TIDMLIN TIDMLINC
RNS Number : 0829C
LitComp Plc
05 November 2009
Not for release, publication or distribution, in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction
5 November 2009
LITCOMP PLC
RECOMMENDED CASH OFFER BY TORRIDON CAPITAL LIMITED
Summary
* Further to the announcement made by LitComp plc on 24 September 2009 announcing
that it was in advanced discussions regarding a possible offer for the Company,
Torridon Capital Limited and the Independent LitComp Directors are pleased to
announce today that they have reached agreement on the terms of a recommended
cash offer to be made by Torridon Capital Limited for the entire issued and to
be issued share capital of LitComp (excluding the share capital held by the
Executive Directors and their connected persons which is subject to the
arrangements detailed in paragraph 4 below).
* Under the terms of the Offer, LitComp Shareholders (except the Executive
Directors and their connected persons) are entitled to receive 35 pence in cash
for each LitComp Share. The Offer values the Fully Diluted Share Capital of
LitComp at approximately GBP5.48 million.
* Loan Note Holders will receive an equivalent offer of GBP1.167 per GBP1 Loan
Note and continue to receive interest payable by the Company on the Loan Notes
up to the date of redemption. Further details can be found in paragraph 15 of
this announcement.
* The price to be paid under the Offer of 35 pence compares to the closing price
of LitComp Shares of 36 pence per LitComp share on 23 September 2009, being the
last business day immediately prior to the announcement by LitComp that it had
received an approach and to 29 pence per LitComp share being the closing price
on the last business day immediately prior to this announcement
* Torridon Capital Limited is a newly incorporated Scottish company established
solely for the purposes of making the Offer and which is indirectly controlled
by Maven and will on the Offer being declared wholly unconditional be controlled
by Maven and Nigel Wray. Further information relating to Torridon and its owners
and directors is set out in paragraph 9 of this announcement. It is intended
that the Executive Directors will be shareholders in Torridon and will continue
to manage the LitComp business after completion of the Offer. The transaction
has therefore been structured so as to enable the Executive Directors to receive
shares in Torridon in exchange for their shareholdings in LitComp. The
Independent Directors will resign as soon as reasonably practical following the
the Offer becoming, or being declared wholly unconditional.
* LitComp plc (AIM:LIN), through its subsidiaries, supplies financial and legal
insurance products and litigation services in the United Kingdom. It also
provides "After-the-Event" and other specialist insurances, medico legal
reports, and psychological reports. LitComp's clients principally comprise firms
of solicitors based in the United Kingdom.
* Irrevocable undertakings to (a) convert certain of the Loan Notes held by them,
(b) consent to the non-payment of the Loan Notes on 31 October 2009, (c) waive
their rights in respect of such non-payment for the period prior to the lapse of
the Offer and (d) accept the Offer, have been received from Maven and Nigel
Wray.
* Irrevocable undertakings to (a) convert certain of the Loan Notes held by them,
(b) consent to non-payment of the Loan Notes on 31 October 2009 (c) waive their
right in respect of such non-payment for period prior to the lapse of the
Offer (d) waive their rights under the LitComp Share Schemes and (e) accept the
Offer (if extended to them in the event that the Resolution is not passed at the
General Meeting) have been received from the Executive Directors and their
connected persons who hold LitComp Shares.
* Irrevocable undertakings to vote in favour of the Resolution approving the
arrangements with the Executive Directors described at paragraph 4 of this
announcement which will be proposed at the General Meeting, have been received
from Douglas Smith as one of the Independent Directors (Christopher Collins
having no shareholding).
* In total irrevocable undertakings (excluding those from the Executive Directors
and their connected persons) to accept the Offer have been received in respect
of 2,645,027 LitComp Shares representing, approximately 41.2 per cent. of the
Diluted Share Capital of LitComp (excluding the Executive Directors and their
connected persons). Further details of all the irrevocables received by the
Company are detailed in Appendix III of this announcement. In addition the
Executive Directors have agreed with the Offeror, conditional upon the Offer
becoming unconditional as to acceptances, to transfer their shares in the
Company to the Offeror in exchange for shares in the Offeror.
* The Independent LitComp Directors, who have been so advised by Astaire
Securities, consider the terms of the Offer, when taking into account the
outstanding obligation on LitComp to repay the Loan Notes on 31 October 2009 and
the likely effect on the prospects for the Company as a result, to be fair and
reasonable and in the best interests of LitComp Shareholders as a whole. In
providing its advice to the Independent LitComp Directors, Astaire
Securities inter alia has taken into account the commercial assessments of the
Independent LitComp Directors.
