Offer for Softtechnet
NewMedia SPARK PLC
26 May 2000
Not for release, publication or distribution in, into or from the
United States, Canada, Australia or Japan
NewMedia SPARK plc ('SPARK')
Recommended Offer for Softtechnet.com plc ('Softtechnet')
Summary of the Offer
The Boards of SPARK and Softtechnet announce the terms of a
recommended offer, to be made by Peel Hunt plc, on behalf of
SPARK, for the whole of the issued and to be issued share capital
of Softtechnet.
Key features of the Offer:
- The Offer is on the basis of 4 new SPARK Shares and 1 new
SPARK Warrant for every 10 Softtechnet Shares.
- The Offer values each Softtechnet Share at 24p and the entire
existing issued share capital of Softtechnet at approximately
£33.5 million. The Offer represents a premium of 65.5 per cent.
over the closing middle-market price of 14.5p for each Softtechnet
Share on 25 May 2000.
- The Board of Softtechnet, which has been advised by Grant
Thornton, is unanimously recommending that Softtechnet
Shareholders accept the Offer.
- Irrevocable undertakings have been received from the Board of
Softtechnet, Standen Consult Limited and PNT Capital Advisors (an
adviser to Softtechnet) to accept the Offer in respect of
shareholdings which amount, in aggregate, to 11,065,000
Softtechnet Shares, representing approximately 7.92 per cent. of
the existing issued ordinary share capital of Softtechnet. In the
event that a competing offer is announced by a third party, these
undertakings will remain binding.
- Tony Sarin, the Chief Executive of Softtechnet, has agreed to
join the Board of SPARK as an executive director upon the Offer
becoming unconditional in all respects.
Reasons for the Offer:
- The Enlarged Group will have a strong balance sheet, having
invested approximately £130 million in its portfolio and having
cash resources of over £45 million.
- Softtechnet brings significant expertise and infrastructure
in the Indian technology and Internet markets which SPARK has
identified as an area for expansion.
- SPARK will benefit from Tony Sarin, Softtechnet's Chief
Executive, joining the Board of SPARK in an executive capacity.
He will also act as Chairman of the wholly owned Indian investment
subsidiary, SPARK India. Sanjit Talukdar, a Softtechnet director,
will be appointed as CEO of SPARK India and will have a key
advisory role within the Enlarged Group.
- The merger of SPARK and Softtechnet represents a pioneering
example of two quoted technology and Internet investment companies
choosing to come together in order to create a stronger and
enlarged group.
Commenting on the Offer:
Mike Whitaker, Chief Executive of SPARK, said:
'The merger of Softtechnet with SPARK will further strengthen the
Enlarged Group's balance sheet, give us access to investment and
businesses co-operation opportunities in the strategically
important Indian market, and will also consolidate our position as
the leading technology and Internet investment Group quoted in the
UK.'
Tony Sarin, Chief Executive of Softtechnet, said:
'We are pleased to announce this merger with SPARK. SPARK has a
developed an infrastructure and a strong management team which can
build on the progress we have made since our AIM admission,
particularly in relation to our developments in the Indian market.
The specialist Internet and technology investment strategy of
SPARK complements our strategy of pre-IPO investments, resulting
in a combined ability to nurture investee companies from inception
to IPO.
The Board of Softtechnet now believes that the need for
consolidation in the industry is apparent and that the business
can be developed faster towards its maximum potential by merging
with another leading participant. Becoming part of the SPARK
Group should provide an exciting opportunity to create an enlarged
business and allow Softtechnet Shareholders to participate in the
activities of the largest specialist Internet and technology
investment company quoted in the UK.'
This summary should be read in conjunction with the accompanying
full announcement. The Offer will be subject to the terms and
conditions set out or referred to in Appendix I to the
accompanying full announcement.
Enquiries:
Michael Whitaker - NewMedia SPARK plc:
020 7851 7600
David Davies - Peel Hunt plc:
020 7418 8900
Tony Sarin - Softtechnet.com plc:
020 7713 6886
Gerald Beaney - Grant Thornton:
020 7728 2589
Tim Anderson / Isabel Petre - Buchanan Communications:
020 7466 5000
The availability of the Offer to persons outside the United
Kingdom may be affected by the laws of the relevant jurisdictions.
Such persons should inform themselves about and observe any
applicable requirements.
The Offer will not be made, directly or indirectly, in, into or
from or by use of the mails or any other means or instrumentality
(including, without limitation, facsimile transmission, telex,
telephonic or electronic transmission) of interstate or foreign
commerce of, or any facilities of a national securities exchange
of, Australia, Canada, Japan or the United States, and will not be
capable of acceptance by any such use, means, instrumentality or
facilities or from within Australia, Canada, Japan or the United
States. Accordingly, copies of this announcement and any other
documents relating to the Offer are not being, and must not be,
mailed, transmitted or otherwise distributed or sent in or into or
from Australia, Canada, Japan or the United States and persons
receiving this announcement (including custodians, nominees and
trustees) must not distribute or send it in, into or from
Australia, Canada, Japan or the United States. Doing so may
render invalid any related purported acceptance of the Offer.
Peel Hunt plc, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, has approved this
document solely for the purposes of Section 57 of the Financial
Services Act 1986. Peel Hunt plc is acting for SPARK and no-one
else in connection with the Offer and will not be responsible to
anyone other than SPARK for providing the protections afforded to
customers of Peel Hunt plc nor for giving advice in relation to
the Offer.
