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Thursday 11 January, 2018

Vermeg Group N.V.

Offer by Vermeg Group N.V.

RNS Number : 5515B
Vermeg Group N.V.
11 January 2018
 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART,

 DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE

 TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

11 January 2018

RECOMMENDED CASH ACQUISITION


of


LOMBARD RISK MANAGEMENT PLC


by


VERMEG GROUP N.V.

to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006

Summary and Highlights

·        The Boards of Vermeg Group N.V. ("Vermeg"), the financial software provider, and Lombard Risk Management plc ("Lombard Risk" or the "Company") announce the terms of a recommended cash offer by Vermeg for the entire issued and to be issued ordinary share capital of Lombard Risk (the "Acquisition"). It is intended that the Acquisition will be implemented by way of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme") (or if Vermeg elects, with the consent of the Panel, by way of a Takeover Offer).

-     Vermeg has provided IT solutions to the financial services and insurance industry for over 15 years and has become a key partner for custody/asset management and life insurance solutions in Europe. In order to enhance its market position, Vermeg has embarked on an ambitious development strategy, via a combination of organic growth and acquisitions.

-     The Vermeg Board believes that the Acquisition represents a compelling opportunity to acquire an innovative global technology firm with a dedicated focus on the collateral management and regulatory reporting niches, which, when combined with the existing Vermeg business, would have the potential to create a strong complementary platform for future growth and value creation.

-     Vermeg believes that it is the optimal partner for Lombard Risk. Although the companies address a broadly similar client base within the financial services industry, they are highly complementary in terms of solutions, with minimal overlap across geographies and product portfolio.

·        Under the terms of the Acquisition, each Scheme Shareholder will receive 13 pence in cash for each Ordinary Share (the "Offer Price"), valuing the entire existing issued ordinary share capital of Lombard Risk at approximately £52.08 million.

·        The Offer Price represents a premium of approximately:

-     98.5 per cent. to the Closing Price per Ordinary Share of 6.55 pence at the close of business on 10 January 2018 (being the last Business Day prior to the commencement of the Offer Period); and

-     78.8 per cent. to the three month volume weighted average Closing Price per Ordinary Share of 7.27 pence to 10 January 2018 (being the last Business Day prior to the commencement of the Offer Period).

·        If, after the date of this Announcement and before the Effective Date, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Ordinary Shares, Vermeg reserves the right to reduce the consideration payable under the terms of the Acquisition by an amount of up to the amount of such dividend and/or distribution and/or other return of capital.

·        The Lombard Risk Directors, who have been so advised by Quayle Munro as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing advice to the Lombard Risk Directors, Quayle Munro has taken into account the commercial assessments of the Lombard Risk Directors. Quayle Munro is providing independent financial advice to the Lombard Risk Directors for the purposes of Rule 3 of the Code. Accordingly, the Lombard Risk Directors intend unanimously to recommend that Ordinary Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting.

·        Vermeg has received irrevocable undertakings from the Lombard Risk Directors to vote (or to procure or direct that the registered holders of Ordinary Shares of which they are the beneficial holders or in which they are interested, vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of, in aggregate, approximately 3.53 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

·        Vermeg has received irrevocable undertakings to vote (or to procure or direct that the registered holders of the relevant Ordinary Shares vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from each of Mr John Wisbey, Lombard Risk's largest shareholder and its founder and former Chief Executive Officer, and RBC Trustees (Jersey) Limited as trustee of The Advanced Technologies Trust in which Mr Wisbey is interested in respect of, in aggregate, approximately 13.65 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

·        In addition, Vermeg has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from certain significant institutional shareholders in respect of, in aggregate, approximately 21.58 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

·        In total, therefore, Vermeg has received irrevocable undertakings to vote (or to procure or direct that the registered holders of Ordinary Shares of which they are the beneficial holders or in which they are otherwise interested, vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of, in aggregate, approximately 38.76 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

·        Further details of the abovementioned irrevocable undertakings are set out in section 7 of, and Appendix III to, this Announcement.

·        Vermeg expects that, following completion of the Acquisition, Lombard Risk will operate as it does today under its existing executive management team within the Vermeg Group.

·        The Acquisition will be subject to the satisfaction of all relevant conditions, including the Conditions and certain further terms set out in Appendix I to this Announcement.

·        The Acquisition will be put to Ordinary Shareholders at the Court Meeting and at the General Meeting. In order to become Effective, the Scheme must be approved by a majority in number of Ordinary Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the Ordinary Shares voted. In addition, a Special Resolution implementing the Scheme must be passed by Ordinary Shareholders representing at least 75 per cent. of votes cast at the General Meeting. The Scheme will also need to be sanctioned by the Court.

·        It is expected that the Scheme Document, containing further information about the Acquisition, notices of the Court Meeting and the General Meeting and details of the actions to be taken by Scheme Shareholders to approve the Scheme, together with the respective Forms of Proxy, will be posted to Ordinary Shareholders and (for information only) in separate letters to participants in the Lombard Risk Share Schemes as soon as reasonably practicable and in any event, within 28 days of the date of this Announcement unless Vermeg and Lombard Risk otherwise agree, and the Panel consents, to a later date.

·        The Lombard Risk Directors have consented to the publication of the Scheme Document within 14 days of the date of this Announcement should the parties be in a position to do so, but in any event no later than 28 days from the date of this Announcement. The Scheme Document will contain an expected timetable for the Acquisition process.

·        Commenting on the Acquisition, Badreddine Ouali, Founder and Chairman of Vermeg said:

          "Vermeg's acquisition of Lombard Risk will create a leading global financial software provider, with the scale and network to service an increasingly global and consolidating customer base. With highly complementary offerings and minimal overlap regarding geographies and product portfolio, the combination provides a strong platform for future growth and value creation. The enlarged group with its increased geographical reach will have access to greater operational resources and cross-selling opportunities across a broader and expanded client base for its enhanced portfolio of market leading solutions. In addition, Vermeg regards the management and employees of Lombard Risk as key to the ongoing success of the combined entity. Our offer provides Lombard Risk shareholders with the certainty of a cash exit, at a significant premium over the prevailing value of their Ordinary Shares."

·        Commenting on the Acquisition, Philip Crawford, Chairman of Lombard Risk said: 

          "The combination of Vermeg and Lombard Risk has very strong commercial logic. The combined group will benefit from a range of complementary products and solutions, increased scale, a broader international presence and have the ability to accelerate growth through investment and wider routes to market. In reaching the decision to recommend this offer the Lombard Risk Board has considered in detail the best interests of all stakeholders and the Company as a whole. We believe that Vermeg's all cash offer provides shareholders with certainty of value at a level in excess of the risk adjusted prospects of Lombard Risk on a standalone basis."

This summary should be read in conjunction with, and is subject to, the full text of the following announcement (including its Appendices). The Acquisition will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Scheme Document. Appendix II to this Announcement contains the bases of calculations and sources of certain information contained in this summary and the following Announcement. Appendix III to this Announcement contains details of the irrevocable undertakings received by Vermeg. Appendix IV to this Announcement contains details of the termination payments to be made to Lombard Risk's non-executive directors on the Effective Date. Appendix V to this Announcement contains the definitions of certain terms used in this summary and the following content of this Announcement.

Enquiries:

Vermeg Group N.V.

Badreddine Ouali, Chairman

Pascal Leroy, Chief Executive Officer

 

via Hudson Sandler on

Tel: +44 (0) 207 796 4133

Strand Hanson Limited

(Financial Adviser to Vermeg)

Stuart Faulkner

Matthew Chandler

James Dance

 

Tel: +44 (0) 207 409 3494

 

Eurohold, S.L.

(Strategic Adviser to Vermeg)

Bernard Demode

Sonja Fell

 

Tel: +33 (0) 1 78 42 36 26

 

Hudson Sandler LLP

(PR Adviser to Vermeg)

Daniel de Belder

Nick Lyon

Bertie Berger

Tel: +44 (0) 207 796 4133

Lombard Risk Management plc

Tel: +44 (0) 207 593 6700

Alastair Brown, Chief Executive Officer

Nigel Gurney, Chief Financial Officer




Newgate Communications Limited

(PR Adviser to Lombard Risk)

Tel: +44 (0) 207 653 9850

Bob Huxford


Charlotte Coulson

James Ash




Quayle Munro Limited

(Lead Financial Adviser and Rule 3 Adviser to Lombard Risk)

Tel: +44 (0) 207 907 4200

Mark Fisher


Tim Shortland

Paul Tracey




WG Partners LLP

(Financial Adviser and Joint Broker to Lombard Risk)

Tel: +44 (0) 203 705 9330

David Wilson


Claes Spång

Chris Lee




finnCap Limited

(Nomad and Joint Broker to Lombard Risk)

Tel: +44 (0) 207 220 0500

Stuart Andrews


Carl Holmes


Scott Mathieson

 


Shareholder Helpline (8.30 a.m. to 5.30 p.m., Monday to Friday)

Tel: +44 (0) 370 707 1125

 

Further information

This Announcement is for information purposes only and does not constitute, or form part of an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Lombard Risk in any jurisdiction in contravention of applicable law. The Acquisition will be made solely by means of the Scheme Document or Offer Document or any other document by which the Acquisition is made, which will contain the full terms and conditions of the Acquisition including details of how to vote in respect of the Acquisition. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document. Ordinary Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been despatched.

Please be aware that addresses, electronic addresses and certain other information provided by Ordinary Shareholders, persons with information rights and other relevant persons for the receipt of communications from Lombard Risk may be provided to Vermeg during the Offer Period as required under Section 4 of Appendix IV of the Code to comply with Rule 2.11(c).

Strand Hanson, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Vermeg in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and the other matters referred to in this Announcement and will not be responsible to anyone other than Vermeg for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

Eurohold is acting exclusively as strategic adviser to Vermeg in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and the other matters referred to in this Announcement and will not be responsible to anyone other than Vermeg for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

Quayle Munro, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as lead financial adviser and Rule 3 adviser to Lombard Risk in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and any other matter referred to in this Announcement and will not be responsible to anyone other than Lombard Risk for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

WG Partners, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser and joint broker to Lombard Risk in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and any other matter referred to in this Announcement and will not be responsible to anyone other than Lombard Risk for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

finnCap, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as nominated adviser and joint broker to Lombard Risk and will not regard any other person as its client in relation to the Acquisition and the other matters referred to in this Announcement and will not be responsible to anyone other than Lombard Risk for providing the protections afforded to its clients or for providing advice in relation to the Acquisition or any other matter referred to in this Announcement.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of and observe, any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Ordinary Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purposes of complying with English law, the AIM Rules and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales.

Unless otherwise determined by Vermeg or required by the Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. If the Acquisition is implemented by way of a Takeover Offer, unless otherwise permitted by applicable law or regulation, the Takeover Offer may not be made, directly or indirectly, in or into or by use of mail or any other means or instrumentality (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of or any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

The availability of the Acquisition to Ordinary Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of and observe, any applicable requirements.

Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Additional information for US investors

The Acquisition relates to the shares of an English company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. Neither the proxy solicitation rules nor the tender offer rules under the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), will apply to the Acquisition. Moreover, the Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom and under the Code to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. If in the future, Vermeg exercises its right to implement the proposed acquisition by way of a Takeover Offer, the proposed acquisition will be made in compliance with applicable U.S. laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Financial information included in this Announcement has been prepared, unless specifically stated otherwise, in accordance with accounting standards applicable in the UK and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

It may be difficult for US holders of Ordinary Shares to enforce their rights and claims arising out of the US federal securities laws, since Vermeg and Lombard Risk are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US holders of Ordinary Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

The receipt of cash pursuant to the Acquisition by a US holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme will likely be a taxable transaction for United States federal income tax purposes and potentially under any applicable United States state or local, as well as foreign and other, tax laws. Each Ordinary Shareholder is urged to consult his or her independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him or her.

Forward-looking statements

This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition, and other information published by Vermeg and Lombard Risk contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Vermeg and Lombard Risk about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. The "forward-looking statements" contained in this Announcement include statements relating to the expected effects of the Acquisition on Vermeg and Lombard Risk, the expected timing and scope of the Acquisition and other statements other than historical facts. All statements other than statements of historical facts included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "should", "could", "would", "may", "anticipates", "estimates", "synergy", "cost-saving", "projects", "goal", "strategy", "budget", "forecast" or "might", or words or terms of similar substance or the negative thereof are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Lombard Risk's and Vermeg's operations and benefits from the Acquisition; and (iii) the effects of government regulation on Vermeg's or Lombard Risk's business.

These forward-looking statements are not guarantees of future financial performance. Except as expressly provided in this Announcement, they have not been reviewed by the auditors of Vermeg or Lombard Risk or their respective financial advisers. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. These factors include the satisfaction of the Conditions, as well as additional factors such as: the risk of disruptions to Vermeg's or Lombard Risk's businesses; the negative effects of the Announcement of the Acquisition or the consummation of the Acquisition on Vermeg's operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the Acquisition; fluctuations in demand for Lombard Risk's and Vermeg's products; loss of market share and industry competition; fluctuations in capital markets; fluctuations in interest and exchange rates; the occurrence of unforeseen disasters or catastrophes; political or economic instability in principal markets; adverse outcomes in litigation; and general, local and global economic, political, business and market conditions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Vermeg nor Lombard Risk, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent oral or written forward-looking statements attributable to Vermeg or Lombard Risk or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Unless otherwise required by applicable law, Vermeg and Lombard Risk disclaim any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with their legal and regulatory obligations.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Lombard Risk or Vermeg, as appropriate, for the current or future financial years would necessarily be greater or less than the historical published earnings or earnings per share for Lombard Risk or Vermeg, as appropriate.

Rule 2.9 information

In accordance with Rule 2.9 of the Code, Lombard Risk confirms that, as at the close of business on 10 January 2018, being the last Business Day before the date of this Announcement, it has 400,593,686 Ordinary Shares in issue. Lombard Risk currently holds 234 Ordinary Shares in treasury. Lombard Risk's International Securities Identification Number ("ISIN") is GB00B030JP46.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website and availability of hard copies

A copy of this Announcement and the documents required to be published by Rule 26 of the Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Lombard Risk's website at https://www.lombardrisk.com/investor-centre-2/, by no later than 12 noon (London time) on the Business Day following the date of this Announcement. For the avoidance of doubt, the content of such website is not incorporated into and does not form part of this Announcement.

A hard copy of this Announcement will be sent to Ordinary Shareholders (other than Ordinary Shareholders who have elected to receive electronic communications) in the near future. Ordinary Shareholders may request a hard copy of this Announcement by contacting Computershare on +44 (0) 370 707 1125 between 8.30 a.m. to 5.30 p.m., Monday to Friday or by submitting a request in writing to Computershare at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS13 8AE. Ordinary Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form. If you have received this Announcement in electronic form, copies of this Announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made.

 


THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART,

DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE

TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

FOR IMMEDIATE RELEASE

11 January 2018

RECOMMENDED CASH ACQUISITION


of


LOMBARD RISK MANAGEMENT PLC


by

 
VERMEG GROUP N.V.

to be effected by means of a Scheme of Arrangement
under Part 26 of the Companies Act 2006

1.         Introduction

The Boards of Vermeg and Lombard Risk are pleased to announce the terms of a recommended cash offer pursuant to which the entire issued and to be issued ordinary share capital of Lombard Risk shall be acquired by Vermeg. It is intended that the Acquisition will be implemented by way of a scheme of arrangement under Part 26 of the Companies Act (or if Vermeg elects, with the consent of the Panel, by way of a Takeover Offer).

2.         The Acquisition

Under the terms of the Acquisition, which will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, Scheme Shareholders who are on the register of members of Lombard Risk at the Scheme Record Time will be entitled to receive:

for each Scheme Share                                                   13 pence in cash

The Offer Price values the entire existing issued ordinary share capital of Lombard Risk at approximately £52.08 million and the price of 13 pence in cash per Ordinary Share represents a premium of approximately:

·        98.5 per cent. to the Closing Price per Ordinary Share of 6.55 pence at the close of business on 10 January 2018 (being the last Business Day prior to the commencement of the Offer Period); and

·        78.8 per cent. to the three month volume weighted average Closing Price per Ordinary Share of 7.27 pence to 10 January 2018 (being the last Business Day prior to the commencement of the Offer Period).

If, after the date of this Announcement and before the Effective Date, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Ordinary Shares, Vermeg reserves the right to reduce the consideration payable under the terms of the Acquisition by an amount of up to the amount of such dividend and/or distribution and/or other return of capital.

If any such dividend, distribution or return of value is paid or made after the date of this Announcement and Vermeg exercises its rights described above, any reference in this Announcement to the consideration payable under the Scheme shall be deemed to be a reference to the consideration as so reduced. Any exercise by Vermeg of its rights referred to in this section shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the terms of the Scheme.

If the Scheme becomes Effective, Scheme Shareholders will not be entitled to receive payments for any amounts of less than 1 penny and any such amounts will be disregarded. Any amounts payable to Scheme Shareholders which include fractions of 1 penny will be rounded down to the nearest whole penny and such fractional entitlements will be disregarded.

Subject to the Conditions and certain further terms set out in Appendix I to this Announcement, the Acquisition is expected to become Effective in late February 2018. The Scheme Document will contain an expected timetable for the Acquisition process.

3.         Conditions

The Acquisition is conditional on the satisfaction of the formal conditions required to be satisfied in connection with the Scheme as set out in Appendix I to this Announcement, including:

·        the approval of the Scheme by a majority in number of the Scheme Shareholders present and voting (and entitled to vote), representing not less than 75 per cent. in value of the Scheme Shares voted, either in person or by proxy, at the Court Meeting;

·        the approval of the Special Resolution at the General Meeting by Ordinary Shareholders by the requisite majority at the General Meeting;

·       the sanction of the Scheme by the Court and the registration of the Scheme Court Order with the Registrar of Companies;

·        the Scheme becoming Effective before the Longstop Date; and

·        the satisfaction (or where permissible, waiver) of the other Conditions listed in Appendix I to this Announcement.

4.         Recommendation

The Lombard Risk Directors, who have been advised by Quayle Munro, as the independent financial adviser for the purposes of Rule 3 of the Code, as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Lombard Risk Directors, Quayle Munro has taken into account the commercial assessments of the Lombard Risk Directors. In addition, the Lombard Risk Directors consider the terms of the Acquisition to be in the best interests of the Ordinary Shareholders as a whole.

Accordingly, the Lombard Risk Directors intend unanimously to recommend that Ordinary Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting, as the Lombard Risk Directors have irrevocably undertaken to do in respect of their own beneficial holdings of 14,136,425 Ordinary Shares (representing, in aggregate, approximately 3.53 per cent of the ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the last Business Day prior to the date of this Announcement).

5.         Background to and reasons for the recommendation

Lombard Risk is a dedicated provider of regulatory reporting and collateral management solutions to the financial services industry. Lombard Risk's portfolio of software and services is designed to help financial institutions around the world improve the management of complex and changing risks to which they are exposed and to assist in the associated regulatory reporting.

Lombard Risk was admitted to trading on AIM in September 2004 as an established financial software and managed services company with a suite of software products primarily focussed on the interest rate and credit derivatives markets. Since then, Lombard Risk has diversified, through acquisition and organic growth, into regulatory reporting and collateral management and has grown such that, for the financial year ended 31 March 2016, it generated total revenues of £23.7 million, had 350 employees and held client relationships with over 250 financial and corporate institutions including some of the world's largest banks.

During calendar year 2016 Lombard Risk conducted a strategic review which led to a strategic product re-alignment and a renewed focus on two core product areas: regulatory reporting and collateral management. At that time, Lombard Risk raised additional funding from shareholders to fund a two-year plan which required the implementation of a number of changes in the business in order to achieve the ambitions of revenue growth and cash profitability.

Lombard Risk successfully delivered a step-change in revenues (with total revenues for its financial year ending 31 March 2017 of £34.3 million) which has contributed to the partial delivery of the strategic plan. However, a number of initiatives remain in progress. These have required continued and on-going investment to deliver key changes in the business, such as the establishment of and transition to a new technology centre in Birmingham and the rebuilding of Lombard Risk's sales pipeline in order to support the delivery of future revenues. In addition, Lombard Risk has made significant changes to its management structure and has suspended its previously progressive dividend policy.

Lombard Risk operates in a market where client contracts are often large and the precise timing of the enactment of new contracts can be hard to predict given their nature and the dependency on client resources required for implementation. The cash flow related to new contracts can also vary depending on clients' preferences for different commercial structures.

The Lombard Risk Board believes that the integration of Vermeg and Lombard Risk can accelerate the strategic growth plan for Lombard Risk as part of a larger group with access to complementary software and operational resources and access to a broader client base through increased geographical reach. The Lombard Risk Board is aware of the importance that increased scale would bring to the future success of Lombard Risk and to Lombard Risk's customers and employees. On 25 October 2017, Lombard Risk announced its interim results for the six months ended 30 September 2017 which included a 16.4 per cent. decrease in revenues versus the corresponding period in 2016 and a commensurate negative EBITDA of £3.5 million (H1 2016: positive £1.5 million). Cash as at 30 September 2017 was £0.4 million with undrawn debt facilities of £4.5 million. Since that date up to 30 November 2017, Lombard Risk has drawn down £2.0 million from its debt facilities in order to cover its working capital funding requirements.

