TIDM0HR2 TIDMNXG
RNS Number : 3375J
CME Group Inc.
29 March 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 OF
SUCH JURISDICTION
For immediate release
29 March 2018
RECOMMED ACQUISITION
OF
NEX GROUP PLC ("NEX")
BY
CME LONDON LIMITED ("BIDCO")
a wholly-owned subsidiary
of CME GROUP INC. ("CME")
(to be implemented by way of a scheme of arrangement under Part
26 of the Companies Act 2006)
Summary
-- The boards of CME and NEX are pleased to announce that they
have reached agreement on the terms of a recommended acquisition
whereby the entire issued and to be issued share capital of NEX
will be acquired by Bidco (a newly-incorporated company and
wholly-owned subsidiary of CME) and CME. It is intended that the
Acquisition will be implemented by means of a Court-sanctioned
scheme of arrangement under Part 26 of the Companies Act.
-- Under the terms of the Acquisition, NEX Shareholders will be entitled to receive:
for each NEX Share 500 pence in cash
and
0.0444 New CME Shares
-- Based on CME's closing share price of US$158.84 at 5.00 p.m.
(Eastern Daylight time) and the exchange rate of US$1.4101:GBP1, at
4.00 p.m. (London time) on 28 March 2018 (being the last
practicable date prior to this Announcement):
-- the terms of the Acquisition value each NEX Share at 1,000
pence per share and NEX's entire issued and to be issued share
capital at approximately GBP3.9 billion ($5.4 billion); and
-- the terms of the Acquisition represent a premium of approximately:
-- 49.2 per cent. to the Closing Price per NEX Share of 670.5
pence on 15 March 2018 (being the date the Offer Period
commenced);
-- 49.3 per cent. to the volume weighted average Closing Price
per NEX Share of 670.1 pence for the one month ended on 15 March
2018 (being the date the Offer Period commenced); and
-- 57.7 per cent. to the volume weighted average Closing Price
per NEX Share of 634.3 pence for the three months ended on 15 March
2018 (being the date the Offer Period commenced).
-- In addition, the boards of CME and NEX have agreed that NEX
Shareholders will be entitled to receive a final dividend for NEX
in respect of the year ending 31 March 2018, such dividend not to
exceed an amount of 7.65 pence per NEX Share (the "NEX Final
Dividend").
-- The CME Board believes there is a compelling strategic and
financial rationale for undertaking the Acquisition:
-- Unique opportunity to create a leading, client-centric,
global markets company, generating significant efficiencies across
futures, cash and OTC products at a time when market participants
are seeking to lower their cost of trading and better manage
risk.
-- Improves offering to customers through the complementary
combination of CME's exchange-traded derivative products and NEX's
OTC products.
-- Expands CME's international footprint and client base in EMEA and APAC.
-- Financially attractive for CME Shareholders because of
compelling cost synergies, enhanced combined growth opportunities
and the attractive standalone financial profile of NEX.
-- The CME Board expects the Acquisition to generate run rate
cost synergies of $200 million, which are anticipated to be fully
achieved by the end of 2021 (assuming completion in 2018). In order
to realise the total synergies, CME expects to incur one-time cash
costs of $285 million. Further details on cost synergies are set
out in the Quantified Financial Benefits Statement in Appendix IV
to this Announcement, together with the reports from KPMG, CME's
reporting accountants, and J.P. Morgan and Barclays, CME's
financial advisers.
-- In addition to expected cost synergies, there are anticipated
to be compelling revenue growth opportunities. CME will be able to
market its existing product offering to NEX's attractive customer
base whilst CME will also benefit from the opportunity to cross
sell NEX products.
-- The Acquisition is expected to be immediately accretive to
CME's cash adjusted earnings per share from 2019 with fully phased
in synergies, and is expected to meet or exceed all of CME's
investment criteria.
-- The robust pro-forma free cash flow profile of the Combined
Company will allow CME to maintain its variable dividend structure
(at a more moderate level in 2018) whilst de-levering in the near
term.
-- Following completion of the Acquisition, NEX CEO Michael
Spencer will join the CME Board. He will remain with the Combined
Company as a Special Adviser, working to drive the integration and
continued evolution of the NEX businesses. He also will be
ambassador for the Combined Company working with key clients,
regulators and officials in EMEA and Asia.
-- NEX's headquarters will be combined with CME's, and the
Combined Company's headquarters will be located at CME's head
office in Chicago. The Combined Company will also maintain its
European headquarters in London.
-- The NEX Directors, who have been so advised by Citi and
Evercore as to the financial terms of the Acquisition, consider the
terms of the Acquisition to be fair and reasonable. In providing
their advice to the NEX Directors, Citi and Evercore have taken
into account the commercial assessments of the NEX Directors. Citi
and Evercore are providing independent financial advice to the NEX
Directors for the purposes of Rule 3 of the Code.
-- Accordingly, the NEX Directors intend to recommend
unanimously that NEX Shareholders vote in favour of the resolutions
relating to the Scheme at the Meetings (or in the event that the
Acquisition is implemented by way of an Offer, that NEX
Shareholders accept the Offer), as the NEX Directors have
irrevocably undertaken to do in respect of their entire beneficial
holdings of 63,590,827 NEX Shares, in aggregate, representing
approximately 16.75 per cent. of the issued share capital of NEX as
at 28 March 2018, being the last practicable date prior to this
Announcement.
-- CME and Bidco intend to finance the cash consideration
payable by Bidco to Scheme Shareholders under the terms of the
Acquisition from existing cash on balance sheet and third party
debt.
-- CME is where the world comes to manage risk. Through its
exchanges, CME offers the widest range of global benchmark products
across all major asset classes, including futures and options based
on interest rates, equity indexes, foreign exchange, energy,
agricultural products and metals. CME provides electronic trading
globally on its CME Globex platform. CME also offers clearing and
settlement services across asset classes for exchange-traded and
over-the-counter derivatives through its clearing house, CME
Clearing. CME's products and services are designed to provide
businesses around the world with the means to effectively manage
risk. CME also provides hosting, connectivity and customer support
for electronic trading through its co-location services. The CME
Direct platform offers side-by-side trading of exchange-listed and
privately negotiated markets. CME provides clearing and settlement
services for exchange-traded contracts, as well as for cleared
swaps, and provides regulatory reporting solutions for market
participants through its global repository services in the United
States, United Kingdom, Canada and Australia. Finally, CME offers a
wide range of market data services - including live quotes, delayed
quotes, market reports and a comprehensive historical data
service.
-- NEX is a financial technology company at the centre of the
global financial markets. NEX provides electronic trade execution
platforms for the OTC markets and delivers transaction lifecycle
management and information services to help its clients optimise
their capital, mitigate their risk and reduce their operational
costs. NEX partners with emerging technology companies to bring
greater efficiency, transparency and scale to the world's capital
markets. Encouraging technological advancement to improve the
markets, NEX invests in companies that challenge convention. NEX is
a global business, serving clients in more than 50 countries, and
employing almost 2,000 people, with key hubs in the U.K., U.S.,
Israel, Sweden and Singapore. NEX is organised into three main
business lines: NEX Markets, NEX Optimisation and NEX
Opportunities.
Commenting on the Acquisition, Terry Duffy, Chairman and Chief
Executive Officer of CME, said:
"At a time when market participants are seeking ways to lower
trading costs and manage risk more effectively, the Acquisition
will allow us to create significant value and efficiencies for our
clients globally. As one organisation, we will be able to employ
the complementary strengths of each company, while diversifying our
combined businesses across futures, cash and OTC products and
post-trade services.
Michael Spencer and his senior leadership team have built a
world-class organisation that is at the center of capital markets.
We are committed to maintaining the longstanding relationships NEX
has with its clients and exchange and clearing house partners.
Building on NEX's deep roots in Europe and Asia and CME's strong
technology platform, we will transform our international profile
and broaden our distribution network in spot and futures FX
products as well as cash, repo and futures products in U.S.
Treasuries."
Commenting on the Acquisition, Michael Spencer, Chief Executive
Officer of NEX, said:
"The combination of NEX and CME will be an industry-changing
transaction. Bringing together cash and futures products and OTC
services will be unique, offering clients improved access to
trading, greater financial efficiencies and highly valuable data
sets. The technology and innovation opportunities will be diverse
and extraordinary. Clients will be better served.
CME's decision to choose London as its European headquarters is
also a signal of tremendous support for Britain's financial
services sector."
-- Save for the Permitted Dividends, if any dividend or other
distribution is authorised, declared, made or paid in respect of
NEX Shares on or after the date of this Announcement, each of CME
and Bidco reserves the right to reduce the offer consideration by
the aggregate amount of such dividend or other distribution.
-- It is intended that the Acquisition will be implemented by
means of a Court-sanctioned scheme of arrangement under Part 26 of
the Companies Act (or, if CME or Bidco elects, subject to the
consent of the Panel and subject to the terms of the Co-operation
Agreement, an Offer). The Acquisition is conditional on, among
other things: (i) the approval of NEX Shareholders at the Court
Meeting and the passing of the resolutions by NEX Shareholders at
the General Meeting; (ii) the sanction of the Scheme by the Court;
(iii) approval from competition authorities in the U.K. and U.S.;
and (iv) approval from regulatory authorities in the U.K., U.S.,
Hong Kong, Germany, Italy and Sweden. The Acquisition does not
require the approval of CME Shareholders.
-- The Acquisition is expected to become Effective in the second
half of 2018, subject to the satisfaction (or, where applicable,
waiver) of the Conditions set out in Appendix I to this
Announcement.
-- Further details of the Acquisition will be contained in the
Scheme Document which is intended to be posted to NEX Shareholders
along with notices of the Court Meeting and General Meeting and the
Forms of Proxy within 28 days of the date of this Announcement,
unless NEX and CME otherwise agree, and the Panel consents, to a
later date. Subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, the Scheme Document will also
be made available on CME's website at www.cmegroup.com/nex-group
and NEX's website at www.nex.com/offer.
This summary should be read in conjunction with, and is subject
to, the full text of this Announcement (including its
Appendices).
The Acquisition will be subject to the Conditions and further
terms that are set out in Appendix I, and to the full terms and
conditions which will be set out in the Scheme Document. Appendix
II contains the bases and sources of certain information used in
this Announcement. Appendix III contains details of the irrevocable
undertakings received in relation to the Acquisition that are
referred to in this Announcement. Appendix IV contains details and
bases of belief of the anticipated quantified financial benefits of
the Acquisition and of the related reports from CME's reporting
accountants, KPMG, and its financial advisers, J.P. Morgan and
Barclays. Appendix V contains definitions of terms used in this
Announcement.
For the purposes of Rule 28 of the Code, the Quantified
Financial Benefits Statement contained in this Announcement is the
responsibility of CME and the CME Directors. Each of KPMG, J.P.
Morgan and Barclays has given and not withdrawn its consent to the
publication of its respective report in this Announcement in the
form and context in which it is included.
Investor and media calls
An investor slide deck is now available on the Investor
Relations section of CME's web site at www.cmegroup.com. CME and
NEX will hold an investor call and webcast today at 1.30 p.m.
London Time / 8:30 a.m. Eastern Time / 7:30 a.m. Central Time to
discuss this Announcement. A live audio Webcast of the Q&A call
will be available on the Investor Relations section of CME's
website at www.cmegroup.com. In the United States, investors can
participate by phone at +1.800.263.8506, and outside the U.S. at
+1.719.457.2615. After the call, an archived recording will be
available online and will be accessible by phone for seven days at
+1 888.203.1112 in the U.S. and +1.719.457.0820 outside the U.S.
with passcode 1872692.
CME and NEX will also hold a media call at 2.30 p.m. London Time
/ 9:30 a.m. Eastern Time / 8:30 a.m. Central Time. Journalists can
participate in the United States by calling +1.888.417.2254 and
internationally by dialing +1.719.457.2656.
Enquiries:
CME
Anita Liskey (Media contact) +1 312 466 4613
Laurie Bischel (Media contact) +1 312 648 8698
John Peschier (Investor Relations) +1 312 930 8491
J.P. Morgan (Lead financial adviser to CME and financial adviser
to Bidco)
Anu Aiyengar +1 888 963 5089
Jeremy Capstick +44 (0) 20 7742 4000
Dwayne Lysaght
Adam Laursen
Barclays (Financial adviser to CME)
Joel Fleck +1 212 526 7000
Matthew Smith +44 (0) 20 7623 2323
Edelman (PR adviser to CME)
John Kiely +44 (0) 203 047 2538
Alex Simmons +44 (0) 203 047 2543
NEX
Samantha Wren, CFO +44 (0) 207 818 9000
Alex Dee, Head of Investor Relations
Bryony Scragg, Head of Media Relations
Citi (Joint lead financial adviser and corporate broker to
NEX)
Piers Davison +44 (0) 207 986 4000
Jan Skarbek
Peter Brown (Corporate Broking)
Evercore (Joint lead financial adviser to NEX)
Jane Gladstone +1 212 857 3100
Edward Banks +44 (0) 207 653 6000
Dave Cox
Maitland (PR adviser to NEX)
Neil Bennett +44 (0) 207 379 5151
Rebecca Mitchell +44 (0) 7951 057351
Goldman Sachs International is also acting as a financial
adviser to NEX. Clifford Chance LLP are retained as legal advisers
to NEX. Skadden, Arps, Slate, Meagher & Flom are retained as
legal advisers to CME.
Important notices relating to financial advisers
J.P. Morgan Securities LLC, together with its affiliate J.P.
Morgan Securities plc (which conducts its U.K. investment banking
business as J.P. Morgan Cazenove and which is authorised in the
United Kingdom by the Prudential Regulation Authority (the "PRA")
and regulated in the United Kingdom by the PRA and the Financial
Conduct Authority) ("J.P. Morgan") is acting exclusively as joint
financial adviser for CME and financial adviser to Bidco and no one
else in connection with the matters set out in this announcement
and will not regard any other person as its client in relation to
the matters set out in this announcement and will not be
responsible to anyone other than CME and Bidco for providing the
protections afforded to the clients of J.P. Morgan, nor for
providing advice in relation to any matter referred to herein.
Barclays Bank PLC, acting through its Investment Bank
("Barclays") (which is authorised in the United Kingdom by the
Prudential Regulation Authority (the "PRA") and regulated in the
United Kingdom by the PRA and the Financial Conduct Authority) is
acting exclusively as joint financial adviser for CME and no one
else in connection with the matters set out in this announcement
and will not be responsible to anyone other than CME for providing
the protections afforded to the clients of Barclays, nor for
providing advice in relation to any matter referred to herein.
In accordance with the Code, normal United Kingdom market
practice and Rule 14e-5(b) of the U.S. Exchange Act, Barclays and
its affiliates will continue to act as exempt principal trader in
NEX securities on the London Stock Exchange. These purchases and
activities by exempt principal traders which are required to be
made public in the United Kingdom pursuant to the Code will be
reported to a Regulatory Information Service and will be available
on the London Stock Exchange website at
www.londonstockexchange.com. This information will also be publicly
disclosed in the United States to the extent that such information
is made public in the United Kingdom.
Citigroup Global Markets Limited ("Citi"), which is authorised
by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential
Regulation Authority, is acting as joint lead financial adviser to
NEX and for no one else in connection with matters set out in this
announcement and will not be responsible to anyone other than NEX
for providing the protections afforded to its clients or for
providing advice in relation to matters set out in this
announcement.
Evercore Group L.L.C. ("Evercore LLC"), which is a securities
broker-dealer registered with the U.S. Securities and Exchange
Commission ("SEC") and subject to regulation by the SEC and the
Financial Industry Regulatory Authority ("FINRA"), and Evercore
Partners International LLP ("EPI LLP") (together with Evercore LLC,
"Evercore"), which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, are acting as joint
lead financial adviser for NEX and no one else in connection with
matters set out in this announcement, and will not be responsible
to anyone other than NEX for providing the protections afforded to
clients of Evercore or for providing advice in relation to matters
referred to in this announcement. Neither Evercore nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract or in tort, under statute or otherwise) to any
person who is not a client of Evercore in connection with this
announcement, any statement contained therein or otherwise. Apart
from the responsibilities and liabilities, if any, which may be
imposed on Evercore by FSMA, or the regulatory regime established
thereunder, or under the regulatory regime of any jurisdiction
where exclusion of liability under the relevant regulatory regime
would be illegal, void or unenforceable, neither Evercore nor any
of its affiliates accepts any responsibility or liability
whatsoever for the contents of this Announcement, and no
representation, express or implied, is made by it, or purported to
be made on its behalf, in relation to the contents of this
Announcement, including its accuracy, completeness or verification
of any other statement made or purported to be made by it, or on
its behalf, in connection with NEX or the matters described in this
Announcement. To the fullest extent permitted by applicable law,
Evercore and its affiliates accordingly disclaim all and any
responsibility or liability whether arising in tort, contract or
otherwise (save as referred to above) which they might otherwise
have in respect of this Announcement or any statement contained
therein.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting exclusively for NEX and no one else in
connection with the Acquisition and will not be responsible to
anyone other than NEX for providing the protections afforded to
clients of Goldman Sachs International or for providing advice in
connection with the Acquisition or the matters described in this
Announcement or any transaction or arrangement referred to
herein.
Further information
This Announcement is for information purposes only and is not
intended to and does not constitute, or form any part of, an offer
to sell or an invitation to purchase or subscribe for any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely by the Scheme Document, which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Scheme. Any voting
decision or response in relation to the Acquisition should be made
solely on the basis of the Scheme Document.
This Announcement does not constitute a prospectus or a
prospectus equivalent document.
Overseas shareholders
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom (including Restricted
Jurisdictions) should inform themselves about, and observe, any
applicable legal or regulatory requirements. In particular, the
ability of persons who are not resident in the United Kingdom or
who are subject to the laws of another jurisdiction to vote their
NEX Shares in respect of the Scheme at the Court Meeting, or to
execute and deliver Forms of Proxy appointing another to vote at
the Court Meeting on their behalf, may be affected by the laws of
the relevant jurisdictions in which they are located or to which
they are subject. Any failure to comply with applicable legal or
regulatory requirements of any jurisdiction may constitute a
violation of securities laws in that jurisdiction. This
Announcement has been prepared for the purpose of complying with
English law 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 England.
Copies of this Announcement and any formal documentation
relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction or any
jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related
purported vote in respect of acceptance of the Acquisition.