Grant Thornton is acting for Softtechnet and no-one else in
connection with the Offer and will not be responsible to anyone
other than Softtechnet for providing the protections afforded to
clients of Grant Thornton nor for giving advice in relation to the
Offer.
The new SPARK Shares and new SPARK Warrants to be issued pursuant
to the Offer have not been, nor will they be, registered under the
United States Securities Act of 1933, as amended nor under the
relevant securities laws of Australia, Canada, Japan or any state
of the United States and may not (except in the case of the United
States, pursuant to an applicable exemption from the Securities
Act) be offered, sold or delivered, directly or indirectly, in or
into Australia, Canada, Japan or the United States.
This announcement does not constitute an offer or invitation to
purchase any securities.
Not for release or distribution in, into or from the United
States, Canada, Australia or Japan.
NewMedia SPARK plc ('SPARK')
Recommended Offer for Softtechnet.com plc ('Softtechnet')
Introduction
The Boards of SPARK and Softtechnet announce the terms of a
recommended offer by SPARK to acquire the whole of the issued and
to be issued share capital of Softtechnet. The Offer will be made
by Peel Hunt plc on behalf of SPARK. The Offer values each
Softtechnet Share at 24p and the entire issued share capital of
Softtechnet at approximately £33.5 million.
The Offer is conditional, inter alia, upon SPARK Shareholders
passing appropriate resolutions to authorise the directors of
SPARK to allot the new SPARK Shares and the new SPARK Warrants and
on the admission of the new SPARK Shares and new SPARK Warrants to
trading on AIM. The resolutions are to be proposed at an
Extraordinary General Meeting of SPARK.
Certain terms used in this announcement are defined in Appendix
II.
Terms of the Offer
On behalf of SPARK, Peel Hunt plc will offer to acquire, on the
terms and subject to the conditions set out in Appendix I and the
further terms to be set out in the formal Offer Document and the
Form(s) of Acceptance, all of the Softtechnet Shares. The Offer
will be made on the basis of:
4 new SPARK Shares and 1 new SPARK Warrant for every 10
Softtechnet Shares
and so in proportion for any other number of Softtechnet Shares
held. Fractional entitlements to new SPARK Shares and new SPARK
Warrants will be disregarded and will not be issued to Softtechnet
Shareholders.
The Offer values each Softtechnet Share at 24p and the issued
share capital of Softtechnet at approximately £33.5 million. This
represents a premium of approximately 65.5 per cent. over the
closing middle-market price of 14.5p for a Softtechnet Share on 25
May 2000, being the last dealing day prior to the date of this
announcement.
Recommendation
The Board of Softtechnet, which has been so advised by Grant
Thornton, considers the terms of the Offer to be fair and
reasonable. Accordingly, the Board of Softtechnet intends
unanimously to recommend all Softtechnet Shareholders to accept
the Offer, as the directors of Softtechnet have irrevocably
undertaken to do in respect of their own beneficial shareholdings.
In providing this advice, Grant Thornton has taken into account
the commercial assessments of the directors of Softtechnet.
Background to and reasons for the Offer
Since its flotation on AIM in October 1999, SPARK has made
substantial progress. The Company has invested approximately £130
million in a portfolio of 39 investments, including the £85
million acquisition of the leading Swedish incubator Cell ICD and
its portfolio in March of this year. SPARK is now the largest
specialist Internet and technology investment company quoted in
the UK, with offices in London and Stockholm, a substantial and
well-diversified investment portfolio, and one of the largest
specialist investment teams operating in this area.
SPARK's preliminary results for the period to 31 March 2000, which
are also announced today, show a pre-tax profit of approximately
£2.9 million together with further unrealised portfolio gains
transferred to reserves of approximately £18 million. SPARK's
stated net asset value as at 31 March 2000 was approximately 60p
per share, including cash resources of approximately £33 million.
SPARK has made further investments since 31 March and its present
cash resources are approximately £23 million.
SPARK's aim is to build further upon its leadership position in
this area, and the acquisition of Softtechnet will represent a
significant further step forwards. The two companies are highly
complementary, and advantages of the merger include:
- The Enlarged Group will have a strong balance sheet, having
invested approximately £130 million in its portfolio and
having cash resources of over £45 million. Both Boards
believe that balance sheet strength is of considerable
importance in current turbulent market conditions.
- Softtechnet brings significant expertise and infrastructure
in the Indian technology and Internet markets. SPARK had
identified the Indian market as a particularly attractive
area for expansion but has to date lacked the expertise to
develop an Indian investment division of its own. The
Enlarged Group will benefit from a wholly owned Indian
investment subsidiary to be re-named SPARK India, which is
strategically positioned to make significant further
investments in this area.
- SPARK will benefit from Tony Sarin, Softtechnet's Chief
Executive, joining the SPARK Board in an executive capacity.
He will also act as Chairman of SPARK India. Sanjit Talukdar
will be appointed as CEO of SPARK India and will have a key
advisory role within the Enlarged Group. SPARK also hopes to
retain the interest and advisory input of a number of other
Softtechnet non-executive Directors and strategic advisers.
The merger of SPARK and Softtechnet represents a pioneering
example of two quoted technology and Internet investment companies
choosing to come together in order to create a stronger and
enlarged group. Both Boards believe there are at present too many
quoted Internet investment companies, and that many of them lack
the scale of organisational or financial resources necessary to
operate effectively in this area. SPARK therefore anticipates
further consolidation in this area, and believes that the Enlarged
Group will be strongly placed to lead this consolidation.
