trusts and persons connected with them, and any recommendation and related opinions of the directors of Norkom. To the best of the knowledge and belief of the directors of BAE Systems and BAE Systems Holdings (who have taken all reasonable care to ensure that such is the case), the information contained in this 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.
Financial Advisers
Jefferies, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Norkom and no one else in connection with the Offer and will not be responsible to anyone other than Norkom for providing the protections afforded to clients of Jefferies or for providing advice in relation to the Offer or any other matters referred to in this announcement.
Goodbody Corporate Finance and Goodbody Stockbrokers, which are regulated by the Central Bank of Ireland, are acting exclusively for Norkom and no one else in connection with the Offer and will not be responsible to anyone other than Norkom for providing the protections afforded to customers of Goodbody Corporate Finance and/ or Goodbody Stockbrokers, or for providing advice in relation to the Offer or any other matters referred to in this announcement.
BofA Merrill Lynch, a subsidiary of Bank of America Corporation, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for BAE Systems and BAE Systems Holdings and no one else in connection with the Offer and accordingly will not be responsible to anyone other than BAE Systems and BAE Systems Holdings for providing the protections afforded to clients of BofA Merrill Lynch nor for providing advice in relation to the Offer or any other matter referred to in this announcement.
General
This announcement does not constitute an offer to purchase, sell, subscribe for or exchange or the solicitation of an offer to purchase, sell, subscribe for or exchange any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Offer or otherwise.
The distribution of this announcement in or into certain jurisdictions may be restricted by the laws of those jurisdictions. Accordingly, copies of this announcement and all other documents relating to the Offer are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction. Persons receiving such documents (including, without limitation, nominees, trustees and custodians) should observe these restrictions. Failure to do so may constitute a violation of the securities laws
of any such jurisdiction.
Any response in relation to the Offer should be made only on the basis of the information contained in the Offer Document or any document by which the Offer is made.
This announcement is made pursuant to Rule 2.5 of the Takeover Rules.
Pursuant to Rule 2.6(c) of the Takeover Rules, this announcement will be available to Norkom and BAE Systems Holdings employees on Norkom's website (www.norkom.com) and BAE Systems' website (www.baesystems.com).
Forward-looking Statements
This announcement may contain certain forward-looking statements with respect to the financial condition, results of operations and business of the Norkom Group and/or the BAE Systems Group and certain plans and objectives of the Board of Norkom and/or the Boards of BAE Systems and BAE Systems Holdings. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words of similar meaning. These statements are based on assumptions and assessments made by the Board of Norkom and/or the Boards of BAE Systems and/ or BAE Systems Holdingsin light of their respective experience and their respective perception of historical trends, current conditions, expected future developments and other factors they believe appropriate. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this announcement could cause actual results or developments to differ materially from those expressed in or implied by such forward-looking statements.
Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. None of Norkom, BAE Systems or BAE Systems Holdings assumes any obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.
The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and publication of this announcement shall not give rise to any implication that there has been no change in the facts set out in this announcement since such date. Nothing contained in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Norkom, BAE Systems or BAE Systems Holdings except where expressly stated.
Rule 8 - Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Rules, if any person is, or becomes, 'interested' (directly or indirectly) in one per cent. or more of any class of "relevant securities" of Norkom, all "dealings" in any "relevant securities" of Norkom (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. (Dublin 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 lapses or is otherwise withdrawn or on which the Offer Period otherwise ends. If two or more persons co-operate on the basis of any agreement, either express or tacit, either oral or written, to acquire an "interest" in "relevant securities" of Norkom, they will be deemed to be a single person for the purpose of Rule 8.3 of the Takeover Rules.
Under the provisions of Rule 8.1 of the Takeover Rules, all "dealings" in "relevant securities" of Norkom, by Norkom or BAE Systems, or by any of their respective "associates", during the Offer Period must be disclosed by no later than 12.00 noon (Dublin 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 can be found on the Panel's website at www.irishtakeoverpanel.ie.