If the Acquisition is implemented by way of an Offer, the Offer
may not (unless otherwise permitted by applicable law and
regulation) be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including,
without limitation, facsimile, e-mail 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 Acquisition will
not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to NEX Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Notice to U.S. investors in NEX
The Acquisition relates to the shares of a U.K. company and is
being made by means of a scheme of arrangement provided for under
Part 26 of the Companies Act. The Acquisition, implemented by way
of a scheme of arrangement, is not subject to the tender offer
rules or the proxy solicitation rules under the U.S. Exchange Act.
Accordingly, the Acquisition is subject to the disclosure
requirements and practices applicable to a scheme of arrangement
involving a target company in the U.K. listed on the London Stock
Exchange, which differ from the disclosure requirements of U.S.
tender offer and proxy solicitation rules. If, in the future, CME
or Bidco exercises its right to implement the Acquisition by way of
an Offer, subject to the terms of the Co-operation Agreement, and
determines to extend the Offer into the U.S., the Acquisition will
be made in compliance with applicable U.S. laws and
regulations.
The New CME Shares to be issued pursuant to the Acquisition have
not been registered under the U.S. Securities Act, and may not be
offered or sold in the U.S. absent registration or an applicable
exemption from the registration requirements of the U.S. Securities
Act. The New CME Shares to be issued pursuant to the Acquisition
will be issued pursuant to the exemption from registration provided
by Section 3(a)(10) under the U.S. Securities Act. If, in the
future, CME or Bidco exercises its right to implement the
Acquisition by way of an Offer, subject to the terms of the
Co-operation Agreement, or otherwise in a manner that is not exempt
from the registration requirements of the U.S. Securities Act, it
will file a registration statement with the SEC that will contain a
prospectus with respect to the issuance of New CME Shares. In this
event, NEX Shareholders and NEX ADR Holders are urged to read these
documents and any other relevant documents filed with the SEC, as
well as any amendments or supplements to those documents, because
they will contain important information, and such documents will be
available free of charge at the SEC's website at www.sec.gov or by
directing a request to CME's contact for enquiries identified
above.
Neither the SEC nor any U.S. state securities commission has
approved or disapproved of the New CME Shares to be issued in
connection with the Acquisition, or determined if this Announcement
is accurate or complete. Any representation to the contrary is a
criminal offence in the U.S..
The financial information included in this Announcement has been
prepared in accordance with International Financial Reporting
Standards (as adopted by the European Union) and thus may not be
comparable to financial information of U.S. companies or companies
whose financial statements are prepared in accordance with U.S.
generally accepted accounting principles.
It may be difficult for U.S. NEX Shareholders and NEX ADR
Holders to enforce their rights and any claim arising out of the
U.S. federal securities laws, because NEX is located in a non-U.S.
country, and some or all of its officers and directors are
residents of a non-U.S. country. U.S. NEX Shareholders and NEX ADR
Holders may not be able to sue a non-U.S. company or its officers
or directors in a non-U.S. court for violations of the U.S.
securities laws. Further, it may be difficult to compel a non-U.S.
company and its affiliates to subject themselves to a U.S. court's
judgment.
U.S. NEX Shareholders and NEX ADR Holders also should be aware
that the transaction contemplated herein may have tax consequences
in the U.S. and, that such consequences, if any, are not described
herein. U.S. NEX Shareholders and NEX ADR Holders are urged to
consult with legal, tax and financial advisers in connection with
making a decision regarding this transaction.
Forward looking statements
This Announcement contains certain forward-looking statements
with respect to CME, Bidco, NEX and the Combined Company. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "aim",
"will", "may", "would", "could" or "should" or other words of
similar meaning or the negative thereof. Forward-looking statements
include statements relating to the following: (i) future capital
expenditures, expenses, revenues, economic performance, synergies,
financial conditions, market growth, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of the operations of the CME Group or the NEX
Group; and (iii) the effects of government regulation on the
business of the CME Group or the NEX Group.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. All subsequent oral or written
forward-looking statements attributable to CME, Bidco or NEX or any
persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. None of CME, Bidco or
NEX undertakes any obligation to update publicly or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
The form 10-K of CME for the year ended 31 December 2017
contains additional information regarding forward-looking
statements with respect to CME.
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 ordinary share, for CME or NEX, respectively for the
current or future financial years would necessarily match or exceed
the historical published earnings or earnings per ordinary share
for CME or NEX, respectively.
Quantified Financial Benefits Statement
Statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to in the Quantified Financial
Benefits Statement may not be achieved, may be achieved later or
sooner than estimated, or those achieved could be materially
different from those estimated. No statement in the Quantified
Financial Benefits Statement, or this Announcement generally,
should be construed as a profit forecast or interpreted to mean
that the Combined Company's earnings in the first full year
following the Effective Date of the Scheme, or in any subsequent
period, would necessarily match or be greater than or be less than
those of NEX or CME for the relevant preceding financial period or
any other period. For the purposes of Rule 28 of the Code, the
Quantified Financial Benefits Statement contained in this
Announcement is the responsibility of CME and the CME
Directors.
Right to switch to an Offer
Each of CME and Bidco reserves the right to elect, subject to
the consent of the Panel and subject to the terms of the
Co-operation Agreement, to implement the Acquisition by way of an
Offer for the entire issued and to be issued share capital of NEX
as an alternative to the Scheme. In such an event, the Offer will
be implemented on the same terms (subject to appropriate
amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to in Appendix I
to this Announcement.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this
Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, at www.cmegroup.com/nex-group and
www.nex.com/offer by no later than 12 noon on 30 March 2018.
Neither the contents of these websites nor the content of any
other website accessible from hyperlinks on such websites is
incorporated into, or forms part of, this Announcement.
You will not be sent a hard copy of this Announcement unless you
request one. You may request a hard copy of this Announcement, free
of charge, by contacting Link Asset Services, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU or on +44 (0) 371 664 0565.
NEX Shareholders may also request that all future documents,
announcements and information sent to them in relation to the
Acquisition should be in hard copy form.
Market Abuse Regulation
This Announcement contains inside information for the purposes
of Article 7 of MAR. Market soundings (as defined in MAR) were
taken in respect of a potential offer with the result that certain
persons became aware of inside information (as defined in MAR) as
permitted by MAR. This inside information is set out in this
Announcement. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
such inside information relating to NEX and its securities.
Information relating to NEX Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by NEX Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from NEX may be provided to CME during the offer
period as required under Section 4 of Appendix 4 of the Code to
comply with Rule 2.11(c) of the Code.
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.
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 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (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 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
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 OF
SUCH JURISDICTION
For immediate release
29 March 2018
RECOMMED ACQUISITION
OF
NEX GROUP PLC ("NEX")
BY
CME LONDON LIMITED ("BIDCO")
a wholly-owned subsidiary
of CME GROUP INC. ("CME")
(to be implemented by way of a scheme of arrangement under Part
26 of the Companies Act 2006)
1. Introduction
The boards of CME and NEX are pleased to announce that they have
reached agreement on the terms of a recommended acquisition whereby
the entire issued and to be issued share capital of NEX will be
acquired by Bidco (a newly-incorporated company and wholly-owned
subsidiary of CME) and CME. It is intended that the Acquisition
will be implemented by means of a Court-sanctioned scheme of
arrangement under Part 26 of the Companies Act.
2. The Acquisition
The Acquisition, which will be on the terms and subject to the
Conditions set out below and in Appendix I, and to be set out in
the Scheme Document, will be made on the following basis:
for each NEX Share 500 pence in cash
and
0.0444 New CME Shares
Based on CME's closing share price of US$158.84 at 5.00 p.m.
(Eastern Daylight time) and the exchange rate of US$1.4101:GBP1 at
4.00 p.m. (London time) on 28 March 2018 (being the last
practicable date prior to this Announcement):
-- the terms of the Acquisition value each NEX Share at 1,000
pence per share and NEX's entire issued and to be issued share
capital at approximately GBP3.9 billion ($5.4 billion); and
-- the terms of the Acquisition represent a premium of approximately:
-- 49.2 per cent. to the Closing Price per NEX Share of 670.5
pence on 15 March 2018 (being the date the Offer Period
commenced);
-- 49.3 per cent. to the volume weighted average Closing Price
per NEX Share of 670.1 pence for the one month ended on 15 March
2018 (being the date the Offer Period commenced); and
-- 57.7 per cent. to the volume weighted average Closing Price
per NEX Share of 634.3 pence for the three months ended on 15 March
2018 (being the date the Offer Period commenced).
The NEX Shares will be acquired by CME and Bidco (or their
nominee) with full title guarantee, fully paid and free from all
liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights or interests
whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including
(without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of
share capital or share premium account or otherwise) made on or
after the Effective Date in respect of the NEX Shares.
In addition, the boards of CME and NEX have agreed that NEX
Shareholders will be entitled to receive a final dividend for NEX
in respect of the year ending 31 March 2018, such dividend not to
exceed an amount of 7.65 pence per NEX Share (the "NEX Final
Dividend"). In the event that the Effective Date occurs prior to
the date of NEX's 2018 annual general meeting (currently expected
to be in July 2018), the NEX Board intends to declare the NEX Final
Dividend as a second interim dividend for the relevant period. In
addition, if prior to the Effective Date, CME declares a dividend
other than in respect of its regular four quarterly dividends (a
"CME Special Dividend"), then NEX will also be entitled to declare
and pay, by way of a special dividend, an amount per NEX Share
equal to 0.0444 times the CME Special Dividend, multiplied by the
exchange rate for the conversion of U.S. dollars into pounds
sterling derived from WM/Reuters as at 4.00 p.m. (London time) on
the ex-dividend date of the CME Special Dividend (the "NEX Special
Dividend") .
Save for the Permitted Dividends, if any dividend or other
distribution in respect of the NEX Shares is authorised, declared,
paid or made on or after the date of this Announcement, each of CME
and Bidco reserves the right to reduce the consideration payable
for each NEX Share under the terms of the Acquisition by the amount
per NEX Share of such dividend or distribution.
3. Background to and reasons for the Acquisition
The CME Board believes there is a compelling strategic and
financial rationale for undertaking the Acquisition:
Unique opportunity to create a leading, client-centric, global
markets company, generating significant efficiencies across
futures, cash and OTC products at a time when market participants
are seeking to lower their cost of trading and better manage
risk
-- The Acquisition combines CME, the most diverse derivatives
marketplace, with NEX's electronic FX and fixed income cash
execution platforms, EBS and BrokerTec, and OTC post-trade
services.
-- EBS is a leading electronic trading platform within the
approximately $5 trillion cash FX market, a market which is
expected to benefit from increased volatility and rising interest
rate differentials as the global economy moves beyond financial
crisis era monetary policy. In addition, the growth of Asian
currencies within the world financial system and increased
electronification are also expected to increase the average cash FX
volume traded.
-- BrokerTec is a leading electronic trading platform for cash
fixed income products, particularly U.S. Treasuries. The U.S.
Treasuries market is positioned to benefit from a favourable macro
environment with the ongoing unwind of the U.S. Federal Reserve
balance sheet and more normalised monetary policy.
-- The Acquisition is driven in part by CME's desire to acquire
both EBS and BrokerTec, given the opportunity to streamline access
to these adjacent platforms and CME's listed fixed income and FX
derivatives products.
-- The continued trend towards increased regulatory requirements
through initiatives such as MiFID II and Uncleared Margin Rules is
increasing compliance costs and collateral requirements for OTC
market participants, and increasing demand for post-trade solutions
such as those provided by NEX Optimisation.
Improves offering to customers through the complementary
combination of CME's exchange-traded derivative products and NEX's
OTC products
-- The scale and liquidity of NEX's trading platforms combined
with the capital efficiencies and risk mitigation enabled by NEX's
post-trade services make NEX highly complementary to, and aligned
with, CME's goal of helping businesses efficiently manage risk.
-- CME will be committed to maintaining and further
strengthening the valued relationships with NEX's leading customers
and exchange and clearing house partners. These relationships have
supported the development and growth of NEX's offerings to date and
will continue to underpin the growth of the NEX businesses going
forward. In particular, BrokerTec clearing will be maintained at
FICC, with a goal to increase capital efficiencies for
customers.
-- At the same time, the combination will enable CME to deliver
significant value to customers across the combined set of CME and
NEX businesses through:
-- Streamlined technology and a consolidated operational
infrastructure across marketplaces and post-trade services, at a
time when customers are seeking cost efficiencies and the reduction
of operational complexity.
-- Valuable new efficiencies and risk mitigation services
through expansion and improved integration of clearing and
post-trade services across listed, OTC cleared and bilateral OTC
marketplaces, to address the continuing impact of regulatory
capital costs, including uncleared margin rules.
-- Expanded and streamlined market data offerings based on the
combination of data offerings from CME and NEX, enabling better
data-driven insights for customers to manage risks and evaluate
trading decisions.
Expands CME's international footprint and client base in EMEA
and APAC
-- Building on NEX's deep roots in Europe and Asia, the
Acquisition transforms CME's global footprint and strengthens its
distribution to a broader range of clients and geographies.
-- The Acquisition is expected to increase CME's international
revenue by over 35%, with more than $350 million of NEX's revenue
originating outside the U.S.
Financially attractive for CME Shareholders because of
compelling cost synergies, enhanced combined growth opportunities
and the attractive standalone financial profile of NEX
-- The CME Board expects the Acquisition to generate run rate
cost synergies of $200 million, which are anticipated to be fully
achieved by the end of 2021 (assuming completion in 2018). Cost
synergies are expected to be realised through centralisation and
consolidation of operational functions, IT systems migration and
consolidation, and removal of duplicate selling, general and
administrative expenses.
-- In addition to expected cost synergies, there are anticipated to be compelling revenue growth opportunities. CME will be able to market its existing product offering to NEX's attractive customer base whilst CME will also benefit from the opportunity to cross sell NEX products.
-- The CME Board also expects incremental revenue growth to be
generated from using CME's resource base and expertise to
accelerate execution of NEX's existing initiatives.
-- NEX's standalone financial profile is highly attractive and
complementary, with a high proportion of subscription based revenue
compared to CME's largely transaction based revenue model.
-- The Acquisition is expected to be immediately accretive to
CME cash adjusted earnings per share from 2019 with fully phased in
synergies, and is expected to meet or exceed all of CME's
investment criteria. The robust pro-forma free cash flow profile of
the Combined Company will allow CME to maintain its variable
dividend structure whilst de-levering in the near term. CME expects
to maintain its medium term target debt to EBITDA level of 1.0x and
minimum cash target of $700 million, and expects to return to
approximately current leverage levels within two years of
completion of the Acquisition. Over time, the Acquisition will
increase CME's ability to return capital to CME Shareholders.
4. Financial Benefits of the Acquisition
The Acquisition is expected to create significant value through
cost synergies of $200 million, on a run rate basis by the end of
2021 (assuming completion in 2018), and new revenue growth
opportunities
The Combined Company expects to create significant value through
centralisation and consolidation of operational functions, IT
systems migration and consolidation, and removal of duplicate
selling, general and administrative expenses.
CME has a strong track record of creating shareholder value from
complex transactions and delivering synergies whilst successfully
growing its core business and retaining talent.
The CME Board, having reviewed and analysed the potential
benefits of the Acquisition, based on its experience and the
analysis completed and presented by management, expects that the
Acquisition will deliver annualised run rate cost synergies of $200
million by the end of 2021 (assuming completion in 2018). These
savings are in addition to the annual cost savings of GBP40 million
from the transformation programme previously announced by NEX,
which are expected to be achieved in full in 2020.
Other than the NEX-announced transformation plan cost savings,
these synergies are expected to arise as a direct result of the
Acquisition and could not be achieved independently of the
Acquisition.
These cost synergies are divided among and would be realised
principally from:
a) Centralisation and consolidation of operational functions,
accounting for approximately 20% of the recurring cost
synergies:
-- streamlining of operational support required for the trading
platforms and post-trade services; and
-- scale efficiencies across common businesses.
b) IT systems migration and consolidation, accounting for a
further approximately 35% of the recurring cost synergies:
-- harmonisation of technology infrastructure across the Combined Company; and
-- centralisation and removal of duplicate IT functions.
c) Removal of duplicate selling, general and administrative
expenses, accounting for the remaining approximately 45% of the
recurring cost synergies:
-- streamlining of support and service functions and corporate systems; and
-- removal of duplication of services.
The total expected run rate cost synergies of $200 million per
annum are equivalent to approximately 12.5% of the Combined
Company's 2017 adjusted operating costs of approximately $1.6
billion.
It is expected that synergy and savings realisation will take
place progressively, whereby approximately 25% of the run rate cost
synergies would be realised by the end of year 1, rising to
approximately 55% by the end of year 2 and 100% by the end of year
3.
In order to realise the total synergies, CME expects to incur
one-time cash costs of $285 million. Of this, approximately $60
million will be capital investment to facilitate the migration of
IT systems and for consolidation of facilities.
Dis-synergies have been considered in quantifying the net impact
of the synergy benefits and are not expected to be material.
The CME Board also believes there will be significant
opportunity for the Combined Company to deliver incremental revenue
growth. More specifically, the CME Board believes the Acquisition
will create opportunities for revenue growth across multiple areas,
including by:
-- using CME's resource base and expertise to accelerate
execution of NEX's existing initiatives;
-- offering optimisation services across listed, OTC cleared and
bilateral OTC marketplaces, enabling new efficiencies and risk
mitigation offerings to benefit customers;
-- delivering streamlined access to CME's and NEX's deep liquidity in cash and futures products;
-- increasing CME's global reach, building on NEX's deep roots in Europe and Asia; and
-- providing expanded market data offerings, enabling better
data-driven insights for customers to manage risks and evaluate
trading decisions.
The paragraphs above relating to expected cost synergies
constitute the "Quantified Financial Benefits Statement" for the
purposes of Rule 28 of the Code.
Appendix IV sets out further detail on the Quantified Financial
Benefits Statement, including the basis of preparation and
principal assumptions, and the reports required by Rule 28.1(a) of
the Code by KPMG, CME's reporting accountant, and by J.P. Morgan
and Barclays, CME's financial advisers. References in this
Announcement to the Quantified Financial Benefits Statement should
be read in conjunction with Appendix IV.
5. Recommendation
The NEX Directors, who have been so advised by Citi and Evercore
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 NEX Directors, Citi and Evercore have taken into account the
commercial assessments of the NEX Directors. Citi and Evercore are
providing independent financial advice to the NEX Directors for the
purposes of Rule 3 of the Code.