Proposed director and proposed CEO of SPARK India
Tony Sarin is a senior equity partner of Morley & Scott, a top
thirty-five UK firm of chartered accountants. As well as being
one of the four senior partners on the firm's executive committee,
he is responsible for advising a substantial corporate client
base. Tony has been invited to sit on various committees,
including the Bank of England Small Business Panel advising on
Asian businesses and the Asian Business Association where he was
recently elected as Vice-Chairman. The Asian Business Association
works directly under the umbrella of the London Chamber of
Commerce where Tony was recently elected as a Council Member. He
is a member one of the sub committees of the UK Government's Task
Force for 'New Deal' and is a director of Quercus Enterprises
Limited, a property investment company
Sanjit Talukdar has over ten years' investment related experience.
He has worked with leading financial institutions including Credit
Suisse First Boston and Foreign and Colonial Emerging Markets
Limited, where he launched one of the first open-ended funds to
invest in India. He is a director of PNT Capital Advisors, one of
the founding shareholders of Softtechnet and formerly investment
sub-adviser to the Aberdeen India Fund. Sanjit was a board member
of Aberdeen India from March 1997 until its merger in May 1999. He
is a professional economist and holds degrees from both Oxford
University and the London School of Economics.
Irrevocable undertakings to accept the Offer
Irrevocable undertakings have been received from the Board of
Softtechnet, Standen Consult Limited and PNT Capital Advisors (an
adviser to Softtechnet) to accept the Offer in respect of
shareholdings which amount, in aggregate, to 11,065,000
Softtechnet Shares, representing approximately 7.92 per cent. of
the existing issued ordinary share capital of Softtechnet. In the
event that a competing offer is announced by a third party, these
undertakings will remain binding.
New SPARK Warrants
The Board of SPARK will use its reasonable endeavours to have the
new SPARK Warrants admitted to trading on AIM no later than the
date of admission of the new SPARK Shares to trading on AIM. Each
new SPARK Warrant will give a right to subscribe for one SPARK
Share at any time during the three years from the date of
admission of the new SPARK Warrants to trading on AIM, at an
exercise price of 75p per new SPARK Share.
The Board of SPARK wishes to make the new SPARK Warrants available
to all continuing shareholders in SPARK and, accordingly, a bonus
issue of new SPARK Warrants is expected to be made, following the
Offer being declared or becoming unconditional in all respects, by
SPARK to existing shareholders in SPARK on the basis of 1 new
SPARK Warrant for every 10 existing SPARK Shares held.
Softtechnet's directors and employees
The Board of Softtechnet has agreed to resign upon the Offer
becoming or being declared unconditional in all respects. SPARK
has confirmed that, in the event that the Offer becomes or is
declared wholly unconditional, the existing employment rights,
including pension rights, of all employees of Softtechnet will be
fully safeguarded.
Softtechnet Warrants
The Board of SPARK will make appropriate proposals in due course
to holders of Softtechnet Warrants to ensure that their interests
are safeguarded.
Disclosure of Interests in Softtechnet
Stanley Hollander, a non-executive director of SPARK, holds
375,000 Softtechnet Shares.
Cancellation of trading on AIM of Softtechnet Shares
As soon as it is appropriate and possible to do so and subject to
the Offer becoming or being declared unconditional in all
respects, SPARK intends to apply for the cancellation of trading
of Softtechnet Shares on AIM.
In addition, on receipt of sufficient acceptances or other
acquisition of Softtechnet Shares, SPARK intends to apply the
provisions of sections 428 to 430F of the Companies Act 1985 to
acquire compulsorily any Softtechnet Shares that have not been
assented to or acquired pursuant to the Offer or otherwise.
Overseas Softtechnet Shareholders
The availability of the Offer to Softtechnet Shareholders not
resident in the UK or who are citizens in countries other than the
UK, may be affected by the laws of the relevant jurisdiction.
Softtechnet Shareholders who are not resident in the UK should
inform themselves about and observe any applicable requirements.
Unless otherwise determined by SPARK and Softtechnet, the Offer
will not be made, directly or indirectly, in into or from, or by
use of the mails of, or by any means or instrumentality
(including, without limitation, facsimile transmission, telex or
telephone) or interstate or foreign commerce of, or any facilities
of a national securities exchange of, the United States nor will
it be made in into or from Canada, Australia or Japan and, subject
to certain exemptions, the Offer will not be capable of acceptance
by any such use, means, instrumentality or facility or from within
the United States, Canada, Australia or Japan. In addition,
unless otherwise determined by SPARK and Softtechnet or except as
required or permitted by applicable law, copies of this
announcement and any other documents related to the Offer are not
being, and must not be, mailed or otherwise distributed or sent in
or into or from the United States, Canada, Australia or Japan and
persons receiving such documents (including custodians, nominees
and trustees) must not distribute or send them in, into or from
the United States, Canada, Australia or Japan.
The new SPARK Shares and new SPARK Warrants to be issued pursuant
to the Offer have not been and will not be, registered under the
US Securities Act of 1933, as amended, or under any of the
relevant securities laws of any state or district of the US,
Canada, Australia or Japan. Accordingly, unless an exemption
under such Act or other laws is available, the new SPARK Shares
may not be offered, sold, transferred or delivered, directly or
indirectly, in into or from the US, Canada, Australia or Japan or
to or for the account or benefit of any US, Canadian, Australian
or Japanese person. This announcement and related materials do
not constitute an offer of securities for sale in the US, Canada,
Australia of Japan.
