TIDMCSN
RNS Number : 0316Q
Chesnara PLC
24 November 2016
Chesnara plc
24 November 2016
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No.596/2014. Upon the publication of this
announcement via a Regulatory Information Service, this inside
information is now considered to be in the public domain.
THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED IN IT, IS NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN, NEW ZEALAND OR ANY OTHER JURISDICTION IN WHICH THE
SAME WOULD BE UNLAWFUL.
THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS.
INVESTORS SHOULD NOT PURCHASE OR SUBSCRIBE FOR ANY SECURITIES
REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION
CONTAINED IN A PROSPECTUS EXPECTED TO BE PUBLISHED BY THE COMPANY
TODAY IN CONNECTION WITH THE AQUISITION AND THE FIRM PLACING AND
PLACING AND OPEN OFFER.
Chesnara plc
Proposed Acquisition of Legal & General Nederland
Levensverzekering Maatschappij N.V ("Legal & General
Nederland") by Chesnara Holdings B.V. for EUR160 million
(approximately GBP135.6 million) (the "Acquisition"), and Firm
Placing and Placing and Open Offer by Chesnara plc ("Chesnara" or
the "Company") to raise approximately GBP70 million
Highlights
-- Proposed acquisition of Legal & General Nederland, a
Dutch life and pension insurer and a wholly owned subsidiary of
Legal & General Group plc, for EUR160 million (c.GBP135.6
million)
-- Acquisition provides a strong fit with Chesnara's strategy of
acquiring life and pension businesses in its chosen markets
-- Legal & General Nederland increases Chesnara's scale in
the Netherlands and provides a complementary platform to the Waard
Group, Chesnara's existing local operations
-- Consideration of EUR160 million represents a 33% discount to Economic Value
-- Acquisition enhances long-term cash generation and supports Chesnara's dividend strategy
-- Firm Placing and Placing and Open Offer to raise a total of
approximately GBP70 million before expenses to part fund the
Acquisition; balance of the consideration being funded from
Chesnara's cash resources and incremental debt
-- Acquisition and its financing are expected on completion of
the Acquisition ("Completion") to enhance Chesnara Group's EcV by
GBP126.3 million, gross of the GBP70 million equity raise. This
equates to an EcV enhancement per share of 28 pence (7.6%)
John Deane, Chief Executive of Chesnara, commented: "Chesnara is
delighted to be acquiring another well-run and attractive business
in the Dutch life assurance market. As with our Swedish subsidiary
Movestic, we will be writing protection and pension new business.
This will complement our closed book consolidation business Waard.
We see great opportunities for both organisations within the
Chesnara group to deliver value to our customers, their advisors
and our shareholders."
Shore Capital is acting as sole sponsor in relation to the
Acquisition and the Firm Placing and Placing and Open Offer and
Shore Capital and Panmure Gordon (UK) Limited ("Panmure Gordon")
are acting as joint global co-ordinators and joint bookrunners in
relation to the Firm Placing and Placing and Open Offer. References
to "Shore Capital" refer to Shore Capital and Corporate Limited
and/or Shore Capital Stockbrokers Limited, as the context
admits.
Stifel Nicolaus Europe Limited (trading as Keefe, Bruyette &
Woods) ("Keefe, Bruyette & Woods") is acting as financial
adviser to the Company in relation to the Acquisition and as
Placing Agent in relation to the Firm Placing and Placing and Open
Offer.
The Firm Placing and Placing and Open Offer are both fully
underwritten by Shore Capital and Panmure Gordon and will be
conditional upon, inter alia, the approval of shareholders at a
General Meeting expected to be held on 13 December 2016. The
Acquisition is categorised as a Class 1 transaction under the UK
Listing Rules and is therefore conditional upon the approval of
Chesnara shareholders at the General Meeting.
Further information on the Acquisition and the Firm Placing and
Placing and Open Offer will be contained within the combined Class
1 circular and prospectus which is expected to be sent to
Qualifying Shareholders later today. Appendix I sets out the full
terms and conditions of the Firm Placing and Placing. Appendix II
sets out the definitions of terms used in this announcement.
Sterling and Euro conversions are based on the exchange rate of
GBP1.00 : EUR1.18, except for any pro forma and accretion figures
which are based on the 30 June 2016 exchange rate of GBP1.00: EUR
1.21.
Indicative abridged timetable
(a full timetable is set out in paragraph 20 below)
Publication of Prospectus the Notice of General 24 November 2016
Meeting, the Form of Proxy and the Application Form
Basic Open Offer Entitlements and Excess Basic Open Offer 25 November 2016
Entitlements credited to stock accounts in CREST of Qualifying
CREST Shareholders
Latest time and date for receipt of Forms of Proxy 11 a.m. on 9 December 2016
Latest time and date for receipt of completed Application Forms and payment in full
under 11 a.m. on 12 December
the Open Offer or settlement of relevant CREST instructions (as appropriate)
General Meeting 11.a.m. on 13 December 2016
Results of Placing and Open Offer to be announced through a On 13 December
Regulatory Information Service
Dealings in New Ordinary Shares, fully paid, commence on the London Stock Exchange 8 a.m. on 15 December 2016
Expected date of completion of the Acquisition During the first quarter of 2017
Enquiries
Chesnara plc
John Deane, Chief Executive +44 (0)1772 972079
David Rimmington, Finance Director +44 (0)1772 972079
Shore Capital
Sponsor and joint global co-ordinator and joint bookrunner
Hugh Morgan +44 (0)20 7408 4090
Toby Gibbs
Panmure Gordon
Joint global co-ordinator and joint bookrunner
Dominic Morley +44 (0)20 7886 2500
Charles Leigh-Pemberton
Keefe, Bruyette & Woods
Financial Adviser in relation to the Acquisition and Placing
Agent
Stephen Howard +44 (0)20 7663 5400
Max Cornu-Thenard
FWD Consulting
Financial PR +44 (0)20 7280 0651
Roddy Watt +44 (0)7714 770493
Further information in relation to the Acquisition and Firm
Placing and Placing and Open Offer
1. INTRODUCTION
On 24 November 2016, Chesnara announced that it had reached
agreement on the terms of the proposed acquisition of Legal &
General Nederland. Legal & General Nederland was founded in
1984, as an indirect wholly owned subsidiary of the Legal &
General Group. Legal & General Nederland then acquired Unilife
Netherlands later the same year. Legal & General Nederland is a
specialist insurer operating in the life insurance and pensions
sector in the Netherlands. It is a leading Dutch player in
adviser-led risk and investment-linked products, serving high-end
affluent customers and has an established defined contribution
group pension platform focused on Dutch SMEs. The headline
consideration for the Acquisition is EUR160(1) million to be paid
in cash. The Acquisition consideration is proposed to be financed
by a combination of the Firm Placing and Placing and Open Offer to
raise in aggregate approximately GBP70 million (before expenses),
the New Debt Facilities totalling GBP100.2 million (GBP40 million
and EUR71 million), which replace an existing debt facility of
GBP52.8 million and raises GBP47.4 million of incremental debt (as
described below at paragraph 5.2 below) and the balance from
Chesnara's existing cash resources.
The Directors believe that Legal & General Nederland is an
attractive acquisition target and that its addition to the Chesnara
Group will continue the Company's successful acquisition-based
growth within its target markets and value range. The Acquisition
provides Chesnara with a platform for further expansion into the
Netherlands and the Directors believe that, as in the case of
Waard, Chesnara's first acquisition in the Netherlands in 2015,
there is a strong cultural fit between Legal & General
Nederland and the Chesnara Group.
In view of the size of the Acquisition in relation to Chesnara,
the Acquisition constitutes a Class 1 transaction for the purposes
of the Listing Rules and therefore requires the approval of
Shareholders, which will be sought at a General Meeting of the
Company. The notice convening the General Meeting will be set out
in the Prospectus. The Acquisition also requires regulatory
approval, including obtaining a declaration of no objection
(verklaring van geen bezwaar) from the Dutch Central Bank (De
Nederlandsche Bank) ("DNB"), the Dutch local regulator which itself
will confirm that the PRA, as group supervisor, has no objections
to the Acquisition. The principal terms of the Acquisition are
described in more detail in paragraph 1 of this letter and Part II
(Principal Terms of the Acquisition) of the Prospectus.
The Issue Price represents a discount of approximately 2.9 per
cent. to the Closing Price of 309 pence per Ordinary Share on 23
November 2016 (being the Latest Practicable Date). The Firm Placing
and Placing and Open Offer are conditional, inter alia, upon the
passing of the Resolutions and Admission but are not conditional
upon completion of the Acquisition.
2. BACKGROUND TO AND REASONS FOR THE ACQUISITION
The Directors previously identified that the Dutch insurance
market was an attractive market to enter due to its highly
fragmented characteristics offering the opportunity for
consolidation, as well as the Netherlands having a similar
regulatory environment to that of the UK. Since the Chesnara
Group's entry into the Dutch insurance market (following its
successful acquisition of the Waard Group in May 2015), Chesnara
has stated its intention to build the Chesnara Group's presence in
the Dutch insurance market and has continued to investigate
opportunities for value-enhancing acquisitions. Chesnara has a
proven track record of acquiring and integrating insurance
companies in accordance with the Chesnara Group's strict
acquisition criteria and converting these into strong returns to
Shareholders.
[1] In addition to the headline consideration, the deferred
capital related consideration will accrue from 30 June 2016 to the
date of completion of the Acquisition, which is expected to occur
during the first quarter of 2017. The Company calculated the
maximum interest payable to be EUR2.3 million.
The acquisition of Legal & General Nederland is consistent
with Chesnara's three core strategic objectives:
-- Maximise value from in force books
Legal & General Nederland is expected to enhance the future
cash flows available for distribution to Shareholders, achieved
through the generation of profits combined with the expected
reduction of capital requirements.
-- Acquire life and pension businesses
A key attraction of the recent acquisition of the Waard Group in
the Netherlands was the opportunity it created for Chesnara to
replicate its previously successful and proven UK consolidation
strategy in the Dutch insurance market. The Acquisition is a
logical next step for Chesnara pursuing this strategy. The
Acquisition is at a 33 per cent. discount to EcV and hence is value
accretive in its own right but, in addition, it significantly
increases Chesnara's operational scale bringing, based on
information at 30 June 2016, 170,600 policies and EUR2.2 billion
assets under management and as a result its prospects for further
acquisition activity in the Netherlands.
-- Enhance value through new business
Legal & General Nederland is open to new business and
presents an opportunity for Chesnara to generate profits from an
appropriately targeted and profitable product offering. The
benefits of a philosophy that focuses on profitability rather than
sales volume are evidenced by the successful new business operation
in Movestic, which has been built upon realistic target market
shares.
Attractions to Chesnara of the Legal & General Nederland
acquisition
The Directors have reviewed a number of potential acquisitions
and believe that Legal & General Nederland offers a suitable
and attractive opportunity for Shareholders, policyholders and
management. When measured against Chesnara's key assessment
criteria for acquisitions of: EcV enhancement, cash generation,
customer outcomes and risk profile the Directors believe that the
Acquisition is a good strategic fit for the Chesnara Group. In
particular:
-- Positive expected impact on EcV
The consideration of EUR160 million (excluding deferred cost of
capital related consideration) for the Acquisition represents a 33
per cent. discount to Chesnara's estimate of Legal & General
Nederland's EcV of EUR239 million as at 30 June 2016. The
Acquisition and the Firm Placing and Placing and Open Offer are
anticipated to increase Chesnara's EcV by approximately 27.5 per
cent. or GBP126.3 million. This represents an EcV per share
increase of approximately 28 pence, or 7.6 per cent. In addition to
the headline consideration, deferred cost of capital related
consideration will accrue for the period from 1 October 2016 to the
date of completion, expected to be during the first quarter of
2017. Given that the Acquisition Agreement provides that completion
of the Acquisition must occur by no later than 31 July 2017, the
Company has calculated the maximum amount of interest payable to be
EUR2.3 million (which assumes that completion of the Acquisition
were to occur on 31 July 2017).
-- Well capitalised and cash generative company
Legal & General Nederland is well capitalised on a Solvency
II basis with a ratio of 219 per cent. As at 30 June 2016, adopting
a standard formula model with no transitional arrangements. This
together with the fact that Legal & General Nederland is a
profitable business results in the potential for phased, orderly
capital extraction.
-- Consistent governance model and strong operational performance
Legal & General Nederland is a subsidiary of the Legal &
General Group, a significant UK FTSE company and as a result a
strong corporate governance culture is well established and will
continue with Chesnara as the ultimate parent company. It is not
envisaged that any significant changes will be required to be made
to the Chesnara governance structure as the required changes were
implemented by the Chesnara Group following the acquisition of
Waard in 2015. Legal & General Nederland has an independent
operating model with little direct reliance on the Legal &
General Group processes or support. As such, it should continue to
deliver its high servicing standards under Chesnara ownership and
there is expected to be no requirement for systems separation,
migrations or integration. Following completion of the Acquisition,
Legal & General Nederland will continue to receive asset
management services from LGIM under the LGIM Asset Management
Agreement for a further four years, subject to performance, thus
ensuring continuity of service levels and policy performance.
Further details on the LGIM Asset Management Agreement will be
found in paragraph 9.2(a) of Part XIV (Additional Information) of
the Prospectus.