Taking into account the considerations above, the Lombard Risk Directors consider that the Acquisition provides Ordinary Shareholders with certainty of value at a level in excess of the risk adjusted prospects of Lombard Risk on a standalone basis. The Offer Price represents a significant premium, in cash, of approximately 98.5 per cent. to the Closing Price of Lombard Risk shares on 10 January 2018, approximately 78.8 per cent. to the three-month volume weighted average Closing Price to 10 January 2018 and approximately 48.6 per cent. to the price at which new shares were last issued in an equity fundraising by Lombard Risk in June 2016.

6.         Background to and reasons for the Acquisition

The Vermeg Board believes that the Acquisition represents a compelling opportunity to acquire an innovative global technology firm with a dedicated focus on the collateral management and regulatory reporting niches which, when combined with the existing Vermeg business, would have the potential to create a strong complementary platform for future growth and value creation.

Vermeg has provided IT solutions to the financial services and insurance industry for over 15 years and has become a key partner for custody/asset management and life insurance solutions in Europe. In order to enhance its market position, Vermeg has embarked on an ambitious development and growth strategy via a combination of organic growth and acquisitions.

Vermeg believes that it is the optimal partner for Lombard Risk. Although both companies address a similar client base within the financial services industry, they are highly complementary in terms of solutions, with minimal overlap across geographies and product portfolio.

In particular, Lombard Risk's market leading regulatory reporting solution represents a strong vertical addition to Vermeg's solutions portfolio. Conversely, as Lombard Risk does not currently operate in the insurance market, Vermeg's successful insurance management solution could potentially be deployed across a number of Lombard Risk's operating geographies which are not currently being served by Vermeg. Furthermore, both companies are active in the highly attractive collateral management business, with complementary offerings, with Lombard Risk addressing the commercial, and Vermeg the central banking sector.

The proposed combination is also expected to lead to an extended presence in the European market, as well as in the US, Canada and Asia Pacific territories, a broadened and expanded client base and cross-selling opportunities with existing clients through an enhanced portfolio offering of market leading solutions.

7.         Irrevocable Undertakings

Vermeg has received irrevocable undertakings to vote (or to procure or direct that the registered holders of the relevant Ordinary Shares, vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from each of Mr John Wisbey, Lombard Risk's largest shareholder and its founder and former Chief Executive Officer, and RBC Trustees (Jersey) Limited as trustee of The Advanced Technologies Trust in which Mr Wisbey is interested in respect of, in aggregate, 54,675,000 Ordinary Shares representing approximately 13.65 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

Vermeg has also received irrevocable undertakings to vote (or to procure or direct that the registered holders of Ordinary Shares of which they are the beneficial holders or in which they are interested, vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from the Lombard Risk Directors in respect of, in aggregate, 14,136,425 Ordinary Shares of which they are the beneficial holders or in which they are interested, representing approximately 3.53 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

In addition, Vermeg has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting from certain significant institutional shareholders in respect of, in aggregate, 86,466,725 Ordinary Shares representing approximately 21.58 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

In total, therefore, Vermeg has received irrevocable undertakings to vote (or procure or direct that the registered holders of Ordinary Shares of which they are the beneficial holders or in which they are interested vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting in respect of, in aggregate, 155,278,150 Ordinary Shares representing approximately 38.76 per cent. of the existing ordinary share capital of Lombard Risk in issue on 10 January 2018 (being the latest practicable date prior to the date of this Announcement).

Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.

8.         Information relating to Vermeg

Vermeg is a European leader in insurance management solutions and a financial software provider, with operations in France, Belgium, the Netherlands, Luxembourg and Tunisia.

Incorporated and headquartered in Amsterdam, Netherlands, the Vermeg Group reported having more than 600 employees and revenues of €53 million, EBITDA of €16 million and profit before tax of €11 million, for its latest financial year to 31 December 2016.

Founded in 2002, Vermeg remains in private ownership and has over 15 years' experience and expertise in developing and marketing software solutions and services to over 100 customers and partners in more than 22 countries.

Vermeg's five key business lines address five specific client segments, namely:

·        Wealth & Asset Management: for asset managers, asset owners and wealth managers;

·        Digital Financial Services: for financial and insurance companies with digital transformation goals;

·        Pension & Insurance: for insurers, health insurers and pension funds;

·        Financial Markets & Securities Services: for central banks, custodians, asset servicers and market infrastructure players; and

·        Property Casualty Insurance: for non-life insurers.

9.         Information relating to Lombard Risk

Lombard Risk is an AIM quoted financial services technology company headquartered in London, United Kingdom. Lombard Risk is a leading and global provider of integrated collateral management, regulatory compliance and reporting solutions for the financial services industry. With currently over 300 employees, Lombard Risk reported annual revenues of £34.3 million for its financial year ending 31 March 2017. Lombard Risk was founded in 1988 and has been admitted to trading on AIM since September 2004.

In addition to its headquarters in London, Lombard Risk has offices in New York, Hong Kong and Singapore, representation in Tokyo, Frankfurt and Sydney, and development centres in Shanghai and Birmingham. In addition to these global operations, Lombard Risk enjoys relationships with strategic partners internationally and operates through two key segments, namely, Risk Management and Trading and Regulatory Reporting. Lombard Risk's Risk Management and Trading segment includes the cross-product collateral management solution, COLLINE, the recently announced cloud-based AgileCOLLATERAL, and Lombard Risk's original risk management product, OBERON. Lombard Risk's regulatory reporting solutions enable clients to meet reporting requirements across multiple jurisdictions and include the flagship product AgileREPORTER in addition to the REPORTER and REG-REPORTER platforms supporting over 200 customers.

Lombard Risk published its audited results for the twelve months ended 31 March 2017 on 24 May 2017 and published its interim results for the six months ended 30 September 2017 on 25 October 2017. Both the audited results and the interim results can be found on Lombard Risk's website at https://www.lombardrisk.com/investor-centre-2/.

Current trading and prospects

On 25 October 2017, Lombard Risk released its interim results for the six months ended 30 September 2017. Since 30 September 2017, Lombard Risk has continued to trade in line with management's expectations and, up to 30 November 2017, has drawn down £2.0 million from its existing £4.5 million debt facilities in order to cover its working capital funding requirements.

Further financial and other information on Lombard Risk will be set out in the Scheme Document.

10.       Lombard Risk Share Schemes

Lombard Risk operates four Lombard Risk Share Schemes for its employees and non-executive directors and consultants under which options have been granted to acquire Ordinary Shares. There are currently no outstanding options over Ordinary Shares pursuant to the EMI Scheme. To the extent not already exercised, participants have six months starting with the date of the Scheme Court Hearing to exercise any outstanding options, after which time any unexercised options will lapse. If already exercisable, options can be exercised before the Scheme Record Time and the resultant Ordinary Shares will be subject to the Scheme. Where options are exercised after the Scheme Record Time, the resulting Ordinary Shares will be automatically transferred to Vermeg on the same terms as the Acquisition (other than the terms as to timing and formalities).

Participants in the Lombard Risk Share Schemes will be contacted regarding the effect of the Scheme on their rights under the Lombard Risk Share Schemes and provided with further details concerning the proposals which Vermeg will make to the participants. Vermeg intends to make a cash cancellation payment proposal to participants in the Lombard Risk Share Schemes (other than the CSOP Scheme) whereby participants will receive, in exchange for waiving their options, a cash payment representing the amount by which the per share consideration exceeds the per share exercise price under their options (subject to the deduction of any income tax and National Insurance contributions, as required). The cash cancellation payment proposal will put participants in the same net position as if they were to exercise their options and receive the same consideration as the Scheme Shareholders. To allow participants in the CSOP Scheme to exercise their options in a tax efficient manner and receive the same consideration as the Scheme Shareholders, Vermeg intends to offer a cashless exercise facility for options granted under the CSOP Scheme whereby the exercise price will be deducted from the Offer Price and paid to Lombard Risk with the participants receiving the net amount. Details of these proposals will be set out in separate letters to be sent to participants in the Lombard Risk Share Schemes.

11.       Financing

Vermeg intends to finance the cash consideration payable by Vermeg to Scheme Shareholders from a combination of Vermeg's existing cash resources and the EBRD Loan, described below.

To assist in financing the Acquisition, Vermeg Solutions, a subsidiary of Vermeg (as borrower) has entered into the EBRD Loan Agreement, which provides for a loan facility in the principal amount of up to €25 million, and Vermeg has entered into the related EBRD Guarantee. Further details of the financing arrangements will be included in the Scheme Document.

Strand Hanson, financial adviser to Vermeg, is satisfied that sufficient cash resources are available to Vermeg to enable it to satisfy in full the cash consideration payable to Scheme Shareholders under the terms of the Acquisition.

Further information on the financing of the Acquisition will be set out in the Scheme Document.

12.       Lombard Risk's Directors, management, employees, research and development and locations

Vermeg believes that it is the ideal partner for Lombard Risk and is well positioned and resourced to support Lombard Risk's existing executive management in continuing to grow the business.

Accordingly, Vermeg expects that, following successful completion of the Acquisition, Lombard Risk will operate principally as it does today from its existing locations and places of business, but within the Vermeg organisation, so as to ensure that the distinctive ethos of the Lombard Risk brands is maintained and that the business is best positioned for its future development.

Vermeg attaches great importance to the skills and experience of Lombard Risk's existing management and employees, particularly as it does not currently have an existing presence in the majority of Lombard Risk's operational geographies and product segments. Vermeg's management team believes that Lombard Risk's staff will benefit from greater opportunities going forwards as Lombard Risk continues to develop and exploit its established knowledge base and complementary product portfolio offerings within the Vermeg organisation.

Although integration plans have yet to be finalised, and are subject to engagement and due consultation with the appropriate stakeholders within Lombard Risk and Vermeg, the integration process will likely lead to a limited number of redundancies, where the businesses have overlapping functions or where operational efficiencies are identified.

In particular, Lombard Risk's R&D teams in its development centre in Shanghai are expected to be further reduced in size, in line with the pre-existing plans of Lombard Risk's senior management to transition to a new technology development centre in Birmingham, which are currently in the course of being implemented. Vermeg's intention is ultimately to have at least two main R&D centres servicing the enlarged group, one in the UK (with split teams between London and Birmingham) and one in Tunisia, where Vermeg already has a successful IT-development centre.

The exact quantum and pace of the envisaged reduction in staffing in Shanghai has still to be determined but is expected to be material, and will depend, inter alia, on the availability of appropriate resources in both the UK and Tunisia and the speed of handover between the teams. The reorganisation of R&D staff between the existing teams/sites of Vermeg and Lombard Risk, and future hires, will accordingly be influenced by the transitioning process.

There is no intention to make any material changes to the operational and professional services teams of Lombard Risk or Vermeg, which will continue to serve the enlarged group's current and future client base in the same manner as they do at present.