General
The Offer Document, containing the full terms and conditions of
the Offer, and the AIM admission document in respect of the new
SPARK Shares and the new SPARK Warrants will be posted to
Softtechnet Shareholders as soon as practicable and in any event
within 28 days of the date of this announcement. This
announcement does not constitute an offer or invitation to
purchase securities. A circular to SPARK Shareholders explaining
the Offer and convening an Extraordinary General Meeting to seek
approval for the Offer will also be despatched at the same time.
The directors of SPARK accept responsibility for the information
contained in this announcement other than that relating to
Softtechnet or the Softtechnet Group, but including the statements
expressed to be opinions of the directors of SPARK. To the best
of the knowledge and belief of the directors of SPARK (who have
taken all reasonable care to ensure such is the case), the
information contained herein 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 Softtechnet accept responsibility for the
information contained in this announcement relating to Softtechnet
and the Softtechnet Group. To the best of the knowledge and
belief of the directors of Softtechnet (who have taken all
reasonable care to ensure such is the case), the information
contained herein 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 Offer will comply with the rules and regulations of the London
Stock Exchange and with the Code.
The new SPARK Shares issued pursuant to the Offer will be issued
credited as fully paid and free from all liens, equities, charges,
encumbrances, rights of pre-emption and other interests of any
nature whatsoever. The new SPARK Shares will rank pari passu in
all respects with the existing SPARK Shares including the right to
receive and retain in full all dividends and other distributions
declared, made or paid after the date of this announcement.
Softtechnet Shares to be acquired pursuant to the Offer are to be
acquired fully paid and free from all liens, equities, charges,
encumbrances, rights of pre-emption and other third party
interests of any nature whatsoever and together with all rights
now or hereafter attaching thereto, including, without limitation,
the right to receive and retain in full all dividends and other
distributions declared, made or paid hereafter.
The Offer will extend to all existing issued or unconditionally
allotted and fully paid Softtechnet Shares and to any Softtechnet
Shares that are unconditionally allotted or issued prior to the
time and date on which the Offer closes (or such earlier time
and/or date, not (without the consent of the Panel) being earlier
than the date on which the Offer becomes or is declared
unconditional as to acceptances or, if later, the first closing
date of the Offer, as SPARK may decide) as a result of the
exercise of Softtechnet Warrants or otherwise.
The Offer is conditional, inter alia, upon SPARK Shareholders
passing appropriate resolutions to authorise the directors of
SPARK to allot the new SPARK Shares and the new SPARK Warrants and
on the admission of the new SPARK Shares and new SPARK Warrants to
trading on AIM. The Board of SPARK intends to vote in favour of
such resolutions in respect of its own beneficial holdings of
SPARK Shares.
Full acceptance of the Offer (assuming no exercise of Softtechnet
Warrants) would result in the issue of up to 55,850,000 new SPARK
Shares representing approximately 18.2 per cent. of the enlarged
issued share capital of SPARK following the completion of the
Offer.
Peel Hunt plc, which is regulated in the United Kingdom by The
Securities and Futures Authority Limited, has approved this
document solely for the purposes of Section 57 of the Financial
Services Act 1986. Peel Hunt plc is acting for SPARK and no-one
else in connection with the Offer and will not be responsible to
anyone other than SPARK for providing the protections afforded to
customers of Peel Hunt plc nor for giving advice in relation to
the Offer.
Grant Thornton is acting for Softtechnet and no-one else in
connection with the Offer and will not be responsible to anyone
other than Softtechnet for providing the protections afforded to
clients of Grant Thornton nor for giving advice in relation to the
Offer.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
The Offer, which will be made by Peel Hunt plc on behalf of SPARK,
will comply with the applicable rules and regulations of the
London Stock Exchange and the Code and will be governed by English
law and subject to the jurisdiction of the English courts and will
be subject to the terms and conditions set out below and as set
out in the formal Offer Document.