'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks in this paragraph, Dealing Disclosure Requirements, are defined in the Takeover Rules, 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, you should consult the Panel's website at www.irishtakeoverpanel.ie or contact the Panel on telephone number +353 (0) 1 678 9020; fax number +353 (0) 1 678 9289
No Profit Forecast
No statement in this announcement is intended to constitute a profit forecast for any period, nor should any statement be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for BAE Systems, BAE Systems Holdings or Norkom, as appropriate.
APPENDIX I
CONDITIONS TO THE OFFER
The Offer will comply with the Takeover Rules and, where relevant, the ESM Rules and the AIM Rules and will be subject to the terms and conditions set out in this document and to be set out in the Offer Document. The Offer will be governed by laws of Ireland and subject to the exclusive jurisdiction of the courts of Ireland, which exclusivity shall not limit the right to seek provisional or protective relief in the courts of another State during or after any substantive proceedings have been instituted in Ireland, nor shall it limit the right to bring enforcement proceedings in another State on foot of an Irish judgment.
The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (Dublin time) on the initial closing date (or such later time(s) and/or date(s) as BAE Systems Holdings may, with the consent of the Panel or in accordance with the Takeover Rules, decide) in respect of not less than 80 per cent. (or such lower percentage as BAE Systems Holdings may decide) in nominal value of the Norkom Shares Affected, provided that this condition shall not be satisfied unless BAE Systems Holdings shall have acquired or agreed to acquire (whether pursuant to the Offer or otherwise) Norkom Shares conferring in aggregate more than 50 per cent. of the voting rights then exercisable at a general meeting of Norkom.
For the purposes of this condition:
(i) any Norkom Shares which have been unconditionally allotted shall be deemed to carry the voting rights they will carry upon their being entered in the register of members of Norkom; and
(ii) the expression "Norkom Shares Affected" shall mean:
(A) Norkom Shares which have been issued or unconditionally allotted on or before the date the Offer is made; and
(B) Norkom Shares which have been issued or unconditionally allotted after that date but before the time at which the Offer closes, or such earlier date as BAE Systems Holdings may, subject to the Takeover Rules, decide (not being earlier than the date on which the Offer becomes unconditional as to acceptances or, if later, the initial closing date);
but excluding any Norkom Shares which, on the date the Offer is made, are held in the beneficial ownership of BAE Systems Holdings within the meaning of Section 204 of the Act;
(b) no national, federal, local or governmental commission, board, body, bureau, or other regulatory authority or agency, including courts and other judicial bodies, any competition, anti-trust or supervisory body or other governmental, regulatory agency or body or securities exchange, including any instrumentality or entity designed to act for or on behalf of any of the foregoing, in each case, having instituted or implemented any action, proceeding, investigation, enquiry, reference or suit or having made, enforced, enacted, issued or deemed applicable to the Offer any statute, regulation or order or having withheld any consent which would reasonably be expected to:
(i) make the Offer or the acquisition or the proposed acquisition of any shares in, or control of, Norkom by any member of the Wider BAE Systems Group void, unenforceable or illegal under the laws of any relevant jurisdiction or directly or indirectly prohibit or otherwise materially restrict or delay the implementation of, or impose material additional adverse conditions or obligations with respect thereto, or require amendment thereof, the Offer or the acquisition of any shares in, or control of, Norkom by any member of the Wider BAE Systems Group;
(ii) except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole or the Wider BAE Systems Group taken as a whole, require, prevent or delay the divestiture (or alter the terms of any proposed divestiture) by the Wider BAE Systems Group or the Wider Norkom Group of all or any substantial part of their respective businesses, assets or properties (including, without limitation, the shares or securities of any other member of the Norkom Group) or impose any limitation on their ability to conduct all or any part of their respective businesses and to own or control any of their respective assets or properties;
(iii) impose any material limitation or delay on the ability of BAE Systems Holdings to acquire, or to hold or to exercise effectively, directly or indirectly, all or any material rights of ownership of shares, Norkom Shares, (or the equivalent) in, or to exercise voting or management control over, Norkom or any subsidiary or subsidiary undertaking of Norkom which is material in the context of the Wider Norkom Group taken as a whole (each a 'Material Subsidiary') or on the ability of any member of the Wider Norkom Group to hold or exercise effectively, directly or indirectly, rights of ownership of shares (or the equivalent) in, or to exercise rights of voting or management control over, any member of the Wider Norkom Group;