Lombard Risk's sales and marketing team is expected to play a more prominent role in the enlarged group, selling the enhanced/enriched product range and services portfolio of the combined entities into their enlarged target markets and geographies. Vermeg has a limited salesforce at present and will therefore build on Lombard Risk's existing sales team to enable further growth for the enlarged group.

Vermeg expects there to be some overlap in the general and administrative (G&A) functions and consequent material reduction in roles. Vermeg's intention is to seek the cancellation of the admission of the Ordinary Shares to trading on AIM from or shortly after the Effective Date, resulting in Lombard Risk's G&A team being entirely focused on supporting business growth, rather than on investor/public quoted company related matters.

Lombard Risk's current headquarters will not be relocated within the twelve month period following the Effective Date and no changes are envisaged with respect to any redeployment of the Lombard Risk Group's existing fixed asset base. However, certain administrative and financial functions are expected to be transferred and integrated into the existing Vermeg shared services centre via an orchestrated transitional process.

Save as set out above and the mutually agreed resignations of Lombard Risk's four non-executive directors (as further detailed in Appendix IV of this Announcement), the Vermeg Board does not have any plans to make any other material changes either to the continued employment or the terms and conditions of employment or in the balance of the skills and functions of the management and employees of the Lombard Risk Group or the Vermeg Group.

The Vermeg Board has given assurances to the Lombard Risk Board that, following the successful completion of the Acquisition, the existing rights and terms and conditions of employment, including pension obligations (including employer contributions into Lombard Risk's pension schemes, the accrual of benefits for existing members of such schemes and the admission of new members, as appropriate), of the management and employees of Lombard Risk and its subsidiaries will be fully safeguarded.

There are no agreements or arrangements between Vermeg and the management or employees of Lombard Risk in relation to their on-going involvement in the business and the Acquisition will not be conditional on reaching agreement with such persons. As indicated above, it has been mutually agreed that the appointment of Lombard Risk's non-executive directors will terminate with effect from the Effective Date and that they will each receive remuneration in line with the termination provisions of their respective letters of appointment by way of compensation.

Vermeg has not entered into, and is not in discussions on any proposals to enter into, any form of incentivisation arrangements with members of Lombard Risk's management who are interested in Ordinary Shares and has no plans to do so. Following completion of the Acquisition, Vermeg may put in place incentive arrangements for certain members of Lombard Risk's management team. No proposals have been made on the terms of any such incentive arrangements for relevant managers.

13.       Offer-related Arrangements

Confidentiality and Standstill Agreement

Lombard Risk and Vermeg entered into a confidentiality and standstill agreement on 4 January 2018 (the "Confidentiality and Standstill Agreement") pursuant to which each of Lombard Risk and Vermeg has undertaken to keep certain information relating to the other party confidential and not to disclose it to third parties (other than to authorised persons) unless required by law or regulation. These confidentiality obligations will remain in force for a period of 15 months from the date of the Confidentiality and Standstill Agreement.

The Confidentiality and Standstill Agreement contains customary standstill undertakings from Vermeg to Lombard Risk in connection with the acquisition of interests in the securities of Lombard Risk and related arrangements.

14.       Structure of the Acquisition

It is intended that the Acquisition will be implemented by means of a Court-sanctioned scheme of arrangement between Lombard Risk and the Scheme Shareholders under Part 26 of the Companies Act. The Scheme is an arrangement between Lombard Risk and the Scheme Shareholders. The procedure involves, among other things, an application by Lombard Risk to the Court to sanction the Scheme, in consideration for which Scheme Shareholders will receive cash on the basis described in section 2 above.

The purpose of the Scheme is to provide for Vermeg to become the owner of the entire issued and to be issued share capital of Lombard Risk. Following the Scheme becoming Effective, the Scheme Shares will be transferred to Vermeg, in consideration for which Scheme Shareholders whose names appear on the register of members of Lombard Risk at the Scheme Record Time will receive 13 pence per Scheme Share in cash on the basis set out in section 2 of this Announcement.

The Scheme will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement and to the full terms and conditions to be set out in the Scheme Document, and will only become Effective if, among other things, the following events occur on or before the Longstop Date or such later date as Vermeg and Lombard Risk agree and the Panel and the Court may allow. In summary, the Scheme will be conditional upon:

·        a resolution to approve the Scheme being passed by a majority in number of the Scheme Shareholders present and voting (and entitled to vote) at the Court Meeting, either in person or by proxy, representing not less than 75 per cent. in value of the Scheme Shares held by those Scheme Shareholders;

·        the Special Resolution necessary to implement the Scheme being passed at the General Meeting (which will require the approval of Ordinary Shareholders representing at least 75 per cent. of the votes cast at the General Meeting);

·        following the Court Meeting and General Meeting, the Scheme being sanctioned by the Court (with or without modification, on terms agreed by Vermeg and Lombard Risk); and

·        an office copy of the Scheme Court Order being delivered to the Registrar of Companies.

Upon the Scheme becoming Effective: (i) it will be binding on all Scheme Shareholders, irrespective of whether or not they attended or voted at the Court Meeting and the General Meeting (and if they attended and voted, whether or not they voted in favour); and (ii) share certificates in respect of Ordinary Shares will cease to be of value and should be destroyed and entitlements to Ordinary Shares held within the CREST system will be cancelled.

Any Ordinary Shares issued before the Scheme Record Time will be subject to the terms of the Scheme. The Special Resolution to be proposed at the General Meeting will, among other matters, provide that the Lombard Risk Articles be amended to incorporate provisions requiring any Ordinary Shares issued after the Scheme Record Time (other than to Vermeg and/or its nominees) to be automatically transferred to Vermeg on the same terms as the Acquisition (other than terms as to timings and formalities). The provisions of the Lombard Risk Articles (as amended) will avoid any person (other than Vermeg and its nominees) holding shares in the capital of Lombard Risk after the Effective Date.

The Scheme shall lapse if the Scheme does not become Effective by the Longstop Date, provided however that the deadline for the Scheme to become Effective may be extended by agreement between Vermeg and Lombard Risk, with the consent of the Court or Panel, if required. Vermeg reserves the right, subject to Panel consent, to elect to implement the Acquisition by way of a Takeover Offer on terms more fully described in section 19 below.

The Scheme Document will include full details of the Scheme, together with notices of the Court Meeting and the General Meeting. The Scheme Document will also contain the expected timetable for the Acquisition, and will specify the necessary actions to be taken by Ordinary Shareholders.

Lombard Risk has in issue the Deferred Shares. The Deferred Shares are not listed on any exchange and effectively have no rights. In particular they do not confer on their holders any right to any dividend or distribution nor the right to receive notice of, attend, speak or vote at general meetings of Lombard Risk. The Deferred Shares will not form part of, and will be unaffected by, the Acquisition. In accordance with the Lombard Risk Articles, Lombard Risk shall procure the transfer of the Deferred Shares for a nominal sum to Vermeg on the completion of the Acquisition.

The Lombard Risk Directors have consented to the publication of the Scheme Document within 14 days of the date of this Announcement should the parties be in a position to do so, but in any event by no later than 28 days from the date of this Announcement. The Scheme Document together with the Forms of Proxy will be posted to Ordinary Shareholders and, for information only, to persons with information rights and to holders of options and awards granted under the Lombard Risk Share Schemes, as soon as reasonably practicable. Subject, among other things, to the satisfaction or waiver of the Conditions, it is expected that the Scheme will become Effective by late February 2018.

15.       Cancellation of admission to trading on AIM and re-registration

On completion of the Acquisition, the Company will become a wholly owned subsidiary of Vermeg. Prior to the Scheme becoming Effective, an application will be made to the London Stock Exchange for admission of the Ordinary Shares to trading on AIM to be cancelled from or shortly after the Effective Date. The last day of dealings in Ordinary Shares on AIM is expected to be the Business Day immediately prior to the Effective Date and no transfers shall be registered after 6.00 p.m. on that date.

On the Effective Date, share certificates in respect of Ordinary Shares will cease to be valid and entitlements to Ordinary Shares held within the CREST system will be cancelled or transferred. It is also intended that shortly after the Effective Date, Lombard Risk will be re-registered as a private limited company under the relevant provisions of the Companies Act.

16.       Disclosure of interests in Lombard Risk relevant securities

Save for the irrevocable undertakings referred to in section 7 above, as at the close of business on 10 January 2018 (being the latest practicable date prior to the date of this Announcement), neither Vermeg, nor any of the directors of Vermeg or any member of the Vermeg Group, nor, so far as the directors of Vermeg are aware, any person acting in concert with Vermeg for the purposes of the Acquisition, had any interest in, right to subscribe for, or had borrowed or lent any Ordinary Shares or securities convertible or exchangeable into Ordinary Shares, nor did any such person have any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, or any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the Code, in relation to Ordinary Shares or in relation to any securities convertible or exchangeable into Ordinary Shares.

In the interests of secrecy, prior to this Announcement, Vermeg has not made any enquiries in respect of the matters referred to in this section of certain parties who may be deemed by the Panel to be acting in concert with Vermeg for the purposes of the Scheme. Enquiries of such parties will be made as soon as practicable following the date of this Announcement and Vermeg confirms that further disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Code will be made as soon as possible, if required.

Furthermore, save for the irrevocable undertakings described in section 7 above, no arrangement exists between Vermeg or Lombard Risk or a person acting in concert with Vermeg or Lombard Risk in relation to Ordinary Shares. For these purposes, an "arrangement" includes any indemnity or option arrangement, any agreement or any understanding, formal or informal, of whatever nature, relating to Ordinary Shares which may be an inducement to deal or refrain from dealing in such securities.

17.       Overseas Shareholders

The availability of the Acquisition and the distribution of this Announcement to Ordinary Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdiction. Ordinary Shareholders who are in any doubt regarding such matters should consult an appropriate independent professional adviser in the relevant jurisdiction without delay.

This Announcement does not constitute an offer for sale for any securities or an offer or an invitation to purchase any securities. Ordinary Shareholders are advised to read carefully the Scheme Document and the related Forms of Proxy once these have been dispatched.

18.       Documents published on a website

Copies of the following documents will be made available on Lombard Risk's website at https://www.lombardrisk.com/investor-centre-2/, by no later than 12 noon (London time) on 12 January 2018 until the Effective Date:

·        this Announcement;

·        the irrevocable undertakings referred to in section 7 above;

·        the EBRD Loan Agreement;

·        the EBRD Guarantee; and

·        the Confidentiality and Standstill Agreement.

Neither the contents of Lombard Risk's website, nor the content of any other website accessible from hyperlinks on such website, is incorporated into or forms part of this Announcement.

19.       General

Vermeg reserves the right, subject to Panel consent, to elect to implement the Acquisition by way of a Takeover Offer as an alternative to the Scheme. If the Acquisition is implemented by way of a Takeover Offer, the Acquisition will be implemented on substantially the same terms as those which would apply to the Scheme (subject to appropriate amendments, including an acceptance condition set at 90 per cent. of the Ordinary Shares to which the Takeover Offer relates or such lesser percentage, being more than 50 per cent., as Vermeg may decide).