-- Territory
Legal & General Nederland's location is consistent with the
Director's assessment that the Dutch insurance market would present
further value adding consolidation potential following Chesnara's
acquisition of the Waard Group in 2015. It will enable Chesnara to
build upon its established relationship with the DNB in the
Netherlands since the Acquisition and will enable the Chesnara
Group to utilise its existing organisational structure to exercise
control without the need for additional resource. Moreover, the
operational and financial size of the Acquisition together with the
Waard acquisition creates substantial scale in the Dutch insurance
market with 247,118 policies and EUR2.4 billion of assets under
management, as at 30 June 2016, and is expected to support further
acquisitions in the region.
-- Products
Legal & General Nederland's products are well matched to
Chesnara's risk appetite with a focus on protection and unit linked
savings together with an acceptable level of exposure to annuities
and product guarantees.
-- Potential for profitable new business operation
The Acquisition provides potential for new business profits from
products that the Chesnara Group understands and are aligned to its
risk appetite. Legal & General Nederland has a keen focus on
product profitability, a unit linked specialism and sells through
an IFA distribution model. This model is consistent with Chesnara's
existing open operation in Sweden and is well matched to its
strategic objectives regarding new business operations.
Impact Assessment
-- Acquisitions maintain the effectiveness of the Chesnara
Group's operating model. The Acquisition is expected to both create
a source of value enhancement and sustain the cash generation
potential of the Enlarged Group and is deemed by the Chesnara Board
to be a good cultural fit with the Chesnara Group.
-- The Acquisition is expected to increase the Chesnara Group's
EcV by approximately GBP126.3 million (1) .
-- The Acquisition is expected to enhance the cash flows of the
Enlarged Group, supporting the Chesnara Group's dividend
strategy.
-- The Acquisition is expected to have a positive impact in
terms of the absolute level of Chesnara Group Solvency II
surplus.
-- The potential impact of the Acquisition falls within the
Chesnara Group's risk appetite.
-- The Enlarged Group's gearing ratio post-acquisition is
expected to be 25.8 per cent.which is well within the Chesnara
Group's debt and leverage policy which incorporates the Board's
risk appetite. The ratio is expected to reduce to below 20 per
cent. within one year of completion based on the proposed debt
repayment terms.
(1) Based on pro-forma adjustment to the Company's EcV at 30
June 2016 and using the closing exchange rates as at 30 June 2016
of GBP1 = Euro 1.21 and GBP1 = Swedish Krona 11.38.
Completion of the Acquisition
Completion of the Acquisition is conditional upon, inter alia,
Admission, consent of two thirds of the Seller's lenders under its
revolving credit facility for the Seller to enter the Acquisition
and the receipt of regulatory approval, including obtaining a
declaration of no objection (verklaring van geen bezwaar) from the
DNB, the local Dutch regulator which itself will confirm that the
PRA, as group supervisor, has no objections to the Acquisition,
which is expected to be received during the first quarter of 2017.
In addition, the Acquisition is also subject to certain conditions
which are customary for an acquisition of this nature.
3. SUMMARY INFORMATION ON LEGAL & GENERAL NEDERLAND
Legal & General Nederland was founded in 1984 as a
subsidiary of the Legal & General Group and is a specialist
insurer operating in the life insurance and pensions sector in the
Netherlands. Legal & General Nederland is a leading Dutch
player in adviser-led risk and investment-linked products, serving
high-end affluent customers and has an established defined
contribution group pension platform focused on Dutch SMEs.
Legal & General Nederland is a "top 5" provider in the term
assurance market and a market leader in investment-linked products,
which are backed by a wide range of investment funds. Legal &
General Nederland has strong collaborative ties with IFAs (with
approximately 2,000 adviser relationships) through which its
business is sold.
Legal & General Nederland's accounts indicate historic
profitability with strong solvency ratios on a Solvency II basis.
During the period from 1 January 2013 to 30 June 2016 the Legal
& General Nederland business paid EUR151 million of dividends
to Legal & General Group plc.
Key Legal & General Nederland metrics were as follows as at
30 June 2016:
-- EUR219.8 million of Solvency II own funds;
-- EUR2.2 billion of funds under management;
-- Approximately 170,600 policies; and
-- Solvency ratio of 219 per cent.
Legal & General Nederland is split into three operating
segments: risk, wealth and group pensions. As at the Latest
Practicable Date, the Legal & General Nederland business had
170,600 in-force policies split by product as follows:
-- 114,200 in Risk;
-- 47,900 in Wealth; and
-- 8,500 in Group Pensions.
As a subsidiary of a group that is listed on the London Stock
Exchange, Legal & General Nederland has in place financial
reporting processes and procedures to enable it to report to the
standards required under Chesnara ownership, which will benefit the
transition process following completion of the Acquisition. Legal
& General Nederland is regulated by the DNB, the prudential
supervisor of the Dutch financial market, and reports using the
Solvency II regime standard formula for calculating its capital
requirements, and does not use any transitional arrangements, nor
adjustments regarding volatility or matching.
Legal & General Nederland's operations are predominantly
managed "in-house" and are almost fully independent from the Legal
& General Group support. Legal & General Nederland receives
investment management services at arm's length from LGIM.
Legal & General Nederland is led by an experienced
management team who have an average of 25 years of experience and
an average of 8 years working at Legal & General Nederland. The
management team is supported by 162 employees which is equivalent
to 147 full time employees.
Legal & General Nederland has historically used a degree of
reinsurance where it was deemed appropriate to manage the risks
that it had written, including two proportional treaties and an
excess loss cover.
Summary of the recent key financial dynamics of Legal &
General Nederland
During the period from 1 January 2013 to 30 June 2016, Legal
& General Nederland has consistently delivered profits on an
IFRS basis. The annual levels of profit have been volatile largely
due to the IFRS accounting treatment of actuarial liabilities and
the assets backing these liabilities. As is common in the Dutch
market, the actuarial liabilities for certain policies are valued
using economic assumptions that are applied at the point the policy
is sold and are not revalued using updated economic inputs, thereby
giving rise to greater IFRS profit volatility. IFRS profitability
is not directly linked to Solvency or EcV which are considered to
be the more commercial relevant financial metrics.
During the period from 1 January 2013 to 30 June 2016,
pre-dividend Solvency II "own funds" have increased by EUR50.2
million (15.7 per cent.). During that same period the SCR has
reduced by EUR4 million (3.8 per cent.) On a year on year basis the
movement in "own funds" is significantly more stable than the
aforementioned IFRS profits. However, a degree of variability has
been evident which is dominated by the impact of movements in
interest rates, bond spreads and equity values. Legal & General
Nederland is well capitalised with a Solvency II ratio of 219 per
cent. as at 30 June 2016. The Solvency II "own funds" as at 30 June
2016 are EUR219.8 million against a statutory capital requirement
of EUR100.2 million with an absolute level of surplus of
approximately EUR120 million above the statutory requirement. Legal
& General Nederland operates to a capital plan which requires a
minimum Solvency II ratio of 160 per cent.
4. SUMMARY INFORMATION ON CHESNARA
Chesnara is primarily a life and pensions closed book
consolidator, and is the owner of Countrywide Assured, Movestic and
the Waard Group. Chesnara has been listed on the premium segment of
the London Stock Exchange's Main Market since May 2004.
Key Chesnara Group metrics for the period ending 30 June 2016
were as follows:
-- GBP459.9 million of EcV;
-- GBP5.1 billion of funds under management;
-- 907,000 policyholders; and
-- 6.96 per cent. dividend yield (based on Chesnara share price as at 30 June 2016).
Chesnara has a track record of identifying, completing and
integrating acquisitions, as well as delivering growth and strong
shareholder returns. During the period from 1 January 2009 to 28
October 2016, it generated a Total Shareholder Return of 236 per
cent. Chesnara currently has a strong financial position. As at 30
June 2016, Chesnara had a Group Solvency II ratio of 148 per cent.,
with a corresponding regulatory surplus of GBP100 million. Chesnara
operates according to three core strategic objectives, namely:
-- Maximising value from its existing business;
-- Acquiring further life and pensions businesses where they
satisfy stringent assessment criteria; and
-- Value enhancement through the writing of profitable new business.
Chesnara's current acquisition strategy is to target
opportunities in the UK and the Netherlands which have an
acquisition value ranging from GBP50 million to GBP200 million and
which are earnings accretive for Shareholders. Opportunities are
assessed giving full regard to the following four criteria:
-- Cash generation expectations (base case and stressed);
-- EcV impact;
-- Strategic fit and potential; and
-- Risk profile.
Further information on the Chesnara Group will be set out in
Part IV (Information on the Chesnara Group) of the Prospectus.
5. PRINCIPAL TERMS AND CONDITIONS OF THE ACQUISITION
In order to implement the Acquisition, Chesnara, or one or more
of its subsidiaries (as the case may be) has entered into the
agreements set out below. A more detailed summary of the key terms
of these agreements is set out in Part II (Principal Terms of the
Acquisition) of the Prospectus.
5.1 Acquisition Agreement
Under the terms of the Acquisition Agreement, and subject to the
satisfaction of certain conditions, the Buyer has agreed to acquire
Legal & General Nederland with economic effect from 1 January
2016, with a purchase price adjusted for Legal & General
Nederland's 30 June 2016 unaudited financial statements. The final
purchase price shall be the sum of EUR160 million plus an interest
rate of 1 per cent. per annum for the period starting on 1 October
2016 to 31 December 2016 and an interest rate of 2 per cent. per
annum for the period starting on 1 January 2017 to completion of
the Acquisition. Given that the Acquisition Agreement provides that
completion of the Acquisition must occur by no later than 31 July
2017, the Company has calculated the maximum amount of interest
payable to be EUR2.3 million (which assumes that completion of the
Acquisition were to occur on 31 July 2017). Furthermore, any amount
of leakage (if any) will be deducted from the purchase price. The
Acquisition Agreement is governed by Dutch law. Completion of the
Acquisition is conditional on the following: (a) successful
completion of the works council consultation process in the
Netherlands; (b) obtaining a declaration of no objection
(verklaring van geen bezwaar) from the DNB in relation to the
Acquisition in accordance with Article 3.95 of the Dutch Financial
Supervision Act (Wet op het financieel toezicht) which itself will
confirm that the PRA, as the group supervisor, has no objections to
the Acquisition; (c) the resignation of certain nominated
individuals from the supervisory board of Legal & General
Nederland and replaced with other nominated individuals as
supervisory board members of Legal & General Nederland, one of
whom shall become chairman, with effect from completion of the
Acquisition; (d) the resignation of a nominated current member of
the management board of Legal & General Nederland, effective
from the earlier of (i) 1 April 2017 and (ii) the date of
completion of the Acquisition; (e) the consent of two thirds of the
Seller's lenders under its revolving credit facility for the Seller
to enter the Acquisition; (f) the absence of a material adverse
change occurring under the Sponsor and Placing Agreement prior to
Admission or a material adverse change (including a major default
that also constitutes a material adverse change)occurring under the
Existing Debt Facilities Agreement prior to completion of the
Acquisition; (g) the passing of the Resolutions, including approval
of the Acquisition, by Chesnara Shareholders at the General
Meeting; and (h) Admission. Completion of the Acquisition is
expected to take place in the first quarter of 2017.
The Seller has given an indemnity to the Buyer in respect of any
losses, damages, costs (including administrative handling costs and
reasonable legal costs), liabilities and expenses (including taxes)
suffered by the Buyer or Legal & General Nederland arising out
of claims from (former) customers of Legal & General Nederland
in relation to Woekerpolis up to a maximum amount of EUR60 million.
The indemnity being given is subject to a risk-sharing arrangement
between the Seller and the Buyer. Both the indemnity and the
rule-sharing arrangement will operate for three years after
completion of the Acquisition. Further details on this indemnity
and the risk-sharing arrangement to which it is subject will be
found in Part II (Principal Terms of the Acquisition) of the
Prospectus.
5.2 New Debt Facilities Agreement
The Chesnara Group's Existing Debt Facilities (the "Existing
Debt Facilities") of GBP52.8 million are to be replaced by New Debt
Facilities of approximately GBP100.2 million, comprising both a
Sterling and Euro tranche. The facilities will be provided by The
Royal Bank of Scotland plc.
The New Debt Facilities will be divided into two separate
tranches:
(a) Facility A is a sterling facility for an amount of GBP40
million and will be used to refinance part of the Chesnara Group's
Existing Debt Facilities of GBP52.8 million; and
(b) Facility B is a Euro facility for an amount of EUR71 million
and will be used to partially fund the costs of the
Acquisition.
Both tranches of the New Debt Facilities will remain in place
for a period of five years. Further details of the Chesnara Group's
Existing Debt Facilities and the New Debt Facilities are set out in
paragraphs 9.1(d) and 9.1(e) of Part XIV (Additional Information)
of the Prospectus. The Existing Debt Facilities will be irrevocably
cancelled and repaid on completion of the Acquisition.
6. FINANCING THE ACQUISITION
Chesnara proposes to fund the Acquisition through a combination
of:
-- the proceeds of the Firm Placing and Placing and Open Offer
of 23,333,334 New Ordinary Shares at an Issue Price of 300 pence
per New Ordinary Share, raising gross proceeds of approximately
GBP70 million and net proceeds of approximately GBP66.1 million
after deduction of estimated expenses of the Firm Placing and
Placing and Open Offer. The principal terms of the Firm Placing and
Placing and Open Offer are set out in paragraph 9 below;
-- the New Debt Facilities totalling GBP100.2 million (GBP40
million and EUR71 million), which replace an existing debt facility
of GBP52.8 million and raises GBP47.4 million of incremental debt.