Accordingly, the NEX Directors intend to recommend unanimously
that NEX Shareholders vote in favour of the resolutions relating to
the Acquisition at the Meetings (or in the event that the
Acquisition is implemented by way of an Offer, to accept or procure
acceptance of such Offer), as they have irrevocably committed to do
in respect of their entire beneficial holdings of 63,590,827 NEX
Shares, representing approximately 16.75 per cent. of NEX's issued
share capital as at 28 March 2018, being the last practicable date
prior to this Announcement.
6. Background to and reasons for the recommendation
Intercapital plc was founded by Michael Spencer in 1986 as Inter
Capital Brokers Limited ("Inter Capital"). Exco plc acquired the
wholesale broking operations of Inter Capital by means of a reverse
takeover in October 1998 and changed its name to Intercapital plc.
In 1999, the company merged with Garban Group to create
Garban-Intercapital plc, the largest inter-dealer broker in the
world with approximately 2,000 employees across 26 offices.
Garban-Intercapital plc renamed itself ICAP plc in 2001. The ICAP
group continued to grow and develop over the next 15 years, driven
by acquisitions in the electronic markets and post-trade
businesses, including BrokerTec in 2003, EBS in 2006, Reset in
2007, TriOptima in 2010 and Abide Financial and ENSO Financial in
2016.
In 2016, the ICAP group sold its voice broking business to
Tullett Prebon plc, recognising the market trend towards electronic
markets and the opportunities being created by regulatory change.
As part of that transaction, the ICAP name was sold to Tullett
Prebon plc and the remaining business was rebranded under NEX Group
plc. NEX implemented a new strategy to become a financial
technology business with a portfolio of leading electronic trade
execution platforms (NEX Markets) and post-trade products and
services (NEX Optimisation).
The NEX Directors remain confident in NEX's ability to deliver
on its financial aspirations. Since the completion of the disposal
to Tullett Prebon plc in December 2016, NEX has been focused on the
execution of its strategy and delivery of growth in revenue and
earnings, and has performed strongly. Despite challenging market
conditions, NEX has seen robust revenue growth, a growing global
business and an expanding client base, and launched a
transformation programme to deliver GBP40m of cost savings. NEX has
achieved a total shareholder return of 52.4 per cent. since the
sale of its voice broking business in 2016.
In assessing the terms of the Acquisition, the NEX Directors
considered the value and prospects of NEX's business and the
potential medium term value of NEX Shares on a standalone basis,
the potential financial and strategic benefits resulting from a
combination of NEX and CME, and the potential prospects and value
of the Combined Company. Whilst NEX has a clear strategy to deliver
shareholder value and the NEX Directors believe the company would
have a strong independent future, the NEX Directors consider that
the Acquisition provides shareholders with value at a level which
adequately recognises NEX's growth potential:
-- the Acquisition represents a material premium of
approximately 49.2 per cent. to the Closing Price per NEX Share of
670.5 pence on 15 March 2018 (being the date the Offer Period
commenced);
-- the Acquisition allows NEX Shareholders to crystallise a
significant portion of their investment in cash;
-- the NEX Directors consider that the share element of the
Acquisition provides an attractive opportunity for NEX Shareholders
to participate in the upside from a combination with CME, including
from synergies, greater scale and cross selling opportunities;
and
-- the NEX Directors recognise the benefits of being part of a
larger combined company and developing a client-centric, global
markets business.
7. Irrevocable undertakings
Bidco has received irrevocable undertakings to vote or procure
votes in favour of the resolutions relating to the Scheme at the
Meetings (or in the event that the Acquisition is implemented by
way of an Offer, to accept or procure acceptance of such Offer)
from the NEX Directors, in respect of their entire beneficial
holdings, amounting to 63,590,827 NEX Shares, in aggregate,
representing approximately 16.75 per cent. of the issued share
capital of NEX as at 28 March 2018, being the last practicable date
prior to this Announcement.
Bidco has also received irrevocable undertakings from Michael
Spencer, Samantha Wren and Ken Pigaga, also NEX Directors, to vote
or procure votes in favour of the resolutions relating to the
Scheme at the Meetings (or in the event that the Acquisition is
implemented by way of an Offer, to accept or procure acceptance of
such Offer) in respect of any NEX Shares received by them prior to
the Voting Record Time as a result of their options and awards over
NEX Shares (excluding awards under tax qualifying share option
plans) under the NEX Share Schemes (being 5,240,658 NEX Shares for
Michael Spencer, 67,883 NEX Shares for Samantha Wren and 447,031
NEX Shares for Ken Pigaga).
The Irrevocable Undertakings will cease to be binding if:
-- the Acquisition is implemented by way of an Offer and an
offer document is not sent to NEX Shareholders within the permitted
period under the Code or as otherwise agreed with the Panel; or
-- the Scheme lapses or is withdrawn in accordance with its
terms and CME or Bidco publicly confirms that it does not intend to
proceed with the Acquisition or to implement the Acquisition by way
of an Offer or otherwise; or
-- any competing offer for the issued and to be issued ordinary
share capital of NEX is made which is declared wholly unconditional
(if implemented by way of a takeover offer) or otherwise becomes
effective (if implemented by way of a scheme of arrangement);
or
-- the Scheme has not become effective by 6.00 p.m. (London time) on the Long Stop Date,
and will remain binding if a higher competing offer is made for
NEX.
Further details of these Irrevocable Undertakings are set out in
Appendix III.
8. Information on CME and Bidco
CME
CME is where the world comes to manage risk. Through its
exchanges, CME offers the widest range of global benchmark products
across all major asset classes, including futures and options based
on interest rates, equity indexes, foreign exchange, energy,
agricultural products and metals. CME provides electronic trading
globally on its CME Globex platform. CME also offers clearing and
settlement services across asset classes for exchange-traded and
over-the-counter derivatives through its clearing house, CME
Clearing. CME's products and services are designed to provide
businesses around the world with the means to effectively manage
risk. CME also provides hosting, connectivity and customer support
for electronic trading through its co-location services. The CME
Direct platform offers side-by-side trading of exchange-listed and
privately negotiated markets. CME provides clearing and settlement
services for exchange-traded contracts, as well as for cleared
swaps, and provides regulatory reporting solutions for market
participants through its global repository services in the United
States, United Kingdom, Canada and Australia. Finally, CME offers a
wide range of market data services - including live quotes, delayed
quotes, market reports and a comprehensive historical data
service.
Chicago Mercantile Exchange Inc. was founded in 1898 as a
not-for-profit corporation. In 2000, Chicago Mercantile Exchange
Inc. demutualised and became a shareholder-owned corporation. As a
consequence, Chicago Mercantile Exchange Inc. adopted a for-profit
approach to its business, including strategic initiatives aimed at
optimising contract volume, efficiency and liquidity. In 2002,
Chicago Mercantile Exchange Holdings Inc. completed its initial
public offering of its Class A common stock, which is listed on
Nasdaq under the symbol "CME". In 2007, Chicago Mercantile Exchange
Holdings Inc. merged with CBOT Holdings, Inc. and was renamed CME
Group Inc. In connection with the merger, CME acquired the Board of
Trade of the City of Chicago, Inc. ("CBOT"). CBOT is a leading
marketplace for trading agricultural and U.S. Treasury futures as
well as options on futures. In 2008, CME merged with NYMEX
Holdings, Inc. and acquired New York Mercantile Exchange, Inc.
("NYMEX") and Commodity Exchange, Inc. ("COMEX"). On NYMEX,
customers primarily trade energy futures and options contracts,
including contracts for crude oil, natural gas, heating oil and
gasoline. On COMEX, customers trade metal futures and options
contracts, including contracts for gold, silver and copper. In
2012, CME acquired The Board of Trade of Kansas City, Missouri,
Inc. ("KCBT") and its hard red winter wheat product line and
effective December 2013, KCBT operations were transferred to CBOT.
In April 2013, CME purchased the non-controlling interest in CME
Index Services from Dow Jones & Company resulting in an
increase in CME's ownership to 27% of the S&P/Dow Jones Indices
LLC joint venture with S&P Global, Inc. (formerly known as
McGraw-Hill), originally established in 2012. In 2013, CME began
offering repository services and now offer global trade repository
services in the United States, United Kingdom, Canada and
Australia.
CME's business has historically been subject to the extensive
regulation of the U.S. Commodity Futures Trading Commission. As a
result of CME's global operations, it is also subject to the rules
and regulations of the local jurisdictions in which it conducts
business, including the European Securities and Markets Authority
and the FCA. Additionally, CME's U.S. clearing house has been
designated as systemically important, which carries with it
enhanced regulatory oversight of certain of its risk-management
standards, clearing and settlement activities, including additional
oversight by the U.S. Federal Reserve.
CME's principal executive offices are located at 20 South Wacker
Drive, Chicago, Illinois 60606.
Bidco
Bidco is a newly-incorporated English private limited company,
and a direct subsidiary of CME. Bidco has been formed at the
direction of CME for the purposes of implementing the Acquisition
together with CME. Bidco has not traded since its date of
incorporation, nor has it entered into any obligations other than
in connection with the Acquisition.
9. Information on NEX
NEX is a financial technology company at the centre of the
global financial markets. NEX provides electronic trade execution
platforms for the OTC markets and delivers transaction lifecycle
management and information services to help its clients optimise
their capital, mitigate their risk and reduce their operational
costs.
NEX partners with emerging technology companies to bring greater
efficiency, transparency and scale to the world's capital markets.
Encouraging technological advancement to improve the markets, NEX
invests in companies that challenge convention.
NEX is a global business, serving clients in more than 50
countries, and employing almost 2,000 people, with key hubs in the
U.K., U.S., Israel, Sweden and Singapore. NEX is organised into
three main business lines: NEX Markets, NEX Optimisation and NEX
Opportunities.
NEX Markets provides electronic execution platforms and
solutions in FX and fixed income products. The BrokerTec and EBS
platforms offer efficient and effective trading solutions across a
range of instruments including spot FX, FX forwards, U.S.
Treasuries, European government bonds and E.U. and U.S. repo. These
electronic platforms are built on its bespoke networks connecting
participants in financial markets.
NEX Markets delivers solutions to the widest range of financial
and professional institutions, including banks, hedge funds, asset
managers, professional trading firms and corporations around the
world.
-- Central Limit Order Books (anonymous)
-- BrokerTec: USTs, U.S. Repo, EGBs, E.U. Repo, Gilts
-- EBS Market: Spot FX, NDFs, precious metals
-- EBS Hedge: Spot FX
-- Clients: Global banks, regional banks, professional trading firms, hedge funds, central banks
-- Relationship-based Platforms (disclosed)
-- EBS Direct: Spot, forwards, NDFs, precious metals, options
-- EBS Select: Spot FX, NDFs, precious metals
-- BrokerTec Direct: UST actives
-- Clients: Primary dealers, global banks, regional banks,
professional trading firms, hedge funds
-- Execution Management System (disclosed)
-- EBS Institutional: Spot, forwards, NDFs
-- Clients: Asset managers
-- Cash and FX Liquidity Management Centre (disclosed)
-- NEX Treasury: MMF, Spot FX, forwards
-- Clients: Treasurers
NEX Optimisation is dedicated to mitigating risk, increasing
efficiency, reducing costs and streamlining increasingly complex
processes for its clients and offers the opportunity to optimise
both regulatory and financial resources. NEX Optimisation operates
a number of distinct services across the transaction lifecycle:
-- Traiana enables global market participants to automate
cross-asset risk management and pre/post-trade processing, for both
listed and over the counter transactions
-- TriOptima is a provider of critical post trade infrastructure
and risk management services for the OTC derivatives market
-- NEX Data delivers pricing, analytics, index and regulatory
reporting solutions to a global and diverse client base providing
innovative insights in pre and post trade services that enable
confident trading decisions and market analysis
-- ENSO is the leading treasury and portfolio finance solution
for the Hedge Fund industry with over $1 Trillion in AUA and
creates a consolidation point for our client's treasury
activities
-- NEX Regulatory Reporting platform, lowers costs, eliminates
operational risk and provides regulatory reporting
effectiveness
-- RESET is a provider of risk mitigation services that manage
basis risk in trading portfolios for the derivatives
marketplace
Clients include the sell side, buyside, central counterparty
clearing houses, custodians and central securities
depositories.
NEX Opportunities invests in financial technology companies that
are transforming markets. NEX partners with pioneers who are
bringing new technologies, sciences, business models, and talent to
capital markets technology.
Investee companies include:
-- Duco
-- OpenGamma
-- RSRCHXchange
-- Axoni
-- Cloud9
-- OpenFin
-- Acadiasoft
-- Digital Asset Holdings
NEX was formed following the disposal of ICAP's global hybrid
voice broking and information business to Tullett Prebon plc in
December 2016. The ICAP name was sold to Tullett Prebon plc and the
remaining business was rebranded NEX Group plc.
10. NEX Share Schemes
Awards under the NEX Share Schemes will vest or lapse in
accordance with the applicable scheme rules.
Following the Acquisition, any NEX Shares received on vesting of
an award or exercise of an option will be automatically transferred
to CME and Bidco for the same consideration payable under the
Scheme.
Further detail is set out in the Co-operation Agreement.
Appropriate proposals will be made in due course to participants
in the NEX Share Schemes.
11. Financing
CME and Bidco intend to finance the cash consideration payable
by Bidco to Scheme Shareholders from existing cash on balance sheet
and third party debt as described below.
CME has entered into a bridge facility agreement (the "Facility
Agreement") with, among others, J.P. Morgan Chase Bank N.A. and
Barclays, the proceeds of which will be used to fund the cash
consideration payable by Bidco to Scheme Shareholders in connection
with the Acquisition. CME has secured the fully committed bridge
financing from J.P. Morgan Chase Bank N.A., as Joint Lead Arranger
and Administrative Agent, and Barclays, as Joint Lead Arranger and
Syndication Agent. Such term loan facility will mature on the date
that is 364 days from the initial borrowing date thereunder, will
be unsecured and will have terms similar to the existing revolving
credit facility among CME, the lenders party thereto and Bank of
America, N.A. as administrative agent. It is currently contemplated
that the commitments under the Facility Agreement will be reduced
or refinanced with the proceeds of long-term senior unsecured debt
to take place after signing and before the Effective Date.
J.P. Morgan is satisfied that sufficient cash resources are
available to Bidco 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. Management, employees and locations of business
The CME Board believes that it is the ideal partner for NEX and
the Acquisition will result in continued growth for the Combined
Company.
Following completion of the Acquisition, NEX CEO Michael Spencer
will join the CME Board. He will remain with the Combined Company
as a Special Adviser, working to drive the integration and
continued evolution of the NEX businesses. He also will be
ambassador for the Combined Company working with key clients,
regulators and officials in EMEA and Asia.
Employees and employment rights
CME believes existing employees of NEX will be a key factor in
maximising the opportunities and benefits the Acquisition will
create for the Combined Company. CME also believes NEX's employees
will benefit from greater opportunities as a result of being part
of a larger, more global group with a wider range of complementary
products and technologies.
CME's evaluation work to identify potential synergies of the
Combined Company is underway. Although ongoing, CME's work to date
has confirmed there will be some duplication between the two
businesses. Appropriate measures required to achieve expected
synergy benefits will be assessed further following completion of
the Acquisition.
CME anticipates a reduction in the headcount of the Combined
Company of approximately 16%. The Combined Company's operations,
IT, and selling, general and administrative functions are expected
to be reduced in size in the first three years following completion
of the Acquisition.
The finalisation and implementation of any workforce reductions
will be subject to comprehensive planning and appropriate
engagement with stakeholders, including affected employees and any
appropriate employee representative bodies. CME would implement any
job reductions in accordance with all relevant legal obligations.
CME intends to approach the employee and management integration
process with the aim of retaining and motivating the best talent
across the Combined Company.
CME plans to fully observe, following completion of the
Acquisition, contractual and statutory employment rights, including
in relation to pensions, of all NEX employees. CME does not intend
to make any material changes to the conditions of employment of the
employees (or balance of skills and functions) of NEX. CME also
does not intend to make any changes with regard to employer
contributions into NEX's existing pension schemes or the accrual of
benefits to existing members or the admission of new members to
such pension schemes.
Headquarters and locations
NEX's headquarters will be combined with CME's, and the Combined
Company's headquarters will be located at CME's head office in
Chicago. The Combined Company will also maintain its European
headquarters in London.
CME believes there may be consolidation of office space in
London, New York, Singapore, Hong Kong, Tokyo, Beijing and Sydney.
CME expects to retain either CME's or NEX's offices (or potentially
both) in these locations.
CME will also consider potential efficiencies from combining NEX
and CME's physical data centres and potentially moving some of the
data stored in existing physical data centres to the virtual
cloud.
No other changes are envisaged with respect to the redeployment
of NEX's existing material fixed assets.
Other items
CME does not envisage any material change to the research and
development functions of NEX as a result of the Acquisition.
CME's intention is to seek the cancellation of the trading of
NEX Shares on the London Stock Exchange from or shortly after the
Effective Date, which would result in cost savings from not having
to maintain a listing and related supporting back office
functions.
No statements in this paragraph 12 constitute "post-offer
undertakings" for the purposes of Rule 19.5 of the Code.
13. Acquisition related arrangements
Confidentiality Agreement
CME and NEX entered into a confidentiality agreement on 15
February 2018 (the "Confidentiality Agreement"), pursuant to which
each party has undertaken to keep confidential information relating
to the other and to the Acquisition and not to disclose it to third
parties (with certain exceptions). These confidentiality
obligations will remain in force until the third anniversary of the
date of the Confidentiality Agreement. The Confidentiality
Agreement contains standstill provisions which restricted CME from
acquiring or offering to acquire interests in certain securities of
NEX; with those restrictions ceasing to apply upon the release of
this Announcement. The Confidentiality Agreement contains
restrictions on CME contacting NEX's shareholders, directors,
employees, customers, suppliers and lenders for a period of
eighteen months (though these restrictions will no longer apply in
certain specified circumstances). The Confidentiality Agreement
also contains provisions pursuant to which each party has agreed
not to solicit directors and certain senior employees of the other
party, subject to customary carve-outs, for a period of eighteen
months.
Confidentiality and Joint Defense Agreement
CME, NEX and their respective external legal counsels entered
into a confidentiality and joint defense agreement (the
"Confidentiality and Joint Defense Agreement") dated 13 March 2018,
the purpose of which is to ensure that the exchange or disclosure
of certain materials relating to the parties only takes place
between their respective external legal counsels and external
experts, and does not diminish in any way the confidentiality of
such materials and does not result in a waiver of privilege, right
or immunity that might otherwise be available.