Conditions of the Offer
The Offer will be conditional upon:
(i) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 3.00 p.m. London time on the
first closing date of the Offer (or such later time(s) and/or
date(s) as SPARK may, subject to the rules of the Code,
decide) in respect of not less than 90 per cent. (or such
lesser percentage as SPARK may decide) in nominal value of
the Softtechnet Shares to which the Offer relates, provided
that this condition shall not be satisfied unless SPARK
and/or any of its wholly-owned subsidiaries shall have
acquired or agreed to acquire (pursuant to the Offer or
otherwise) Softtechnet Shares carrying in aggregate more than
50 per cent. of the voting rights then exercisable at a
general meeting of Softtechnet including for this purpose (to
the extent, if any, required by the Panel) any such voting
rights attaching to any Softtechnet Shares that are
unconditionally allotted or issued before the Offer becomes
or is declared unconditional as to acceptances whether
pursuant to the exercise of any outstanding subscription or
conversion rights or otherwise. For the purposes of this
condition:
(a) the expression 'Softtechnet Shares to which the Offer
relates' shall be construed in accordance with sections
428 to 430F of the Act;
(b) shares that have been unconditionally allotted shall to
the extent (if any) required by the Panel be deemed to
carry the voting rights that they will carry upon issue;
and
(c) valid acceptances shall be treated as having been
received in respect of any Softtechnet Shares that SPARK
and its subsidiaries shall, pursuant to section 429(8)
of the Act, be treated as having acquired or contracted
to acquire by virtue of acceptances of the Offer;
(ii) the passing at an Extraordinary General Meeting of SPARK (or
at any adjournment thereof) of such resolution(s) as are
necessary to approve, implement and effect the Offer and the
acquisition by SPARK of Softtechnet pursuant thereto;
(iii) the London Stock Exchange agreeing to admit to trading
on AIM the new SPARK Shares and the new SPARK Warrants to be
issued pursuant to the Offer and (unless or to the extent the
Panel agrees otherwise) such admission becoming effective in
accordance with Chapter 16 of the Rules of the London Stock
Exchange, as appropriate, or (if determined by SPARK and
subject to the consent of the Panel) the London Stock
Exchange agreeing to admit such shares to AIM subject only to
(i) the allotment of such shares and/or (ii) the Offer
becoming or being declared unconditional in all respects;
(iv) no relevant authority having intervened in a way that would
or might reasonably be expected to:
(a) make the Offer or its implementation or the acquisition
or proposed acquisition by SPARK of any Softtechnet
Shares, or the acquisition of control of Softtechnet by
SPARK, void, unenforceable and/or illegal or, to an
extent that is material in the context of the Offer,
directly or indirectly restrain, restrict, prohibit,
delay or otherwise interfere with the implementation
thereof, or impose additional conditions or obligations
with respect thereto, or otherwise challenge or require
amendment of the Offer or the acquisition or proposed
acquisition of any Softtechnet Shares, or the
acquisition of control of Softtechnet by SPARK to an
extent which is material in the context of the Offer;
(b) as a result of the Offer, require, prevent or delay the
divestiture or alter the terms of any proposed
divestiture by SPARK or Softtechnet or any member of the
wider SPARK Group or the wider Softtechnet Group of all
or any material part of their respective businesses,
assets or properties or impose a material limitation on
the ability of any of them to conduct any of their
respective businesses or to own any of their respective
assets or properties or any part thereof in any such
case in a manner or to an extent which is material in
the context of the wider SPARK Group or the wider
Softtechnet Group (as the case may be) taken as a whole;
(c) impose any material limitation on the ability of SPARK
or of any member of the wider Softtechnet Group to
exercise effectively, directly or indirectly, any rights
of ownership in respect of shares or other securities
(or the equivalent) in, or to manage or control,
Softtechnet or, to an extent material in the context of
the wider Softtechnet Group taken as a whole, any member
of the wider Softtechnet Group;
(d) as a result of the Offer, require SPARK or any member of
the wider Softtechnet Group to offer to acquire any
shares or other securities (or the equivalent) in any
member of the wider Softtechnet Group owned by any third
party or to sell or offer to sell any shares or other
securities (or the equivalent), such acquisition or sale
being material in the context of the wider Softtechnet
Group taken as a whole;
(e) result in a material delay in the ability of SPARK, or
render SPARK unable, to acquire some or all of the
Softtechnet Shares or require or prevent or materially
delay divestiture by SPARK of any such shares or other
securities of Softtechnet;
(f) result in any member of the wider Softtechnet Group
ceasing to be able to carry on its business under any
name which it at present uses where such use is material
to the business of the wider Softtechnet Group taken as
a whole;
(g) impose any material limitation on, or result in any
material delay in, the ability of any member of the
wider SPARK Group or wider Softtechnet Group to
integrate or co-ordinate its business, or any part
thereof, with the business(es) of any part of the wider
SPARK Group or the wider Softtechnet Group in any such
case being material in the context of the wider group
concerned taken as a whole; or
(h) otherwise materially and adversely affect the business,
assets, or profits of the wider Softtechnet Group, taken
as a whole, to an extent that is material in the context
of the wider Softtechnet Group taken as a whole,
and all necessary filings having been made, all regulatory
and statutory obligations having been complied with, in each
case in any relevant jurisdiction, all applicable waiting and
other time periods during which any relevant authority could
have intervened, in respect of the Offer or the acquisition
or proposed acquisition of any shares or other securities in,
or control of, Softtechnet by SPARK, having expired, lapsed
or terminated;
(v) all authorisations and determinations necessary in any
jurisdiction for or in respect of the Offer or the
acquisition or proposed acquisition of any shares or other
securities in, or control of, Softtechnet by SPARK having
been obtained in terms and in a form reasonably satisfactory
to SPARK from all relevant authorities or (without prejudice
to the generality of the foregoing) from any persons or
bodies with whom any member of the wider Softtechnet Group
has entered into contractual arrangements and such
authorisations and determinations together with all
authorisations and determinations necessary for any member of
the wider Softtechnet Group to carry on its business
remaining in full force and effect at the time at which the