The key terms of the New Debt Facilities are set out in paragraph
9.1(e) of Part XIV (Additional Information) of the Prospectus;
and
-- the balance from Chesnara's own cash resources.
7. RELATED PARTY TRANSACTION
Columbia Threadneedle Investments is currently interested in
approximately 12.16 per cent. of the Company's issued share capital
and is therefore deemed a substantial shareholder of Chesnara for
the purposes of the Listing Rules. As part of the Firm Placing and
Placing and Open Offer, Columbia Threadneedle Investments has
subscribed for 2,270,713 New Ordinary Shares pursuant to the Firm
Placing and has conditionally subscribed for 567,678 New Ordinary
Shares pursuant to the Placing, in each case at the Issue Price,
amounting to GBP8.5 million at the Issue Price. Columbia
Threadneedle Investment's participation in the Firm Placing and
Placing and Open Offer constitutes a smaller related party
transaction pursuant to Listing Rule 11.1.10R (and therefore
Chesnara is not required to comply with the requirements of Listing
Rule 11.1.7R).
8. STRUCTURE OF THE ISSUE
The Company proposes to raise an aggregate of GBP70 million
(gross) through the issue of 23,333,334 New Ordinary Shares by way
of the Firm Placing and Placing and Open Offer. The decision to
structure the equity capital raising by way of the Firm Placing and
Placing and Open Offer takes into account a number of factors,
including the total net proceeds to be raised. Whilst recognising
the importance of pre-emption rights, the Directors are also
cognisant that there may be a limit to the amount of additional
capital that can be sought from existing Shareholders. The
Directors consider the Firm Placing and Placing and Open Offer to
be an appropriate fundraising structure, providing certainty of
funds to complete the Acquisition and access to new institutional
investors to broaden the Chesnara Group's shareholder base, while
providing existing Shareholders with the opportunity to participate
in the fundraising through the Open Offer. Subject to the
conditions to the Placing and Open Offer being satisfied,
Qualifying Shareholders are being offered the opportunity to apply
for the Open Offer Shares at the Issue Price pro rata to their
holdings of Existing Ordinary Shares on the Record Date on the
basis of 3.69 New Ordinary Shares for every 100 Existing Ordinary
Shares ("Basic Open Offer Entitlement"). Qualifying Shareholders
are also being given the opportunity, provided they take up their
Open Offer Entitlements in full, to apply for Excess Shares through
the Excess Application Facility up to a maximum number of Excess
Shares equal to two times the number of Existing Ordinary Shares
held in such Qualifying Shareholder's name as at the Record Date
("Excess Open Offer Entitlement"). Qualifying Shareholders are not
being offered the right to subscribe for the Firm Placed Shares.
Qualifying Shareholders with fewer than 28 shares will not have the
opportunity to participate in the open offer.
All elements of the Issue have the same Issue Price.
9. PRINCIPAL TERMS OF THE ISSUE
The Company intends to raise gross proceeds of approximately
GBP70 million (approximately GBP66.1 million net of estimated
expenses of the Firm Placing and Placing and Open Offer) through
the issue of 23,333,334 New Ordinary Shares by way of the Firm
Placing and Placing and Open Offer at the Issue Price. The Issue is
conditional upon, amongst other things, Admission becoming
effective by no later than 8 a.m. on 15 December 2016 (or such
later time and/or date as the Company and the Joint Bookrunners may
agree, not being later than 8 a.m. on 29 December 2016).
Placing and Open Offer
The Company intends to raise gross proceeds of approximately
GBP70 million through the Placing and Open Offer of 23,333,334 New
Ordinary Shares at the Issue Price.
The Placing and Open Offer is conditional upon, amongst other
things, Admission becoming effective by not later than 8 a.m. on 15
December 2016 (or such later time and/or date as the Company may
agree with the Banks, not being later than 8 a.m. on 29 December
2016).
The Issue Price represents a discount of GBP0.09 (2.9 per cent.)
to the Closing Price of GBP3.09 per Existing Ordinary Share on the
Latest Practicable Date.
The Joint Bookrunners have agreed, pursuant to the Sponsor and
Placing Agreement, to conditionally place all the Open Offer Shares
at the Issue Price with institutional and other investors. The
commitments of these placees are subject to clawback in respect of
valid applications for Open Offer Shares by Qualifying Shareholders
pursuant to the Open Offer. Subject to the Placing and Open Offer
not being terminated, any Open Offer Shares which are not applied
for in respect of the Open Offer will be issued to placees procured
by the Joint Bookrunners, or failing which, to the Joint
Bookrunners, in each case at the Issue Price, with the net proceeds
retained for the benefit of the Company.
Qualifying Shareholders are being given the opportunity to apply
for the Open Offer Shares at the Issue Price on and subject to the
terms and conditions of the Open Offer, pro rata to their holdings
of Existing Ordinary Shares on the Record Date on the following
basis:
3.69 New Ordinary Shares for every 100 Existing Ordinary
Shares
Fractions of New Ordinary Shares will not be allotted and each
Qualifying Shareholder's entitlement under the Open Offer will be
rounded down to the nearest whole number. Fractional entitlements
will be aggregated and made available in the Excess Application
Facility. Accordingly, Qualifying Shareholders with fewer than 28
Existing Ordinary Shares will not have the opportunity to
participate in the Open Offer.
Qualifying Shareholders may apply for any whole number of New
Ordinary Shares up to their maximum entitlement which, in the case
of Qualifying Non-CREST Shareholders, is equal to the number of
Basic Open Offer Entitlements as shown on their Application Form
or, in the case of Qualifying CREST Shareholders, is equal to the
number of Basic Open Offer Entitlements standing to the credit of
their stock account in CREST. Qualifying Shareholders with holdings
of Existing Ordinary Shares in both certificated and uncertificated
form will be treated as having separate holdings for the purpose of
calculating their Basic Open Offer Entitlements.
Firm Placing
The Company is proposing to issue 18,668,994 Firm Placed Shares
pursuant to the Firm Placing at the Issue Price, the principal
terms and conditions of which will be summarised in paragraph 2 of
Part III (Terms and Conditions of the Issue) of the Prospectus.
The Firm Placed Shares are not subject to clawback and do not
form part of the Placing and Open Offer. The Firm Placing is
expected to raise gross proceeds of approximately GBP56 million.
The Firm Placing is subject to the same conditions and termination
rights which apply to the Placing and Open Offer. Subject to waiver
or satisfaction of the conditions and the Firm Placing not being
terminated, the Firm Placed Shares will be issued to placees and/or
other subscribers procured by the Joint Bookrunners,or failing
which, to the Joint Bookrunners subject to the terms and conditions
of the Sponsor and Placing Agreement, with the net proceeds
retained for the benefit of the Company. The Firm Placees will not
be entitled to participate in the Open Offer in respect of Firm
Placed Shares.
Excess Application Facility
Qualifying Shareholders who have taken up their Basic Open Offer
Entitlement in full may apply for Excess Shares using the Excess
Application Facility up to a maximum number of Excess Shares equal
to two times the number of Existing Ordinary Shares held in such
Qualifying Shareholder's name as at the Record Date.
Qualifying Non-CREST Shareholders wishing to apply to subscribe
for Excess Shares may do so by completing the relevant sections on
the Application Form. Qualifying CREST Shareholders who wish to
apply to subscribe for more than their Basic Open Offer
Entitlements will have Excess Basic Open Offer Entitlements
credited to their stock account in CREST and should refer to Part
III (Terms and Conditions of the Issue) of the Prospectus for
information on how to apply for Excess Shares pursuant to the
Excess Application Facility. Excess applications will be satisfied
only to the extent that corresponding applications for Basic Open
Offer Entitlements are not made by other Qualifying Shareholders or
are made for less than their pro rata entitlements. The total
number of Open Offer Shares is fixed and will not be increased in
response to any applications under the Excess Application Facility.
If there is an oversubscription resulting from excess applications,
allocations in respect of such excess applications will be scaled
down pro rata to the number of Excess Shares applied for under this
Excess Application Facility by Qualifying Shareholders or allocated
in such manner as the Board may, in its absolute discretion,
determine and no assurances can be given that the applications by
Qualifying Shareholders will be met in full, in part or at all.
Excess monies in respect of applications which are not met in
full will be returned to the applicant (at the applicant's risk)
without interest as soon as practicable thereafter by way of cheque
or CREST payment, as appropriate.
Further information
Application will be made to the FCA for the New Ordinary Shares
to be to be admitted to listing on the premium listing segment of
the Official List and application will be made to the London Stock
Exchange for the New Ordinary Shares to be admitted to trading on
its main market for listed securities. Subject to the conditions
below being satisfied, it is expected that Admission will become
effective on 15 December 2016 and that dealings for normal
settlement in the New Ordinary Shares will commence at 8 a.m. on
the same day.
The New Ordinary Shares issued under the Firm Placing and
Placing and Open Offer, when issued and fully paid, will be
identical to, and rank pari passu with, the Existing Ordinary
Shares, including the right to receive all dividends and other
distributions declared, made or paid on the Existing Ordinary
Shares by reference to a record date on or after Admission.
Shareholders should note that the Open Offer is not a rights issue.
Qualifying CREST Shareholders should note that the Basic Open Offer
Entitlements will not be tradeable or listed and that, although the
Basic Open Offer Entitlements will be admitted to CREST and be
enabled for settlement, applications in respect of entitlements
under the Open Offer may only be made by the Qualifying Shareholder
originally entitled or by a person entitled by virtue of a bona
fide market claim raised by Euroclear's Claims Processing Unit.
Qualifying Non-CREST Shareholders should note that the Application
Form is not a negotiable document and cannot be traded. Qualifying
Shareholders should be aware that in the Open Offer, unlike in a
rights issue, any Open Offer Shares not applied for will not be
sold in the market or placed for the benefit of Qualifying
Shareholders who do not apply under the Open Offer, but will be
subscribed for under the Placing with the net proceeds retained for
the benefit of the Company and Qualifying Shareholders who do not
apply to take up their Basic Open Offer Entitlements will have no
rights under the Open Offer to receive any proceeds from it.
A Qualifying Shareholder that does not take up any Open Offer
Shares under the Open Offer (or a Shareholder in the United States
or an Excluded Territory who is not eligible to participate in the
Open Offer) will experience a dilution of 15.6 per cent. as a
result of the Issue.
Further information on the Issue, and the terms and conditions
on which it is made, including the procedure for application and
payment in the Open Offer, are set out in Appendix I to this
announcement (Terms and Conditions of the Issue) and, where
relevant, in the Application Form.
The Firm Placing and Placing and Open Offer is conditional,
inter alia, upon:
(a) the passing without amendment of the Resolutions at the
General Meeting (and not, except with the prior written agreement
of the Banks, at any adjournment of such meeting) on 13 December
2016 (or such later date as the Banks may agree) and the
Resolutions remaining in force;
(b) the Company having complied with its obligations under the
Sponsor and Placing Agreement and under the terms and conditions of
the Placing and Open Offer which fall to be performed on or prior
to Admission;
(c) the Sponsor and Placing Agreement being entered into and
becoming unconditional in all respects (as regards the Firm Placing
and Placing and Open Offer) and not having been terminated prior to
Admission;
(d) Admission taking place by not later than 8a.m. on 15
December 2016 (or such time and/or date as the Banks and the
Company may agree, being not later than 8 a.m. on 29 December
2016);
(e) the Signing Protocol being entered into and not having been
terminated in accordance with its terms and no circumstances having
arisen such that, in the opinion of the Banks, the Acquisition
Agreement would be incapable of completing in accordance with its
term; and
(f) the New Debt Facilities Agreement being entered into,
becoming unconditional in all respects (other than in relation to
conditions relating solely to Admission or completion of the
Acquisition Agreement) and not having been terminated in accordance
with its terms.
Accordingly, if any such conditions are not satisfied the Firm
Placing and Placing and Open Offer will not proceed, any Basic Open
Offer Entitlements admitted to CREST will thereafter be disabled
and application monies received under the Open Offer will be
refunded to the applicants, by cheque (at the applicant's risk) in
the case of Qualifying Non-CREST Shareholders and by way of a CREST
payment in the case of Qualifying CREST Shareholders, without
interest, as soon as practicable thereafter.
10. USE OF PROCEEDS OF THE ISSUE
The Company intends to use the net proceeds of the Firm Placing
and Placing and Open Offer to part fund the Acquisition and to
satisfy the associated acquisition costs (including adviser fees).
In the event that the Acquisition does not complete, the Board
intends that the net proceeds of the Issue, after satisfying the
expenses related to the Issue and the Acquisition (estimated to
amount to approximately GBP62.2 million), will be used to execute
other acquisition opportunities. The Board believes there are a
number of such potential acquisition opportunities within the Dutch
and wider European insurance markets.
Pending utilisation of the proceeds of the Firm Placing and
Placing and Open Offer, monies will be used to strengthen the
balance sheet and for working capital purposes in supporting the
Chesnara Group's strategy, but to the extent that opportunities for
such acquisitions or further capital expenditure are not identified
by the Board, the Board will review the Chesnara Group's funding
structure and will consider its options, which will include the
return of surplus cash to its shareholders in as tax efficient a
manner as possible.