Clean Team Confidentiality Agreement
CME and NEX entered into a clean team confidentiality agreement
(the "Clean Team Confidentiality Agreement") on 20 February 2018,
which sets out how any confidential information that is
competitively sensitive can be disclosed, used or shared for the
purposes of due diligence, synergies evaluation, planning the
transition and integration and regulatory clearance.
Co-operation Agreement
CME, Bidco and NEX entered into the Co-operation Agreement dated
29 March 2018, pursuant to which, among other things, the parties
have agreed to co-operate for the purposes of obtaining all
regulatory clearances required in connection with the Acquisition
and in connection with the preparation of the Scheme Document.
The Co-operation Agreement will terminate if: (i) agreed in
writing between CME, Bidco and NEX; or (ii) upon the service of
written notice by NEX to CME or CME to NEX if: (a) prior to the
Long Stop Date: (A) any Condition which has not been waived is (or
has become) incapable of satisfaction by the Long Stop Date and,
notwithstanding that it has the right to waive such Condition, CME
will not do so; or (B) any Condition which is incapable of waiver
has become incapable of satisfaction by the Long Stop Date (in each
case in circumstances where the invocation of the relevant
Condition (or confirmation that the Condition is incapable of
satisfaction, as appropriate) is permitted by the Panel); (b) NEX
makes an announcement before the publication of the Scheme Document
and (if different) the circular convening the General Meeting that:
(A) the NEX Board no longer intends to recommend the Acquisition;
(B) it will not convene the Court Meeting or the General Meeting;
or (C) it intends not to post the Scheme Document or (if different)
the circular convening the General Meeting; (c) the NEX Board
withdraws its recommendation of the Acquisition or if the Scheme
Document does not contain such recommendation; (d) a third party
announces a firm intention to make an offer or revised offer for
the entire issued share capital of NEX which is (A) recommended by
the NEX Board; or (B) completes, becomes effective or is declared
or becomes unconditional in all respects; (e) if the Acquisition is
withdrawn, terminated or lapses in accordance with its terms prior
to the Long Stop Date, other than where CME or Bidco exercises its
right under the Co-operation Agreement to implement the Acquisition
by way of an Offer or it is otherwise followed within five Business
Days (or such other period as CME, Bidco and NEX may agree) by an
announcement under Rule 2.7 of the Code made by CME or Bidco or any
person acting in concert with CME to implement the Acquisition by a
different takeover offer or scheme of arrangement on substantially
the same or improved terms; (f) if the Scheme is not approved by
the NEX Shareholders at the Court Meeting or the General Meeting or
the Court refuses to sanction the Scheme and, in each case, within
two Business Days of a request from CME, NEX fails to give its
consent to implement the Acquisition by way of an Offer rather than
the Scheme; or (g) unless otherwise agreed by CME, Bidco and NEX,
if the Effective Date has not occurred by the Long Stop Date.
Where CME is responsible for any regulatory clearances or
authorisations which are necessary or expedient to satisfy a
regulatory Condition, CME and Bidco have agreed to use all
reasonable efforts to secure such regulatory clearances and
authorisations as soon as reasonably practicable following the date
of this Announcement. CME and Bidco have each agreed not to invoke
any regulatory Condition 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 regulatory Condition are of
material significance to CME or Bidco in the context of the
Acquisition in accordance with the Code as applied by the
Panel.
The Co-operation Agreement records CME's and NEX's intention to
implement the Acquisition by way of a Scheme, subject to the
ability of CME and NEX to implement the Acquisition by way of an
Offer in the circumstances described in the Co-operation Agreement
(which have been summarised in this Announcement).
The Co-operation Agreement contains information on the impact of
the Scheme on employees' options and awards under the NEX Share
Schemes and Bidco's proposals for dealing with the options and
awards. It also covers the treatment of employees' bonuses, a high
level statement on employee retention awards designed to motivate
and retain employees up to and following the Acquisition and
proposals for the treatment of pay and benefits in the event that
an employee leaves the NEX Group.
The detail of the proposals for NEX Share Schemes will be
provided in separate communications to participants in due course.
Employees will be provided with background to and information on
the treatment of other aspects of remuneration arrangements at the
appropriate time.
14. Structure of the Acquisition
Scheme
It is intended that the Acquisition will be effected by a
Court-sanctioned scheme of arrangement between NEX and the Scheme
Shareholders under Part 26 of the Companies Act. The purpose of the
Scheme is to provide for CME and Bidco to become the owners of the
whole of the issued and to be issued share capital of NEX. Under
the Scheme, the Acquisition is to be principally achieved by
the:
(a) transfer of the Scheme Shares held by Scheme Shareholders to
CME and Bidco in consideration for which the Scheme Shareholders
will receive New CME Shares and cash consideration; and
(b) passing of the resolutions at the General Meeting.
Approval by Court Meeting and General Meeting
In order to become Effective, the Scheme requires the:
(a) satisfaction (or, where applicable, waiver) of the Conditions;
(b) approval of a majority in number of the Scheme Shareholders
who vote, representing not less than 75 per cent. in value of the
Scheme Shares held by those Scheme Shareholders, present and
voting, either in person or by proxy, at the Court Meeting; and
(c) approval of not less than 75 per cent. of the votes cast,
either in person or by proxy, of the resolutions at the General
Meeting (to be held directly after the Court Meeting) necessary in
order to implement the Scheme.
Application to Court to sanction the Scheme
Once the approvals of the NEX Shareholders have been obtained at
the Court Meeting and the General Meeting, and the other Conditions
have been satisfied or (where applicable) waived, the Scheme must
be sanctioned by the Court at the Court Hearing.
The Scheme will become effective in accordance with its terms on
delivery of the Court Order to the Registrar. Upon the Scheme
becoming Effective, it will be binding on all Scheme Shareholders,
irrespective of whether or not they attended or voted at the Court
Meeting or General Meeting, or whether they voted in favour of or
against the Scheme.
Full details of the Scheme to be set out in the Scheme
Document
The Scheme will be subject to the satisfaction (or, where
applicable, waiver) of the Conditions and the full terms and
conditions to be set out in the Scheme Document. Further details of
the Scheme will be set out in the Scheme Document, including the
expected timetable and the action to be taken by Scheme
Shareholders.
The Scheme will be governed by the laws of England and Wales.
The Scheme will be subject to the applicable requirements of the
Code, the Panel, the London Stock Exchange, the FCA and the Listing
Rules.
It is expected that the Scheme Document will be dispatched to
NEX Shareholders and, for information only, to participants in the
NEX Share Schemes within 28 days of the date of this Announcement,
unless CME and NEX otherwise agree, and the Panel consents, to a
later date.
Conditions to the Acquisition
The Acquisition will be subject to the Conditions and further
terms set out in full in Appendix I to this Announcement and to be
set out in the Scheme Document.
Amongst others, the Conditions include competition law
clearances by the CMA and under the U.S. HSR Act, and regulatory
approvals in the U.K., U.S., Hong Kong, Germany, Italy and
Sweden.
The Scheme will also be conditional, amongst other things, upon
the:
(a) Scheme becoming Effective by the Long Stop Date, failing which the Scheme will lapse;
(b) approval of the Scheme by a majority in number of the Scheme
Shareholders, representing not less than 75 per cent. in value of
the Scheme Shares held by those Scheme Shareholders, present and
voting, either in person or by proxy, at the Court Meeting or at
any adjournment thereof on or before 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 as may be agreed between
CME and NEX and the Court may allow);
(c) passing of the resolutions by the requisite majority at the
General Meeting to be held on or before 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 as may be agreed between
CME and NEX and the Court may allow); and
(d) sanction of the Scheme on or before the 22nd day after the
expected date of the Court Hearing to be set out in the Scheme
Document in due course (or such later date as may be agreed between
CME and NEX and the Court may allow) and the delivery of an office
copy of the Court Order to the Registrar.
Scheme timetable/further information
A full anticipated timetable will be set out in the Scheme
Document which is intended to be posted to NEX Shareholders along
with notices of the Court Meeting and General Meeting and the Forms
of Proxy within 28 days of the date of this Announcement, unless
NEX and CME otherwise agree, and the Panel consents, to a later
date. Subject to certain restrictions relating to persons resident
in Restricted Jurisdictions, the Scheme Document will also be made
available on CME's website at www.cmegroup.com/nex-group and NEX's
website at www.nex.com/offer.
At this stage, subject to the approval and availability of the
Court (which is subject to change), and subject to the satisfaction
(or, where applicable, waiver) of the Conditions, CME expects the
Acquisition will become Effective in the second half of 2018.
Right to switch to an Offer
Each of CME and Bidco reserves the right to elect, subject to
the consent of the Panel and subject to the terms of the
Co-operation Agreement, to implement the Acquisition by way of an
Offer for the entire issued and to be issued share capital of NEX
as an alternative to the Scheme. In such an event, the Offer will
be implemented on the same terms (subject to appropriate
amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to in Part C of
Appendix I to this Announcement.
15. De-listing and re-registration
Prior to the Scheme becoming Effective, a request will be made
by NEX to the London Stock Exchange to cancel trading in NEX Shares
on its market for listed securities to take effect on, or shortly
after, the Effective Date and the U.K. Listing Authority will be
requested to cancel the listing of the NEX Shares from the Official
List on, or shortly after, the Effective Date.
Share certificates in respect of the NEX Shares will cease to be
valid and should be destroyed following the Effective Date and
entitlements to NEX Shares held within the CREST system shall be
cancelled.
As soon as practicable after the Effective Date and after the
cancellation of the listing of the NEX Shares on the Official List
and the cancellation of the admission to trading of the NEX Shares
on the London Stock Exchange's Main Market for listed securities,
it is intended that NEX will be re-registered as a private limited
company under the relevant provisions of the Companies Act.
16. Disclosure of interests in NEX
CME confirms that it made an Opening Position Disclosure,
setting out the details required to be disclosed by it under Rule
8.1(a) of the Code, on 27 March 2018.
As at the close of business on 28 March 2018, being the last
practicable date prior to the publication of this Announcement,
save for: (i) the disclosures in this paragraph 16; and (ii) the
Irrevocable Undertakings referred to in paragraph 7 above, none of
Bidco or any of its directors or CME or any of its directors or, so
far as CME and the Board of Bidco are aware, any person acting, or
deemed to be acting, in concert with Bidco:
-- had an interest in, or right to subscribe for, relevant securities of NEX;
-- had any short position in (whether conditional or absolute
and whether in the money or otherwise), including any short
position under a derivative, any agreement to sell or any delivery
obligation or right to require another person to purchase or take
delivery of, relevant securities of NEX;
-- had procured an irrevocable commitment or letter of intent to
accept the terms of the Acquisition in respect of relevant
securities of NEX; or
-- had borrowed or lent any NEX Shares.
Furthermore, save for the Irrevocable Undertakings described in
paragraph 7 above, no arrangement exists between Bidco, CME or NEX
or an associate of any of Bidco, CME or NEX in relation to NEX
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 NEX 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 persons resident in, or citizens of, or otherwise
subject to, jurisdictions outside the United Kingdom may be
affected by the laws of the relevant jurisdictions. Such persons
should inform themselves of, and observe, any applicable legal or
regulatory requirements of their jurisdiction. NEX Shareholders who
are in any doubt regarding such matters should consult an
appropriate independent professional adviser in the relevant
jurisdiction without delay.
This Announcement is not intended to and does not constitute or
form part of any offer to sell or to subscribe for, or any
invitation to purchase or subscribe for, or the solicitation of any
offer to purchase or otherwise subscribe for, any securities. NEX
Shareholders are advised to read carefully the Scheme Document and
the Forms of Proxy once these have been dispatched.
18. Fractional entitlements
Fractions of New CME Shares will not be allotted to NEX
Shareholders. Instead, all fractional shares which a holder of NEX
Shares would otherwise be entitled to receive will be aggregated
and calculations will be rounded down, and such holder shall
receive, in lieu of such fractional entitlements, cash in an amount
(rounded down to the nearest penny) equal to such fractional amount
multiplied by the last reported sale price of CME Shares on Nasdaq
(as reported in The Wall Street Journal or, if not reported
therein, in another authoritative source selected by CME) on the
last Business Day prior to the Effective Date.
19. General
The Acquisition will be subject to the Conditions and other
terms set out in this Announcement and to the full terms and
conditions which will be set out in the Scheme Document. It is
expected that the Scheme Document will be dispatched to NEX
Shareholders as soon as practicable and, in any event, (save with
the consent of the Panel) within 28 days of this Announcement.
In deciding whether or not to vote or procure votes in favour of
the resolutions relating to the Scheme at the Meetings in respect
of their NEX Shares, NEX Shareholders should rely on the
information contained, and follow the procedures described, in the
Scheme Document.
Details of the effect of the Acquisition on NEX ADR Holders will
be set out in the Scheme Document in due course.
J.P. Morgan, Barclays, Citi, Evercore and KPMG have each given
and not withdrawn their consent to the publication of this
Announcement with the inclusion herein of the references to their
names in the form and context in which they appear.
The Scheme Document will not be reviewed by any federal state
securities commission or regulatory authority in the United States,
nor will any commission or authority pass upon the accuracy or
adequacy of the Scheme Document. Any representation to the contrary
is unlawful and may be a criminal offence.
The Acquisition will be subject to the Conditions and further
terms that are set out in Appendix I, and to the full terms and
conditions which will be set out in the Scheme Document. Appendix
II contains the bases and sources of certain information used in
this Announcement. Appendix III contains details of the Irrevocable
Undertakings received in relation to the Acquisition that are
referred to in this Announcement. Appendix IV contains details and
basis of preparation and principal assumptions of the anticipated
quantified financial benefits of the Acquisition and of the reports
required by Rule 28.1(a) of the Code from CME's reporting
accountants, KPMG, and its financial advisers, J.P. Morgan and
Barclays. Appendix V contains definitions of terms used in this
Announcement. The Appendices form part of, and should be read in
conjunction with, this Announcement.
20. Documents on display
Subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, copies of the following documents will,
by no later than 12 noon (London time) on the Business Day
following the date of this Announcement, be made available on CME's
website at www.cmegroup.com/nex-group and NEX's website at
www.nex.com/offer (as applicable) until the end of the Offer
Period:
(a) this Announcement;
(b) the Confidentiality Agreement;
(c) the Confidentiality and Joint Defense Agreement;
(d) the Clean Team Confidentiality Agreement;
(e) the Co-operation Agreement;
(f) the Irrevocable Undertakings; and
(g) the Finance Documents.
Neither the contents of NEX's website or the contents of CME's
website, nor the content of any other website accessible from
hyperlinks on either such website, is incorporated into or forms
part of, this Announcement.
Enquiries:
CME
Anita Liskey (Media contact) +1 312 466 4613
Laurie Bischel (Media contact) +1 312 648 8698
John Peschier (Investor Relations) +1 312 930 8491
J.P. Morgan (Lead financial adviser to CME and financial adviser
to Bidco)
Anu Aiyengar +1 888 963 5089
Jeremy Capstick +44 (0) 20 7742 4000
Dwayne Lysaght
Adam Laursen
Barclays (Financial adviser to CME)
Joel Fleck +1 212 526 7000
Matthew Smith +44 (0) 20 7623 2323
Edelman (PR adviser to CME)
John Kiely +44 (0) 203 047 2538
Alex Simmons +44 (0) 203 047 2543
NEX
Samantha Wren, CFO +44 (0) 207 818 9000
Alex Dee, Head of Investor Relations
Bryony Scragg, Head of Media Relations
Citi (Joint lead financial adviser and corporate broker to
NEX)
Piers Davison +44 (0) 207 986 4000
Jan Skarbek
Peter Brown (Corporate Broking)
Evercore (Joint lead financial adviser to NEX)
Jane Gladstone +1 212 857 3100
Edward Banks +44 (0) 207 653 6000
Dave Cox
Maitland (PR adviser to NEX)
Neil Bennett +44 (0) 207 379 5151
Rebecca Mitchell +44 (0) 7951 057351
Goldman Sachs International is also acting as a financial
adviser to NEX. Clifford Chance LLP are retained as legal advisers
to NEX. Skadden, Arps, Slate, Meagher & Flom are retained as
legal advisers to CME.
Important notices relating to financial advisers
J.P. Morgan Securities LLC, together with its affiliate J.P.
Morgan Securities plc (which conducts its U.K. investment banking
business as J.P. Morgan Cazenove and which is authorised in the
United Kingdom by the Prudential Regulation Authority (the "PRA")
and regulated in the United Kingdom by the PRA and the Financial
Conduct Authority) ("J.P. Morgan") is acting exclusively as joint
financial adviser for CME and financial adviser to Bidco and no one
else in connection with the matters set out in this announcement
and will not regard any other person as its client in relation to
the matters set out in this announcement and will not be
responsible to anyone other than CME and Bidco for providing the
protections afforded to the clients of J.P. Morgan, nor for
providing advice in relation to any matter referred to herein.
Barclays Bank PLC, acting through its Investment Bank
("Barclays") (which is authorised in the United Kingdom by the
Prudential Regulation Authority (the "PRA") and regulated in the
United Kingdom by the PRA and the Financial Conduct Authority) is
acting exclusively as joint financial adviser for CME and no one
else in connection with the matters set out in this announcement
and will not be responsible to anyone other than CME for providing
the protections afforded to the clients of Barclays, nor for
providing advice in relation to any matter referred to herein.
In accordance with the Code, normal United Kingdom market
practice and Rule 14e-5(b) of the U.S. Exchange Act, Barclays and
its affiliates will continue to act as exempt principal trader in
NEX securities on the London Stock Exchange. These purchases and
activities by exempt principal traders which are required to be
made public in the United Kingdom pursuant to the Code will be
reported to a Regulatory Information Service and will be available
on the London Stock Exchange website at
www.londonstockexchange.com. This information will also be publicly
disclosed in the United States to the extent that such information
is made public in the United Kingdom.
Citigroup Global Markets Limited ("Citi"), which is authorised
by the Prudential Regulation Authority and regulated in the United
Kingdom by the Financial Conduct Authority and the Prudential
Regulation Authority, is acting as joint lead financial adviser to
NEX and for no one else in connection with matters set out in this
announcement and will not be responsible to anyone other than NEX
for providing the protections afforded to its clients or for
providing advice in relation to matters set out in this
announcement.