* The Offer will, when formally made, be conditional upon the receipt of
acceptances in respect of LitComp Shares carrying more than 90 per cent. or more
by nominal value and voting rights of the LitComp Shares.
* The Offer will be funded by Torridon from its cash resources.
* The Offer Document containing further details of the Offer and the Form of
Acceptance will be posted as soon as reasonably practicable, and in any event
within 28 days of this announcement. The Offer will be subject, inter alia, to
the satisfaction or waiver of the conditions set out in Appendix I to this
announcement and in the Offer Document.
Seymour Pierce Limited is unable to act as financial adviser to LitComp due to a
conflict of interest under the City Code, but is acting as Nominated Adviser and
Broker to LitComp. Astaire Securities plc is acting as financial adviser to
LitComp. Shore Capital and Corporate Limited is acting as sole financial adviser
to Torridon.
This summary should be read in conjunction with, and is subject to, the full
text of the following announcement and the Appendices. The Offer will be subject
to the conditions set out in Appendix I to this announcement. Appendix II to
this announcement contains the bases and sources of certain information
contained in this announcement. Appendix III to this announcement contains
details of the irrevocable undertakings. Appendix IV to this announcement
contains the definitions of certain terms used in this summary.
Enquiries:
+---------------------------------------------+----------------------------+
| LITCOMP PLC | Telephone: +44 (0)147 656 |
| Jason Smart, Chief Executive Officer | 0113 |
| Paul Lavender, Finance Director | |
| | |
+---------------------------------------------+----------------------------+
| TORRIDON CAPITAL LIMITED | Telephone: +44 (0) 207 199 |
| Stella Panu, Director | 3510 |
| | |
+---------------------------------------------+----------------------------+
| ASTAIRE SECURITIES PLC | Telephone: +44 (0)207 448 |
| (Financial Adviser to LitComp) | 4400 |
| Lindsay Mair | |
| Luke Cairns | |
| | |
+---------------------------------------------+----------------------------+
| Seymour Pierce LIMITED | Telephone: +44 (0)207 107 |
| (Nominated Adviser and Broker to LitComp) | 8000 |
| Richard Feigen | |
| Chris Howard | |
| Christopher Wren | |
| | |
+---------------------------------------------+----------------------------+
| SHORE CAPITAL AND CORPORATE LIMITED | Telephone: +44 (0)207 408 |
| (Financial Adviser to the Offeror) | 4090 |
| Dru Danford | |
| Stephane Auton | |
| | |
+---------------------------------------------+----------------------------+
| BisHOPSGATE COMMUNICATIONS | Telephone: +44 (0)207 562 |
| (Financial PR Advisers to LitComp) | 3350 |
| Maxine Barnes | |
+---------------------------------------------+----------------------------+
The Directors of the Company accept responsibility for the information contained
in this announcement relating to LitComp, the LitComp Directors and members of
their immediate families, related trusts and persons connected with them. To the
best of the knowledge and belief of the Directors of the Company (who have taken
all reasonable care to ensure that such is the case) the information contained
in this announcement for which they are responsible is in accordance with the
facts and does not omit anything likely to impact the import of this
announcement.
The Torridon Directors accept responsibility for the information contained in
this announcement other than relating to LitComp, the LitComp Directors and
members of their immediate families, related trusts and persons connected with
them. To the best of the knowledge and belief of the Offeror Directors (who have
taken all reasonable care to ensure that such is the case), the information
contained in this announcement for which they are responsible is in accordance
with the facts and does not omit anything likely to affect the import of such
information.
Astaire Securities, which is authorised and regulated by the Financial Services
Authority, is acting exclusively for LitComp and no one else in connection with
the Offer and this announcement and will not be responsible to anyone other than
LitComp for providing the protections afforded to clients of Astaire Securities
or for providing advice in connection with the Offer or any matter referred to
herein.
Seymour Pierce, which is authorised and regulated by the Financial Services
Authority, is acting exclusively for LitComp and no one else as Nominated
Adviser and Broker for the purpose of the AIM Rules in respect of this
announcement and will not be responsible to anyone other than LitComp for
providing the protections afforded to clients of Seymour Pierce or for providing
advice in connection with the Offer or any matter referred to herein.