11. FINANCIAL EFFECTS OF THE ACQUISITION AND THE ISSUE
The Firm Placing and Placing and Open Offer will result in
23,333,334 New Ordinary Shares being issued. Upon Admission and
assuming the exercise of options under any share option schemes,
the Enlarged Issued Share Capital is expected to be 149,738,226
Ordinary Shares (excluding 147,535 treasury shares). On this basis,
the New Ordinary Shares will represent approximately 15.6 per cent.
of the Enlarged Issued Share Capital. A Qualifying Shareholder who
does not take up their Basic Open Offer Entitlements in full (and
does not receive any other New Ordinary Shares pursuant to the
Issue) will have their shareholding in Chesnara diluted by up to
approximately 15.6 per cent. as a result of the Issue. Furthermore,
a Qualifying Shareholder who takes up their Basic Open Offer
Entitlements in full (and does not receive any other New Ordinary
Shares pursuant to the Issue) will have their shareholding in
Chesnara diluted by approximately 12.5 per cent. as a result of the
Firm Placing.
A pro forma statement of net assets of the Company illustrating
the effect of the Issue on the Company's audited net assets as at
30 June 2016, as if it had been undertaken at that date, will be
set out in Part XI (Unaudited Pro Forma Combined IFRS Financial
Information For The Enlarged Group) of the Prospectus. This
information is unaudited and has been prepared for illustrative
purposes only. Taking into account the receipt of the net proceeds
of the Firm Placing and the Placing and Open Offer of approximately
GBP66.1 million, the pro forma net assets of the Company as at 30
June 2016 would have been GBP380.4 million, with pro forma net cash
of GBP236.7 million. The Issue is not expected to have a material
impact on the earnings of the Company. Should the Acquisition
complete, it is expected to be earnings accretive. However, the
Issue is not conditional upon completion of the Acquisition.
12. CURRENT TRADING AND PROSPECTS
Since 30 June 2016, being the most recently published financial
information for Chesnara, the Chesnara Group has traded in line
with expectations. One of the key drivers of the performance and
position of the Chesnara Group is the economic environment, with
key levers being gilt yields, equity markets and the Euro and
Swedish Krona to sterling exchange rate. Gilt yields have reduced
since 30 June 2016 and the FTSE 100, being a useful barometer for
equity performance, has continued to rise in the same period, being
4.8 per cent. higher at the Latest Practicable Date when compared
with 30 June 2016. The principal Swedish equity markets have also
increased since 30 June 2016, with the OMX30 index having increased
by 12.0 per cent. to reach 1,483 as at the Latest Practicable Date.
Sterling has strengthened slightly against both the Euro and
Swedish Krona in the same period. The net impact of the economic
variables is that the financial position of the Chesnara Group has
not changed materially since 30 June 2016.
Countrywide Assured, the Chesnara Group's principal operating
subsidiary in the UK, has been in run-off for a number of years.
The non-economic drivers of the business can be predicted with a
reasonable degree of certainty, with expenses being controlled and
persistency remaining within the Company's long-term assumptions.
Movestic, Chesnara's Swedish subsidiary, has also traded
satisfactorily and continues to steadily recover market share in
its targeted profitable business segments. The Waard Group
contributes only a relatively small proportion of the Chesnara
Group's earnings and these have emerged in line with expectations
since 30 June 2016.
As at 30 June 2016 there were several ongoing UK regulatory
issues, including:
-- A FCA investigation into the appropriateness of Chesnara's
level of disclosure regarding exit charges, paid-up charges and
early transfer charges to its customers holding closed book
products;
-- the findings and recommendations of the FCA's "Thematic
review into the fair treatment of long- standing customers in the
life and pension industry" which is under consultation; and
-- FCA proposals to cap exit charges on pensions for those aged over 55.
During the period since 30 June 2016 there have been no
developments to the position on any of these issues that suggest
the accounting treatment and reported outlook as per the 2016
Unaudited Interim Financial Statements has deteriorated. The FCA
has confirmed its previous proposals will be implemented and
amongst them, a 1 per cent. cap on early exit pension charges for
existing personal and stakeholder pension schemes will be
introduced from 31 March 2017. The Chesnara Group's 2016 Unaudited
Interim Financial Statements published on 30 August 2016 make
allowance for the introduction of the 1 per cent. cap
13. DIVID POLICY
The Chesnara Group is committed to offering its Shareholders an
attractive income stream arising from the profits of its life
assurance business. In its interim results, which were announced on
10 August 2016, the Chesnara Group declared an interim dividend of
6.80 pence per share, an increase of 2.9 per cent. over the
dividend of 6.61 pence declared for the comparable period in
2015.
14. GENERAL MEETING
A notice convening a General Meeting to be held at the offices
of Panmure Gordon at 11 a.m. on 13 December 2016 at which the
Resolutions will be proposed will be set out at the end of the
Prospectus. The purpose of the General Meeting is to consider and,
if thought fit, pass the Resolutions as set out in full in the
Notice of General Meeting.
Your attention is again drawn to the fact that the Firm Placing
and Placing and Open Offer and the Acquisition are conditional and
dependent upon the Resolutions being passed (there are also
additional conditions which must be satisfied before the
Acquisition and the Firm Placing and Placing and Open Offer can be
completed).
However, Shareholders should be aware that it is possible that,
subsequent to Admission becoming effective, the Acquisition could
fail to complete. This possibility is discussed further in
paragraph 10 above and paragraph 1 of Part II (Principal Terms of
the Acquisition) of the Prospectus.
For further information in relation to the Resolutions to be
proposed at the General Meeting, see the Notice of General Meeting
at the end of the Prospectus.
15. OVERSEAS SHAREHOLDERS
The distribution of the Prospectus, the Application Form and the
making of the Open Offer to persons who have registered addresses
in, or who are resident or ordinarily resident in, or citizens of,
or which are corporations, partnerships or other entities created
or organised under the laws of countries other than the United
Kingdom or to persons who are nominees of, or custodians, trustees
or guardians for, persons who are citizens or nationals of, or
resident in, countries other than the United Kingdom may be
restricted by the laws or regulatory requirements of the relevant
jurisdictions.
Any failure to comply with such restrictions may constitute a
violation of the securities laws of the relevant jurisdiction.
Those persons should consult their professional advisers as to
whether they require any governmental or other consents or need to
observe any applicable legal requirement or other formalities to
enable them to apply for Open Offer Shares under the Open
Offer.
No action has been or will be taken by the Company, the Joint
Bookrunners or any other person, to permit a public offering in any
jurisdiction where action for that purpose may be required, other
than in the United Kingdom.
Receipt of the Prospectus and/or an Application Form and/or a
credit of Basic Open Offer Entitlements to a stock account in CREST
will not constitute an invitation or offer of securities for
subscription, sale or purchase in those jurisdictions in which it
would be illegal to make such an invitation or offer and, in those
circumstances, the Prospectus and/or the Application Form must be
treated as sent for information only and should not be copied or
redistributed.
Application Forms will not be sent to, and Basic Open Offer
Entitlements will not be credited to stock accounts in CREST of,
persons with registered addresses in the United States or any
Excluded Territory or their agent or intermediary, except where the
Company is satisfied that such action would not result in the
contravention of any registration or other legal requirement in any
jurisdiction.
It is the responsibility of any person (including, without
limitation, custodians, agents, nominees and trustees) outside the
United Kingdom wishing to apply for Open Offer Shares under the
Open Offer to satisfy himself or herself as to the full observance
of the laws of any relevant territory in connection therewith,
including obtaining any governmental or other consents that may be
required, observing any other formalities required to be observed
in such territory and paying any issue, transfer or other taxes due
in such territory.
16. TAXATION
Your attention is drawn to Part XII (United Kingdom Taxation) of
the Prospectus in relation to taxation matters. If you are in any
doubt as to your tax position, you should consult your own
professional adviser without delay.
17. EMPLOYEE SHARE SCHEMES
In accordance with the rules of the Share Schemes, the number of
ordinary shares subject to subsisting awards under such schemes
and/or the exercise price (if any) may be adjusted to take account
of the issue of New Ordinary Shares pursuant to the Open Offer.
Participants will be informed of such adjustments in due
course.
18. FURTHER INFORMATION
Your attention is drawn to the section entitled "Risk Factors"
of the Prospectus and to Part XIV (Additional Information) of the
Prospectus. You should read all of the information contained in the
Prospectus before deciding the action to take in respect of the
General Meeting. If you are a Qualifying Shareholder, and, subject
to certain exceptions, unless you have a registered address in, or
are resident in, the United States or any of the Excluded
Territories, your attention is drawn in connection with the Firm
Placing and Placing and Open Offer to the further information which
will be contained in Part III (Terms and Conditions of the Issue)
of the Prospectus.
The results of the votes cast at the General Meeting will be
announced as soon as possible once known through a Regulatory
Information Service and on the Chesnara website
(www.chesnara.co.uk). It is expected that this will be on 13
December 2016.
19. RECOMMATION
The Chesnara Board considers the Acquisition and the Issue to be
in the best interests of Chesnara and Shareholders as a whole.
Accordingly, the Chesnara Board unanimously recommends that
Shareholders vote in favour of the Resolutions to be proposed at
the General Meeting as they intend to do (or procure to be done, as
the case may be) in respect of their entire holdings of 133,043
Ordinary Shares in aggregate, representing approximately 0.1 per
cent. of the existing issued ordinary share capital of Chesnara.
The Directors are fully supportive of the Firm Placing and Placing
and Open Offer. Certain of the Directors of Chesnara (including the
Chief Executive and the Group Finance Director) intend to
participate in the Placing and Open Offer. The extent of Director
participation will be announced post completion of the Issue.
20. Expected Timetable of Principal Events
Each of the times and dates in the table below is indicative
only and may be subject to change.(1)
Record Date for entitlements 5.30 p.m. on 22
under the Open Offer November 2016
Announcement of the Acquisition 24 November 2016
and the Issue
Ex-entitlement date for the 24 November 2016
Open Offer
Publication and posting of 24 November 2016
the Prospectus, the Notice
of General Meeting, the Form
of Proxy and the Application
Form
Basic Open Offer Entitlements 25 November 2016
and Excess Basic Open Offer
Entitlements credited to stock
accounts in CREST of Qualifying
CREST Shareholders
Latest recommended time and 4.30 p.m. on 6 December
date for requesting withdrawal 2016
of Basic Open Offer Entitlements
and Excess Basic Open Offer
Entitlements from CREST (i.e.
if your Basic Open Offer Entitlements
and Excess Basic Open Offer
Entitlements are in CREST and
you wish to convert them into
certificated form)
Latest recommended time and 3 p.m. on 7 December
date for depositing Basic Open 2016
Offer Entitlements and Excess
Basic Open Offer Entitlements
into CREST (i.e. if your Basic
Open Offer Entitlements and
Excess Basic Open Offer Entitlements
are represented by an Application
Form and you wish to convert
them to uncertificated form)
Latest time and date for splitting 3 p.m. on 8 December
Application Forms (to satisfy 2016
bona fide market claims)
Latest time and date for receipt 11.00 a.m. on 9
of Forms of Proxy December 2016
Latest time and date for receipt 11.00 a.m. on 12
of completed Application Forms December 2016
and payment in full under the
Open Offer or settlement of
relevant CREST instructions
(as appropriate)
Results of Placing and Open 13 December 2016
Offer to be announced through
a Regulatory Information Service
General Meeting 11.00 a.m. on 13
December 2016
Dealings in New Ordinary Shares, 8.00 a.m. on 15
fully paid, commence on the December 2016
London Stock Exchange and New
Ordinary Shares credited to
CREST accounts
Despatch of definitive share by no later than
certificates for the New Ordinary 23 December 2016
Shares in certificated form
(1) The times and dates set out in the expected timetable of
principal events above and mentioned throughout this document may
be adjusted by Chesnara with the agreement of the Banks in which
event details of the new times and dates will be notified to the
UKLA, the London Stock Exchange and, where appropriate, Qualifying
Shareholders.
Important Notice
Shore Capital and Corporate Limited and Shore Capital
Stockbrokers Limited have been appointed as sponsor and joint
bookrunner, respectively, in connection with the Acquisition, the
Firm Placing and Placing and Open Offer and Admission. Shore
Capital and Corporate Limited and Shore Capital Stockbrokers
Limited, which are each authorised and regulated in the UK by the
FCA, are acting exclusively for the Company and no one else in
connection with the contents of this announcement, the Acquisition,
the Firm Placing and Placing and Open Offer, Admission or any other
matters referred to in this announcement and will not regard any
other person (whether or not a recipient of this announcement) as a
client in relation to the Acquisition, the Firm Placing and Placing
and Open Offer, Admission or any other matters referred to in this
announcement and will not be responsible for providing the
protections afforded to their clients nor for giving advice in
relation to the contents of this announcement, the Acquisition, the
Firm Placing and Placing and Open Offer, Admission or any other
matter or arrangement referred to in this announcement.
Panmure Gordon, which is authorised and regulated in the UK by
the FCA, has been appointed as joint bookrunner in connection with
the Firm Placing and Placing and Open Offer and Admission and is
acting exclusively for the Company and no one else in connection
with the contents of this announcement, the Firm Placing and
Placing and Open Offer, Admission or any other matters referred to
in this announcement and will not regard any other person (whether
or not a recipient of this announcement) as a client in relation to
the Firm Placing and Placing and Open Offer, Admission or any other
matters referred to in this announcement and will not be
responsible for providing the protections afforded to its clients
nor for giving advice in relation to the contents of this
announcement, the Firm Placing and Placing and Open Offer,
Admission or any other matter or arrangement referred to in this
announcement.