(iv) except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole, require any member of the BAE Systems Group or any member of the Wider Norkom Group to acquire or offer to acquire any shares or other securities (or the equivalent) in, or any interest owned by, any member of the Wider Norkom Group owned by any third party;
(v) except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole, cause any member of the Wider Norkom Group to cease to be entitled to any authorisations, clearances, consents, grants, licences, permissions and approvals in Ireland used by it in the carrying on of its business; or
(vi) otherwise materially adversely affect the business, financial condition or results of operations of the Wider Norkom Group taken as a whole;
for the purposes of this Appendix I, the effects referred to in the foregoing sub-paragraphs (i) through (vi) are referred to as a "Restraint";
(c) having obtained from any board, body, bureau, or other regulatory authority or agency, including courts and other judicial bodies, or any Irish competition, anti-trust or supervisory body or other governmental, regulatory agency or body or securities exchange, including any instrumentality or entity designed to act for or on behalf of any of the foregoing and, for the avoidance of doubt, including the Committee on Foreign Investment in the United States, (each a "Governmental Authority") any Clearances required to be obtained or made by the Wider Norkom Group or BAE Systems Holdings in connection with the Offer (except, in each case, for any Clearance or additional instrument that does not impose a Restraint on Norkom or BAE Systems Holdings), it being understood that neither Norkom nor BAE Systems Holdings shall be required to make any material payments, other than filing or other fees payable to a Governmental Authority for seeking the relevant Clearance, all such Clearances remaining in full force and effect, there being no notified intention to revoke or vary or not to renew the same at the time at which the Offer becomes otherwise unconditional;
(d) all applicable waiting periods during which any Governmental Authority could, in respect of the Offer or the proposed acquisition of any shares or other securities (or the equivalent) in, or control of, Norkom or any member of the Wider Norkom Group by BAE Systems Holdings, institute or implement any legal action, proceeding or suit under the laws of any jurisdiction which would be reasonably expected to have a material adverse effect (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole), having expired, lapsed or been terminated;
(e) except as disclosed, there being no provision of any arrangement, agreement, licence, permit, franchise, facility, lease or other instrument to which any member of the Norkom Group is a party or by or to which any such member or any of its respective assets is bound, entitled or be subject and which, in consequence of the Offer would or would be reasonably expected to result (except where, in any of the following cases, the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as whole) in:
(i) any monies borrowed by, or any indebtedness or liability (actual or contingent) of, or any grant available to any member of the Norkom Group becoming, or becoming capable of being declared, repayable immediately or prior to their or its stated maturity or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited;
(ii) the creation or enforcement of any mortgage, charge or other security interest wherever existing or having arisen over the whole or any part of the business, property or assets of any member of the Norkom Group or any such mortgage, charge or other security interest becoming enforceable;
(iii) any such arrangement, agreement, licence, permit, franchise, facility, lease or other instrument or the rights, liabilities, obligations or interests of any member of the Norkom Group thereunder, or the business of any such members with, any person, firm or body (or any arrangement or arrangements relating to any such interest or business) being terminated or adversely modified or any adverse action being taken or any obligation or liability arising thereunder;
(iv) any assets or interests of, or any asset the use of which is enjoyed by, any member of the Norkom Group being or falling to be disposed of or charged, or ceasing to be available to any member of the Norkom Group or any right arising under which any such asset or interest would be required to be disposed of or charged or would cease to be available to any member of the Norkom Group otherwise than in the ordinary course of business;
(v) any Material Subsidiary ceasing to be able to carry on business; or
(vi) the creation of any liability or liabilities (actual or contingent) by any member of the Norkom Group;
unless, if any such provision exists, such provision shall have been waived, modified or amended on terms reasonably satisfactory to BAE Systems Holdings;
(f) save as disclosed and/or save as publicly disclosed by Norkom by the making of an announcement to the Irish Stock Exchange and/or the London Stock Exchange at any time up to 14 January 2011 (being the date of this announcement) or otherwise publicly disclosed in the interim results of the Norkom Group for the period ended 30 September 2010, no member of the Norkom Group having after the date of this announcement:
(i) issued or agreed to issue additional shares of any class, or securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible or exchangeable securities save with the consent of BAE Systems Holdings and the Panel, (except for (A) issues to Norkom or wholly owned subsidiaries of Norkom (B) upon any exercise of Norkom Share Options);
(ii) recommended, declared, paid or made or issued any bonus issue, dividend or other distribution other than bonus issues, dividends or other distributions lawfully paid or made by a wholly owned subsidiary of Norkom to another member of the Norkom Group;
(iii) save for intra-Norkom Group transactions, made or authorised, proposed or announced any change in its loan capital (save in respect of loan capital which is not convertible into share capital and is not material (in value terms or otherwise) in the context of the Norkom Group taken as a whole);
(iv) implemented, authorised, proposed or announced its intention to propose any merger, demerger, reconstruction, amalgamation, scheme or (except in the ordinary and usual course of trading) acquisition or disposal of (or of any interest in) assets or shares (or the equivalent thereof) in any undertaking or undertakings (except in any such case where the consequences of any such merger, demerger, reconstruction, amalgamation, scheme, acquisition or disposal would not be material (in value terms or otherwise) in the context of the Norkom Group taken as a whole);
(v) except in the ordinary course of business entered into or materially improved, or made any offer (which remains open for acceptance) to enter into or materially improve, the terms of any non-executive director (save as disclosed) or the terms of the employment contract with any director of Norkom or any member of the Norkom Senior Management Team or permitted a variation in the terms or rules governing the Norkom Share Option Plans (save as disclosed);
(vi) issued any loan capital or debentures or (save in the ordinary course of business and save for intra-Norkom Group transactions and except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Norkom Group, taken as a whole) incurred any indebtedness;
(vii) purchased, redeemed or repaid or announced any offer to purchase, redeem or repay any of its own shares or other securities (or the equivalent) or reduced or made any other change to any part of its share capital;
(viii) merged with any body corporate, partnership or business, or (except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Norkom Group, taken as a whole) acquired or disposed of, transferred any asset or mortgaged or encumbered any assets or any right, title or interest in any asset (including shares and trade investments) other than in the ordinary course of business;
(ix) (except in the ordinary course of business or where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole or save as disclosed) entered into or varied in any respect any contract, transaction, arrangement or commitment or announced its intention to enter into or vary in any respect any contract, transaction, arrangement 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 would be materially restrictive on the business of the Wider Norkom Group taken as a whole;
(x) (except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole) 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 to carry on all or a substantial part of any business;
(xi) (except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole) made or agreed to any significant change to the terms of the trust deeds (including the termination or partial termination of the trusts) constituting the pension schemes established for its directors and/or employees and/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 involving the appointment of a trust corporation;
(xii) save in respect of a voluntary solvent liquidation of a member of the Wider Norkom Group which was solvent and dormant at the relevant time or a member of the Wider Norkom Group which is not a Material Subsidiary, taken any corporate action or (except where the consequences thereof would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole) had any legal proceedings instituted against it in respect of its winding-up, dissolution, examination or reorganisation or for the appointment of a receiver, examiner, administrator, administrative receiver, trustee or similar officer of all or any part of its assets or revenues, or (A) been the subject of any analogous proceedings in any jurisdiction, or (B) appointed any analogous person in any jurisdiction in which Norkom or any Material Subsidiary shall be incorporated or carry on any business;
(xiii) entered into any agreement, contract or binding commitment or passed any resolution or made any offer or announcement with respect to, or to effect any of the transactions, matters or events set out in this condition (without prejudice to the exceptions to each paragraph with regard to materiality and other matters); or
(xiv) except in the case of amendments to the memoranda or articles of association of subsidiaries which are not material, amended its memorandum and articles of association (save as agreed with BAE Systems Holdings).