The Acquisition will be made subject to the Conditions and certain further terms set out in Appendix I to this Announcement and the further terms and conditions to be set out in the Scheme Document when issued. The bases of calculations and sources of certain information contained in this Announcement are set out in Appendix II to this Announcement. A summary of the irrevocable undertakings given in relation to the Acquisition is contained in Appendix III to this Announcement. Appendix IV to this Announcement contains details of the termination payments to be made to Lombard Risk's non-executive directors on the Effective Date. Certain terms used in this Announcement are defined in Appendix V to this Announcement.

The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England and Wales. The Scheme will be subject to the applicable requirements of the Code, the Panel and the London Stock Exchange.

Strand Hanson, Quayle Munro, WG Partners and Eurohold have each given and not withdrawn their consent to the publication of this Announcement with the inclusion herein of the references to their names in the form and context in which they appear.

Enquiries:

Vermeg Group N.V.

Badreddine Ouali, Chairman

Pascal Leroy, Chief Executive Officer

 

via Hudson Sandler on

Tel: +44 (0) 207 796 4133

Strand Hanson Limited

(Financial Adviser to Vermeg)

Stuart Faulkner

Matthew Chandler

James Dance

 

Tel: +44 (0) 207 409 3494

 

Eurohold, S.L.

(Strategic Adviser to Vermeg)

Bernard Demode

Sonja Fell

 

Tel: +33 (0) 1 78 42 36 26

 

Hudson Sandler LLP

(PR Adviser to Vermeg)

Daniel de Belder

Nick Lyon

Bertie Berger

Tel: +44 (0) 207 796 4133

Lombard Risk Management plc

Tel: +44 (0) 207 593 6700

Alastair Brown, Chief Executive Officer

Nigel Gurney, Chief Financial Officer




Newgate Communications Limited

(PR Adviser to Lombard Risk)

Tel: +44 (0) 207 653 9850

Bob Huxford


Charlotte Coulson

James Ash




Quayle Munro Limited

(Lead Financial Adviser and Rule 3 Adviser to Lombard Risk)

Tel: +44 (0) 207 907 4200

Mark Fisher


Tim Shortland

Paul Tracey




WG Partners LLP

(Financial Adviser and Joint Broker to Lombard Risk)

Tel: +44 (0) 203 705 9330

David Wilson


Claes Spång

Chris Lee




finnCap Limited

(Nomad and Joint Broker to Lombard Risk)

Tel: +44 (0) 207 220 0500

Stuart Andrews


Carl Holmes


Scott Mathieson

 


Shareholder Helpline (8.30 a.m. to 5.30 p.m., Monday to Friday)

Tel: +44 (0) 370 707 1125

 

Further information

This Announcement is for information purposes only and does not constitute, or form part of, an offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Lombard Risk in any jurisdiction in contravention of applicable law. The Acquisition will be made solely by means of the Scheme Document or Offer Document or any other document by which the Acquisition is made, which will contain the full terms and conditions of the Acquisition including details of how to vote in respect of the Acquisition. Any vote in respect of the Scheme or other response in relation to the Acquisition should be made only on the basis of the information contained in the Scheme Document. Ordinary Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been despatched.

Please be aware that addresses, electronic addresses and certain other information provided by Ordinary Shareholders, persons with information rights and other relevant persons for the receipt of communications from Lombard Risk may be provided to Vermeg during the Offer Period as required under Section 4 of Appendix IV of the Code to comply with Rule 2.11(c).

Strand Hanson, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Vermeg in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and the other matters referred to in this Announcement and will not be responsible to anyone other than Vermeg for providing the protections afforded to its clients or for providing advice in connection with the Acquisition and any other matter referred to in this Announcement.

Eurohold is acting exclusively as strategic adviser to Vermeg in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and the other matters referred to in this Announcement and will not be responsible to anyone other than Vermeg for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

Quayle Munro, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as lead financial adviser and Rule 3 adviser to Lombard Risk in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and any other matter referred to in this Announcement and will not be responsible to anyone other than Lombard Risk for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

WG Partners, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser and joint broker to Lombard Risk in connection with the Acquisition and matters set out in this Announcement and for no-one else and will not regard any other person as its client in relation to the Acquisition and any other matter referred to in this Announcement and will not be responsible to anyone other than Lombard Risk for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

finnCap, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as nominated adviser and joint broker to Lombard Risk and will not regard any other person as its client in relation to the Acquisition and the other matters referred to in this Announcement and will not be responsible to anyone other than Lombard Risk for providing the protections afforded to its clients or for providing advice in connection with the Acquisition or any other matter referred to in this Announcement.

Overseas Shareholders

The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of and observe, any applicable requirements. In particular, the ability of persons who are not resident in the United Kingdom to vote their Ordinary Shares with respect to the Scheme at the Court Meeting, or to appoint another person as proxy to vote at the Court Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This Announcement has been prepared for the purposes of complying with English law, the AIM Rules and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales.

Unless otherwise determined by Vermeg or required by the Code, and permitted by applicable law and regulation, the Acquisition will not be made available, directly or indirectly, in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Scheme by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Acquisition are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Acquisition (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. If the Acquisition is implemented by way of a Takeover Offer, unless otherwise permitted by applicable law or regulation, the Takeover Offer may not be made, directly or indirectly, in or into or by use of mail or any other means or instrumentality (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of or any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Takeover Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction.

The availability of the Acquisition to Ordinary Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of and observe, any applicable requirements.

Further details in relation to Overseas Shareholders will be contained in the Scheme Document.

Additional information for US investors

The Acquisition relates to the shares of an English company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. Neither the proxy solicitation rules nor the tender offer rules under the US Securities Exchange Act of 1934, as amended (the "US Exchange Act"), will apply to the Acquisition. Moreover, the Acquisition is subject to the disclosure requirements and practices applicable in the United Kingdom and under the Code to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. If in the future, Vermeg exercises its right to implement the proposed acquisition by way of a Takeover Offer, the proposed acquisition will be made in compliance with applicable U.S. laws and regulations, including Section 14(e) of the US Exchange Act and Regulation 14E thereunder. Financial information included in this Announcement has been prepared, unless specifically stated otherwise, in accordance with accounting standards applicable in the UK and thus may not be comparable to the financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

It may be difficult for US holders of Ordinary Shares to enforce their rights and claims arising out of the US federal securities laws, since Vermeg and Lombard Risk are located in countries other than the United States, and some or all of their officers and directors may be residents of countries other than the United States. US holders of Ordinary Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

The receipt of cash pursuant to the Acquisition by a US holder as consideration for the transfer of its Scheme Shares pursuant to the Scheme will likely be a taxable transaction for United States federal income tax purposes and potentially under any applicable United States state or local, as well as foreign and other, tax laws. Each Ordinary Shareholder is urged to consult his or her independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him or her.

Forward-looking statements

This Announcement (including information incorporated by reference in this Announcement), oral statements made regarding the Acquisition, and other information published by Vermeg and Lombard Risk contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Vermeg and Lombard Risk about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the "forward-looking statements". The forward-looking statements contained in this Announcement include statements relating to the expected effects of the Acquisition on Vermeg and Lombard Risk, the expected timing and scope of the Acquisition and other statements other than historical facts. All statements other than statements of historical facts included in this Announcement may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "should", "could", "would", "may", "anticipates", "estimates", "synergy", "cost-saving", "projects", "goal", "strategy", "budget", "forecast" or "might", or words or terms of similar substance or the negative thereof are forward-looking statements. Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Lombard Risk's and Vermeg's operations and benefits from the Acquisition; and (iii) the effects of government regulation on Vermeg's or Lombard Risk's business.

These forward-looking statements are not guarantees of future financial performance. Except as expressly provided in this Announcement, they have not been reviewed by the auditors of Vermeg or Lombard Risk or their respective financial advisers. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. These factors include the satisfaction of the Conditions, as well as additional factors such as: the risk of disruptions to Vermeg's or Lombard Risk's businesses; the negative effects of the Announcement of the Acquisition or the consummation of the Acquisition on Vermeg's operating results; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the Acquisition; fluctuations in demand for Lombard Risk's and Vermeg's products; loss of market share and industry competition; fluctuations in capital markets; fluctuations in interest and exchange rates; the occurrence of unforeseen disasters or catastrophes; political or economic instability in principal markets; adverse outcomes in litigation; and general, local and global economic, political, business and market conditions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither Vermeg nor Lombard Risk, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Announcement will actually occur. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements. All subsequent oral or written forward-looking statements attributable to Vermeg or Lombard Risk or any of their respective members, directors, officers or employees or any persons acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Unless otherwise required by applicable law, Vermeg and Lombard Risk disclaim any obligation to update or revise any forward-looking or other statements contained herein other than in accordance with their legal and regulatory obligations.

Rounding

Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

No profit forecasts or estimates

No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Lombard Risk or Vermeg, as appropriate, for the current or future financial years would necessarily be greater or less than the historical published earnings or earnings per share for Lombard Risk or Vermeg, as appropriate.

Rule 2.9 information

In accordance with Rule 2.9 of the Code, Lombard Risk confirms that, as at the close of business on 10 January 2018, being the last Business Day before the date of this Announcement, it has 400,593,686 Ordinary Shares in issue. Lombard Risk currently holds 234 Ordinary Shares in treasury. Lombard Risk's International Securities Identification Number ("ISIN") is GB00B030JP46.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on a website and availability of hard copies

A copy of this Announcement and the documents required to be published by Rule 26 of the Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Lombard Risk's website at https://www.lombardrisk.com/investor-centre-2/ by no later than 12 noon (London) time on the Business Day following the date of this Announcement. For the avoidance of doubt, the content of such website is not incorporated into and does not form part of this Announcement.

A hard copy of this Announcement will be sent to Ordinary Shareholders (other than Ordinary Shareholders who have elected to receive electronic communications) in the near future. Ordinary Shareholders may request a hard copy of this Announcement by contacting Computershare on +44 (0) 370 707 1125 between 8.30 am. to 5.30 p.m., Monday to Friday or by submitting a request in writing to Computershare at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS13 8AE. Ordinary Shareholders may also request that all future documents, announcements and information to be sent to them in relation to the Acquisition should be in hard copy form. If you have received this Announcement in electronic form, copies of this Announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made.

 



Conditions and Certain Further Terms of the Scheme and the Acquisition

A.        Conditions to the Scheme and the Acquisition

1.         The Acquisition will be conditional upon the Scheme becoming unconditional and becoming Effective, subject to the provisions of the Code, by no later than the Longstop Date or such later date (if any) as Vermeg and Lombard Risk may, with the consent of the Panel, agree and (if required) the Court may approve.