Keefe, Bruyette & Woods, which is authorised and regulated
in the UK by the FCA, has been appointed as financial adviser in
connection with the Acquisition and Placing Agent in connection
with the Firm Placing and Placing and Open Offer and Admission and
is acting exclusively for the Company and no one else in connection
with the contents of this announcement, the Firm Placing and
Placing and Open Offer, Admission or any other matters referred to
in this announcement and will not regard any other person (whether
or not a recipient of this announcement) as a client in relation to
the Firm Placing and Placing and Open Offer, Admission or any other
matters referred to in this announcement and will not be
responsible for providing the protections afforded to its clients
nor for giving advice in relation to the contents of this
announcement, the Firm Placing and Placing and Open Offer,
Admission or any other matter or arrangement referred to in this
announcement.
Appendix I: Terms and Conditions of the Firm Placing and the Placing Issue
IMPORTANT INFORMATION ON THE FIRM PLACING AND THE PLACING FOR
INVITED PLACEES ONLY.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE FIRM
PLACING OR THE PLACING. THE TERMS AND CONDITIONS SET OUT HEREIN ARE
FOR INFORMATION PURPOSES ONLY AND ARE ONLY DIRECTED (A) AT PERSONS
IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE
UNITED KINGDOM) WHO ARE "QUALIFIED INVESTORS" WITHIN THE MEANING OF
ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE (DIRECTIVE 2003/71/EC)
("QUALIFIED INVESTORS"), AND (B) IN THE UNITED KINGDOM, AT
QUALIFIED INVESTORS (I) WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS
RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE
FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER
2005 (THE "ORDER") (NAMELY, AUTHORISED FIRMS UNDER THE FSMA;
PERSONS WHO ARE EXEMPT IN RELATION TO PROMOTIONS OF SHARES IN
COMPANIES; PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM INVESTING
IN COMPANIES; GOVERNMENTS; LOCAL AUTHORITIES OR INTERNATIONAL
ORGANISATIONS; OR A DIRECTOR, OFFICER OR EMPLOYEE ACTING FOR SUCH
ENTITIES IN RELATION TO INVESTMENT) AND/OR (II) WHO ARE HIGH VALUE
ENTITIES FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER
(NAMELY, BODIES CORPORATE WITH SHARE CAPITAL OR NET ASSETS OF NOT
LESS THAN GBP5 MILLION (EXCEPT WHERE THE BODY CORPORATE HAS MORE
THAN 20 MEMBERS IN WHICH CASE THE SHARE CAPITAL OR NET ASSETS
SHOULD BE NOT LESS THAN GBP500,000)); UNINCORPORATED ASSOCIATIONS
OR PARTNERSHIPS WITH NET ASSETS OF NOT LESS THAN GBP5 MILLION;
TRUSTEES OF HIGH VALUE TRUSTS; OR A DIRECTOR, OFFICER OR EMPLOYEE
ACTING FOR SUCH ENTITIES IN RELATION TO THE INVESTMENT); AND (C)
ANY OTHER PERSON TO WHOM IT MAY OTHERWISE LAWFULLY BE COMMUNICATED;
AND, IN EACH CASE, WHO HAVE BEEN INVITED TO PARTICIPATE IN THE FIRM
PLACING AND THE PLACING BY THE JOINT BOOKRUNNERS (ALL SUCH PERSONS
TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR
RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY PERSON WHO
HAS RECEIVED OR IS DISTRIBUTING THESE TERMS AND CONDITIONS MUST
SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR
INVESTMENT ACTIVITY TO WHICH THESE TERMS AND CONDITIONS RELATE IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH
RELEVANT PERSONS. THESE TERMS AND CONDITIONS DO NOT THEMSELVES
CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN
THE COMPANY. THE PLACED SHARES HAVE NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION OF THE UNITED STATES AND THE SECURITIES
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR
INDIRECTLY IN, INTO OR WITHIN THE UNITED STATES, EXCEPT PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS. THERE WILL BE NO PUBLIC OFFERING OF
SECURITIES IN THE UNITED STATES.
EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO THE
LEGAL, TAX AND BUSINESS RELATED ASPECTS OF AN ACQUISITION OF PLACED
SHARES.
Unless otherwise defined in these terms and conditions,
capitalised terms used in these terms and conditions shall have the
meaning given to them in this announcement.
If a Relevant Person indicates to either Joint Bookrunner that
it wishes to participate in the Firm Placing and/or the Placing
(together, the "Equity Placings") by making or accepting an offer
to acquire Firm Placed Shares pursuant to the Firm Placing (each
such person a "Firm Placee") and Open Offer Shares pursuant to the
Placing (each such person a "Conditional Placee" and, together with
the Firm Placees, the "Placees") it will be deemed to have read and
understood these terms and conditions, the announcement of which
they form part and the draft prospectus dated 14 November 2016
prepared by, and relating to, the Company (the "Placing Proof") in
their entirety and to be making or accepting such offer subject to
these terms and conditions and to be providing the representations,
warranties, indemnities, agreements and acknowledgements contained
herein. In particular, each such Placee represents, warrants and
acknowledges that it is a Relevant Person and undertakes that it
will acquire, hold, manage and dispose of any of the Placed Shares
that are allocated to it for the purposes of its business only.
Further, each such Placee represents, warrants and agrees that: (a)
if it is a financial intermediary, as that term is used in Article
3(2) of the Prospectus Directive, that the Placed Shares acquired
by and/or subscribed for by it in the Equity Placings will not be
acquired on a non-discretionary basis on behalf of, nor will they
be acquired with a view to their offer or resale to, persons in
circumstances which may give rise to an offer of securities to the
public other than an offer or resale in a member state of the EEA
which has implemented the Prospectus Directive to Qualified
Investors, or in circumstances in which the prior consent of the
Joint Bookrunners has been given to each such proposed offer or
resale; and (b) it is not a US Person (as defined in Regulation S),
and is not acquiring the Placed Shares for the account or benefit
of a US Person, and it is located outside the United States and
acquiring the Placed Shares in an "offshore transaction" (as
defined in Regulation S) for its own account or purchasing the
Placed Shares for an account with respect to which it exercises
sole investment discretion.
These terms and conditions and the information contained herein
are not for release, publication or distribution, directly or
indirectly, in whole or in part, to persons in the United States or
any Excluded Territory.
In particular, the Placed Shares referred to in these terms and
conditions have not been and will not be registered under the
Securities Act or the securities laws of any state or other
jurisdiction of the United States and the Placed Shares may not be
offered or sold directly or indirectly in, into or within the
United States, except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and applicable state securities laws. There will be
no public offering of the Placed Shares in the United States. No
offering of the Placed Shares will be made in the United States.
The Placed Shares have not been approved or disapproved by the U.S.
Securities and Exchange Commission, any state securities commission
in the United States or any other regulatory authority in the
United States, nor have any of the foregoing authorities passed
upon or endorsed the merits of the offer of the Placed Shares or
the accuracy or adequacy of these terms and conditions. Any
representation to the contrary is a criminal offence in the United
States.
The distribution of these terms and conditions and the offer
and/or placing of Placed Shares in certain other jurisdictions may
be restricted by law. No action has been taken by the Joint
Bookrunners or the Company that would permit an offer of the Placed
Shares or possession or distribution of these terms and conditions
or any other offering or publicity material relating to the Placed
Shares in any jurisdiction where action for that purpose is
required, save as mentioned above. Persons into whose possession
these terms and conditions come are required by the Joint
Bookrunners and the Company to inform themselves about and to
observe any such restrictions.
No undertaking, representation, warranty or any other assurance,
express or implied, is made or given by or on behalf of either
Joint Bookrunner or any of their respective affiliates or their
respective directors, officers, employees, agents, advisers, or any
other person, as to the accuracy, completeness, correctness or
fairness of the information or opinions contained in the Placing
Proof or this announcement or for any other statement made or
purported to be made by any of them, or on behalf of them, in
connection with the Company or the Equity Placings and no such
person shall have any responsibility or liability for any such
information or opinions or for any errors or omissions.
Accordingly, save to the extent permitted by law, no liability
whatsoever is accepted by any of the Joint Bookrunners or any of
their respective affiliates or their respective directors,
officers, employees, agents or affiliates or any other person for
any loss howsoever arising, directly or indirectly, from any use of
this announcement or such information or opinions contained herein
or otherwise arising in connection with the Placing Proof.
These terms and conditions do not constitute or form part of,
and should not be construed as, any offer or invitation to sell or
issue, or any solicitation of any offer to purchase or subscribe
for, any Placed Shares or any other securities or an inducement to
enter into investment activity, nor shall these terms and
conditions (or any part of them), nor the fact of their
distribution, form the basis of, or be relied on in connection
with, any investment activity. No statement in these terms and
conditions is intended to be nor may be construed as a profit
forecast and no statement made herein should be interpreted to mean
that the Company's profits or earnings per share for any future
period will necessarily match or exceed historical published
profits or earnings per share of the Company.
Firm Placing and Placing and Open Offer
Placees are referred to these terms and conditions, this
announcement and the Placing Proof containing details of, inter
alia, the Equity Placings. These terms and conditions, this
announcement and the Placing Proof have been prepared and issued by
the Company, and each of these documents is the sole responsibility
of the Company.
Firm Placing
The Firm Placed Shares are not subject to clawback and do not
form part of the Placing and Open Offer. The Firm Placing is
subject to the same conditions and termination rights which apply
to the Placing and Open Offer.
The Joint Bookrunners have agreed, pursuant to the Sponsor and
Placing Agreement, to use reasonable endeavors to place, as agents
of the Company, all the Firm Placed Shares at the Issue Price with
Firm Placees. Subject to the Firm Placing not being terminated, the
Firm Placed Shares will be issued to Firm Placees procured by the
Joint Bookrunners or, failing which, to the Joint Bookrunners,
subject to the terms and conditions of the Sponsor and Placing
Agreement.
Placing and Open Offer
The Joint Bookrunners have agreed, pursuant to the Sponsor and
Placing Agreement, to use reasonable endeavors to conditionally
place, as agents of the Company, all the Open Offer Shares at the
Issue Price with Conditional Placees. Subject to the Placing and
Open Offer not being terminated, any Open Offer Shares which are
not applied for in respect of the Open Offer will be issued to
Placees procured by the Joint Bookrunners or, failing which, to the
Joint Bookrunners, subject to the terms and conditions of the
Sponsor and Placing Agreement.
The commitments of the Conditional Placees are subject to
clawback in respect of valid applications for Open Offer Shares by
Qualifying Shareholders pursuant to the Open Offer, including under
the Excess Application Facility.
Qualifying Shareholders are being given the opportunity to apply
for the Open Offer Shares at the Issue Price on and subject to the
terms and conditions of the Open Offer, on the basis of 3.69 Open
Offer Shares for every 100 Existing Ordinary Shares held on the
Record Date. Open Offer Shares will also be made available to
Qualifying Shareholders under the Excess Application Facility.
Fractions of Open Offer Shares will not be allotted and each
Qualifying Shareholder's entitlement under the Open Offer will be
rounded down to the nearest whole number. Qualifying Shareholders
applying for their full Basic Open Offer Entitlements may also
apply, under the Excess Application Facility, for New Ordinary
Shares in excess of their Basic Open Offer Entitlements at the
Issue Price. The number of Excess Shares a Qualifying Shareholder
can apply for under the Excess Application Facility is capped at a
maximum number equal to two times the number of Existing Ordinary
Shares held in such Qualifying Shareholder's name as at the Record
Date.
The Placed Shares issued under the Firm Placing and Placing and
Open Offer, when issued and fully paid, will be identical to, and
rank pari passu with, the Existing Ordinary Shares, including the
right to receive all dividends and other distributions declared,
made or paid on the Existing Ordinary Shares after Admission.
The Equity Placings
Application will be made to the FCA for the Placed Shares to be
issued under the Firm Placing and the Placing and Open Offer to be
admitted to the premium listing segment of the Official List and to
the London Stock Exchange for the Placed Shares to be admitted to
trading on its main market for listed securities. Subject to the
conditions below being satisfied, it is expected that Admission
will become effective on 15 December 2016 and that dealings for
normal settlement in the Placed Shares will commence at 8 a.m. on
the same day.
The Firm Placing and Placing and Open Offer are conditional,
inter alia, upon:
(i) The Resolutions being passed at the General Meeting;
(ii) Admission becoming effective by not later than 8 a.m. on 15
December 2016 (or such later time and/or date as the Company and
the Banks may agree, being no later than 29 December 2016); and
(iii) the Sponsor and Placing Agreement having become
unconditional in all respects and not having been terminated in
accordance with its terms.
The full terms and conditions of the Open Offer will be
contained in the Prospectus to be issued by the Company in
connection with the Open Offer and Admission. The Prospectus to be
issued by the Company will be approved by the FCA under section 87A
of the FSMA and made available to the public in accordance with
Rule 3.2 of the Prospectus Rules made under Part VI of the
FSMA.
The Joint Bookrunners will seek to procure Placees as agents of
the Company. These terms and conditions give details of the terms
and conditions of, and the mechanics of participation in, the
Equity Placings.