(g) save as disclosed and/or save as publicly disclosed by Norkom by the making of an announcement to the Irish Stock Exchange and/or the London Stock Exchange at any time up to 14 January 2011 (being the date of this announcement) there not having arisen since the date of this announcement any adverse change or adverse deterioration in the business, financial condition or results of operations of the Norkom Group taken as a whole (save to an extent which would not be material (in value terms or otherwise) in the context of the Wider Norkom Group taken as a whole); and
(h) BAE Systems Holdings not having discovered that any financial, business or other information concerning the Norkom Group which has been publicly disclosed is misleading or contains a misrepresentation of fact (save where the consequences of which would not be material (in value terms only) in the context of the Wider Norkom Group taken as a whole).
For the purposes of the conditions set out above:
(i) "Clearances", means all consents, clearances, permissions and waivers that need to be obtained, all applications and filings that need to be made and all waiting periods that may need to have expired, from or under the laws or regulations applied by any Governmental Authority in connection with the implementation of the Offer and, in each case, that constitute Conditions; and any reference to Conditions having been "satisfied" shall be construed as meaning that the foregoing have been obtained, or where appropriate, made or expired in accordance with the relevant Condition;
(ii) "disclosed" means fairly disclosed (i) in writing by or on behalf of Norkom to any member of the BAE Systems Group Holdings or its respective employees, officers or professional advisers at any time in the period from 7 December 2010 up to 14 January 2011 (being the date of this announcement) or (ii) in documentation, notified to BofA Merrill Lynch in writing as being available for inspection, contained in the virtual data room compiled in relation to the Offer and hosted by Merrill Datasite at 13 January 2011);
(iii) "intra-Norkom Group transactions" means transactions between two or more members of the Norkom Group;
(iv) "substantial interest" means an interest in 20 per cent. or more of the voting equity capital of an undertaking;
(v) "Wider BAE Systems Group" means the BAE Systems Group, its associated undertakings and any entities in which any member of the BAE Systems Group holds a substantial interest; and
(vi) "Wider Norkom Group" means the Norkom Group, its associated undertakings and any entities in which any member of the Norkom Group holds a substantial interest.
Subject to the requirements of the Panel, BAE Systems Holdings reserves the right (but shall be under no obligation) to waive, in whole or in part, all or any of the conditions except for (a).
The Offer will lapse unless all the conditions set out above are fulfilled or (if capable of waiver) waived or where appropriate determined by BAE Systems Holdings in its reasonable opinion to have been or remain satisfied by midnight on the day which is 21 days after the later of the initial closing date and the date on which the Offer becomes or is declared unconditional as to acceptances (or such later date as BAE Systems Holdings may, with the consent of the Panel or in accordance with the Takeover Rules, decide). BAE Systems Holdings shall be under no obligation to waive or treat as fulfilled any of conditions set out at (b) to (h) inclusive by a date earlier than the date specified above for the satisfaction thereof notwithstanding that the other conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment.
If BAE Systems Holdings is required to make an offer for Norkom Shares under the provisions of Rule 9 of the Takeover Rules, BAE Systems Holdings may make such alterations to any of the above conditions as are necessary to comply with the provisions of that rule.