Offer becomes or is otherwise declared unconditional in all
respects and all filings necessary for such purpose having
been made and there being no notice of any intention to
revoke, suspend, restrict, modify or not renew any of the
same having been received;
(vi) save as disclosed in writing to SPARK or its advisers in
connection with the Offer prior to 24 May, 2000 there being
no provision of any agreement, arrangement, licence or other
instrument which is material to the Softtechnet Group taken
as a whole to which any member of the wider Softtechnet Group
is a party or by or to which any member of the wider
Softtechnet Group or any part of its assets may be bound,
entitled or subject or any circumstance that, as a result of
the Offer, the proposed acquisition by SPARK of the
Softtechnet Shares or any of them, or change in the control
or management of any member of the wider Softtechnet Group or
otherwise, would or might reasonably be expected to result in
(to an extent that is material in the context of the wider
Softtechnet Group taken as a whole):
(a) any moneys borrowed by, or any other indebtedness,
actual or contingent of, or grant available to, any such
member being or becoming repayable or capable of being
declared repayable immediately or earlier than the
repayment date provided for in such agreement,
arrangement, licence or other instrument, or the ability
of any such member to borrow moneys or incur any
indebtedness being withdrawn or inhibited;
(b) any such agreement, arrangement, licence or other
instrument being terminated or adversely modified or any
onerous obligation or liability arising or any material
and adverse action being taken or arising thereunder;
(c) the assets, rights, liabilities, obligations, interests
or business of any member of the wider Softtechnet Group
under any such agreement, arrangement, licence or
instrument or the interests or business of any such
member in or with any other person, firm, company or
body (or any arrangements relating to any such interests
or business) being terminated or adversely modified or
affected;
(d) any such member ceasing to be able to carry on its
business under any name which it at present uses;
(e) any assets or interests of or the use of which is
enjoyed by any such member being or falling to be
disposed of or charged or any right arising under which
any such asset or interest could be required to be
disposed of or charged or could cease to be available to
any member of the wider Softtechnet Group, in each case
otherwise than in the ordinary course of business;
(f) any change in or effect on the ownership or use of any
intellectual property rights owned or used by any member
of the wider Softtechnet Group;
(g) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any material
part of the business, property or assets of any such
member or any such security interest (whenever and
wherever arising or having arisen) becoming enforceable;
or
(h) the value of any such member or their respective
financial or trading position being prejudiced or
adversely affected or materially and adversely modified;
or
(i) the creation of any liability (actual or contingent) of
any member of the wider Softtechnet Group;
(vii) no member of the wider Softtechnet Group having, save as
announced on or before 24 May 2000 by Softtechnet on the
London Stock Exchange (such information being 'publicly
announced') or save as fairly disclosed in writing to SPARK
or its advisers in connection with the Offer prior to 24 May
2000:
(a) (save as between Softtechnet and, on a pre-emptive
basis, any member of the wider Softtechnet Group which
is a wholly owned subsidiary of Softtechnet or upon the
exercise of rights to subscribe for Softtechnet Shares
pursuant to the existing Softtechnet Warrants on or
prior to 24 May 2000) issued or agreed to issue or
authorised or proposed the issue of additional shares of
any class, or of securities convertible into or
exchangeable for, or rights, warrants or options to
subscribe for or acquire, any such shares or convertible
securities or redeemed, purchased or reduced any part of
its share capital;
(b) recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or
other distribution other than to Softtechnet or to a
member of the wider Softtechnet Group which is a wholly-
owned subsidiary of Softtechnet;
(c) acquired or disposed of or transferred, mortgaged or
charged or created any security interest over any assets
or any rights, title or interest in any asset (including
shares and trade investments) which in any such case is
material in the context of the wider Softtechnet Group
taken as a whole or merged with any body corporate or
authorised or proposed or announced any intention to
propose any merger, demerger, acquisition, disposal,
transfer, mortgage, charge or security interest (in each
case other than in the ordinary course of business);
(d) made or authorised or proposed or announced an intention
to propose any change in its share or loan capital and
details of which have been disclosed to SPARK or its
advisers in connection with the Offer prior to 24 May
2000;
(e) issued, authorised or proposed the issue of any
debentures or incurred or increased any indebtedness or
contingent liability which is material in the context of
the wider Softtechnet Group taken as a whole;
(f) purchased, redeemed or repaid or proposed the purchase,
redemption or repayment of any of its own shares or
other securities or reduced or made any other change to
any part of its share capital to an extent which (other
than in the case of Softtechnet) is material in the
context of the Softtechnet Group taken as a whole;
(g) entered into any contract, reconstruction, amalgamation,
commitment or other transaction or arrangement otherwise
than in the ordinary course of business which is
material in the context of the wider Softtechnet Group
taken as a whole;
(h) entered into or varied any contract, transaction or
commitment (whether in respect of capital expenditure or
otherwise) which is of a loss making, long-term, onerous
or unusual nature or magnitude or which involves or
could involve an obligation of a nature or magnitude
which is material in the context of the wider
Softtechnet Group taken as a whole save in the ordinary
course of business;
(i) entered into any contract, transaction or arrangement
which would be materially restrictive on the business of
any member of the wider Softtechnet Group;
(j) waived or compromised any claim otherwise than in the
ordinary course of business which is material in the
context of the wider Softtechnet Group taken as a whole;
(k) entered into or varied the terms of or terminated any
service agreement with any of the directors of
Softtechnet in any material respect;
(l) taken any corporate action or had any legal proceedings
started or threatened against it for its winding-up,
dissolution or reorganisation or for the appointment of
a receiver, administrator, administrative receiver,
trustee or similar officer of all or any of its assets