Principal terms of the Equity Placings
a) By participating in the Equity Placings, Placees will be
deemed to have read and understood this announcement, these terms
and conditions and the Placing Proof in their entirety and to be
participating and making an offer for any Placed Shares subject to,
and to be providing the representations, warranties, indemnities,
acknowledgements and undertakings contained in, these terms and
conditions.
b) The Joint Bookrunners are arranging the Equity Placings
severally, and not jointly, nor jointly and severally, as agents of
the Company.
c) Participation in the Equity Placings will only be available
to persons who are Relevant Persons and who may lawfully be, and
are, invited to participate by either of the Joint Bookrunners. The
Joint Bookrunners and their respective affiliates are entitled to
offer to subscribe for Placed Shares as principal in the Equity
Placings.
d) The Joint Bookrunners reserve the right not to accept an
offer to subscribe for Placed Shares, either in whole or in part,
and may scale down any offer to subscribe for Placed Shares for
this purpose.
e) An offer to subscribe for Placed Shares will be made on the
basis of this announcement, these terms and conditions and the
Placing Proof. A Placee's commitment to subscribe for the number of
Placed Shares allocated to it (and in the respective numbers of
Firm Placed Shares and Open Offer Shares (subject to clawback) so
allocated) will be agreed with and confirmed to it orally by one of
the Joint Bookrunners and a contract note will be dispatched as
soon as possible thereafter. The oral confirmation to the Placee by
a Joint Bookrunner constitutes an irrevocable, legally binding
contractual commitment to that Joint Bookrunner (as agent of the
Company) to subscribe for the number of Placed Shares allocated to
it on the terms set out in this announcement. Each Placee will have
an immediate, separate, irrevocable and binding obligation, owed to
that Joint Bookrunner, to pay to that Joint Bookrunner (or as that
Joint Bookrunner may direct) as agent of the Company in cleared
funds an amount equal to the product of the Issue Price and the sum
of the number of Firm Placed Shares and, once apportioned after
clawback (in accordance with the procedure described in the
paragraph entitled 'Placing Procedure' below), the Open Offer
Shares, which such Placee has agreed to acquire.
f) The Company will, in consultation with the Joint Bookrunners,
in its absolute discretion determine the allocation to Placees of
the Firm Placed Shares and the Open Offer Shares. The Joint
Bookrunners reserve the right not to accept bids or to accept bids,
either in whole or in part, on the basis of allocations determined
at the Company's discretion and may scale down any bids as the
Company may determine, in consultation with the Joint Bookrunners.
The acceptance of bids shall be at the Joint Bookrunners' absolute
discretion, subject to agreement with the Company.
g) Irrespective of the time at which a Placee's allocation(s)
pursuant to the Equity Placings is/are confirmed, settlement for
all Placed Shares to be acquired pursuant to the Firm Placing and
the Placing will be required to be made on the basis explained
below under the paragraph entitled "Registration and
Settlement".
h) No commissions are payable to Placees in respect of the Firm
Placing. A commission of one per cent. of the aggregate value at
the Issue Price of the Open Offer Shares committed to by
Conditional Placees is payable to the Conditional Placees by the
relevant Joint Bookrunner in respect of the Placing. This
commission is expected to be paid within five Business Days of
Admission (provided Conditional Placees have provided details of
the account payee).
i) By participating in the Equity Placings, each Placee agrees
that its rights and obligations in respect of the Firm Placing
and/or the Placing will terminate only in the circumstances
described below and will not be capable of rescission or
termination by the Placee. All obligations under the Equity
Placings will be subject to the fulfilment of the conditions
referred to in the section below.
Conditions of the Equity Placings and Termination of the Sponsor
and Placing Agreement
The Banks have the right to terminate their obligations under
the Sponsor and Placing Agreement (after such consultation with the
Company as the circumstances may allow) at any time prior to
Admission in certain circumstances including, inter alia, (i) if
any of the warranties contained in the Sponsor and Placing
Agreement was untrue, inaccurate or misleading and/or would be
untrue, inaccurate or misleading if it were to be repeated at any
time prior to Admission so as to have a material adverse effect, in
the reasonable opinion of the Banks, on the Equity Placings or if
any statement in the Issue Documents is incorrect or has become
untrue, incorrect or misleading; or (ii) a material adverse change
in the financial position or prospects of the Group or the Enlarged
Group (taken as a whole); or (iii) the occurrence of certain
specified events of force majeure (as specified in the Sponsor and
Placing Agreement). If the Sponsor and Placing Agreement is
terminated prior to Admission, the Equity Placings will lapse and
the rights and obligations of the Placees hereunder shall cease and
determine at such time and no claim can be made by any Placee in
respect thereof. In such event, all monies (if any) paid by the
Placees to the Joint Bookrunners at such time shall be returned to
the Placees at their sole risk without any obligation on the part
of the Company or the Joint Bookrunners or any of their respective
affiliates to account to the Placees for any interest earned on
such funds. The Placees acknowledge and agree that the Company and
the Banks may, at their sole discretion, exercise their contractual
rights to waive some of the conditions in the Sponsor and Placing
Agreement or to extend the time and/or date for fulfilment of any
of the conditions in the Sponsor and Placing Agreement. Any such
extension or waiver will not affect Placees' commitments.
Placees will only be called on to acquire Placed Shares if the
obligations of the Banks under the Sponsor and Placing Agreement
have become unconditional in all respects and the Banks have not
terminated the Sponsor and Placing Agreement prior to
Admission.
The Banks' obligations under the Sponsor and Placing Agreement
in respect of the Firm Placing and the Placing and Open Offer are
conditional upon, inter alia:
a) Admission occurring not later than 8.a.m. on 15 December 2016
(or such later time and/or date as the Company and the Banks may
agree, being not later than 8 a.m. on 29 December 2016);
b) the passing without amendment of the Resolutions at the
General Meeting (and not, except with the prior written agreement
of the Banks, at any adjournment of such meeting) on 29 December
2016 (or such later date as the Banks may agree) and the
Resolutions remaining in force;
c) the Company having complied with its obligations under the
Sponsor and Placing Agreement and under the terms and conditions of
the Placing and Open Offer which fall to be performed on or prior
to Admission;
d) the Sponsor and Placing Agreement becoming unconditional in
all respects, save for Admission, and not having been terminated in
accordance with its terms;
e) the Signing Protocol being entered into and not having been
terminated in accordance with its terms and no circumstances having
arisen such that, in the opinion of the Banks, the Acquisition
Agreement would be incapable of completing in accordance with its
term; and
f) the New Debt Facilities Agreement being entered into,
becoming unconditional in all respects (other than in relation to
conditions relating solely to Admission or completion of the
Acquisition Agreement) and not having been terminated in accordance
with its terms,
(all conditions included in the Sponsor and Placing Agreement
being together the "Conditions"). It is to be noted that the Equity
Placings are not conditional on completion of the Acquisition.
If any Condition has not been satisfied, has not been waived by
the Banks or has become incapable of being satisfied (and is not
waived by the Banks as described below) or if the Sponsor and
Placing Agreement is terminated, all obligations under these terms
and conditions will automatically terminate. By participating in
the Equity Placings, each Placee agrees that its rights and
obligations hereunder are conditional upon the Sponsor and Placing
Agreement becoming unconditional in all respects and that its
rights and obligations will terminate only in the circumstances
described above and will not be capable of rescission or
termination by it.
The Banks may in their absolute discretion in writing waive
fulfilment of certain of the Conditions or extend the time provided
for fulfilment of such Conditions. Any such extension or waiver
will not affect Placees' commitments as set out in these terms and
conditions. None of the Banks, nor the Company, shall have any
liability to any Placee (or to any other person whether acting on
behalf of a Placee or otherwise) in respect of any decision made by
the Banks as to whether or not to waive or to extend the time
and/or date for the fulfilment of any Condition.
By participating in the Equity Placings each Placee agrees that
the exercise by the Company or any of the Banks of any right or
other discretion under the Sponsor and Placing Agreement shall be
within the absolute discretion of the Company and each of the Banks
(as the case may be) and that neither the Company nor any of the
Banks need make any reference to such Placee and that neither the
Company nor any of the Banks shall have any liability to such
Placee (or to any other person whether acting on behalf of a Placee
or otherwise) whatsoever in connection with any such exercise.
Withdrawal Rights
Placees acknowledge that their acceptance of any of the Placed
Shares is not by way of acceptance of the public offer made in the
Prospectus and (if applicable) the Application Form but is by way
of a collateral contract and as such section 87Q of the FSMA does
not entitle Placees to withdraw in the event that the Company
publishes a supplementary prospectus in connection with the Open
Offer or Admission. If, however, a Placee is entitled to withdraw,
by accepting the offer of Placed Shares, the Placee agrees to
confirm its acceptance of the offer on the same terms immediately
after such right of withdrawal arises.
Placing Procedure
Any allocation of the Offer Shares (subject to clawback) to be
issued pursuant to the Equity Placings will be notified to the
Conditional Placees on or around 24 November 2016 (or such other
time and/or date as the Company and the Banks may agree).
Conditional Placees will be called upon to subscribe for, and
shall subscribe for, the Open Offer Shares only to the extent that
valid applications by Qualifying Shareholders under the Open Offer
(including, at the Company's discretion, under the Excess
Application Facility) are not received by 11 a.m. on 12 December
2016 (or by such later time and/or date as the Company may agree
with the Banks) or if applications have otherwise not been deemed
to be valid in accordance with the Prospectus and (if applicable)
the Application Form.
Registration and Settlement
Settlement of transactions in the Placed Shares following
Admission will take place within the CREST system, subject to
certain exceptions. The Joint Bookrunners and the Company reserve
the right to require settlement for, and delivery of, the Placed
Shares to Placees by such other means that they deem necessary if
delivery or settlement is not possible within the CREST system
within the timetable set out in the Placing Proof and/or the
Prospectus or would not be consistent with the regulatory
requirements in the Placee's jurisdiction. Each Placee will be
deemed to agree that it will do all things necessary to ensure that
delivery and payment is completed in accordance with either the
standing CREST or certificated settlement instructions which they
have in place with the relevant Joint Bookrunner.
It is expected that settlement of the Firm Placing and the
Placing will occur on 15 December 2016, on which date each Placee
must settle the full amount owed by it in respect of the Placed
Shares allocated to it. The Joint Bookrunners may (after
consultation with the Company) specify a later settlement date (or
dates) at their absolute discretion. The Joint Bookrunners will
notify Placees if any of the dates in these terms and conditions
should change, including as a result of delay in the posting of the
Prospectus, the Application Forms or the crediting of the Open
Offer Entitlements or the Excess Open Offer Entitlements in CREST
or the production of a supplementary prospectus or otherwise.
Payment must be made in cleared funds. The payment instructions for
settlement in CREST and settlement outside of CREST will be set out
in the contract note issued to the Placee by the relevant Joint
Bookrunner. Interest is chargeable daily on payments not received
from Placees on the due date at the rate per annum of 2 percentage
points above the Barclays Bank plc base rate. Time shall be of the
essence as regards the obligations of Placees to settle payment for
the Placed Shares and to comply with their other obligations under
this Announcement.
Acceptance
By participating in the Equity Placings, a Placee (and any
person acting on such Placee's behalf) irrevocably acknowledges,
confirms, undertakes, represents, warrants and agrees (as the case
may be) with the Joint Bookrunners and the Company, the
following:
(i) in consideration of its allocation of Placed Shares, to
subscribe at the Issue Price for (a) the Firm Placed Shares
comprised in its allocation and (b) any Open Offer Shares comprised
in its allocation for which it is required to subscribe (subject to
clawback in respect of valid applications from Qualifying
Shareholders in the Open Offer) pursuant to these terms and
conditions, and it has obtained all necessary consents and
authorities to enable it to give its commitment to so subscribe and
purchase, and that it will sign, execute and deliver any documents
and do all acts, matters and things as may be necessary for or
incidental to such subscription and purchase;
(ii) it has read and understood this announcement (including
these terms and conditions) and the Placing Proof in their entirety
and that it has neither received nor relied on any information
given or any investigations, representations, warranties or
statements made at any time by any person in connection with
Admission, the Equity Placings, the Company, the Placed Shares, or
otherwise, other than the information contained in this
announcement (including these terms and conditions) and the Placing
Proof that in accepting the offer of Placed Shares it will be
relying solely on the information contained in this announcement
(including these terms and conditions) and the Placing Proof,
receipt of which is hereby acknowledged, and undertakes not to
redistribute or duplicate such documents;
(iii) it has received the Placing Proof and all such information
as it deems necessary to make an investment decision in relation to
the Placed Shares and it has made its own assessment of the Placed
Shares and have relied on its own investigation of the business,
financial or other position of the Company in agreeing to
participate in the Equity Placing;
(iv) its oral commitment will be made solely on the basis of the
information set out in this announcement, the Placing Proof and the
information publicly announced to a Regulatory Information Service
by or on behalf of the Company on or before the date of this
announcement, such information being all that such Placee deems
necessary or appropriate and sufficient to make an investment
decision in respect of the Placed Shares and that it has neither
received nor relied on any other information given, or
representations or warranties or statements made, by the Joint
Bookrunners or the Company nor any of their respective affiliates
nor any other person and none of such persons will be liable for
any Placee's decision to participate in the Firm Placing and/or the
Placing based on any other information, representation, warranty or
statement;
(v) its agreement to subscribe for Placed Shares is not by way
of acceptance of a public offer made or to be made in the
Prospectus but is by way of a collateral contract and, accordingly,
section 87Q of the FSMA does not entitle it to withdraw its
acceptance in the event that the Company publishes a supplementary
prospectus in connection with the Equity Raising and/or Admission.