Scheme approval

2.         The Scheme will be conditional upon:

(a)        approval of the Scheme at the Court Meeting (and at any separate class meeting which may be required by the Court) (or at any adjournment thereof, provided that the Court Meeting may not be adjourned beyond the 22nd day after the expected date of the Court Meeting to be set out in the Scheme Document in due course (or such later date (if any) as Vermeg and Lombard Risk may agree and the Court may permit)) by a majority in number of the Scheme Shareholders present and voting, either in person or by proxy, representing 75 per cent or more in value of the Scheme Shares held by those Scheme Shareholders;

(b)        all resolutions in connection with or required to approve and implement the Scheme as set out in the notice of the General Meeting (including, without limitation, the Special Resolution) being duly passed by the requisite majority at the General Meeting (or at any adjournment thereof, provided that the General Meeting may not be adjourned beyond the 22nd day after the expected date of the General Meeting to be set out in the Scheme Document in due course (or such later date (if any) as Vermeg and Lombard Risk may agree and the Court may permit)); and

(c)        the sanction of the Scheme without modification or with modification on terms acceptable to Vermeg and Lombard Risk, provided that the Scheme Court Hearing may not be adjourned beyond the 22nd day after the expected date of the Scheme Court Hearing to be set out in the Scheme Document in due course (or such later date (if any) as Vermeg and Lombard Risk may agree and the Court may permit) and the delivery of an office copy of the Scheme Court Order to the Registrar of Companies.

In addition, Vermeg and Lombard Risk have agreed that the Acquisition will be conditional upon the following Conditions and, accordingly, the necessary actions to make the Scheme Effective will not be taken unless such conditions (as amended, if appropriate) have been satisfied or, where relevant, waived:

General Third Party clearances

3.         All notifications to and filings with, Third Parties which are necessary in order to allow the Acquisition to close having been made, all appropriate waiting and other time periods (including any extensions of such waiting and other time periods) under any applicable legislation or regulation of any relevant jurisdiction having expired, lapsed or been terminated (as appropriate).

4.         No Third Party whose consent or non-intervention is required in order to allow the Acquisition to close having intervened (as defined below) and there not continuing to be outstanding any statute, regulation or order of any Third Party in each case which is material in the context of the Vermeg Group, the Lombard Risk Group, the Scheme or the Takeover Offer which would or might reasonably be expected to:

(a)        make the Scheme or the Takeover Offer void, illegal or unenforceable in any jurisdiction, or otherwise directly or indirectly materially restrain, prevent, prohibit, restrict or delay the same or impose additional material conditions or obligations with respect to the Scheme or the Takeover Offer or such acquisition, or otherwise materially impede, challenge or interfere with the Scheme or Takeover Offer;

(b)        materially limit the ability of any member of the Vermeg Group or of the Lombard Risk Group to conduct or integrate or co-ordinate its business, or any part of it, with the businesses or any part of the businesses of any other member of the Vermeg Group or of the Lombard Risk Group;

(c)        result in any member of the Lombard Risk Group or the Vermeg Group ceasing to be able to carry on business under any name under which it presently does so; or

(d)        otherwise materially adversely affect any or all of the business, assets, profits, financial or trading position or prospects of any member of the Lombard Risk Group or of the Vermeg Group.

5.         All material Authorisations which are necessary in order to allow the Acquisition to close in any relevant jurisdiction for or in respect of the Scheme or Takeover Offer having been obtained from all appropriate Third Parties.

Certain matters arising as a result of any arrangement, agreement etc.

6.         Except as Fairly Disclosed, there being no provision of any arrangement, agreement, licence, permit, franchise or other instrument to which any member of the Lombard Risk Group is a party, or by or to which any such member or any of its assets is or are or may be bound, entitled or subject or any circumstance, which, in each case as a consequence of the Scheme or Takeover Offer, could or might reasonably be expected to result in (in each case to an extent which is material in the context of the Lombard Risk Group taken as a whole):

(a)        any monies borrowed by or any other indebtedness or liabilities (actual or contingent) of, or any grant available to, any member of the Lombard Risk Group being or becoming repayable or capable of being declared repayable prior to its stated maturity date or repayment date or the ability of any member of the Lombard Risk Group to borrow monies or incur indebtedness being withdrawn or inhibited or becoming capable of being withdrawn or inhibited;

(b)        the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property, assets or interests of any member of the Lombard Risk Group;

(c)        any member of the Lombard Risk Group ceasing to be able to carry on business under any name under which it presently does so;

(d)        the creation of liabilities (actual or contingent) by any member of the Lombard Risk Group other than in the ordinary course of business;

(e)        the rights, liabilities, obligations or interests of any member of the Lombard Risk Group under any such arrangement, agreement, licence, permit, franchise or other instrument being, or becoming capable of being, terminated or adversely modified or affected; or

(f)        the financial or trading position or the value of any member of the Lombard Risk Group being prejudiced or adversely affected.

7.         Since 31 March 2017 and except as Fairly Disclosed, no member of the Lombard Risk Group having:

(a)        issued or agreed to issue, or authorised or announced its intention to authorise or propose the issue, of 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 securities, other than as between Lombard Risk and wholly-owned subsidiaries of Lombard Risk and except for the issue or transfer out of treasury of Ordinary Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the Lombard Risk Share Schemes;

(b)        purchased or redeemed or repaid any of its own shares or other securities or reduced or made any other change to any part of its share capital;

(c)        proposed, recommended, declared, paid or made any dividend or other distribution or made any bonus issue (other than to Lombard Risk or a wholly-owned subsidiary of Lombard Risk) or made or authorised any change in its loan capital;

(d)        other than pursuant to the Acquisition (and except for any acquisition or disposal in the ordinary course of business or a transaction between Lombard Risk and a wholly-owned subsidiary of Lombard Risk or between such wholly-owned subsidiaries) implemented, effected, authorised or announced its intention to implement, effect or authorise any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof), or acquired or disposed of or transferred, mortgaged, charged or created any security interest over any assets or any right, title or interest in any assets;

(e)        issued, authorised or announced its intention to issue, or made any change in or to, any debentures or (except in the ordinary course of business or except as between Lombard Risk and its wholly-owned subsidiaries or as between such wholly-owned subsidiaries) incurred or increased any indebtedness or liability (actual or contingent);

(f)        entered into, varied, or authorised any agreement, transaction, arrangement or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual in terms of nature or magnitude, or announced any intention to do so;

(g)        taken any corporate action or had any legal proceedings instituted or threatened against it or petition presented or order made for its winding-up (voluntarily or otherwise), striking off, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any material part of its assets and revenues in any jurisdiction;

(h)        entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into, or vary to a material extent, the terms of any contract, service agreement, commitment or arrangement with any director of Lombard Risk;

(i)         proposed, agreed to provide or modified the terms of any pension scheme, share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed by the Lombard Risk Group;

(j)         purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in sub-section (i) above, made any other change to any part of its share capital (other than pursuant to the implementation of the Acquisition);

(k)        (other than in respect of claims between Lombard Risk and any wholly owned subsidiaries of Lombard Risk) waived, compromised or settled any claim;

(l)         been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business;

(m)       taken any steps, corporate action or had any legal proceedings instituted or threatened in writing against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any material part of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed (in any case to an extent which is material in the context of the Lombard Risk Group);

(n)        made, authorised, proposed or announced an intention to propose any change in its loan capital to an extent in any such case which is material in the context of the Lombard Risk Group; or

(o)        entered into any agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) or proposed or announced any intention with respect to any of the transactions, matters or events referred to in this Condition A7.

No adverse change, litigation or regulatory enquiry

8.         Since 31 March 2017 and except as Fairly Disclosed:

(a)        there having been no adverse change or deterioration in the business, assets, financial or trading positions or profit or prospects of any member of the Lombard Risk Group;

(b)        no contingent or other liability of any member of the Lombard Risk Group having arisen or become apparent or increased;

(c)        no litigation, arbitration proceedings, prosecution, investigation or other legal or regulatory proceedings to which any member of the Lombard Risk Group is or may become a party (whether as plaintiff, defendant or otherwise) having been threatened, announced, implemented or instituted by or against or remaining outstanding against or in respect of any member of the Lombard Risk Group; and

(d)        no member of the Lombard Risk Group having conducted its business in breach of any applicable laws and regulations,

in each case to an extent which is material in the context of the Lombard Risk Group taken as a whole.

No discovery of certain matters

9.         Vermeg not having discovered (other than as a result of it having been Fairly Disclosed), that:

(a)        any financial or business or other information concerning the Lombard Risk Group disclosed at any time by or on behalf of any member of the Lombard Risk Group, whether publicly to any member of the Vermeg Group or to any of their advisers or otherwise, is misleading or contains any misrepresentation of fact or omits to state a fact necessary to make any information contained therein not misleading and which was not subsequently corrected before the date of this Announcement by disclosure either publicly or otherwise to Vermeg or its professional advisers;

(b)        any member of the Lombard Risk Group is subject to any liability (actual or contingent) which is not disclosed in Lombard Risk's annual report and accounts for its financial year ended 31 March 2017; or

(c)        any information which has not been Fairly Disclosed and which affects the import of any information disclosed at any time by or on behalf of any member of the Lombard Risk Group,

in each case to an extent which is material in the context of the Lombard Risk Group taken as a whole.

Anti-corruption, sanctions and criminal property

10.       Vermeg not having discovered (other than as a result of it having been Fairly Disclosed) that:

(a)        (i) any past or present member, director, officer or employee of the Lombard Risk Group is or has at any time engaged in any activity, practice or conduct which would constitute an offence under the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other anti- corruption legislation applicable to the Lombard Risk Group; or (ii) any person that performs or has performed services for or on behalf of the Lombard Risk Group is or has at any time engaged in any activity, practice or conduct in connection with the performance of such services which would constitute an offence under the UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977 or any other applicable anti-corruption legislation;

(b)        any asset of any member of the Lombard Risk Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition);

(c)        any past or present member, director, officer or employee of the Lombard Risk Group, or any other person for whom any such person may be liable or responsible, has engaged in any business with, made any investments in, made any funds or assets available to or received any funds or assets from: (i) any government, entity or individual in respect of which US or European Union persons, or persons operating in those territories, are prohibited from engaging in activities or doing business, or from receiving or making available funds or economic resources, by applicable US or European Union laws or regulations, including the economic sanctions administered by the United States Office of Foreign Assets Control or HM Treasury & Customs; or (ii) any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states; or

(d)        a member of the Lombard Risk Group has engaged in any transaction which would cause any member of the Vermeg Group to be in breach of any applicable law or regulation upon its acquisition of Lombard Risk, including the economic sanctions of the United States Office of Foreign Assets Control or HM Treasury & Customs, or any government, entity or individual targeted by any of the economic sanctions of the United Nations, the United States, the European Union or any of its member states.