BAE Systems Holdings reserves the right, following consultation with Norkom and with the consent of the Panel, to elect to implement the acquisition of the Norkom Shares by way of a scheme of arrangement under Section 201 of the Act. In such event, the scheme of arrangement will be implemented on the same terms (subject to appropriate amendments), so far as applicable, as those which would apply to the Offer. In particular, the condition at (a) will not apply and the scheme of arrangement will become effective and binding on the following:
(i) approval at a court meeting or any separate class meeting, if applicable, which may be required by the court, (or any adjournment thereof) by a majority in number of the Norkom Shareholders present and voting, either in person or by proxy, representing 75 per cent. or more in value of the Norkom Shares held by such holders;
(ii) the resolutions required to approve and implement the scheme of arrangement and to be set out in a notice of extraordinary general meeting of the holders of the Norkom Shares being passed by the requisite majority at such extraordinary general meeting;
(iii) the sanction of the scheme of arrangement and confirmation of any reduction of capital involved therein by the court (in both cases with or without modifications, on terms reasonably acceptable to BAE Systems Holdings and Norkom); and
(iv) office copies of the orders of the court sanctioning the scheme of arrangement and confirming the reduction of capital involved therein and the minute required by Section 75 of the Act in respect of the reduction of capital being delivered for registration to the Registrar of Companies and the orders and minute confirming the reduction of capital involved in the scheme of arrangement being registered by the Registrar of Companies in Ireland.
APPENDIX II
BASES OF CALCULATION AND SOURCES OF INFORMATION
In this announcement, unless otherwise stated or the context otherwise requires, the following bases and sources have been used:
(a) the historical share price is sourced from the Irish Stock Exchange
(b) the value of the whole of the existing issued share capital of Norkom is based upon the entire issued ordinary share capital at the date of this announcement, namely 90,018,697 Norkom Shares;
(c) unless otherwise stated, the financial information concerning Norkom has been extracted from the annual reports and audited accounts of Norkom for the relevant period;
(d) references to a percentage of Norkom Shares are based on the number of Norkom Shares in issue as set out at paragraph (b);
(e) references to the arrangements in place between Norkom and BAE Systems Holdings regarding an expenses reimbursement agreement are sourced from the terms of the Expenses Reimbursement Agreement approved by the Panel;
(f) references to the arrangements in place between Norkom and BAE Systems Holdings regarding a transaction agreement are sourced from the Transaction Agreement; and
(g) the entire issued and to be issued share capital (fully diluted share capital) of Norkom is calculated on the basis of:
· the number of issued Norkom Shares, as set out in paragraph (b) above; and
· the "in the money" options in respect of 13,204,039 Norkom Shares outstanding under the Norkom Share Option Plans as at 13 January 2011, the latest practicable date prior to this announcement and which are, or are expected to become, exercisable on or before the Offer becoming or being declared unconditional in all respects.
APPENDIX III
PRE-CONDITION
The Offer is conditional upon BAE Systems Holdings having received irrevocable undertakings in a form satisfactory to BAE Systems Holdings to accept or procure the acceptance of the Offer in respect of approximately 44.9 per cent. of the entire issued share capital of Norkom (on a fully diluted basis) as follows:
Norkom Directors & Senior Management Team
From the following Norkom Directors and Norkom Senior Management Team in respect of their legal or beneficial holdings of Norkom Shares, Norkom Share Options and Norkom Share Awards, totalling in aggregate, 20,313,861 Norkom Shares, representing approximately 19.7 per cent. of the existing issued share capital of Norkom (on a fully diluted basis).