or revenues or any analogous proceedings in any
jurisdiction or for the appointment of any analogous
person in any jurisdiction;
(m) taken any action to commence or institute any legal
proceedings or to settle, compromise or discontinue any
legal proceedings which have already been commenced or
suffered any claims or had any legal proceedings
instituted against it or admitted any liability in any
such claim or proceedings, failed to take action to
refute or defend any such claim or proceedings or taken
any action to settle or compromise any such claim or
proceedings;
(n) made any amendment to its memorandum or articles of
association;
(o) been unable or admitted 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 carrying on all or a
substantial part of its business;
(p) made or agreed or consented to any significant change to
the terms of the trust deeds 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 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 which would be material in the context of
the wider Softtechnet Group taken as a whole; or
(q) entered into any contract, commitment, agreement or
arrangement or passed any resolution with respect to, or
to effect, any of the transactions, matters or events
referred to in this condition, or announced an intention
to do so;
(viii) since 13 March 2000, and save as publicly announced or
as fairly disclosed in writing to SPARK or its advisers in
connection with the Offer prior to 24 May 2000:
(a) no adverse change or deterioration having occurred in
the business, assets, financial or trading position or
profits of Softtechnet or any other member of the wider
Softtechnet Group that is material in the context of the
wider Softtechnet Group taken as a whole;
(b) no litigation or arbitration proceedings, prosecution or
other legal proceedings having been announced,
instituted or threatened in writing by or against or
remaining outstanding against any member of the wider
Softtechnet Group or to which any member of the wider
Softtechnet Group is or is likely to become a party
(whether as plaintiff, defendant or otherwise) and no
enquiry or investigation by or complaint or reference to
any relevant authority against or in respect of any
member of the wider Softtechnet Group having been
threatened in writing, announced or instituted or
remaining outstanding by, against or in respect of any
member of the wider Softtechnet Group and which in any
such case might be likely to adversely affect any member
of the wider Softtechnet Group to an extent that is
material in the context of the wider Softtechnet Group
taken as a whole; and
(c) no contingent or other liability of any member of the
wider Softtechnet Group having arisen or become apparent
that might be likely adversely to affect any member of
the wider Softtechnet Group that is material in the
context of the wider Softtechnet Group taken as a whole;
(ix) save as fairly disclosed in writing to SPARK or its advisers
in connection with the Offer prior 24 May 2000, SPARK not
having discovered that:
(a) any financial, business or other information concerning
Softtechnet or the wider Softtechnet Group that has been
publicly disclosed at any time by or on behalf of any
member of the wider Softtechnet Group is misleading,
contains a misrepresentation of fact or omits to state a
fact necessary to make the information contained therein
not misleading and which was not corrected by subsequent
public announcement made on the London Stock Exchange on
or before 24 May 2000 and which in any such case is
material in the context of the wider Softtechnet Group
taken as a whole;
(b) any information which affects the import of any such
information to an extent that is material in the context
of the wider Softtechnet Group taken as a whole; or
(c) any member of the wider Softtechnet Group or any entity
in which any such member has a significant economic
interest is subject to any liability (actual or
contingent) that has not been publicly announced, such
liability being material in the context of the wider
Softtechnet Group taken as a whole;
(x) SPARK not having discovered that, save as publicly announced
prior to 24 May 2000:
(a) any past or present member of the wider Softtechnet
Group has not complied with all applicable legislation
or regulations of any jurisdiction with regard to the
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,
which non-compliance or any other storage, disposal,
discharge, spillage, leak or emission which has occurred
would be likely to give rise to any liability (whether
actual or contingent) on the part of any member of the
wider Softtechnet Group and which is material in the
context of the wider Softtechnet Group taken as a whole;
or
(b) there is or is likely to be any liability (whether
actual or contingent) to make good, repair, reinstate or
clean up any property now or previously owned, occupied
or made use of by any past or present member of the
wider Softtechnet Group, or in which any such member may
now or previously have had or be deemed to have or have
had an interest, under any environmental legislation,
regulation, notice, circular or order of any relevant
authority, or to contribute to the cost thereof or
associated therewith or indemnify any person in relation
thereto, in any such case to an extent that is material
in the context of the wider Softtechnet Group taken as a
whole.
For the purposes of these conditions:
(a) 'relevant authority' means any government, government
department or governmental, quasi-governmental,
supranational, statutory, regulatory or investigatory
body, court, trade agency, professional association or
institution or environmental body or any other body or
person in any jurisdiction;
(b) a relevant authority shall be regarded as having
'intervened' if it has instituted, implemented, or
threatened or communicated its intention to take or make
any action, proceedings, suit, investigation or inquiry
or reference, or made, enacted or proposed any statute,
regulation, decision or order, or taken any measures or
other steps and 'intervene' shall be construed
accordingly;
(c) 'authorisations' means authorisations, orders, grants,
recognitions, confirmations, consents, licences,
clearances, permissions, exemptions and approvals; and
(d) 'the wider Softtechnet Group' means Softtechnet and its
subsidiary undertakings, associated undertakings and any
other undertakings in which Softtechnet and such
undertakings (aggregating their interests) have a
substantial interest and 'the wider SPARK Group' means
SPARK and its subsidiary undertakings, associated
undertakings and any other undertaking in which SPARK
and such undertakings (aggregating their interests) have
a substantial interest and, for these purposes,
'subsidiary undertaking', 'associated undertaking' and
'undertaking' have the meanings given by the Companies
Act 1985 (but for this purpose ignoring paragraph
20(1)(b) of Schedule 4A to the Companies Act 1985) and
'substantial interest' means a direct or indirect
interest in 20 per cent. or more of the equity capital
of an undertaking.