For the purpose of these Conditions:

"Authorisations" means authorisations, orders, grants, recognitions, determinations, certificates, confirmations, consents, licences, clearances, provisions and approvals, in each case, of a Third Party.

Information shall be regarded as "Fairly Disclosed" by and on behalf of Lombard Risk if it is information which has been: (i) disclosed in the annual report and accounts of Lombard Risk for its financial year ended 31 March 2017; (ii) disclosed in this Announcement; (iii) disclosed in any other public announcement by, or on behalf of, Lombard Risk in accordance with the AIM Rules prior to the date of this Announcement; (iv) fairly disclosed in writing prior to the date of this Announcement by or on behalf of Lombard Risk to Vermeg (or its respective officers, employees, agents or advisers in their capacity as such); or (v) fairly disclosed in the virtual data room operated by or on behalf of Lombard Risk and which Vermeg is able to access in relation to the Acquisition prior to the date of this Announcement.

"Third Party" means any central bank, government, government department or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, authority (including any national or supranational antitrust or merger control authority), court, trade agency, association, institution or professional or environmental body in any relevant jurisdiction, including, for the avoidance of doubt, the Panel.

A Third Party shall be regarded as having "intervened" if it has decided to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference or made, proposed or enacted any statute, regulation, decision or order or taken any measures or other steps or required any action to be taken or information to be provided and "intervene" shall be construed accordingly.

B.        Waiver and invocation of the Conditions

The Scheme will not become Effective unless the Conditions have been fulfilled or (if capable of waiver) waived by no later than the Longstop Date (or such later date as Vermeg and Lombard Risk may, with the consent of the Panel, agree and (if required) the Court may allow).

Subject to the requirements of the Panel, Vermeg reserves the right in its sole discretion to waive, in whole or in part, all or any of the Conditions in Part A above, except for Condition A2 (Scheme approval) which cannot be waived.

If the Panel requires Vermeg to make an offer or offers for any Ordinary Shares under the provisions of Rule 9 of the Code, Vermeg may make such alterations to the Conditions as are necessary to comply with the provisions of that Rule.

Each of the Conditions shall be regarded as a separate Condition and shall not be limited by reference to any other Condition.

C.        Certain further terms of the Acquisition

Under Rule 13.5(a) of the Code, Vermeg may not invoke a Condition to the Acquisition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn unless the circumstances which give rise to the right to invoke the Condition are of material significance to Vermeg in the context of the Acquisition. Condition A2 (Scheme approval) and, if applicable, any acceptance condition if the Acquisition is implemented by means of a Takeover Offer, are not subject to this provision of the Code.

Ordinary Shares will be acquired by Vermeg with full title guarantee, fully paid and free from all liens, equitable interests, charges, encumbrances, rights of pre-emption and other third party rights of any nature whatsoever and together with all rights attaching to them as at the date of this Announcement or subsequently attaching or accruing to them, including the right to receive and retain, in full, all dividends and other distributions (if any) declared, made, paid or payable, or any other return of capital made, on or after the date of this Announcement.

If, on or after the date of this Announcement and before the Effective Date, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Ordinary Shares, Vermeg reserves the right, to reduce the consideration payable under the terms of the Acquisition for the Ordinary Shares by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this Announcement or in the Scheme Document to the consideration payable under the terms of the Acquisition will be deemed to be a reference to the consideration as so reduced. To the extent that any such dividend and/or distribution and/or other return of capital is declared, made or paid or is payable and it is: (i) transferred pursuant to the Acquisition on a basis which entitles Vermeg to receive the dividend or distribution and to retain it; or (ii) cancelled, the consideration payable under the terms of the Acquisition will not be subject to change in accordance with this paragraph. Any exercise by Vermeg of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Acquisition.

The Acquisition will be subject, inter alia, to the Conditions and certain further terms which are set out in this Appendix I to this Announcement and those terms which will be set out in the Scheme Document and such further terms as may be required to comply with the AIM Rules and the provisions of the Code.

The availability of the Acquisition to persons not resident in the United Kingdom may be affected by the laws of the relevant jurisdiction. Any persons who are subject to the laws of any jurisdiction other than the United Kingdom should inform themselves about and observe any applicable requirements. Further information in relation to Overseas Shareholders will be contained in the Scheme Document.

Vermeg reserves the right for any other member of the Vermeg Group, from time to time, to implement the Acquisition.

This Announcement and any rights or liabilities arising hereunder, the Acquisition, the Scheme, and any proxies will be governed by the laws of England and Wales and be subject to the jurisdiction of the English courts. The Scheme will be subject to the applicable requirements of the Code, the Panel, the AIM Rules, AIM and the FCA.


Appendix II


Bases of Calculations 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 value attributed to the existing issued ordinary share capital of Lombard Risk of approximately £52.08 million is based upon the 400,593,686 Ordinary Shares in issue on 10 January 2018 (being the last Business Day prior to the date of this Announcement).

(b)        The Closing Prices are closing middle market quotations derived from the AIM Appendix to the Daily Official List for the particular date(s) concerned.

(c)        The volume weighted average Closing Price of 7.27 pence per Ordinary Share for the three months up to and including 10 January 2018 is derived from Bloomberg's daily price and volume data.

(d)        Unless otherwise stated, the financial information concerning the Lombard Risk Group has been extracted or derived (without material adjustment) from Lombard Risk's audited consolidated financial statements for the year ended 31 March 2017 and its unaudited interim results for the six months to 30 September 2017.

(e)        Unless otherwise stated, the financial information concerning the Vermeg Group has been extracted or derived (without material adjustment) from Vermeg's audited consolidated financial statements for the year ended 31 December 2016.

(f)        All other information relating to Vermeg has been provided by persons duly authorised by the Vermeg Board.

(g)        The maximum cash consideration payable under the Acquisition is based on the 400,593,686 Ordinary Shares in issue on 10 January 2018 (being the last Business Day prior to the date of this announcement).


Appendix III


Details of Irrevocable Undertakings

 

The following holders or controllers of Ordinary Shares have given irrevocable undertakings to vote (or procure or direct that the registered holders of Ordinary Shares of which they are the beneficial holders or in which they are interested, vote) in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting and, if Vermeg exercises its right to implement the Acquisition as a Takeover Offer, to accept, or procure the acceptance of, such Takeover Offer in relation to the following Ordinary Shares.

Part A: Director shareholder irrevocable undertakings

Name

Number of Ordinary Shares

Percentage of issued ordinary share capital of Lombard Risk

Philip Crawford

6,122,736

1.53%

Alastair Brown

1,683,400

0.42%

Nigel Gurney

622,829

0.16%

Alexander Broderick

171,432

0.04%

John McCormick

5,076,756

1.27%

Stephen Rogers

459,272

0.11%

The irrevocable undertakings given by the Lombard Risk Directors will cease to be binding if:

(a)        the Acquisition does not proceed because:

(i)         the Panel consents to Vermeg not proceeding;
(ii)        an event occurs which means Vermeg is no longer required by the Code to proceed with the Acquisition;
(iii)       Vermeg becomes aware that any Condition of the Acquisition has or may become incapable of being fulfilled and the Panel consents to Vermeg not proceeding with the Acquisition; or

(b)        the Acquisition lapses or is withdrawn (and no new replacement Scheme or Takeover Offer is announced by Vermeg).

These irrevocable undertakings will remain binding if a higher competing offer for Lombard Risk is made.

Part B: Non-director shareholder irrevocable undertakings

Name

Number of Ordinary Shares

Percentage of issued ordinary share capital of Lombard Risk

Mr John Michael Wisbey

32,542,500

8.12%

RBC Trustees (Jersey) Limited as trustee of The Advanced Technologies Trust*

22,132,500

5.52%

Hargreave Hale Limited

29,300,000

7.31%

Ruffer LLP

32,895,612

8.21%

Herald Investment Management Limited

24,271,113

6.06%

* - in respect of which Mr Wisbey is interested.

The irrevocable undertaking given by Mr John Wisbey and RBC Trustees (Jersey) Limited as trustee of The Advanced Technologies Trust listed in this Part B shall lapse if the Scheme does not become Effective (or, if so implemented, the Takeover Offer does not become wholly unconditional) before 31 March 2018. The irrevocable undertakings given by the other shareholders listed in this Part B will cease to be binding in the same circumstances as described above in respect of the Lombard Risk Directors' irrevocable undertakings save that the irrevocable undertakings provided by all shareholders listed in this Part B will cease to have effect if any third party makes an offer within ten Business Days (or, in the case of Herald Investment Management Limited, 20 calendar days) of the publication of the Scheme Document to acquire the entire issued and to be issued ordinary share capital of Lombard Risk (not already owned by such party) which values each Scheme Share at a price which is 10 per cent. (or more) higher than the Offer Price (provided that, except in the case of Herald Investment Management Limited, if by or on the tenth Business Day after the day on which the third party's offer is made, the Offer Price is increased such that its value equals or exceeds the third party's offer, the irrevocable undertaking given by those shareholders listed in this Part B shall not lapse). 

 



Appendix IV


Details of Termination Payments to Lombard Risk's Non-Executive Directors

 

Philip Crawford

By a letter dated 10 January 2018, Philip Crawford agreed to resign as a non-executive director of the Company on the Effective Date (the "PC Resignation Letter"). Pursuant to the PC Resignation Letter on the Effective Date, Philip Crawford will receive a payment of £11,250 less the normal deductions for tax and national insurance contributions in lieu of fees, in addition to accrued but unpaid monthly fees, for the 3 month notice period in accordance with Mr Crawford's letter of appointment dated 30 April 2010.

Alexander Broderick

By a letter dated 10 January 2018, Alexander Broderick agreed to resign as a non-executive director of the Company on the Effective Date (the "AB Resignation Letter"). Pursuant to the AB Resignation Letter on the Effective Date, Alexander Broderick will receive a payment of £7,500 less the normal deductions for tax and national insurance contributions in lieu of fees, in addition to accrued but unpaid monthly fees, for the 3 month notice period in accordance with Mr Broderick's letter of appointment dated 9 September 2015.

John McCormick

By a letter dated 10 January 2018, John McCormick agreed to resign as a non-executive director of the Company on the Effective Date (the "JM Resignation Letter"). Pursuant to the JM Resignation Letter on the Effective Date, John McCormick will receive a payment of £7,500 less the normal deductions for tax and national insurance contributions in lieu of fees, in addition to accrued but unpaid monthly fees, for the 3 month notice period in accordance with Mr McCormick's letter of appointment dated 20 October 2015.

Stephen Rogers

By a letter dated 10 January 2018, Stephen Rogers agreed to resign as a non-executive director of the Company on the Effective Date (the "SR Resignation Letter"). Pursuant to the SR Resignation Letter on the Effective Date, Stephen Rogers will receive a payment of £7,500 less the normal deductions for tax and national insurance contributions in lieu of fees, in addition to accrued but unpaid monthly fees, for the 3 month notice period in accordance with Mr Roger's letter of appointment dated 4 July 2013.