|
Senior Management Team |
Total number of Norkom Shares |
Total number of Share Options/Awards |
Percentage of |
|
|
|
|
|
|
Paul Kerley |
4,992,739 |
2,472,870 |
7.2% |
|
Cecil Hayes |
1,513,924 |
900,000 |
2.3% |
|
Kilian Colleran |
2,500,650 |
940,311 |
3.3% |
|
Liam Griffin |
1,449,837 |
940,312 |
2.3% |
|
Liam Davis |
132,910 |
873,750 |
1.0% |
|
John Keane |
112,595 |
568,750 |
0.7% |
|
Brian Rowan |
120,625 |
294,375 |
0.4% |
|
Cormac Reilly |
40,743 |
255,000 |
0.3% |
|
Joe Friscia |
0 |
1,201,935 |
1.2% |
|
|
|
|
|
|
Total Senior Management Team's Interests |
10,864,023 |
8,447,303 |
18.7% |
|
|
|
|
|
|
Luc Philips |
92,000 |
|
0.1% |
|
Kieran Nagle |
430,540 |
|
0.4% |
|
Shane Reihill |
380,848 |
|
0.4% |
|
Gavin O'Reilly |
99,147 |
|
0.1% |
|
Total Non-Executive Directors' Shares |
1,002,535 |
|
1.0% |
|
|
|
|
|
|
Total Interests |
20,313,861 |
|
19.7% |
|
|
|
|
|
TVC Holdings plc and others
From TVC Holdings plc to accept, or procure the acceptance of, the Offer in respect of, in aggregate, 25,814,346 Norkom Shares, representing approximately 25 per cent. of the fully diluted share capital of Norkom, including 701,013 Norkom Shares beneficially owned by John Tracey and 826,431 Norkom Shares beneficially owned by Shane Reihill.
From the TVC Connected Person to accept, or procure the acceptance of, the Offer in respect of, in aggregate, 266,113 Norkom Shares representing approximately 0.3 per cent. of the fully diluted share capital of Norkom.
APPENDIX IV
DEFINITIONS
|
Act |
the Companies Act 1963 of Ireland, as amended |
|
Acting in Concert |
shall have the meaning given to that term in the Irish Takeover Panel Act 1997, as amended
|
|
AIM |
the Alternative Investment Market operated by the London Stock Exchange
|
|
AIM Rules |
the AIM Rules for Companies published by the London Stock Exchange from time to time
|
|
Associate |
shall have the meaning given to that term in the Takeover Rules
|
|
BAE Systems |
BAE Systems plc, a company incorporated under the laws of United Kingdom with registered number 01470151
|
|
BAE Systems Holdings |
BAE Systems (Holdings) Limited, a company incorporated under the laws of United Kingdom with registered number 05265414
|
|
BAE Systems Holdings Directors, Directors of BAE Systems Holdings or Board of BAE Systems Holdings
|
the directors of BAE Systems Holdings at the date of this announcement
|
|
BAE Systems Group |
BAE Systems and its subsidiaries and subsidiary undertakings from time to time and "member of the BAE Systems Group" shall be construed accordingly
|
|
BofA Merrill Lynch |
Merrill Lynch International, a subsidiary of Bank of America Corporation, financial adviser to BAE Systems and BAE Systems Holdings
|
|
Business Day |
any day (other than a public holiday, Saturday or Sunday) on which clearing banks in Dublin are open for normal business |
|
Cash Consideration |
for each Norkom Share €2.10 in cash |
|
Closing Price |
the closing middle market price of a Norkom Share as derived from the Irish Stock Exchange
|
|
Competing Offer |
any offer by a party other than BAE Systems Holdings (or an Associate of BAE Systems Holdings or a person Acting in Concert with BAE Systems Holdings) which is publicly disclosed by means of announcement pursuant to the Takeover Rules and which, if completed, would result in such third party or its Associates holding more than 50% of the voting and other equity securities of Norkom
|
|
Conditions |
the conditions to the Offer set out in Appendix I |
|
entire issued and to be issued share capital of Norkom |
(i) the entire issued ordinary share capital at the date of this announcement, namely 90,018,697 Norkom Shares; and (ii) the "in the money" options in respect of 13,204,039 Norkom Shares outstanding under the Norkom Share Option Plans as at 13 January 2011, the latest practicable date prior to this announcement and which are, or are expected to become, exercisable on or before the Offer becoming or being declared unconditional in all respects
|
|
ESM |