Without prejudice to such acknowledgement, if it is so entitled to
withdraw, it irrevocably agrees (if applicable) not to exercise any
such rights and to confirm its acceptance of the offer to
participate in the Equity Placings on the same terms immediately
after any such right to withdraw arises;
(vi) it understands and accepts that by offering such Placed
Shares, neither Joint Bookrunner is making any recommendations to
or advising such Placee regarding the suitability or merits of any
transaction that such Placee may enter into in connection with the
Equity Placings or otherwise and that such Placee is not, and does
not regard itself as, a client of any of the Banks or Keefe,
Bruyette & Woods in connection with the Equity Placings, and
that the Banks and Keefe, Bruyette & Woods are acting solely
for the Company in relation to the Equity Placings, the Acquisition
and Admission as set out in the Placing Proof and will not be
responsible to such Placee for providing the protections afforded
to their clients or for advising such Placee on the transactions
and arrangements proposed in this announcement and/or the Placing
Proof, nor do the contents or receipt of this announcement
constitute the giving of investment advice by either Joint
Bookrunner or Keefe, Bruyette & Woods to such Placee;
(vii) the content of the this announcement, these terms and
conditions and the Placing Proof are exclusively the responsibility
of the Company and neither Joint Bookrunner nor Keefe, Bruyette
& Woods nor any of their respective affiliates nor any person
acting on its or their behalf will be responsible for or shall have
liability for any information, representation or statement
contained therein and neither Joint Bookrunner nor Keefe, Bruyette
& Woods nor any of their respective affiliates nor any person
acting on its or their behalf will be responsible or liable for a
Placee's decision to accept its Placed Shares;
(viii) neither Panmure Gordon Group nor Shore Capital Group
(each as defined below) nor any of their respective officers,
directors and employees shall, save in the event of fraud on their
part (and to the extent permitted by the rules of the FCA) be
liable to Placees for any matter arising out of the role of either
Joint Bookrunner as agent, broker or otherwise in connection with
the Equity Placings and that where any such liability nevertheless
arises as a matter of law the Placee will immediately waive any
claim against the Panmure Gordon Group and the Shore Capital Group
and any of their respective officers, directors and employees which
it may have in respect thereof. In these terms and conditions, the
expression "Panmure Gordon Group" means Panmure Gordon and its
ultimate holding company(ies) and all direct and indirect
subsidiary undertakings of such holding company(ies) and Shore
Capital Group means Shore Capital Stockbrokers and its ultimate
holding company(ies) and all direct and indirect subsidiary
undertakings of such holding company(ies);
(ix) if the offer of Placed Shares is made to it in the United
Kingdom it is a Qualified Investor who (i) who has professional
experience in matters relating to investments falling within
Article 19(5) of the Order (namely authorised firms under the FSMA;
persons who are exempt in relation to promotions of shares in
companies; persons whose ordinary activities involve them investing
in companies; governments; local authorities or international
organisations; or a director, officer or employee acting for such
entities in relation to investment) and/or (ii) is a high value
entity falling within article 49(2)(a) to (d) of the Order (namely,
bodies corporate with share capital or net assets of not less than
GBP5 million (except where the body corporate has more than 20
members in which case the share capital or net assets should not be
less than GBP500,000)); unincorporated associations or partnerships
with net assets of not less than GBP5 million; trustees of high
value trusts; or a director, officer or employee acting for such
entities in relation to the investment;
(x) it is a person whose ordinary activities involve it (as
principal or agent) acquiring, holding, managing or disposing of
investments for the purpose of its business and it undertake that
it will (as principal or agent) acquire, hold, manage or dispose of
any Placed Shares that are allocated to it for the purposes of its
business;
(xi) if it is in a member state of the European Economic Area
(other than the United Kingdom), it is a Qualified Investor;
(xii) it has complied with its obligations under the Criminal
Justice Act 1993, the EU Market Abuse Regulation (2014/596/EU)
("MAR"), the Bribery Act 2010 and in connection with money
laundering and terrorist financing under the Proceeds of Crime Act
2002 (as amended) and the Terrorism Act 2006 (as amended) and with
the Money Laundering Regulations 2007 and the Money Laundering
Sourcebook of the Financial Conduct Authority and any other
applicable legislation concerning prevention of money laundering
(together, the "Regulations") and, it will on request from either
Joint Bookrunner provide any such information and provide such
assistance to the relevant Joint Bookrunner in order to verify its
identity which the relevant Joint Bookrunner or the Company may
require in compliance with the Regulations. If it is making payment
on behalf of a third party, it has obtained and recorded
satisfactory evidence to verify the identity of the third party as
required by the Regulations. Each Placee's attention is further
drawn to the section entitled "Money Laundering" contained in Part
III of the Placing Proof;
(xiii) its participation in the Firm Placing and/or Placing and
Open Offer will not require it to make a mandatory offer under Rule
9 of the City Code on Takeovers and Mergers;
(xiv) it is not subscribing for Placed Shares pursuant to an
agreement or understanding (whether formal or informal) with
another person or persons or to obtain or consolidate control of
the Company;
(xv) it is not a related party of the Company for the purposes
of the Listing Rules of the UK Listing Authority as at the date
hereof;
(xvi) to the fullest extent permitted by law, it acknowledges
and agrees to the disclaimers contained in the Prospectus and it
acknowledges and agrees to comply with, and to only make offers and
sales of the Placed Shares in compliance with, the selling
restrictions set out in Part III of the Placing Proof;
(xvii) it is not a person who has a registered address in, or is
a resident, citizen or national of, a country or countries, in
which it is unlawful to make or accept an offer to subscribe for
Placed Shares;
(xviii) if it is a person (including, without limitation,
nominees and trustees of such a person) with a registered address
outside the United Kingdom or a citizen or resident of a country
other than the United Kingdom, it has fully observed and will fully
observe the applicable laws of any relevant territory, including
obtaining any requisite governmental or other consents and it has
fully observed and will fully observe any other requisite
formalities and pay any issue, transfer or other taxes due in such
territories;
(xix) the Placed Shares are being offered in a transaction not
involving any public offering in the United States within the
meaning of the Securities Act, and that the Placed Shares have not
been and will not be registered under the Securities Act, the US
Investment Company Act of 1940, as amended or the securities laws
of any state or other jurisdiction of the United States. It further
acknowledges that, subject to certain exceptions, the Placed Shares
may not be offered, sold, pledged, resold, transferred, delivered
or distributed within the United States;
(xx) it is not a US Person (as defined in Regulation S) and it
is located outside the United States and eligible to participate in
an "offshore transaction" as and pursuant to Regulation S; and it
acknowledges that the Placed Shares were not offered to it by means
of any "directed selling efforts" within the meaning of Regulation
S;
(xxi) neither it nor its affiliates nor any person acting of its
or their behalf has engaged, nor will engage, in any "direct
selling efforts" with respect to any Placed Shares, and that it
will not make any offer to the public of the Placed Shares prior to
Admission;
(xxii) it is not acting on a non-discretionary basis for the
account or benefit of a US Person (as defined in Regulation S) or
any person located within the United States at the time the
undertaking to subscribe for Placed Shares
(xxiii) it understands that the Placed Shares have not been
registered under the applicable laws of Australia, Canada, Japan,
New Zealand or any other Excluded Territory. It is not a resident
of any Excluded Territory or a corporation, partnership or other
entity organised under the laws of any Excluded Territory. It has
not offered, sold or delivered, and will not offer, sell or
deliver, in whole or in part, directly or indirectly any of the
Placed Shares in any Excluded Territory or to or for the benefit of
any person resident in any Excluded Territory;
(xxiv) it has not and will not distribute or publish this
announcement, the Placing Proof or any other advertisement or other
offering material in relation to the Placed Shares directly or
indirectly in, into or within any of the Excluded Territories or
the United States (except as permitted in the Placing Proof);
(xxv) it has observed the laws of all relevant jurisdictions,
obtained any requisite governmental exchange controls or other
consents, complied with all relevant formalities and has paid or
will pay any issue, transfer or other taxes due in connection with
its allocation of Placed Shares in any territory and that it has
not taken any action which will or may result in the Joint
Bookrunners or the Company being in breach of the legal or
regulatory requirements of any jurisdiction;
(xxvi) if it elects to receive its Placed Shares in
uncertificated form, the CREST member account will be agreed with
and confirmed to it orally by one of the Joint Bookrunners and a
contract note will be dispatched as soon as possible thereafter
including that information;
(xxvii) the right is reserved in the Banks' absolute discretion
to agree to extend the time for the satisfaction of all or any of
the Conditions and otherwise adjust the timetable for
implementation of the Equity Placings. All times and dates referred
to in this announcement are therefore subject to adjustment in
accordance with this reservation;
(xxviii) it has only communicated or caused to be communicated
any invitation or inducement to engage in investment activity
(within the meaning of section 21 of the FSMA) relating to the
Placed Shares in circumstances in which section 21(1) of the FSMA
does not require approval of the communication by an authorised
person;
(xxix) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in
relation to the Placed Shares, in, from or otherwise involving the
United Kingdom;
(xxx) in the event that it has received any confidential inside
information about the Company in advance of the Equity Placings, it
confirms to the Joint Bookrunners that it has not (i) dealt in the
securities of the Company; (ii) encouraged or required another
person to deal in the securities of the Company; or (iii) disclosed
such information to any person, prior to the information being made
generally available;
(xxxi) it is not liable, and it is not applying as nominee(s) or
agent(s) for a person or persons who is/are or may be liable, to
pay stamp duty reserve tax under sections 93 or 96 of the Finance
Act 1986 or stamp duty under sections 67 or 70 of the Finance Act
1986, in each case at the increased rates referred to in those
sections. For the avoidance of doubt, if this confirmation is
incorrect, the placee acknowledges that stamp duty or stamp duty
reserve tax may be payable for which neither the Joint Bookrunners
nor the Company will be responsible and if, as a result, any of
those persons is obliged by law to pay any such stamp duty or stamp
duty reserve tax (or any penalties or interest in relation
thereto), they shall be entitled to receive it, on an after tax
basis, from it for which purposes it hereby indemnifies on demand
the Joint Bookrunners and the Company in respect of any such
liability;
(xxxii) it agrees that it has no right against any person under
the Sponsor and Placing Agreement pursuant to The Contracts (Rights
of Third Parties) Act 1999;
(xxxiii) in accepting its allocation of Placed Shares, it
irrevocably appoints any director or employee of either Joint
Bookrunner as its agent for the purpose of executing and delivering
to the Company and/or the Company's registrar any document on its
behalf necessary to enable it to be registered as the holder of
Placed Shares for which it has subscribed or to complete the sale
of such Placed Shares on its behalf in the circumstances referred
to earlier;
(xxxiv) that neither Joint Bookrunner owes it fiduciary duties
in respect of any claim it may have relating to the Equity
Placings; and
(xxxv) to indemnify and hold harmless the Company, each Joint
Bookrunner and their respective affiliates from any and all costs,
claims, liabilities and expenses (including legal fees and
expenses) arising out of or in connection with any breach of the
representations, warranties, acknowledgements, agreements and
undertakings in these terms and conditions and further agree that
the provisions of these terms and conditions shall survive after
completion of the Equity Placings.
In addition, Placees should note that they will be liable for
any capital duty, stamp duty and all other stamp, issue,
securities, transfer, registration, documentary or other duties or
taxes (including any interest, fines or penalties relating thereto)
payable outside the UK by them or any other person on the
acquisition by them of any Placed Shares or the agreement by them
to acquire any Placed Shares.
Set-off and Miscellaneous
If a Placee is entitled to participate in the Open Offer by
virtue of being a Qualifying Shareholder it will be able to apply
to subscribe for Open Offer Shares under the terms and conditions
of the Open Offer (including the Excess Application Facility). Any
participation by a Placee as a Qualifying Shareholder in the Open
Offer (including the Excess Application Facility) will not reduce
such Placee's commitment in respect of the Firm Placing or the
Placing.
The Company reserves the right to treat as invalid any
application or purported application for Placed Shares that appears
to the Company or its agents to have been executed, effected or
dispatched from the United States or an Excluded Territory or in a
manner that may involve a breach of the laws or regulations of any
jurisdiction or if the Company or its agents believe that the same
may violate applicable legal or regulatory requirements or if it
provides an address for delivery of the share certificates of
Placed Shares in an Excluded Territory or the United States, or any
other jurisdiction outside the United Kingdom in which it would be
unlawful to deliver such share certificates.
When a Placee or person acting on behalf of the Placee is
dealing with any of the Joint Bookrunners, any money held in an
account with any of the Joint Bookrunners on behalf of the Placee
and/or any person acting on behalf of the Placee will not be
treated as client money within the meaning of the rules and
regulations of the FCA made under the FSMA. The Placee acknowledges
that the money will not be subject to the protections conferred by
the client money rules; as a consequence, this money will not be
segregated from the Joint Bookrunners' money in accordance with the
client money rules and will be used by each of the Joint
Bookrunners in the course of its own business; and the Placee will
rank only as a general creditor of the relevant Joint
Bookrunner.
Times
Unless the context otherwise requires, all references to time
are to London time. All times and dates in these terms and
conditions may be subject to amendment. The Joint Bookrunners will
notify Placees and any persons acting on behalf of the Placees of
any changes.