 

Appendix V


Definitions

The following definitions apply throughout this Announcement unless the context requires otherwise.

"£", "Sterling", "pence" or "p"

the lawful currency of the UK

"", "EUR" or "Euro"

the lawful currency of the member states of the EU that have adopted and retained a common single currency through the monetary union of the Eurozone

"$" or "USD"

the lawful currency of the United States

"2004 Unapproved Scheme"

the 2004 Unapproved Company Share Option Plan adopted by the Lombard Risk Board on 17 September 2004

"2015 Unapproved Scheme"

the 2015 Unapproved Company Share Option Plan adopted by the Lombard Risk Board on 19 October 2015

"Acquisition"

the proposed direct or indirect acquisition of the entire issued and to be issued share capital of Lombard Risk by Vermeg to be implemented by way of the Scheme (or should Vermeg so elect, subject to the consent of the Panel, a Takeover Offer) including, where the context so requires, any subsequent variation, revision, extension or renewal thereof

"AIM"

AIM, a market operated by the London Stock Exchange

"AIM Rules"

the rules and regulations made by the London Stock Exchange applicable to companies quoted on AIM, dated 3 July 2016 (as amended from time to time)

"Announcement"

this announcement made pursuant to Rule 2.7 of the Code

"Bloomberg"

Bloomberg L.P., a privately held financial software company

"Board"

in relation to Vermeg or Lombard Risk, the board of directors of the relevant company

"Business Day"

a day (other than Saturdays, Sundays and UK public holidays) on which banks are open for business in London, United Kingdom

"Closing Price"

the middle market price of an Ordinary Share at the close of business on the day to which such price relates, as derived from the AIM appendix to the Daily Official List

"Code"

the City Code on Takeovers and Mergers

"Companies Act"

 

the Companies Act 2006, as amended from time to time

"Computershare"

Computershare Investor Services PLC

"Conditions"

the conditions to the implementation of the Acquisition (including the Scheme) as set out in Appendix I to this Announcement and to be set out in the Scheme Document

"Confidentiality and Standstill Agreement"

the confidentiality and standstill agreement entered into by Lombard Risk and Vermeg on 4 January 2018 in respect of confidential information relating to Lombard Risk and Vermeg

"Court"

the High Court of Justice of England and Wales

"Court Meeting"

the meeting(s) of the Scheme Shareholders (or any relevant class or classes thereof) to be convened by order of the Court pursuant to section 896 of the Companies Act, notice of which will be set out in the Scheme Document, for the purpose of approving the Scheme, including any adjournment thereof

"CREST"

the relevant system (as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755)) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in such Regulations) in accordance with which securities may be held and transferred in uncertificated form

"CSOP Scheme"

the 2014 HM Revenue & Customs Approved Company Share Option Plan adopted by the Lombard Risk Board on 20 March 2014

"Daily Official List"

the daily official list of the London Stock Exchange

"Dealing Disclosure"

an announcement pursuant to Rule 8 of the Code containing details of dealings in interests in relevant securities of a party to an offer

"Deferred Shares"

the 429,829,575 deferred shares in the share capital of Lombard Risk of £0.001 each

"EBRD"

the European Bank for Reconstruction and Development

"EBRD Guarantee"

the deed of guarantee and indemnity by Vermeg to EBRD dated 7 December 2017, relating to the EBRD Loan

"EBRD Loan"

the €25 million loan facility incurred pursuant to the EBRD Loan Agreement

"EBRD Loan Agreement"

 

the agreement relating to the EBRD Loan by and between Vermeg Solutions, as borrower, and EBRD, as lender, dated 7 December 2017

"Effective"

the Scheme becoming effective in accordance with its terms, which will be set out in the Scheme Document

"Effective Date"

the date upon which the Scheme becomes Effective or, if Vermeg elects and the Panel consents to implement the Acquisition by way of a Takeover Offer, the date on which the Takeover Offer is declared or becomes unconditional in all respects in accordance with the requirements of the Code

"EMI Scheme"

the Enterprise Management Incentive Scheme adopted by the Lombard Risk Board on 17 September 2004

"EU"

the European Union

"Eurohold"

Eurohold S.L.

"Excluded Shares"

(i) any Ordinary Shares beneficially owned by Vermeg or any other member of the Vermeg Group; (ii) any Ordinary Shares held in treasury by Lombard Risk; and (iii) any other Ordinary Shares which Vermeg and Lombard Risk agree will not be subject to the Scheme (including the Deferred Shares)

"FCA"

The United Kingdom's Financial Conduct Authority

"finnCap"

finnCap Limited

"Forms of Proxy"

the form of proxy in connection with each of the Court Meeting and the General Meeting, which shall accompany the Scheme Document

"General Meeting"

the general meeting of Lombard Risk to be convened in connection with the Scheme, notice of which will be set out in the Scheme Document, including any adjournment thereof

"IT"

"Lombard Risk" or the "Company"

information technology

Lombard Risk Management plc, a public limited company (registered under number 03224870), incorporated and registered in England and Wales

"Lombard Risk Articles"

the articles of association of Lombard Risk, as adopted from time to time

"Lombard Risk Board Recommendation"

the unanimous and unqualified recommendation from the Lombard Risk Directors to Ordinary Shareholders in respect of the Acquisition: (i) to vote in favour of the shareholder resolution(s) as are necessary to approve, implement and effect the Scheme and Acquisition and changes to the Lombard Risk Articles; or (ii) if Vermeg elects to proceed with a Takeover Offer to accept such Takeover Offer

"Lombard Risk Directors"

the directors of Lombard Risk as at the date of this Announcement

"Lombard Risk Group"

Lombard Risk, its subsidiaries and its subsidiary undertakings

"Lombard Risk Share Schemes"

the EMI Scheme, the 2004 Unapproved Scheme, the CSOP Scheme and the 2015 Unapproved Scheme

"London Stock Exchange"

London Stock Exchange plc

"Longstop Date"

means 15 June 2018, or such later date (if any) as Vermeg and Lombard Risk may agree and (if required) the Panel and Court may allow

"Offer Document"

an offer document published by or on behalf of Vermeg in connection with a Takeover Offer, including any revised offer document

"Offer Period"

the offer period (as defined in the Code) relating to Lombard Risk

"Offer Price"

13 pence per Scheme Share

"Opening Position Disclosure"

an announcement containing details of interests or short position(s) in, or rights to subscribe for, any relevant securities of a party to the offer if the person concerned has such a position

"Ordinary Shareholders"

the registered holders of Ordinary Shares from time to time

"Ordinary Shares"

the ordinary shares of £0.005 each in the capital of Lombard Risk

"Overseas Shareholders"

Ordinary Shareholders who are resident in, ordinarily resident in, or citizens of, jurisdictions outside the United Kingdom

"Panel"

the Panel on Takeovers and Mergers

"Quayle Munro "

Quayle Munro Limited

"Registrar of Companies"

the Registrar of Companies in England and Wales

"Restricted Jurisdiction"

any jurisdiction where local laws or regulations may result in a significant risk of civil, regulatory or criminal exposure if information concerning the Acquisition is sent or made available to Ordinary Shareholders in that jurisdiction

"Scheme" or "Scheme of Arrangement"

the scheme of arrangement proposed to be made under Part 26 of the Companies Act between Lombard Risk and the Scheme Shareholders, with or subject to any modification, addition or condition approved or imposed by the Court and agreed to by Lombard Risk and Vermeg

"Scheme Court Hearing"

the hearing of the Court to sanction the Scheme under Part 26 of the Companies Act

"Scheme Court Order"

the order of the Court sanctioning the Scheme under Part 26 of the Companies Act

"Scheme Document"

the document to be sent to (among others) Ordinary Shareholders containing and setting out, among other things, the full terms and conditions of the Scheme and containing the notices convening the Court Meeting and the General Meeting

"Scheme Record Time"

the time and date specified in the Scheme Document, expected to be 6.00 p.m. on the Business Day immediately prior to the Effective Date

"Scheme Shareholders"

holders of Scheme Shares

"Scheme Shares"

Ordinary Shares:

(a)  in issue as at the date of the Scheme Document;

(b)  (if any) issued after the date of the Scheme Document and prior to the Scheme Voting Record Time; and

(c)  (if any) issued on or after the Scheme Voting Record Time and before the Scheme Record Time, either on terms that the original or any subsequent holders thereof shall be bound by the Scheme or in respect of which the holders thereof shall have agreed in writing to be bound by the Scheme,

but in each case other than the Excluded Shares

"Scheme Voting Record Time"

the time and date to be specified in the Scheme Document by reference to which entitlement to vote on the Scheme will be determined

"Special Resolution"

the special resolution to be proposed by Lombard Risk at the General Meeting in connection with, among other things, the approval of the Scheme and the alteration of the Lombard Risk Articles and such other matters as may be necessary to implement the Scheme

"Strand Hanson"

Strand Hanson Limited

"Takeover Offer"

if (subject to the consent of the Panel), Vermeg elects to effect the Acquisition by way of a takeover offer (as defined in Chapter 3 of Part 28 of the Companies Act), the offer to be made by or on behalf of Vermeg to acquire the issued and to be issued ordinary share capital of Lombard Risk on the terms and subject to the conditions to be set out in the Offer Document

"UK" or "United Kingdom"

the United Kingdom of Great Britain and Northern Ireland

"UK Listing Authority"

the FCA acting in its capacity as the competent authority for listing under the Financial Services and Markets Act 2000

"United States of America", "United States" or "US"

the United States of America, its territories and possessions, any state of the United States and the District of Columbia

"US Exchange Act"

the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder

"Vermeg"

Vermeg Group N.V., a company incorporated in the Netherlands, with company number 810974769 with its registered office at Strawinskylaan 441, Toren A, 4th floor, 1070ND Amsterdam, the Netherlands

"Vermeg Group"

Vermeg, its subsidiaries and its subsidiary undertakings

"Vermeg Solutions"

Vermeg Solutions S.A., a non-resident limited liability company (registered under trade number B159 352 002), organised and existing under the laws of the Republic of Tunisia, a subsidiary of Vermeg

"WG Partners"

WG Partners LLP

 

For the purposes of this Announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "associated undertaking" have the meanings given by the Companies Act.

References to an enactment include references to that enactment as amended, replaced, consolidated or re-enacted by or under any other enactment before or after the date of this Announcement. All references to time in this Announcement are to London time unless otherwise stated.

Percentages of voting rights, share capital and relevant Lombard Risk securities are calculated by reference to the relevant percentage held and in issue outside treasury.

References to the singular include the plural and vice versa, unless the context requires otherwise, and words imparting the masculine gender should include the feminine or neutral gender.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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