the Enterprise Securities Market, a market operated by the Irish Stock Exchange |
|
ESM Rules |
the ESM Rules for Companies published by the Irish Stock Exchange from time to time |
|
Euro or € or EUR |
the currency unit of participating member states of the European Union as defined in Recital (2) of Council Regulation 974/98/EC |
|
Expenses Reimbursement Agreement
|
has the meaning ascribed to that term in paragraph 11 of this announcement |
|
Form of Acceptance |
the form of acceptance relating to the Offer which will accompany the Offer Document
|
|
Goodbody Corporate Finance |
Goodbody Corporate Finance, financial adviser and ESM adviser to Norkom |
|
Goodbody Stockbrokers |
Goodbody Stockbrokers, broker to Norkom |
|
Ireland |
the island of Ireland excluding Northern Ireland and the word "Irish" shall be construed accordingly |
|
Irish Stock Exchange
|
The Irish Stock Exchange Limited |
|
Jefferies |
Jefferies International Limited, Rule 3 and financial adviser to Norkom |
|
London Stock Exchange
|
London Stock Exchange plc |
|
Norkom or the Company
|
Norkom Group plc |
|
Norkom Directors, Directors of Norkom or Board of Norkom
|
the directors of Norkom at the date of this announcement
|
|
Norkom Group |
Norkom and its subsidiaries and subsidiary undertakings
|
|
Norkom Senior Management Team |
Paul Kerley, Cecil Hayes, Liam Davis, Liam Griffin, Kilian Colleran, John Keane, Brian Rowan, Cormac Reilly and Joe Friscia
|
|
Norkom Share Awards |
awards in respect of Norkom Shares under the Norkom Group Limited 2006 Share Option Plan
|
|
Norkom Share Option Plans |
the Norkom Group Limited 2006 Share Option Plan and the Norkom Technologies Limited Share Option Plan |
|
Norkom Share Options |
options to subscribe for Norkom Shares granted pursuant to the Norkom Share Option Plans |
|
Norkom Shareholders
|
holders of Norkom Shares |
|
Norkom Shares
|
the existing unconditionally allotted or issued and fully paid ordinary shares of €0.01 each in the capital of Norkom and any further such shares which are unconditionally allotted or issued before the date on which the Offer closes (or such earlier date as BAE Systems Holdings may, with the Panel's consent or subject to the Takeover Rules, decide)
|
|
Northern Ireland |
the counties of Antrim, Armagh, Derry, Down, Fermanagh and Tyrone on the island of Ireland |
|
Offer |
the recommended offer to be made by BAE Systems Holdings to acquire the entire issued and to be issued share capital of Norkom on the terms and subject to the conditions to be set out in the Offer Document and the Form of Acceptance, and where the context so requires, any subsequent revision, variation, extension or renewal of such offer
|
|
Offer Document |
the document detailing the terms and conditions of the Offer to be sent to Norkom Shareholders
|
|
Offer Period |
means the period commencing on 26 November 2010
|
|
Panel
|
the Irish Takeover Panel |
|
Restricted Jurisdiction |
any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information is sent or made available to Norkom Shareholders in that jurisdiction
|
|
Takeover Rules |
the Irish Takeover Panel Act, 1997, Takeover Rules 2007, as amended |
|
Transaction Agreement |
has the meaning ascribed to that term in paragraph 12 of this announcement
|
|
TVC Connected Person |
Irene McCullough |
|
UK or United Kingdom |
the United Kingdom of Great Britain and Northern Ireland (and its dependent territories) |
All references to time in this document are to Dublin time.
Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.
Any reference to "subsidiary undertaking", "associated undertaking" and "undertaking" have the meanings given by the European Communities (Companies: Group Accounts) Regulations, 1992.
Any reference to "subsidiary" has the meaning given to it by Section 155 of the Act.
Any references to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof. Any reference to any legislation is to Irish legislation unless specified otherwise.
This information is provided by RNS
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