Evercore Group L.L.C. ("Evercore LLC"), which is a securities
broker-dealer registered with the U.S. Securities and Exchange
Commission ("SEC") and subject to regulation by the SEC and the
Financial Industry Regulatory Authority ("FINRA"), and Evercore
Partners International LLP ("EPI LLP") (together with Evercore LLC,
"Evercore"), which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, are acting as joint
lead financial adviser for NEX and no one else in connection with
matters set out in this announcement, and will not be responsible
to anyone other than NEX for providing the protections afforded to
clients of Evercore or for providing advice in relation to matters
referred to in this announcement. Neither Evercore nor any of its
subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect,
whether in contract or in tort, under statute or otherwise) to any
person who is not a client of Evercore in connection with this
announcement, any statement contained therein or otherwise. Apart
from the responsibilities and liabilities, if any, which may be
imposed on Evercore by FSMA, or the regulatory regime established
thereunder, or under the regulatory regime of any jurisdiction
where exclusion of liability under the relevant regulatory regime
would be illegal, void or unenforceable, neither Evercore nor any
of its affiliates accepts any responsibility or liability
whatsoever for the contents of this Announcement, and no
representation, express or implied, is made by it, or purported to
be made on its behalf, in relation to the contents of this
Announcement, including its accuracy, completeness or verification
of any other statement made or purported to be made by it, or on
its behalf, in connection with NEX or the matters described in this
Announcement. To the fullest extent permitted by applicable law,
Evercore and its affiliates accordingly disclaim all and any
responsibility or liability whether arising in tort, contract or
otherwise (save as referred to above) which they might otherwise
have in respect of this Announcement or any statement contained
therein.
Goldman Sachs International, which is authorised by the
Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the
United Kingdom, is acting exclusively for NEX and no one else in
connection with the Acquisition and will not be responsible to
anyone other than NEX for providing the protections afforded to
clients of Goldman Sachs International or for providing advice in
connection with the Acquisition or the matters described in this
Announcement or any transaction or arrangement referred to
herein.
Further information
This Announcement is for information purposes only and is not
intended to and does not constitute, or form any part of, an offer
to sell or an invitation to purchase or subscribe for any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to the Acquisition or otherwise. The
Acquisition will be made solely by the Scheme Document, which will
contain the full terms and conditions of the Acquisition, including
details of how to vote in respect of the Scheme. Any voting
decision or response in relation to the Acquisition should be made
solely on the basis of the Scheme Document.
This Announcement does not constitute a prospectus or a
prospectus equivalent document.
Overseas shareholders
The release, publication or distribution of this Announcement in
jurisdictions other than the United Kingdom may be restricted by
law and therefore any persons who are subject to the laws of any
jurisdiction other than the United Kingdom (including Restricted
Jurisdictions) should inform themselves about, and observe, any
applicable legal or regulatory requirements. In particular, the
ability of persons who are not resident in the United Kingdom or
who are subject to the laws of another jurisdiction to vote their
NEX Shares in respect of the Scheme at the Court Meeting, or to
execute and deliver Forms of Proxy appointing another to vote at
the Court Meeting on their behalf, may be affected by the laws of
the relevant jurisdictions in which they are located or to which
they are subject. Any failure to comply with applicable legal or
regulatory requirements of any jurisdiction may constitute a
violation of securities laws in that jurisdiction. This
Announcement has been prepared for the purpose of complying with
English law 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 England.
Copies of this Announcement and any formal documentation
relating to the Acquisition are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction or any
jurisdiction where to do so would constitute a violation of the
laws of such jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any
Restricted Jurisdiction. Doing so may render invalid any related
purported vote in respect of acceptance of the Acquisition.
If the Acquisition is implemented by way of an Offer, the Offer
may not (unless otherwise permitted by applicable law and
regulation) be made, directly or indirectly, in or into or by use
of the mails or any other means or instrumentality (including,
without limitation, facsimile, e-mail 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 Acquisition will
not be capable of acceptance by any such use, means,
instrumentality or facilities or from within any Restricted
Jurisdiction.
Further details in relation to NEX Shareholders in overseas
jurisdictions will be contained in the Scheme Document.
Notice to U.S. investors in NEX
The Acquisition relates to the shares of a U.K. company and is
being made by means of a scheme of arrangement provided for under
Part 26 of the Companies Act. The Acquisition, implemented by way
of a scheme of arrangement, is not subject to the tender offer
rules or the proxy solicitation rules under the U.S. Exchange Act.
Accordingly, the Acquisition is subject to the disclosure
requirements and practices applicable to a scheme of arrangement
involving a target company in the U.K. listed on the London Stock
Exchange, which differ from the disclosure requirements of U.S.
tender offer and proxy solicitation rules. If, in the future, CME
or Bidco exercises its right to implement the Acquisition by way of
an Offer, subject to the terms of the Co-operation Agreement, and
determines to extend the Offer into the U.S., the Acquisition will
be made in compliance with applicable U.S. laws and
regulations.
The New CME Shares to be issued pursuant to the Acquisition have
not been registered under the U.S. Securities Act, and may not be
offered or sold in the U.S. absent registration or an applicable
exemption from the registration requirements of the U.S. Securities
Act. The New CME Shares to be issued pursuant to the Acquisition
will be issued pursuant to the exemption from registration provided
by Section 3(a)(10) under the U.S. Securities Act. If, in the
future, CME or Bidco exercises its right to implement the
Acquisition by way of an Offer, subject to the terms of the
Co-operation Agreement, or otherwise in a manner that is not exempt
from the registration requirements of the U.S. Securities Act, it
will file a registration statement with the SEC that will contain a
prospectus with respect to the issuance of New CME Shares. In this
event, NEX Shareholders and NEX ADR Holders are urged to read these
documents and any other relevant documents filed with the SEC, as
well as any amendments or supplements to those documents, because
they will contain important information, and such documents will be
available free of charge at the SEC's website at www.sec.gov or by
directing a request to CME's contact for enquiries identified
above.
Neither the SEC nor any U.S. state securities commission has
approved or disapproved of the New CME Shares to be issued in
connection with the Acquisition, or determined if this Announcement
is accurate or complete. Any representation to the contrary is a
criminal offence in the U.S..
The financial information included in this Announcement has been
prepared in accordance with International Financial Reporting
Standards (as adopted by the European Union) and thus may not be
comparable to financial information of U.S. companies or companies
whose financial statements are prepared in accordance with U.S.
generally accepted accounting principles.
It may be difficult for U.S. NEX Shareholders and NEX ADR
Holders to enforce their rights and any claim arising out of the
U.S. federal securities laws, because NEX is located in a non-U.S.
country, and some or all of its officers and directors are
residents of a non-U.S. country. U.S. NEX Shareholders and NEX ADR
Holders may not be able to sue a non-U.S. company or its officers
or directors in a non-U.S. court for violations of the U.S.
securities laws. Further, it may be difficult to compel a non-U.S.
company and its affiliates to subject themselves to a U.S. court's
judgment.
U.S. NEX Shareholders and NEX ADR Holders also should be aware
that the transaction contemplated herein may have tax consequences
in the U.S. and, that such consequences, if any, are not described
herein. U.S. NEX Shareholders and NEX ADR Holders are urged to
consult with legal, tax and financial advisers in connection with
making a decision regarding this transaction.
Forward looking statements
This Announcement contains certain forward-looking statements
with respect to CME, Bidco, NEX and the Combined Company. These
forward-looking statements can be identified by the fact that they
do not relate only to historical or current facts. Forward-looking
statements often use words such as "anticipate", "target",
"expect", "estimate", "intend", "plan", "goal", "believe", "aim",
"will", "may", "would", "could" or "should" or other words of
similar meaning or the negative thereof. Forward-looking statements
include statements relating to the following: (i) future capital
expenditures, expenses, revenues, economic performance, synergies,
financial conditions, market growth, dividend policy, losses and
future prospects; (ii) business and management strategies and the
expansion and growth of the operations of the CME Group or the NEX
Group; and (iii) the effects of government regulation on the
business of the CME Group or the NEX Group.
These forward-looking statements involve known and unknown
risks, uncertainties and other factors which may cause the actual
results, performance or achievements of any such person, or
industry results, to be materially different from any results,
performance or achievements expressed or implied by such
forward-looking statements. These forward-looking statements are
based on numerous assumptions regarding the present and future
business strategies of such persons and the environment in which
each will operate in the future. All subsequent oral or written
forward-looking statements attributable to CME, Bidco or NEX or any
persons acting on their behalf are expressly qualified in their
entirety by the cautionary statement above. None of CME, Bidco or
NEX undertakes any obligation to update publicly or revise
forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally
required.
The form 10-K of CME for the year ended 31 December 2017
contains additional information regarding forward-looking
statements with respect to CME.
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 ordinary share, for CME or NEX, respectively for the
current or future financial years would necessarily match or exceed
the historical published earnings or earnings per ordinary share
for CME or NEX, respectively.
Quantified Financial Benefits Statement
Statements of estimated cost savings and synergies relate to
future actions and circumstances which, by their nature, involve
risks, uncertainties and contingencies. As a result, the cost
savings and synergies referred to in the Quantified Financial
Benefits Statement may not be achieved, may be achieved later or
sooner than estimated, or those achieved could be materially
different from those estimated. No statement in the Quantified
Financial Benefits Statement, or this Announcement generally,
should be construed as a profit forecast or interpreted to mean
that the Combined Company's earnings in the first full year
following the Effective Date of the Scheme, or in any subsequent
period, would necessarily match or be greater than or be less than
those of NEX or CME for the relevant preceding financial period or
any other period. For the purposes of Rule 28 of the Code, the
Quantified Financial Benefits Statement contained in this
Announcement is the responsibility of CME and the CME
Directors.
Right to switch to an Offer
Each of CME and Bidco reserves the right to elect, subject to
the consent of the Panel and subject to the terms of the
Co-operation Agreement, to implement the Acquisition by way of an
Offer for the entire issued and to be issued share capital of NEX
as an alternative to the Scheme. In such an event, the Offer will
be implemented on the same terms (subject to appropriate
amendments), so far as applicable, as those which would apply to
the Scheme and subject to the amendment referred to in Appendix I
to this Announcement.
Publication on website
In accordance with Rule 26.1 of the Code, a copy of this
Announcement will be made available (subject to certain
restrictions relating to persons resident in Restricted
Jurisdictions), free of charge, at www.cmegroup.com/nex-group and
www.nex.com/offer by no later than 12 noon on 30 March 2018.
Neither the contents of these websites nor the content of any
other website accessible from hyperlinks on such websites is
incorporated into, or forms part of, this Announcement.
You will not be sent a hard copy of this Announcement unless you
request one. You may request a hard copy of this Announcement, free
of charge, by contacting Link Asset Services, The Registry, 34
Beckenham Road, Beckenham, Kent BR3 4TU or on +44 (0) 371 664 0565.
NEX Shareholders may also request that all future documents,
announcements and information sent to them in relation to the
Acquisition should be in hard copy form.
Market Abuse Regulation
This Announcement contains inside information for the purposes
of Article 7 of MAR. Market soundings (as defined in MAR) were
taken in respect of a potential offer with the result that certain
persons became aware of inside information (as defined in MAR) as
permitted by MAR. This inside information is set out in this
Announcement. Therefore, those persons that received inside
information in a market sounding are no longer in possession of
such inside information relating to NEX and its securities.
Information relating to NEX Shareholders
Please be aware that addresses, electronic addresses and certain
other information provided by NEX Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from NEX may be provided to CME during the offer
period as required under Section 4 of Appendix 4 of the Code to
comply with Rule 2.11(c) of the Code.
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.
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 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (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 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0)20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
APPIX I
CONDITIONS AND FURTHER TERMS OF THE ACQUISITION
Part A
Conditions to the Acquisition
The Acquisition will be conditional upon the Scheme becoming
unconditional and becoming Effective, subject to the Code, by no
later than 11.59 p.m. on the Long Stop Date.
Scheme approval
a) The Scheme will be conditional upon:
(i)
A. its approval by a majority in number representing not less
than 75 per cent. in value of the NEX Shareholders (or the relevant
class or classes thereof, if applicable) in each case present,
entitled to vote and voting, either in person or by proxy, at the
Court Meeting and at any separate class meeting which may be
required by the Court or at any adjournment of any such meeting;
and
B. the Court Meeting and any separate class meeting which may be
required by the Court or any adjournment of any such meeting being
held on or before 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 CME and NEX may agree and the Court may
allow);
(ii)
A. all resolutions necessary to approve and implement the Scheme
being duly passed by the requisite majority or majorities at the
General Meeting or at any adjournment of that meeting; and
B. the General Meeting or any adjournment of that meeting being
held on or before 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 CME and NEX may agree and the Court
may allow); and
(iii)
A. the sanction of the Scheme by the Court with or without
modification (but subject to any such modification being acceptable
to CME and NEX) and the delivery of a copy of the Court Order to
the Registrar; and
B. the Court Hearing being held on or before the 22nd day after
the expected date of the Court Hearing to be set out in the Scheme
Document in due course (or such later date, if any, as CME and NEX
may agree and the Court may allow).
If any Condition referred to in paragraphs (a)(i) to (iii) above
is not capable of being satisfied by the date specified therein,
CME shall make an announcement through a Regulatory Information
Service as soon as practicable and, in any event, by not later than
7.00 a.m. on the Business Day following the date so specified,
stating whether CME has invoked that Condition or, with the
agreement of NEX, specified a new date by which that Condition must
be satisfied.
In addition, CME and NEX 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 the following Conditions (as amended if appropriate) have
been satisfied or, where relevant, waived:
Competition law and regulatory approvals
U.S. HSR Act clearance
b) all necessary notifications and filings having been made and
all applicable waiting periods (including any extensions thereof)
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and
the rules and regulations made thereunder having expired, lapsed or
been terminated as appropriate in each case in respect of the
Acquisition;
CMA clearance
c) the CMA deciding, in terms reasonably satisfactory to CME:
(i) not to make a Phase 2 CMA Reference (pursuant to sections 33 or
73 of the Enterprise Act 2002); or (ii) where the CMA has made a
Phase 2 CMA Reference, confirmation having been received by CME
from the CMA that: (A) the Acquisition may proceed without any
undertakings, conditions or orders; or (B) the Acquisition may
proceed subject to the giving of such undertakings by, or the
imposition of such conditions or orders on, CME or NEX, on terms
reasonably satisfactory to CME, and all necessary approvals or
consents for clearance having been provided by the CMA;
FCA
d) the FCA:
(i) giving notice in writing to CME pursuant to section 189(4)(a) of FSMA of its approval;
(ii) being treated as having given such approval under section 189(6) of FSMA; or
(iii) giving notice in writing to CME pursuant to section 189(7)
of FSMA of its conditional approval, on terms which will not
materially limit the ability of any member of the CME Group to
conduct or integrate or coordinate its business, or any part of it,
with the businesses or any part of the businesses of any member of
the NEX Group,
in respect of each person (whether or not a member of the CME
Group) who will acquire control or (if applicable) increase control
over (as defined in sections 181 and 182 of FSMA) any member of the
NEX Group which is (or shall be as at the Effective Date) a U.K.