SPARK reserves the right to waive all or any of the above
conditions, in whole or in part except conditions (i), (ii) and
(iii). The Offer will lapse unless all the above conditions have
been fulfilled or (if capable of waiver) waived, or, where
appropriate, have been determined by SPARK in its reasonable
opinion to be or remain satisfied, by midnight on the day which is
21 days after the later of the first closing date of the Offer and
the date on which the Offer becomes or is declared unconditional
as to acceptances, or such later date as SPARK may, with the
consent of the Panel, decide, provided that SPARK shall be under
no obligation to waive or treat as fulfilled any of conditions
(iv) to (x) inclusive by a date earlier than the latest date
specified or referred to above for the fulfillment thereof
notwithstanding that any such condition or the other conditions of
the Offer may at any date earlier than such latest 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.
Further Terms of the Offer
The Offer will lapse if the acquisition of Softtechnet is referred
to the Competition Commission before the later of 3.00 pm (London
time) on the first closing date of the Offer and the date on which
the Offer becomes or is declared unconditional as to acceptances.
In such circumstances, the Offer will cease to be capable of
further acceptance and SPARK and accepting Softtechnet
Shareholders shall thereupon cease to be bound by acceptances
submitted at or before the time when the Offer so lapses.
If SPARK is required by the Panel to make an offer for Softtechnet
Shares under the provisions of Rule 9 of the Code, SPARK may make
such alterations to the terms and conditions of the Offer as are
necessary to comply with the provisions of that Rule.
APPENDIX II
DEFINITIONS
The following definitions apply throughout this announcement,
unless the context otherwise requires:
'AIM' the Alternative Investment Market of the
London Stock Exchange
'Australia' the Commonwealth of Australia, its states,
territories or possessions
'Board' The board of directors of SPARK and
Softtechnet (as the case may be)
'Code' The City Code on Takeovers and Mergers
'Enlarged Group' the SPARK Group, as enlarged by the
acquisition of Softtechnet
'Form(s) of the form(s) of acceptance and authority
Acceptance' relating to the Offer
'Japan' Japan, its cities, its prefectures,
territories and possessions
'London Stock the London Stock Exchange Limited
Exchange'
'new SPARK the new ordinary shares of 2.5p each in the
Shares' capital of SPARK to be issued credited as
fully paid pursuant to the Offer
'Offer' the recommended offer to be made by Peel Hunt
plc on behalf of SPARK to acquire all of the
Softtechnet Shares on the terms and subject to
the conditions set out in this announcement
and in Appendix I to this announcement and to
be set out in the formal Offer Document and
Form(s) of Acceptance including, where the
context so requires, any subsequent revision,
variation, extension or renewal of such offer
including, unless the context otherwise
requires, the offer to be made to the holders
of the Summer Warrants
'Offer Document' the document to be issued to Softtechnet
Shareholders making the Offer
'Panel' The Panel on Takeovers and Mergers
'Securities Act' the US Securities Act of 1933 (as amended)
'SPARK ' or NewMedia SPARK plc
'Company'
'SPARK Group' SPARK and its subsidiary undertakings
'SPARK India' the Mauritian subsidiary of Softtechnet, which
is intended to be renamed SPARK India
'SPARK holders of SPARK Shares
Shareholders'
'SPARK Shares' ordinary shares of 2.5p each in the capital of
SPARK
'SPARK Warrants' the warrants to subscribe for SPARK Shares to
be issued pursuant to the Offer and the bonus
issue to SPARK Shareholders discussed in this
announcement
'Softtechnet' Softtechnet.com plc
'Softtechnet Softtechnet and its subsidiary undertakings
Group'
'Softtechnet holders of Softtechnet Shares
Shareholders'
'Softtechnet the existing issued or unconditionally
Shares' allotted and fully paid ordinary shares of 4p
each in the capital of Softtechnet and any
further such shares that are issued or
unconditionally allotted before the time and
date on which the Offer closes (or such
earlier time and/or date, not without the
consent of the Panel being earlier than the
date on which the Offer becomes or is declared
unconditional as to acceptances or, if later,
the first closing date of the Offer), as SPARK
may decide
'Softtechnet the 10,000,000 warrants to subscribe for
Warrants' Softtechnet Shares outstanding at the date of
this announcement
'UK' or 'United the United Kingdom of Great Britain and
Kingdom' Northern Ireland
'US' or 'United the United States of America, its territories
States' and possessions, any state of the United
States of America and the District of Columbia
and all other areas subject to its
jurisdiction
APPENDIX III
BASES AND SOURCES OF INFORMATION
(1) Unless otherwise stated, the financial information concerning
SPARK contained in this announcement has been extracted from the
preliminary statement of results for the period ended 31 March
2000, which was announced today.
(2) The value of the Offer is based on 139,625,000 Softtechnet
Shares in issue on 25 May 2000. The closing middle-market prices
of the Softtechnet Shares are based on the middle-market price of
Softtechnet Shares derived from the AIM Appendix to the Daily
Official List of the London Stock Exchange for the relevant dates.
(3) The percentage of the enlarged issued share capital of SPARK
is based on 250,752,957 SPARK Shares in issue on 25 May 2000. The
closing middle-market prices of SPARK Shares are based on the
middle-market price of SPARK Shares derived from the AIM Appendix
to the Daily Official List of the London Stock Exchange for the
relevant dates.
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