Appendix II: Definitions
The following definitions apply throughout this
announcement unless the context requires otherwise:
"2016 Unaudited Interim the 30 June 2016 unaudited
Financial Statements" half year financial statements
of Chesnara;
"Acquisition" the proposed acquisition
of Legal & General Nederland
by way of acquisition of
the Legal & General Nederland
Shares pursuant to the Acquisition
Agreement;
"Acquisition Agreement" the agreement in the agreed
form between the Buyer and
the Seller pursuant to which
the Buyer has conditionally
agreed to acquire the Legal
& General Nederland Shares,
a summary of which is contained
in Part II (Principal Terms
of the Acquisition) of the
Prospectus;
"Admission" the proposed admission of
the New Ordinary Shares
by the UKLA to listing on
the premium segment of the
Official List and by the
London Stock Exchange to
trading on the main market
of the London Stock Exchange;
"Application Form" the personalised application
form being sent to Qualifying
Non-CREST Shareholders for
use in connection with the
Open Offer;
"Banks" Shore Capital and Panmure
Gordon;
"Basic Open Offer Entitlement" an entitlement of a Qualifying
Shareholder to apply for
3.69 Open Offer Shares for
every 100 Existing Ordinary
Shares held by him or her
on the Record Date pursuant
to the Open Offer;
"Board" or "Chesnara the board of Directors of
Board" the Company;
"Business Day" a day (excluding Saturdays,
Sundays and public holidays
in England and Wales) on
which banks are generally
open for business in London;
"Buyer" Chesnara Holdings B.V.,
a private company with limited
liability (besloten vennootschap
met beperkte aansprakelijkheid),
incorporated under the laws
of the Netherlands, having
its seat (statutaire zetel)
in Amsterdam and its registered
office at Geert Scholtenslaan
11, third floor, 1687 CL
Wognum, the Netherlands;
"Capita Asset Services" a trading name of Capita
Registrars Limited;
"certificated" in relation to a share or
other security, a share
or other security, title
to which is recorded in
the relevant register of
the share or other security
concerned as being held
in certificated form (that
is, not in CREST);
"Chesnara" or "Company" Chesnara plc a company incorporated
in England and Wales with
registered number 4947166
and having its registered
office at 2nd floor, Building
4, West Strand Business
Park, Preston PR1 8UY;
"Chesnara Group" or Chesnara and its subsidiary
"Group" undertakings from time to
time;
"Closing Price" the closing middle market
price of a relevant share
as published by the London
Stock Exchange;
"Conditional Placees" those who will take up Placed
Shares under the Placing;
"Conditions" all conditions included
in the Sponsor and Placing
Agreement;
"Countrywide Assured" the Chesnara Group's life
assurance subsidiary in
the UK;
"CREST" or "CREST system" the paperless settlement
procedure operated by Euroclear
enabling system securities
to be evidenced otherwise
than by certificates and
transferred otherwise than
by written instrument;
"CREST member" a person who has been admitted
by Euroclear as a system
member (as defined in the
CREST Regulations);
"Directors" or "Chesnara the directors of the Company,
Directors" whose names appear in paragraph
1 of Part XIII (Directors,
Senior Managers and Corporate
Governance) of the Prospectus,
or, as the context requires,
the directors from time
to time of the Company,
and Director shall be construed
accordingly;
"DNB" De Nederlandsche Bank, the
Dutch Central Bank;
"document" this combined prospectus
and circular;
"EEA" the European Economic Area;
"EEA States" the member states of the
EEA;
"Enlarged Group" the Chesnara Group as enlarged
by the Acquisition and the
Placing and Open Offer proceeds
(following completion of
the Firm Placing, Placing
and Open Offer and completion
of the Acquisition, respectively);
"Enlarged Issued Share the Existing Issued Share
Capital" Capital together with the
New Ordinary Shares;
"EU" the European Union;
"Euroclear" Euroclear UK and Ireland
Limited;
"Excess Application a facility of Excess Shares
Facility" available under the Excess
Basic Open Offer Entitlements;
"Excess Basic Open Shareholders' entitlements
Offer Entitlements" to Ordinary Shares available
under the Excess Application
Facility;
"Excess Shares" Ordinary Shares which are
not subscribed for by Qualifying
Shareholders in connection
with their Basic Open Offer
Entitlements;
"Excluded Territories" Australia, Canada, Japan,
New Zealand and any other
jurisdictions where the
extension and availability
of the Firm Placing and
Placing and Open Offer would
breach any applicable law;
"Existing Debt Facilities" existing loan facilities
originally in a maximum
amount of GBP73.8 million
provided by The Royal Bank
of Scotland plc;
"Existing Debt Facilities the facilities agreement
Agreement" between, inter alia, the
Company as borrower and
The Royal Bank of Scotland
plc as mandated lead arranger,
original lender and facility
agent dated 7 October 2013
relating to the Existing
Debt Facilities;
"Existing Issued Share Ordinary Shares in issue
Capital" as at the Latest Practicable
Date;
"Existing Ordinary the Ordinary Shares in issue
Shares" immediately prior to the
Firm Placing and Placing
and Open Offer;
"FCA" the Financial Conduct Authority
of the UK;
"Firm Placing" the placing of the Firm
Placed Shares with Firm
Placees;
"Firm Placees" those who will take up Firm
Placed Shares under the
Firm Placing;
"Firm Placed Shares" the 18,668,994 New Ordinary
Shares which are the subject
of the Firm Placing;
"Form of Proxy" the form of proxy to be
used in connection with
the General Meeting;
"FSMA" the Financial Services and
Markets Act 2000, as amended;
"General Meeting" the general meeting of the
Company proposed to be held
at the offices of Panmure
Gordon, at 11 a.m. on 13
December 2016 to approve
the Resolutions, the notice
which is contained in this
announcement and the Prospectus;
"IFAs" Independent Financial Advisers;
"IFRS" International Financial
Reporting Standards as adopted
by the European Union;
"ISIN" international securities
identification number;
"Issue" the issue of New Ordinary
Shares pursuant to the Firm
Placing and Placing and
Open Offer, as further described
in this announcement and
the Prospectus;
"Issue Documents" this announcement, the Prospectus
(including any pathfinder
version or placing proof
thereof), the Application
Form and any other document
issued by or on behalf of
the Company in connection
with the Firm Placing and
Placing and Open Offer with
the authority of the Company,
including, without limitation,
any supplementary prospectus;
"Issue Price" 300 pence per New Ordinary
Share;
"Joint Bookrunners" Shore Capital Stockbrokers
Limited and Panmure Gordon;
"Keefe, Bruyette & Stifel Nicolaus Europe Limited
Woods" (trading as Keefe, Bruyette
& Woods);
"Latest Practicable 23 November 2016 (being
Date" the latest practicable date
prior to publication of
this announcement);
"Legal & General Group" Legal & General Group plc
and its subsidiary undertakings
from time to time;
"Legal & General Nederland" Legal & General Nederland
Levensverzekering Maatschappij
N.V., a company incorporated
under the laws of the Netherlands,
having its seat (statutaire
zetel) at Hilversum, the
Netherlands and its registered
office at Laapersveld 68,
1213 VB Hilversum, the Netherlands;
"Legal & General Nederland the share capital of Legal
Shares" & General Nederland;
"LGIM" Legal & General Investment
Management Limited;
"Listing Rules" the listing rules made by
the FCA under section AJA
of FSMA;
"London Stock Exchange" London Stock Exchange plc;
or "LSE"
"MAR" or "Market Abuse Regulation (EU) No 596/2014
Regulation" of the European Parliament
and of the Council of 16
April 2014;
"Member State" a member state of the EEA;
"Money Laundering Regulations" the Money Laundering Regulations
(SI 2007 No. 2157), as amended;
"Movestic" Movestic Livförsäkring
AB;
"New Debt Facilities" new loan facilities in a
maximum amount of GBP40
million and EUR71 million
provided by The Royal Bank
of Scotland plc and arranged
for the purposes of, inter
alia, the Acquisition;
"New Debt Facilities the facilities agreement
Agreement" between, inter alia, the
Company as borrower and
The Royal Bank of Scotland
plc as mandated lead arranger,
original lender and facility
agent dated 24 November
2016 relating to the New
Debt Facilities;
"New Ordinary Shares" the Ordinary Shares proposed
to be issued by Chesnara
pursuant to the Firm Placing
and the Placing and Open
Offer;
"Notice of General the notice of General Meeting
Meeting" to be contained in the Prospectus;
"Official List" the official list of the
FCA;
"Open Offer" the offer to Qualifying
Shareholders to subscribe
for Open Offer Shares;
"Open Offer Shares" the 4,664,340 New Ordinary
Shares to be offered to
Qualifying Shareholders
pursuant to the Open Offer;
"Ordinary Shares" the ordinary shares of 5
pence each in the capital
of Chesnara;
"Overseas Shareholders" Qualifying Shareholders
who are resident in, or
citizens of, countries other
than the United Kingdom;
"Panmure Gordon" Panmure Gordon (UK) Limited
"Placed Shares" the Firm Placed Shares and
the Open Offer Shares which
"Placing" are the subject of the Placing
the conditional placing
by the Joint Bookrunners
of the Placing Shares, subject
to clawback pursuant to
the Open Offer;
"Placing Agent" Keefe, Bruyette & Woods;
"Placing and Open Offer" the Placing and Open Offer;
"Placing Shares" the 4,664,340 New Ordinary
Shares which the Joint Bookrunners
will conditionally place
pursuant to the Placing;
"PRA" Prudential Regulation Authority;
"Prospectus" the combined circular and
prospectus expected to be
published by the Company
today in relation to the
"Prospectus Directive" Acquisition, the Firm Placing
and Open Offer and Admission;
Directive 2003/71/EC (as
amended from time to time,
including by Directive 2010/73/EC
(the "PAD Amending Directive")
to the extent implemented
in the relevant EEA State)
and includes any relevant
implementing measures in
each EEA State that has
implemented Directive 2003/71/EC;
"Prospectus Rules" the prospectus rules of
the FCA made pursuant to
section 73A of FSMA;
"Qualifying CREST Shareholders" Qualifying Shareholders
holding Ordinary Shares
in uncertificated form;
"Qualifying non-CREST Qualifying Shareholders
Shareholder" holding Ordinary Shares
in certificated form;
"Qualifying Shareholder(s)" Shareholder(s) on the register
of members of the Company
at the Record Date (excluding
the Company in respect of
any shares held in treasury);
"Record Date" 5.00 p.m. on 22 November
2016;
"Regulation S" Regulation S under the Securities
Act;
"regulatory authority" any central bank, ministry,
governmental, quasi-governmental
(including the European
Union), supranational, statutory,
regulatory or investigative
body or authority (including
any national or supranational
anti-trust or merger control
authority), national, state,
municipal or local government
(including any subdivision,
court, administrative agency
or commission or other authority
thereof), private body exercising
any regulatory, taxing,
importing or other authority,
trade agency, association,
institution or professional
or environmental body or
any other person or body
whatsoever in any relevant
jurisdiction, including
for the avoidance of doubt,
the takeover panel, the
FCA, the UKLA and the London
Stock Exchange;
"Regulatory Information one of the regulatory information
Service" services authorised by the
UKLA to receive, process
and disseminate regulatory
information from listed
companies;
"Resolutions" the ordinary resolutions
to be proposed at the General
Meeting (and set out in
the notice of general meeting
to be contained in the Prospectus)
to, among other matters,
approve the Acquisition;
"Securities Act" the United States Securities
Act of 1933, as amended;
"Seller" Legal & General Nederland
Overseas Holdings Limited,
a company organised under
the laws of England and
Wales, having its seat (statutaire
zetel) in London, United
Kingdom and its registered
office at One Coleman Street,
London EC2R 5AA, United
Kingdom;
"Share Schemes" the share schemes currently
operated by Chesnara as
described in paragraph 7
of Part XIV (Additional
Information) of the Prospectus;
"Shareholder" any holder of Ordinary Shares;
"Shore Capital" or Shore Capital and Corporate
"SC" Limited or Shore Capital
Stockbrokers Limited, as
the context admits;
"Signing Protocol" the signing protocol dated
24 November 2016 between
the Buyer, the Seller, Chesnara
as the Buyer's guarantor
and Legal & General Nederland
Insurance Holding Limited
as the Seller's guarantor
pursuant to which the parties
irrevocably commit to entering
into the Acquisition Agreement
after the successful completion
of the works council process
in the Netherlands;
"Solvency II" an EU Directive which reviews
the prudential regime for
insurance and reinsurance
undertakings in the European
Union;
"Sponsor" Shore Capital and Corporate
Limited;
"Sponsor and Placing the conditional agreement
Agreement" among the Company, Shore
Capital and Panmure Gordon
dated 24 November 2016,
a summary of which is contained
in paragraph 9 of Part XIV
(Additional Information)
of the Prospectus;
"stock account" an account within a member
account in CREST to which
a holding of a particular
share or other security
in CREST is admitted;
"Total Shareholder total shareholder return,
Return" measured with reference
to both dividends and capital
growth;
"UKLA" the UK Listing Authority;
"uncertificated" in relation to a share or
other security, a share
or other security, title
or in "uncertificated to which is recorded in
form" the relevant register of
the share or other security
concerned as being held
in uncertificated form (that
is, in CREST) and title
to which may be transferred
by using CREST;
"United Kingdom" or the United Kingdom of Great
"UK" Britain and Northern Ireland;
"United States" or the United States of America,
"US" its territories and possessions,
any state of the United
States of America, the District
of Columbia, and all other
areas subject to its jurisdiction;
"Waard Group" Waard and its subsidiary
undertakings from time to
time; and
"Woekerpolis" the litigation risk in relation
to potential mis-selling
of unit-linked products
by life insurers in the
Netherlands.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQLIFERLTLSFIR
(END) Dow Jones Newswires
November 24, 2016 02:01 ET (07:01 GMT)
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