authorised person (as defined in section 191G(1) of FSMA), and
which in either case would result from or in connection with or is
contemplated by the implementation of the Acquisition;
e) the FCA:
(i) giving notice in writing to CME pursuant to section 301G(2) of FSMA of its approval; or
(ii) being treated as having given such approval under section 301G(4) of FSMA,
in respect of each person (whether or not a member of the CME
Group) who will acquire control or (if applicable) increase control
over (as defined in sections 301D of FSMA) any member of the NEX
Group which is (or shall be as at the Effective Date) a recognised
investment exchange (as defined in section 285 of FSMA), and which
in either case would result from or in connection with or is
contemplated by the implementation of the Acquisition;
Hong Kong Monetary Authority
f) the Hong Kong Monetary Authority confirming in writing to CME
that the Acquisition shall not result in any entity in the NEX
Group which is an approved Money Broker (as defined in the Banking
Ordinance (Cap. 155 of the laws of Hong Kong) ("BO")) ceasing to
fulfil one or more of the criteria in Schedule 11 to the BO;
Securities and Futures Commission of Hong Kong
g) the Securities and Futures Commission of Hong Kong:
(i) giving notice in writing to CME pursuant to section
132(1)(a) of Securities and Futures Ordinance (Cap. 571 of the laws
of Hong Kong) ("SFO") of its approval; or
(ii) giving notice in writing to CME pursuant to 132(1)(a) of
SFO of its conditional approval, on terms which will not materially
limit the ability of any member of the CME Group to conduct or
integrate or coordinate its business, or any part of it, with the
businesses or any part of the businesses of any member of the NEX
Group;
BaFin
h) BaFin, the German Federal Financial Supervisory Authority,
and the Bundesbank, the German Central Bank, having:
i) confirmed in writing to CME that no regulatory notification
pursuant to -- 2c of the German Banking Act is required in relation
to the proposed Acquisition; or
ii) approved in writing to CME (or, as at the expiry of its
statutory review period, not having made any objection to) the
change of controlling shareholders of any member of the NEX Group
authorised by BaFin as a financial services provider, as a result
of the Acquisition or its implementation pursuant to the German
Banking Act;
Bank of Italy
i) the Bank of Italy confirming in writing to CME that it raises
no objections (or, as at the expiry of its statutory review period,
not having made any objection to) the change of controlling
shareholders of any member of the NEX Group authorised in Italy as
a financial services provider, as a result of the Acquisition or
its implementation;
Swedish Financial Supervisory Authority
j) the Swedish Financial Supervisory Authority giving notice of:
(i) its approval to CME in respect of (or, as at the expiry of
its statutory review period, having been deemed to approve) the
change of controlling shareholders of any member of the NEX Group
authorised in Sweden as an authorised investment firm as a result
of the proposed Acquisition or its implementation; or
(ii) its conditional approval (on terms which will not
materially limit the ability of any member of the CME Group to
conduct or integrate or coordinate its business, or any part of it,
with the businesses or any part of the businesses of any member of
the NEX Group), pursuant to chapter 24, section 3a of the
Securities Market Act, to CME in respect of the change of
controlling shareholders of any member of the NEX Group authorised
in Sweden as an authorised investment firm as a result of the
Acquisition or its implementation;
SEC
k) all necessary notifications and filings having been made to
the U.S. Securities and Exchange commission including any necessary
amendment to the Form BD and Form ATS currently on file for
BrokerTec Americas LLC;
FINRA
l) the Financial Industry Regulatory Authority having confirmed
in writing that it approves the change in ownership and control of
BrokerTec Americas LLC as required by FINRA Rule 1017;
CFTC
m) the U.S. Commodity Futures Trading Commission having
confirmed in writing that it approves the change in ownership and
control of NEX SEF Ltd. as may be required by CFTC Regulation
37.3(e);
Other regulatory
n) any other relevant change of control consents, notifications
or approvals as are required or desirable having been received or
given (as appropriate) prior to the completion of the Acquisition
according to the law of any other jurisdiction;
o) a Relevant Authority not having cancelled or varied, and not
having notified any member of the NEX Group (or intimated that it
may notify) of any proposal to cancel or vary, any permission held
by any authorised person within the NEX Group required to carry on
its business at the date of this announcement;
Listing on Nasdaq, effectiveness of registration
p) confirmation having been received by CME that the New CME
Shares have been approved for listing, subject to official notice
of issuance, on Nasdaq; and
q) in the event that the Acquisition is implemented by way of an
Offer, absent an available exemption from the registration
requirements of the U.S. Securities Act, CME's registration
statement having been declared effective by the SEC and no stop
order having been issued or proceedings for suspension of the
effectiveness of CME's registration statement having been initiated
by the SEC and CME having received all necessary U.S. state
securities law or blue sky authorisations;
General third party clearances
r) the waiver (or non-exercise within any applicable time
limits) by any relevant government or governmental,
quasi-governmental, supranational, statutory, regulatory,
environmental or investigative body, court, trade agency,
association, institution, any entity owned or controlled by any
relevant government or state, or any other body or person
whatsoever in any jurisdiction (each a "Third Party") of any
termination right, right of pre-emption, first refusal or similar
right (which is material in the context of the Wider NEX Group or
the Wider CME Group taken as a whole) arising as a result of or in
connection with the Acquisition including, without limitation, its
implementation and financing or the proposed direct or indirect
acquisition of any shares or other securities in, or control of,
NEX by CME or any member of the CME Group;
s) no Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, enquiry or reference, or enacted, made or proposed
any statute, regulation, decision or order, or having taken any
other steps which would or might reasonably be expected to:
(i) require, prevent or materially delay the divestiture, or
materially alter the terms envisaged for any proposed divestiture
by any member of the Wider CME Group or any member of the Wider NEX
Group of all or any portion of their respective businesses, assets
or property or impose any limitation on the ability of any of them
to conduct their respective businesses (or any of them) or to own
any of their respective assets or properties or any part thereof
which in any such case would be material in the context of the
Wider NEX Group or Wider CME Group taken as a whole;
(ii) require, prevent or materially delay, or materially alter
the terms envisaged for, any proposed divestiture by any member of
the Wider CME Group of any shares or other securities in NEX;
(iii) impose any material limitation on, or result in a delay
in, the ability of any member of the Wider CME Group directly or
indirectly to acquire or to hold or to exercise effectively,
directly or indirectly, all or any rights of ownership in respect
of shares or loans or securities convertible into shares or any
other securities (or the equivalent) in any member of the Wider NEX
Group or the Wider CME Group or to exercise management control over
any such member, in each case, to an extent which is material in
the context of the Wider NEX Group or the Wider CME Group;
(iv) otherwise adversely affect the business, assets, profits or
prospects of any member of the Wider CME Group or of any member of
the Wider NEX Group to an extent which is material in the context
of the Wider CME Group or the Wider NEX Group, in either case taken
as a whole;
(v) make the Acquisition or its implementation or the
acquisition or proposed acquisition by CME or any member of the
Wider CME Group of any shares or other securities in, or control of
NEX void, illegal, or unenforceable under the laws of any relevant
jurisdiction, or otherwise, directly or indirectly, materially
restrain, restrict, prohibit, delay or otherwise interfere with the
same, or impose material additional conditions or obligations with
respect thereto, or otherwise challenge or interfere therewith;
(vi) require (save as envisaged in the Acquisition) any member
of the Wider CME Group or the Wider NEX Group to offer to acquire
any shares or other securities (or the equivalent) or interest in
any member of the Wider NEX Group or the Wider CME Group owned by
any third party where such acquisition would be material in the
context of the Wider NEX Group taken as a whole or, as the case may
be, the Wider CME Group taken as a whole;
(vii) impose any limitation on the ability of any member of the
Wider CME Group to 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 Wider NEX Group which is adverse to and
material in the context of the Wider NEX Group or the Wider CME
Group, in each case taken as a whole in the context of the
Acquisition; or
(viii) result in any member of the Wider NEX Group ceasing to be
able to carry on business under any name under which it presently
does so, and all applicable waiting and other time periods during
which any such Third Party could institute, implement or threaten
any action, proceeding, suit, investigation, enquiry or reference
or any other step under the laws of any jurisdiction in respect of
the Acquisition or the acquisition or proposed acquisition of any
NEX Shares having expired, lapsed or been terminated;
t) in addition to the competition law and regulatory approvals
referred to in paragraphs (b) - (o) above, all necessary filings or
applications having been made in connection with the Acquisition
and all necessary statutory or regulatory obligations in any
jurisdiction having been complied with in connection with the
Acquisition or the acquisition by any member of the Wider CME Group
of any shares or other securities in, or control of, NEX and all
authorisations, orders, recognitions, grants, consents, licences,
confirmations, clearances, permissions and approvals or the
proposed acquisition of any shares or other securities in, or
control of, NEX by any member of the Wider CME Group having been
obtained in terms and in a form reasonably satisfactory to CME from
all appropriate Third Parties or persons with whom any member of
the Wider NEX Group has entered into contractual arrangements and
all such authorisations, orders, recognitions, grants, consents,
licences, confirmations, clearances, permissions and approvals
together with all authorisations orders, recognitions, grants,
licences, confirmations, clearances, permissions and approvals
necessary or appropriate to carry on the business of any member of
the Wider NEX Group, in each case which is material in the context
of the Wider CME Group or the Wider NEX Group as a whole, remaining
in full force and effect and all material filings necessary for
such purpose have been made and there being no notice or intimation
of any intention to revoke or not to renew any of the same at the
time at which the Acquisition becomes otherwise unconditional and
all necessary statutory or regulatory obligations in any
jurisdiction having been complied with;
Certain matters arising as a result of any arrangement,
agreement etc.
u) except as Disclosed, there being no provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider NEX Group is a party or by or to
which any such member or any of its assets are or may be bound,
entitled or subject, which, in each case as a consequence of the
Acquisition or the proposed acquisition of any shares or other
securities in NEX or because of a change in the control or
management of NEX or otherwise, would or would reasonably be
expected to result in (in each case to an extent which is material
in the context of the Wider NEX Group as a whole, or in the context
of the Acquisition):
(i) any monies borrowed by or any other indebtedness or
liabilities (actual or contingent) of, or grant available to any
such member, being or becoming repayable or capable of being
declared repayable immediately or earlier than their or its stated
maturity date or repayment date or the ability of any such member
to borrow monies or incur any indebtedness being withdrawn or
inhibited or being capable of becoming or being withdrawn or
inhibited;
(ii) any such agreement, arrangement, licence, permit or
instrument or the rights, liabilities, obligations or interests of
any such member thereunder being terminated or adversely affected
or any onerous obligation or liability arising or any action being
taken or arising thereunder;
(iii) any assets or interests of any such member being or
falling to be disposed of or charged or ceasing to be available to
any such member or any right arising under which any such asset or
interest could be required to be disposed of or charged or could
cease to be available to any such member other than in the ordinary
course of business;
(iv) the creation or enforcement of any mortgage, charge or
other security interest over the whole or any part of the business,
property or assets of any such member;
(v) the rights, liabilities, obligations or interests of any
such member in, or the business of any such member with, any
person, firm or body (or any arrangement or arrangements relating
to any such interest or business) being terminated, adversely
modified or affected;
(vi) the value of any such member or its financial or trading
position or prospects being prejudiced or adversely affected;
(vii) any such member ceasing to be able to carry on business
under any name under which it presently does so; or
(viii) the creation of any liability, actual or contingent, by
any such member, other than trade creditors or other liabilities
incurred in the ordinary course of business,
and no event having occurred which, under any provision of any
agreement, arrangement, licence, permit or other instrument to
which any member of the Wider NEX Group is a party or by or to
which any such member or any of its assets may be bound, entitled
or subject, would or might reasonably be expected to result in any
of the events or circumstances as are referred to in sub-paragraphs
(i) to (viii) of this Condition (u), in each case which is or would
be material in the context of the Wider NEX Group taken as a
whole;
No material transactions, claims or changes in the conduct of
the business of the NEX Group
v) except as Disclosed, no member of the Wider NEX Group having, since 31 March 2017:
(i) save as between NEX and wholly-owned subsidiaries of NEX or
for NEX Shares issued pursuant to the exercise of options or
vesting of awards granted under the NEX Share Schemes, issued,
authorised or proposed the issue of additional shares of any
class;
(ii) save as between NEX and wholly-owned subsidiaries of NEX or
for the grant of options and awards under the NEX Share Schemes,
issued or agreed to issue, authorised or proposed the issue of
securities convertible into shares of any class or rights, warrants
or options to subscribe for, or acquire, any such shares or
convertible securities;
(iii) save for the Permitted Dividends, other than to another
member of the NEX Group, recommended, declared, paid or made or
proposed to recommend, declare, pay or make any bonus, dividend or
other distribution whether payable in cash or otherwise;
(iv) save for intra-NEX Group transactions, merged or demerged
with any body corporate or acquired or disposed of or transferred,
mortgaged or charged or created any security interest over any
assets or any right, title or interest in any asset (including
shares and trade investments) or authorised or proposed or
announced any intention to propose any merger, demerger,
acquisition or disposal, transfer, mortgage, charge or security
interest, in each case, other than in the ordinary course of
business;
(v) save for intra-NEX Group transactions, made or authorised or
proposed or announced an intention to propose any material change
in its loan capital;
(vi) issued, authorised or proposed the issue of any debentures
or (save for intra-NEX Group transactions), save in the ordinary
course of business, incurred or increased any indebtedness or
become subject to any liability (actual or contingent);
(vii) purchased, redeemed or repaid or announced any proposal to
purchase, redeem or repay any of its own shares or other securities
or reduced or, save in respect to the matters mentioned in
sub-paragraph (i) above, made any other change to any part of its
share capital;
(viii) implemented, or authorised, proposed or announced its
intention to implement, any reconstruction, amalgamation, scheme,
commitment or other transaction or arrangement otherwise than in
the ordinary course of business or entered into or changed the
terms of any contract with any director or senior executive;
(ix) entered into or varied or authorised, proposed or announced
its intention to enter into or vary any contract, transaction or
commitment (whether in respect of capital expenditure or otherwise)
which is of a long term, onerous or unusual nature or magnitude or
which is or could be restrictive on the businesses of any member of
the Wider NEX Group or the Wider CME Group or which involves an
obligation of such a nature or magnitude or which is other than in
the ordinary course of business and which, in any such case, is
material in the context of the Wider NEX Group or the Wider CME
Group taken as a whole;
(x) (other than in respect of a member of the Wider NEX Group
which is dormant and was solvent at the relevant time) taken any
corporate action or had any legal proceedings started or threatened
against it for its winding-up, dissolution or reorganisation or for
the appointment of a receiver, administrative receiver,
administrator, trustee or similar officer of all or any of its
assets or revenues or any analogous proceedings in any jurisdiction
or had any such person appointed;
(xi) waived or compromised any claim otherwise than in the
ordinary course of business and which is material in the context of
the Wider NEX Group taken as a whole;
(xii) entered into any contract, commitment, arrangement or
agreement otherwise than in the ordinary course of business or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to
propose to, effect any of the transactions, matters or events
referred to in this Condition and which is material in the context
of the Wider NEX Group taken as a whole;
(xiii) having made or agreed or consented to any significant change to:
A. the terms of the trust deeds constituting the pension
scheme(s) established by any member of the Wider NEX Group for its
directors, employees or their dependents;
B. the contributions payable to any such scheme(s) or to the
benefits which accrue or to the pensions which are payable
thereunder;
C. the basis on which qualification for, or accrual or
entitlement to, such benefits or pensions are calculated or
determined; or
D. the basis upon which the liabilities (including pensions) of
such pension schemes are funded, valued or made, in each case, to
the extent which is material in the context of the Wider NEX Group
taken as a whole;
(xiv) proposed, agreed to provide or modified the terms of any
share option scheme, incentive scheme or other benefit relating to
the employment or termination of employment of any person employed
by the Wider NEX Group and in each case which is material in the
context of the Wider NEX Group taken as a whole; or
(xv) having taken (or agreed or proposed to take) any action
which requires, or would require, the consent of the Panel or the
approval of NEX Shareholders in a general meeting in accordance
with, or as contemplated by, Rule 21.1 of the Code;
No adverse change, litigation or regulatory enquiry
w) except as Disclosed, since 31 March 2017:
(i) no adverse change or deterioration having occurred in the
business, assets, financial or trading position or profits or
prospects of any member of the Wider NEX Group which is material in
the context of the Wider NEX Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or
other legal or regulatory proceedings to which any member of the
Wider NEX Group is or may become a party (whether as a plaintiff,
defendant or otherwise) and no investigation by any Third Party
against or in respect of any member of the Wider NEX Group having
been instituted, announced or threatened by or against or remaining
outstanding in respect of any member of the Wider NEX Group which
is material in the context of the Wider NEX Group taken as a
whole;
(iii) no contingent or other liability having arisen or become
apparent to CME which would be likely to adversely affect any
member of the Wider NEX Group, taken as a whole;
(iv) no steps having been taken which are likely to result in
the withdrawal, cancellation, termination or modification of any
licence held by any member of the Wider NEX Group which is
necessary for the proper carrying on of its business; and
(v) no member of the Wider NEX Group having conducted its
business in breach of any applicable laws and regulations which in
any case is material in the context of the Wider NEX Group taken as
a whole;
No discovery of certain matters
x) except as Disclosed, CME not having discovered:
(i) that any financial, business or other information concerning
the Wider NEX Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider
NEX Group is misleading, contains a material misrepresentation of
fact or omits to state a fact necessary to make that information
not misleading; or
(ii) that any member of the Wider NEX Group is subject to any
liability (actual or contingent) which is not disclosed in the
annual report and accounts of NEX for the financial year ended 31
March 2017,
in each case, to the extent which is material in the context of
the Wider NEX Group taken as a whole;
y) except as Disclosed, CME not having discovered that:
(i) any past or present member of the Wider NEX Group has failed
to comply in any material respect with any or all applicable
legislation or regulations, of any jurisdiction with regard to the
use, storage, carriage, disposal, spillage, release, discharge,
leak or emission of any waste or hazardous substance or any
substance likely to impair materially the environment (including
property) or harm human health or animal health or otherwise
relating to environmental matters or the health and safety of
humans, or that there has otherwise been any such storage,
carriage, disposal, spillage, release, discharge, leak or emission
(whether or not the same constituted a non-compliance by any person
with any such legislation or regulations, and wherever the same may
have taken place) any of which storage, carriage, disposal,
spillage, release, discharge, leak or emission would be likely to
give rise to any material liability (actual or contingent) on the
part of any member of the Wider NEX Group; or
(ii) there is, or is likely to be, for that or any other reason
whatsoever, any material liability (actual or contingent) of any
past or present member of the Wider NEX Group to make good, repair,
reinstate or clean up any property now or previously owned,
occupied, operated or made use of or controlled by any such past or
present member of the Wider NEX Group, under any environmental
legislation, regulation, notice, circular or order of any
government, governmental, quasi-governmental, state or local
government, supranational, statutory or other regulatory body,
agency, court, association or any other person or body in any
jurisdiction; or
Anti-corruption, sanctions and criminal property
z) save as Disclosed, CME not having discovered that:
(i) any past or present member, director, officer or employee of
the Wider NEX Group is or has at any time engaged in any activity,
practice or conduct which would constitute an offence under the
Bribery Act 2010, the U.S. Foreign Corrupt Practices Act of 1977 or
any other applicable anti-corruption legislation or any person that
performs or has performed services for or on behalf of the Wider
NEX Group is or has at any time engaged in any activity, practice
or conduct in connection with the performance of such services
which would constitute an offence under the Bribery Act 2010, the
U.S. Foreign Corrupt Practices Act of 1977 or any other applicable
anti-corruption legislation; or
(ii) any asset of any member of the Wider NEX Group constitutes
criminal property as defined by section 340(3) of the Proceeds of
Crime Act 2002 (but disregarding paragraph (b) of that definition);
or
(iii) any past or present member, director, officer or employee
of the NEX 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: (a) any government, entity or
individual in respect of which U.S. 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 U.S. or European
Union laws or regulations, including the economic sanctions
administered by the U.S. Office of Foreign Assets Control, or HM
Treasury in the U.K.; or (b) any government, entity or individual
targeted by any of the economic sanctions of the United Nations,
the U.S., the European Union or any of its member states; or
(iv) no member of the NEX Group being engaged in any transaction
which would cause CME to be in breach of any law or regulation upon
its acquisition of NEX, including the economic sanctions of the
U.S. Office of Foreign Assets Control, or HM Treasury & Customs
in the U.K., or any government, entity or individual targeted by
any of the economic sanctions of the United Nations, the U.S., the
European Union or any of its member states,
in each case, to the extent which is material in the context of
the Wider NEX Group taken as a whole.
Part B
Waiver and Invocation of the Conditions
Subject to the requirements of the Panel in accordance with the
Code, each of CME and Bidco reserves the right to waive, in whole
or in part, all or any of the Conditions in Part A above, except
for Conditions (a)(i)(A), (a)(ii)(A) and (a)(iii)(A) (Scheme
Approval), and (p) and (q) (Listing on Nasdaq, effectiveness of
registration), which cannot be waived.
The Acquisition will be subject to the satisfaction (or waiver,
if permitted) of the Conditions in Part A above, and to certain
further terms set out in Part D below, and to the full terms and
conditions which will be set out in the Scheme Document.
Conditions (a)(i)(A), (a)(ii)(A) and (b) to (z) (inclusive) must
be fulfilled, determined by CME to be or to remain satisfied or (if
capable of waiver) waived, by no later than 11.59 p.m. on the date
immediately preceding the date of the Court Hearing, failing which
the Acquisition will lapse. CME and Bidco shall be under no
obligation to waive or treat as satisfied any of Conditions (b) to
(o) and (r) to (z) (inclusive) by a date earlier than the latest
date specified above for the fulfilment or waiver thereof,
notwithstanding that the other Conditions to the Acquisition may at
such earlier date have been waived or fulfilled and that there are
at such earlier date no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
Part C
Implementation by way of an Offer
Subject to obtaining the consent of the Panel and subject to the
terms of the Co-operation Agreement, each of CME and Bidco reserves
the right to elect to implement the Acquisition by way of an Offer
as an alternative to the Scheme, if: (i) NEX provides its written
consent (an "Agreed Switch"); (ii) a third party announces a firm
intention to make an offer for NEX and the NEX Board recommends the
NEX Shareholders to accept such offer in whole or in part or fails
to publicly reaffirm its recommendation of the Acquisition within 5
Business Days of being requested by CME in writing to do so; (iii)
the NEX Board withdraws or materially and adversely qualifies its
recommendation of the Acquisition; or (iv) in the event that (a)
the Meetings are not held on or before the 22nd day after their
respective expected dates as set out in the Scheme Document (or
such later date as may be agreed in writing between the parties
with the consent of the Panel and the approval of the Court (if
such approval is required)) (except in certain limited
circumstances), or (b) the Court Hearing is not held on or before
the 22nd day after the expected date as set out in the Scheme
Document (or such later date as may be agreed in writing between
the parties with the consent of the Panel and the approval of the
Court (if such approval is required)) (except in certain limited
circumstances).
In such event, such Offer will be implemented on the same terms
and conditions, so far as applicable, as those which would apply to
the Scheme subject to appropriate amendments to reflect the change
in method of effecting the Offer, including (without limitation)
the inclusion of an acceptance condition set at 90 per cent. of the
NEX Shares to which the Offer relates or such lesser percentage as
CME or Bidco (and, in the case of an Agreed Switch, NEX), with the
consent of the Panel, decides, being in any case more than 50 per
cent. of the NEX Shares to which the Offer relates.
Part D
Certain further terms of the Acquisition
The Acquisition will lapse if the Scheme or Offer or any matter
arising from or relating to the Acquisition becomes subject to a
CMA Phase 2 Reference on or before the date of the Meetings.
The Acquisition will lapse if the Scheme or Offer or any matter
arising from or relating to the Acquisition is referred from the
CMA to the European Commission under Article 22(1) of Council
Regulation (EC) 139/2004 before the date of the Meetings.
The Acquisition will lapse if the Scheme does not become
effective by 11.59 p.m. on the Long Stop Date.
The availability of the Acquisition to persons not resident in
the U.K. may be affected by the laws of the relevant jurisdictions.
Persons who are not resident in the U.K. should inform themselves
about, and observe, any applicable requirements. NEX Shareholders
who are in any doubt about such matters should consult an
appropriate independent professional adviser in the relevant
jurisdiction without delay and observe any applicable
requirements.
This Acquisition will be governed by English law and be subject
to the jurisdiction of the English courts and to the Conditions set
out in the Scheme Document. The Acquisition will comply with the
applicable rules and regulations of the FCA, the London Stock
Exchange and the Code.
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other Condition.
Fractions of New CME Shares will not be allotted to NEX
Shareholders. Instead, all fractional shares which a holder of NEX
Shares would otherwise be entitled to receive will be aggregated
and calculations will be rounded down, and such holder shall
receive, in lieu of such fractional entitlements, cash in an amount
(rounded down to the nearest penny) equal to such fractional amount
multiplied by the last reported sale price of CME Shares on Nasdaq
(as reported in The Wall Street Journal or, if not reported
therein, in another authoritative source selected by CME) on the
last Business Day prior to the Effective Date.
The NEX Shares will be acquired by CME and Bidco (or their
nominee) with full title guarantee, fully paid and free from all
liens, equitable interests, charges, encumbrances, rights of
pre-emption and any other third party rights or interests
whatsoever and together with all rights existing at the date of
this Announcement or thereafter attaching thereto, including
(without limitation) the right to receive and retain, in full, all
dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of
share capital or share premium account or otherwise) made on or
after the Effective Date in respect of the NEX Shares.
NEX Shareholders will be entitled to receive a final dividend
for NEX in respect of the year ending 31 March 2018, such dividend
not to exceed an amount of 7.65 pence per NEX Share (the "NEX Final
Dividend"). In the event that the Effective Date occurs prior to
the date of NEX's 2018 annual general meeting (currently expected
to be in July 2018), the NEX Board intends to declare the NEX Final
Dividend as a second interim dividend for the relevant period. In
addition, if prior to the Effective Date, CME declares a dividend
other than in respect of its regular four quarterly dividends (a
"CME Special Dividend"), then NEX will also be entitled to declare
and pay, by way of a special dividend, an amount per NEX Share
equal to 0.0444 times the CME Special Dividend, multiplied by the
exchange rate for the conversion of U.S. dollars into pounds
sterling derived from WM/Reuters as at 4.00 p.m. (London time) on
the ex-dividend date of the CME Special Dividend (the "NEX Special
Dividend") . The record date for the NEX Special Dividend must be a
date on or after the ex-dividend date of the CME Special
Dividend.
Save for the Permitted Dividends, if any dividend or other
distribution is announced, declared, made or paid in respect of the
NEX Shares on or after the date of this Announcement and prior to
the Effective Date, each of CME and Bidco reserves the right to
reduce the consideration payable in respect of each NEX Share by
the amount of all or part of any such dividend or other
distribution.
The New CME Shares will be issued credited as fully paid and
will rank pari passu in all respects with the existing CME Shares,
save that they will not participate in any dividend payable by CME
with reference to a record date prior to the Effective Date.
APPIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this Announcement:
(i) unless otherwise stated, financial information concerning
NEX has been extracted from the Annual Report and Accounts of NEX
for the year ended 31 March 2017 and NEX's results for the six
months ended 30 September 2017;
(ii) unless otherwise stated, financial information concerning
CME has been extracted from the form 10-K of CME for the year ended
31 December 2017;
(iii) the value of the Acquisition is based upon 379,735,432 NEX
Shares in issue on 28 March 2018 and 5,854,555 NEX Shares to be
issued on the expected vesting of awards and the exercise of
options granted or expected to be granted under the NEX Share
Schemes, excluding 785,352 options which are expected to lapse and
including 2,596,024 awards expected to be granted in connection
with the financial year ending 31 March 2018;
(iv) as at 27 March 2018, CME had approximately 342,454,177
fully diluted CME Shares (based on 1,922,265 options outstanding as
at 31 December 2017 and 340,531,912 CME Shares in issue as at 27
March 2018);
(v) as at 28 March 2018 (being the last practicable date prior
to this Announcement), NEX had 379,735,432 NEX Shares in issue;
(vi) unless otherwise stated, all prices for NEX Shares are the
Closing Price for the relevant date;
(vii) unless otherwise stated, all prices for CME Shares are the
closing price derived from Nasdaq on the relevant date;
(viii) the exchange rate of US$1.4101:GBP1 for the conversion of
U.S. dollars into pounds sterling has been derived from WM/Reuters
and is based on the exchange rate as at 4.00 p.m. (London time) on
28 March 2018 (being the last practicable date before the date of
this Announcement); and
(ix) NEX's total shareholder return of 52.4% since the sale of
its voice broking business in 2016 is calculated based on the
increase in the price per NEX Share between its opening price on 30
December 2016 and its closing price on 15 March 2018, plus total
dividends of 30.5p declared and paid to NEX Shareholders since 30
December 2016.
APPIX III
IRREVOCABLE UNDERTAKINGS
Bidco has received irrevocable commitments from the NEX
Directors, as listed below, in respect of their own beneficial
holdings of NEX Shares and (to the extent relevant) the beneficial
holdings of each NEX Director's spouse, civil partner, de facto
partner, or similarly-related person, representing in aggregate
approximately 16.75 per cent. of the existing issued ordinary share
capital of NEX. These commitments require each NEX Director to vote
or procure that the registered holder votes in favour of the
resolutions relating to the Acquisition at the Meetings (or, in the
event the Acquisition is implemented by means of an Offer, to
accept, or procure acceptance of, the Offer).
Name of NEX Director Number of NEX % of NEX issued
Shares share capital
Charles Gregson 233,223 0.06
Michael Spencer 63,117,694 16.62
Samantha Wren 11,367 <0.01
John Sievwright 27,994 0.01
Ivan Ritossa 168,413 0.04
Robert Standing 15,714 <0.01
Ken Pigaga 11,422 <0.01
Anna Ewing 5,000 <0.01
TOTAL 63,590,827 16.75
These Irrevocable Undertakings will continue to be binding in
the event that a higher competing offer is made for NEX.
Bidco has also received irrevocable undertakings from Michael
Spencer, Samantha Wren and Ken Pigaga, also NEX Directors, to vote
or procure votes in favour of the resolutions relating to the
Scheme at the Meetings (or in the event that the Acquisition is
implemented by way of an Offer, to accept or procure acceptance of
such Offer) in respect of any NEX Shares received prior to the
Voting Record Time as a result of their options and awards over NEX
Shares (excluding awards under tax qualifying share option plans)
under the NEX Share Schemes (being 5,240,658 NEX Shares for Michael
Spencer, 67,883 NEX Shares for Samantha Wren and 447,031 NEX Shares
for Ken Pigaga).
The Irrevocable Undertakings will cease to be binding if:
-- the Acquisition is implemented by way of an Offer and an
offer document is not sent to NEX Shareholders within the permitted
period under the Code or as otherwise agreed with the Panel; or
-- the Scheme lapses or is withdrawn in accordance with its
terms and CME or Bidco publicly confirms that it does not intend to
proceed with the Acquisition or to implement the Acquisition by way
of an Offer or otherwise; or
-- any competing offer for the issued and to be issued ordinary
share capital of NEX is made which is declared wholly unconditional
(if implemented by way of a takeover offer) or otherwise becomes
effective (if implemented by way of a scheme of arrangement);
or
-- the Scheme has not become effective by 6.00 p.m. (London time) on the Long Stop Date.
APPIX IV
QUANTIFIED FINANCIAL BENEFITS STATEMENT
Part A
Paragraph 4 of this Announcement contains statements of
estimated cost savings and synergies arising from the Acquisition
(together, the "Quantified Financial Benefits Statement").
A copy of the Quantified Financial Benefits Statement is set out
below:
The CME Board, having reviewed and analysed the potential
benefits of the Acquisition, based on its experience and the
analysis completed and presented by management, expects that the
Acquisition will deliver annualised run rate cost synergies of $200
million by the end of 2021 (assuming completion in 2018). These
savings are in addition to the annual cost savings of GBP40 million
from the transformation programme previously announced by NEX,
which are expected to be achieved in full in 2020.
Other than the NEX-announced transformation plan cost savings,
these synergies are expected to arise as a direct result of the
Acquisition and could not be achieved independently of the
Acquisition.
These cost synergies are divided among and would be realised
principally from:
a) Centralisation and consolidation of operational functions,
accounting for approximately 20% of the recurring cost
synergies:
-- streamlining of operational support required for the trading
platforms and post-trade services; and
-- scale efficiencies across common businesses.
b) IT systems migration and consolidation, accounting for a
further approximately 35% of the recurring cost synergies:
-- harmonisation of technology infrastructure across the Combined Company; and
-- centralisation and removal of duplicate IT functions.
c) Removal of duplicate selling, general and administrative
expenses, accounting for the remaining approximately 45% of the
recurring cost synergies:
-- streamlining of support and service functions and corporate systems; and
-- removal of duplication of services.
The total expected run rate cost synergies of $200 million per
annum are equivalent to approximately 12.5% of the Combined
Company's 2017 adjusted operating costs of approximately $1.6
billion.
It is expected that synergy and savings realisation will take
place progressively, whereby approximately 25% of the run rate cost
synergies would be realised by the end of year 1, rising to
approximately 55% by the end of year 2 and 100% by the end of year
3.
In order to realise the total synergies, CME expects to incur
one-time cash costs of $285 million. Of this, approximately $60
million will be capital investment to facilitate the migration of
IT systems and for consolidation of facilities.
Dis-synergies have been considered in quantifying the net impact
of the synergy benefits and are not expected to be material.
Further information on the bases of belief supporting the
Quantified Financial Benefits Statement, including the principal
assumptions and sources of information, is set out below.
Bases of belief and principal assumptions
-- Headcount reductions were contemplated with the aim of
retaining and motivating the best talent across the Combined
Company.
-- Client-centric approach to the integration whereby a key
value driver will be operational excellence and continued delivery
on customers' needs.
-- In general, the cost synergy assumptions have been risk
adjusted, exercising a degree of prudence in the calculation of the
estimated cost synergy benefit set out above.
-- This cost synergy report has been developed and refined by
CME teams based on data provided by NEX management, internal
analyses, prior experience as well as conducted with access to a
virtual data room, NEX management presentation, and discussions
with NEX management.
-- Estimates were based on CME's and NEX's audited fiscal 2017
results; NEX's results were adjusted for its ongoing transformation
programme.
-- Where possible, CME identified a cost baseline to calculate
estimated savings and expenses on a bottom-up basis, however in
circumstances where data has been limited, estimates and
assumptions were made by CME.
-- Potential areas of dis-synergy have also been considered,
with CME assessing any additional headcount and costs necessary for
the Combined Company to operate successfully, which were determined
to be immaterial for the analysis
-- Revenue benefits have not been included in this synergy report.
-- CME's estimates of ongoing cost benefits and one-off costs
have been phased over a three-year period.
-- The figures have been converted to USD at the US$/GBP spot
rate of 1.41 where applicable, based on the exchange rate as at
4.00 p.m. (London time) on 23 March 2018.
Reports
As required by Rule 28.1(a) of the Code, the Quantified
Financial Benefits Statement has been reported on by KPMG, as
reporting accountants to CME, and J.P. Morgan and Barclays, as
financial advisers to CME.
Copies of these reports are included in Part B and Part C of
this Appendix IV. Each of KPMG, J.P. Morgan and Barclays has given
and not withdrawn its consent to the publication of its report in
this Announcement in the form and context in which it is
included.
Notes
1. These statements of estimated synergies relate to future
actions and circumstances which, by their nature, involve risks,
uncertainties and contingencies. In addition, due to the scale of
the Combined Company, there may be additional changes to the
Combined Company's operations. As a result, the estimated synergies
referred to may not be achieved, or may be achieved later or sooner
than estimated, or those achieved could be materially different
from those estimated.
2. The Quantified Financial Benefits Statement should not be
construed as a profit forecast or interpreted to mean CME's
earnings in the first full year following the Effective Date, or in
any subsequent period, will necessarily match or be greater than or
be less than those of CME or NEX for the relevant preceding
financial period or any other period.
3. For the purposes of Rule 28 of the Code, the Quantified
Financial Benefits Statement is the responsibility of CME and the
CME Directors.
Part B
Report from KPMG LLP
The Directors
CME Group Inc.
20 South Wacker Drive
Chicago, Illinois 60606
USA
J.P. Morgan Securities plc
25 Bank Street,
Canary Wharf,
London E14 5JP
United Kingdom
J.P. Morgan Securities LLC.
(together with J.P. Morgan Securities plc, "J.P. Morgan")
383 Madison Avenue,
New York,
NY - 10179
USA
Barclays Bank PLC, acting through its Investment Bank
5 The North Colonnade,
Canary Wharf, E14 4BB
United Kingdom
29 March 2018
Ladies and Gentlemen
Published Report on Quantified Financial Benefits Statement by
CME Group Inc ("CME")
We refer to the statement (the "Statement") made by the
Directors of CME Group Inc ("Directors") set out in Part A of
Appendix IV to the announcement dated 29 March 2018 in relation to
the proposed acquisition of NEX Group PLC by CME Group Inc (the
"Announcement") to the effect that:
"The CME Board, having reviewed and analysed the potential
benefits of the Acquisition, based on its experience and the
analysis completed and presented by management, expects that the
Acquisition will deliver annualised run rate cost synergies of $200
million by the end of 2021 (assuming completion in 2018). These
savings are in addition to the annual cost savings of GBP40 million
from the transformation programme previously announced by NEX,
which are expected to be achieved in full in 2020.
Other than the NEX-announced transformation plan cost savings,
these synergies are expected to arise as a direct result of the
Acquisition and could not be achieved independently of the
Acquisition.
These cost synergies are divided among and would be realised
principally from:
(a) Centralisation and consolidation of operational functions,
accounting for approximately 20% of the recurring cost
synergies:
- streamlining of operational support required for the trading
platforms and post-trade services; and
- scale efficiencies across common businesses.
(b) IT systems migration and consolidation, accounting for a
further approximately 35% of the recurring cost synergies:
- harmonisation of technology infrastructure across the Combined Company; and
- centralisation and removal of duplicate IT functions.
(c) Removal of duplicate selling, general and administrative
expenses, accounting for the remaining approximately 45% of the
recurring cost synergies:
- streamlining of support and service functions and corporate systems; and
- removal of duplication of services.
The total expected run rate cost synergies of $200 million per
annum are equivalent to approximately 12.5% of the Combined
Company's 2017 adjusted operating costs of approximately $1.6
billion.
It is expected that synergy and savings realisation will take
place progressively, whereby approximately 25% of the run rate cost
synergies would be realised by the end of year 1, rising to
approximately 55% by the end of year 2 and 100% by the end of year
3.
In order to realise the total synergies, CME expects to incur
one-time cash costs of $285 million. Of this, approximately $60
million will be capital investment to facilitate the migration of
IT systems and for consolidation of facilities.
Dis-synergies have been considered in quantifying the net impact
of the synergy benefits and are not expected to be material."
The Statement has been made in the context of the disclosures
Part A of Appendix IV of the announcement setting out, inter alia,
the basis of the Directors' belief (including the principal
assumptions and sources of information) supporting the Statement
and their analysis and explanation of the underlying constituent
elements.
This report is required by Rule 28.1(a) of the City Code on
Takeovers and Mergers ('the City Code') and is given for the
purpose of complying with that requirement and for no other
purpose.
Responsibilities
It is the responsibility of the Directors to prepare the
Statement in accordance with the requirements of the City Code.
It is our responsibility to form an opinion, as required by Rule
28.1(a) of the City Code as to the proper compilation of the
Statement and to report that opinion to you.
Save for any responsibility which we may have to those persons
to whom this report is expressly addressed, to the fullest extent
permitted by law we do not assume any responsibility and will not
accept any liability to any other person for any loss suffered by
any such other person as a result of, arising out of, or in
connection with this report or our statement, required by and given
solely for the purposes of complying with Rule 23.2 of the City
Code, consenting to its inclusion in the announcement.
Basis of preparation of the Statement
The Statement has been prepared on the basis stated in Part A of
Appendix IV of the announcement.
Basis of opinion
We have discussed the Statement, together with the underlying
plans, with the Directors and J.P. Morgan and Barclays. Our work
did not involve any independent examination of any of the financial
or other information underlying the Statement. We conducted our
work in accordance with Standards for Investment Reporting issued
by the Auditing Practices Board of the United Kingdom.
We planned and performed our work so as to obtain the
information and explanations we considered necessary in order to
provide us with reasonable assurance that the Statement has been
properly compiled on the basis stated.
Our work has not been carried out in accordance with auditing or
other standards and practices generally accepted in the United
States of America or other jurisdictions and accordingly should not
be relied upon as if it had been carried out in accordance with
those standards and practices.
We do not express any opinion as to the achievability of the
benefits identified by the Directors in the Statement. The
Statement is subject to uncertainty as described in Appendix II to
the Statement. Because of the significant changes in the enlarged
group's operations expected to flow from the transaction and
because the Statement relates to the future, the actual benefits
achieved are likely to be different from those anticipated in the
Statement and the differences may be material.
Opinion
On the basis of the foregoing, we report that in our opinion the
Statement has been properly compiled on the basis stated.
Yours faithfully
KPMG LLP
Part C
Report from J.P. Morgan Securities plc and Barclays Bank Plc,
acting through its Investment Bank
The Board of Directors
CME Group Inc.
20 South Wacker Drive
Chicago, Illinois 60606
USA
29 March 2018
Dear Ladies and Gentlemen,
We refer to the quantified financial benefits statement, the
bases of belief thereof and the notes thereto (together, the
"Statement") made by CME Group Inc. ("CME") and set out in Part A
of Appendix IV to the Rule 2.7 announcement dated 29 March 2018 of
which this letter forms part (the "Announcement"), for which the
directors of CME (the "Directors") are solely responsible under
Rule 28.3 of the City Code on Takeovers and Mergers (the
"Code").
We have discussed the Statement (including the assumptions,
bases of calculation and sources of information referred to
therein), with the Directors and those officers and employees of
CME who have developed the underlying plans as well as with KPMG
LLP ("KPMG"). The Statement is subject to uncertainty as described
in the Announcement and our work did not involve an independent
examination, or verification, of any of the financial or other
information underlying the Statement.
We have relied upon the accuracy and completeness of all the
financial and other information provided to us by or on behalf of
CME, or otherwise discussed with or reviewed by us, in connection
with the Statement, and we have assumed such accuracy and
completeness for the purposes of providing this letter. The
Directors have confirmed to us that all information relevant to the
Statement has been disclosed to us.
We do not express any view as to the achievability of the
quantified financial benefits, whether on the basis identified by
the Directors in the Statement, or otherwise.
We have also reviewed the work carried out by KPMG and have
discussed with KPMG its opinion addressed to you and us on this
matter and which is set out in Part B of Appendix IV to the
Announcement, and the accounting policies and bases of calculation
for the Statement.
On the basis of the foregoing, we consider that the Statement,
for which the Directors are solely responsible, has been prepared
with due care and consideration.
This letter is provided to you solely having regard to the
requirements of, and in connection with, Rule 28.1(a)(ii) of the
Code and for no other purpose. We accept no responsibility to CME,
its shareholders or to any person other than the Directors in
respect of the contents of this letter. We are acting exclusively
as financial advisers to CME and no one else and it was for the
purpose of complying with Rule 28.1(a)(ii) of the Code that CME
requested us to prepare this letter relating to the Statement. No
person other than the Directors can rely on the contents of, or the
work undertaken in connection with, this letter, and to the fullest
extent permitted by law, we expressly exclude and disclaim all
liability (whether in contract, tort or otherwise) to any other
person, in respect of this letter, its contents or the work
undertaken in connection with this letter or any of the results or
conclusions that may be derived from this letter or any written or
oral information provided in connection with this letter, and any
such liability is expressly disclaimed except to the extent that
such liability cannot be excluded by law.
Yours faithfully,
For and on behalf of
J.P. Morgan Securities plc Barclays Bank plc, acting through its
Investment Bank
APPIX V
DEFINITIONS
The following definitions apply throughout this Announcement,
unless the context otherwise requires:
Acquisition means the proposed acquisition
by CME and Bidco (or its
nominee(s)) of the entire
issued and to be issued share
capital of NEX, to be implemented
by means of the Scheme as
described in this Announcement
(or, should CME or Bidco
so elect, by an Offer subject
to the consent of the Panel
and subject to the terms
of the Co-operation Agreement)
Announcement means this announcement made
pursuant to Rule 2.7 of the
Code
Barclays means Barclays Bank plc,
acting through its Investment
Bank
Bidco means CME London Limited,
a newly-incorporated English
company with registered number
11276290 and with its registered
address at 4th Floor, 1 New
Change, London EC4M 9AF,
United Kingdom
Business Day means a day (other than a
Saturday, Sunday, public
or bank holiday) on which
banks are generally open
for business in London and
Chicago
Citi means Citigroup Global Markets
Limited
Clean Team Confidentiality means the clean team confidentiality
Agreement agreement entered into between
CME and NEX dated 20 February
2018, as described in paragraph
13 of this Announcement
Closing Price means the closing middle
market quotation of a share
derived from the Daily Official
List of the London Stock
Exchange
CMA means the U.K. Competition
and Markets Authority (or
any successor body or bodies
carrying out the same functions
in the United Kingdom from
time to time)
CMA Phase 2 Reference means a reference pursuant
to sections 22, 33, 45 or
62 of the Enterprise Act
2002 of the Acquisition to
the chair of the CMA for
the constitution of a group
under Schedule 4 to the Enterprise
and Regulatory Reform Act
2013
CME means CME Group Inc., a company
incorporated in Delaware
with its registered office
at 20 South Wacker Drive,
Chicago, Illinois, U.S.
CME Board means the board of directors
of CME
CME Directors means the directors of CME
at the date of this Announcement
or, where the context so
requires, the directors of
CME from time to time
CME Group means CME and its subsidiary
undertakings and associated
undertakings
CME Shareholders means the holders of CME
Shares
CME Shares means the shares of Class
A common stock of par value
$0.01 each in the capital
of CME
Code means the City Code on Takeovers
and Mergers
Combined Company means the combined company
following the Acquisition,
comprising the CME Group
and the NEX Group
Companies Act means the Companies Act 2006
Conditions means the conditions to the
Acquisition set out in Part
A of Appendix I and to be
set out in the Scheme Document
Confidentiality means the confidentiality
Agreement agreement entered into between
CME and NEX dated 15 February
2018, as described in paragraph
13 of this Announcement
Confidentiality means the joint defense agreement
and Joint Defense entered into between CME,
Agreement NEX and their respective
external legal counsels dated
13 March 2018, as described
in paragraph 13 of this Announcement
Co-operation Agreement means the co-operation agreement
entered into on 29 March
2018 between CME, Bidco and
NEX and, relating to, amongst
other things, the implementation
of the Acquisition
Court means the High Court of Justice
in England and Wales
Court Hearing means the hearing of the
Court at which NEX will seek
an order sanctioning the
Scheme pursuant to Part 26
of the Companies Act
Court Meeting means the meeting or meetings
of the NEX Shareholders to
be convened by order of the
Court pursuant to Part 26
of the Companies Act for
the purpose of considering
and, if thought fit, approving
the Scheme (with or without
amendment approved or imposed
by the Court and agreed to
by CME, Bidco and NEX) including
any adjournment, postponement
or reconvention of any such
meeting, notice of which
shall be contained in the
Scheme Document
Court Order means the order of the Court
sanctioning the Scheme under
section 899 of the Companies
Act
CREST means 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 the Regulations)
Disclosed means the information which
has been fairly disclosed:
(i) in writing prior to the
date of this Announcement
by or on behalf of NEX to
the CME Group; (ii) in NEX's
published annual or half
year report and accounts
for the relevant financial
period or periods referred
to in the relevant Condition
and published prior to the
date of this Announcement;
(iii) in a public announcement
by NEX prior to the date
of this Announcement by way
of any Regulatory Information
Service; or (iv) in this
Announcement
Effective means: (i) if the Acquisition
is implemented by way of
the Scheme, the Scheme having
become effective in accordance
with its terms; or (ii) if
the Acquisition is implemented
by way of an Offer, the Offer
having been declared or become
unconditional in all respects
in accordance with the requirements
of the Code
Effective Date means the date on which the
Acquisition becomes Effective
Evercore means Evercore Partners International
LLP
Facility Agreement means the facility agreement
between CME, J.P. Morgan
Chase Bank N.A. and Barclays
dated 28 March 2018, as described
in paragraph 11 of this Announcement
FCA means the U.K. Financial
Conduct Authority
Finance Documents means the Facility Agreement
and the fee and syndication
letter
Forms of Proxy means the forms of proxy
in connection with each of
the Court Meeting and the
General Meeting, which shall
accompany the Scheme Document
FSMA means the Financial Services
and Markets Act 2000
General Meeting means the general meeting
of NEX Shareholders (including
any adjournment thereof)
to be convened for the purpose
of considering and, if thought
fit, approving the shareholder
resolutions necessary to
enable NEX to implement the
Acquisition, notice of which
shall be contained in the
Scheme Document
Irrevocable Undertakings means the irrevocable undertakings
given by the NEX Directors
to vote or procure votes
in favour of the Scheme at
the Court Meeting and the
resolutions to be passed
at the General Meeting (or
in the event that the Acquisition
is implemented by way of
an Offer, to accept or procure
acceptance of the Offer),
as detailed in paragraph
7 of this Announcement
J.P. Morgan means J.P. Morgan Securities
LLC, together with its affiliate
J.P. Morgan Securities plc
KPMG means KPMG LLP
Listing Rules means the listing rules made
by the FCA under section
73A of FSMA
London Stock Exchange means London Stock Exchange
plc
Long Stop Date means 31 March 2019, or such
later date (if any) as CME,
Bidco and NEX may agree,
with the consent of the Panel,
and the Court may allow
MAR means the E.U. Market Abuse
Regulation
Meetings means the Court Meeting and
the General Meeting
Nasdaq means the Nasdaq Global Select
Market
New CME Shares means the new CME Shares
proposed to be issued to
NEX Shareholders in connection
with the Acquisition
NEX means NEX Group plc, a public
limited company incorporated
in England and Wales with
registered number 10013770
NEX ADR Holders means holders of NEX ADRs
NEX ADRs means sponsored American
Depositary Receipts of NEX
for which BNY Mellon is the
Depositary
NEX Board means the board of directors
of NEX
NEX Directors means the directors of NEX
as at the date of this Announcement
or, where the context so
requires, the directors of
NEX from time to time
NEX Final Dividend means the final dividend
of NEX in respect of the
year ending 31 March 2018,
such dividend not to exceed
an amount of 7.65 pence per
NEX Share
NEX Group means NEX and its subsidiary
undertakings and associated
undertakings
NEX Shareholders means the holders of NEX
Shares from time to time
NEX Shares means the ordinary shares
of GBP0.175 each in the capital
of NEX
NEX Share Schemes means:
a) the NEX Group plc 2016
Performance Share Plan;
b) the NEX Group plc 2016
Deferred Share Bonus Plan;
c) the NEX Group plc 2016
Senior Management Long Term
Incentive Plan;
d) the NEX Group plc 2016
Global Sharesave Plan;
e) the ICAP plc 2015 Performance
Share Plan;
f) the ICAP plc 2015 Deferred
Share Bonus Plan;
g) the ICAP plc Senior Management
Long Term Incentive Plan;
h) the ICAP plc 2008 Sharesave
Scheme;
i) the ICAP 2003 Bonus Share
Matching Plan;
j) the ICAP Senior Executive
Equity Participation Plan;
and
k) the Traiana, Inc. 2000
Stock Plan
NEX Special Dividend means the dividend permitted
to be declared by NEX, as
further described in paragraph
2 of this Announcement
Offer means, if the Acquisition
is implemented by way of
a takeover offer (as that
term is defined in section
974 of the Companies Act),
the offer to be made by or
on behalf of CME, or an associated
undertaking thereof (including
Bidco), to acquire the entire
issued and to be issued ordinary
share capital of NEX including,
where the context admits,
any subsequent revision,
variation, extension or renewal
of such offer
Offer Period means the period commencing
on 15 March 2018 and ending
on: (i) the earlier of the
date on which the Scheme
becomes Effective or the
date on which the Scheme
lapses or is withdrawn (or
such other date as the Panel
may decide); or (ii) the
earlier of the date on which
the Offer has become or has
been declared unconditional
as to acceptances or the
date on which the Offer lapses
or is withdrawn (or such
other date as the Panel may
decide), in each case other
than where such lapsing or
withdrawal is a result of
CME or Bidco exercising its
right to implement the Acquisition
by way of an Offer
Official List means the official list maintained
by the U.K. Listing Authority
pursuant to Part 6 of FSMA
Opening Position means an announcement containing
Disclosure details of interests or short
positions in, or rights to
subscribe for, any relevant
securities of a party to
the offer if the person concerned
has such a position, as defined
in Rule 8 of the Code
OTC means over-the-counter
Panel means the U.K. Panel on Takeovers
and Mergers
Permitted Dividends means (i) the NEX Final Dividend
and (ii) any NEX Special
Dividend
Quantified Financial has the meaning given in
Benefits Statement Part A of Appendix IV
Registrar means the Registrar of Companies
in England and Wales
Regulatory Information means a primary information
Service provider (as defined in the
FCA's Handbook of Rules and
Guidance), or an incoming
information society service
that has its establishment
in an EEA State other than
the U.K. and that disseminates
regulated information in
accordance with the minimum
standards set out in Article
12 of Commission Directive
implementing Directive 2004/109/EC
Relevant Authority means any central bank, ministry,
governmental, quasigovernmental,
supranational (including
the European Union), statutory,
regulatory or investigative
body, authority or tribunal
(including any national or
supranational antitrust,
competition or merger control
authority, any sectoral ministry
or regulator and any foreign
investment review body),
national, state, municipal
or local government (including
any subdivision, court, tribunal,
administrative agency or
commission or other authority
thereof), any entity owned
or controlled by them, any
private body exercising any
regulatory, taxing, importing
or other authority, trade
agency, association, institution
or professional or environmental
body in any jurisdiction
Restricted Jurisdiction means 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 NEX Shareholders in that
jurisdiction
Scheme means the proposed scheme
of arrangement under Part
26 of the Companies Act between
NEX and Scheme Shareholders
to implement the Acquisition
to be set out in the Scheme
Document, with or subject
to any modification, addition
or condition approved or
imposed by the Court and
agreed to by CME, Bidco and
NEX
Scheme Document means the document to be
dispatched to NEX Shareholders
including the particulars
required by section 897 of
the Companies Act
Scheme Record Time means the time and date to
be specified as such in the
Scheme Document, expected
to be 6.00 p.m. on the Business
Day immediately preceding
the Effective Date, or such
other time as CME, Bidco
and NEX may agree
Scheme Shareholders means holders of Scheme Shares
Scheme Shares means together:
a) the NEX Shares in issue
at the date of the Scheme
Document and which remain
in issue at the Scheme Record
Time;
b) any NEX Shares issued
after the date of the Scheme
Document and prior to the
Voting Record Time which
remain in issue at the Scheme
Record Time; and
c) any NEX Shares issued
at or after the Voting Record
Time and prior to the Scheme
Record Time in respect of
which the original or any
subsequent holder thereof
is bound by the Scheme, or
shall by such time have agreed
in writing to be bound by
the Scheme and, in each case,
which remain in issue at
the Scheme Record Time, excluding,
in any case, any NEX Shares
held by or on behalf of CME
or the CME Group at the Scheme
Record Time
SEC means the U.S. Securities
and Exchange Commission
significant interest means a direct or indirect
interest in 20 per cent.
or more of the total voting
rights conferred by the equity
share capital (as defined
in section 548 of the Companies
Act)
U.K. or United means the United Kingdom
Kingdom of Great Britain and Northern
Ireland
U.K. Listing Authority means the FCA as the authority
for listing in the U.K. when
it is exercising its powers
under Part 6 of FSMA
U.S. or United means the United States of
States America, its territories
and possessions, any state
of the United States of America
and the District of Columbia
U.S. Exchange Act means the U.S. Securities
Exchange Act 1934
U.S. HSR Act the U.S. Hart-Scott-Rodino
Antitrust Improvements Act
of 1976
U.S. Securities means the U.S. Securities
Act Act 1933
Voting Record Time means the time and date to
be specified in the Scheme
Document by reference to
which entitlement to vote
at the Court Meeting will
be determined, expected to
be 6.00 p.m. on the day two
days prior to the Court Meeting
or any adjournment thereof
(as the case may be)
Wider CME Group means CME and its subsidiary
undertakings, associated
undertakings and any other
undertaking in which CME
or such undertakings (aggregating
their interests) have a significant
interest (in each case, from
time to time) but excluding
the Wider NEX Group
Wider NEX Group means NEX and its subsidiary
undertakings, associated
undertakings and any other
undertaking in which NEX
or such undertakings (aggregating
their interests) have a significant
interest (in each case, from
time to time) but excluding
the Wider CME Group
All references to GBP, pence, Sterling, Pounds, Pounds Sterling,
p or GBP are to the lawful currency of the United Kingdom. All
references to USD, $, US$, U.S. dollars, United States dollars and
cents are to the lawful currency of the United States of
America.
All references to statutory provision or law or to any order or
regulation shall be construed as a reference to that provision,
law, order or regulation as extended, modified, amended, replaced
or re-enacted from time to time and all statutory instruments,
regulations and orders from time to time made thereunder or
deriving validity therefrom.
All the times referred to in this Announcement are London times
unless otherwise stated. References to the singular include the
plural and vice versa.
All references to "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the respective
meanings given to them in the Companies Act.
This information is provided by RNS
The company news service from the London Stock Exchange
END
OFFKMGZFKLFGRZG
(END) Dow Jones Newswires
March 29, 2018 02:17 ET (06:17 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
CME (NASDAQ:CME)
Historical Stock Chart
From Jun 2024 to Jul 2024
CME (NASDAQ:CME)
Historical Stock Chart
From Jul 2023 to Jul 2024