Shore Capital and Corporate Limited, which is authorised and regulated by the
Financial Services Authority, is acting exclusively for the Torridon and no one
else in connection with the Offer and will not be responsible to anyone other
than the Torridon for providing the protections afforded to clients of Shore
Capital or for providing advice in connection with the Offer or any matter
referred to herein.
This announcement is for information purposes only and does not constitute an
offer to sell or invitation to purchase or subscribe for any securities or the
solicitation of an offer to sell or invitation to purchase or subscribe for any
securities or any vote for approval in any jurisdiction, nor shall there be any
sale, issue or transfer of the securities referred to in this announcement in
any jurisdiction in contravention of applicable law. The Offer will be made
solely by the Offer Document and the Form of Acceptance accompanying the Offer
Document, which will contain the full terms and conditions of the Offer,
including details of how the Offer may be accepted. Any response in relation to
the Offer should be made only on the basis of the information contained in the
Offer Document or any document by which the Offer is made. This announcement
does not constitute a prospectus or prospectus equivalent document.
This announcement has been prepared for the purpose of complying with English
law and the City Code and the information disclosed may not be the same as that
which would have been disclosed if this announcement had been prepared in
accordance with the laws of jurisdictions outside the United Kingdom. The
release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law. Persons who are not resident in the
United Kingdom or who are subject to laws of other jurisdictions should inform
themselves of, and observe, any applicable requirements. Any failure to comply
with the restrictions in jurisdictions outside the United Kingdom may constitute
a violation of the securities laws of any such jurisdiction.
Shareholders in the United States should note that the Offer relates to the
shares of a UK company and will be governed by English law. Neither the proxy
solicitation nor the tender offer rules under the US Securities Exchange Act of
1934, as amended, will apply to the Offer. Moreover, the Offer will be subject
to the disclosure requirements and practices applicable in the UK, which differ
from the disclosure requirements of the US proxy solicitation rules and tender
offer rules. Financial information included in this announcement and the Offer
documentation with respect to LitComp has been or will have been prepared in
accordance with IFRS and may not be comparable to financial information of US
companies or companies whose financial statements are prepared in accordance
with US GAAP.
The Offer will not be made, directly or indirectly, in, into or from a
Restricted Jurisdiction where to do so would violate the laws in that
jurisdiction, and the Offer will not be capable of acceptance from or within a
Restricted Jurisdiction. Accordingly, copies of this announcement and all
documents relating to the Offer are not being, and must not be, directly or
indirectly, mailed or otherwise forwarded (including, without limitation, by
telex, facsimile transmission, telephone, internet or other forms of electronic
communication), distributed or sent in, into or from a Restricted Jurisdiction
where to do so would violate the laws in that jurisdiction, and persons
receiving this announcement and all documents relating to the Offer (including
custodians, nominees and trustees) must not mail or otherwise distribute or send
them in, into or from such jurisdictions as doing so may invalidate any
purported acceptance of the Offer. The availability of the Offer to LitComp
Shareholders who are not resident in the United Kingdom may be affected by the
laws of the relevant jurisdictions in which they are resident. Persons who are
not resident in the United Kingdom should inform themselves of, and observe, any
applicable requirements.
No listing authority or equivalent has reviewed, approved or disapproved of this
announcement or any of the proposals described herein.
Shareholders should be aware that as part of the process of the Offer addresses,
electronic addresses and certain other information provided by LitComp
Shareholders, persons with information rights and other relevant persons for the
receipt of communications from LitComp may be provided to the Offeror (or any
other bona fide offeror) during the Offer Period as required under the Code.
Any document, announcement or information relating to the Offer will be
published on the LitComp website: www.litcomp-plc.com
Forward Looking Statements
This announcement contains statements about LitComp and the Offeror that are or
may be forward looking statements. All statements other than statements of
historical facts included in this announcement may be forward looking
statements. Without limitation, any statements preceded or followed by or that
include the words "targets", "plans" "believes", "expects", "aims"," intends",
"will", "may", "anticipates", "estimates", "projects", "should" or, words or
terms of similar substance or the negative thereof, are forward looking
statements. Forward looking statements include statements relating to the
following: statements relating to the expected benefits of the acquisition to
the Offeror, background and reasons for the Offer, expectations of the impact of
the acquisition on revenue and earnings of the Offeror, information on the
prospects of the Offeror or LitComp, future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, and future prospects.
Such forward looking statements involve risks and uncertainties that could
significantly affect expected results and are based on certain key assumptions.
Many factors could cause actual results to differ materially from those
projected or implied in any forward looking statements, including risks relating
to the successful integration of LitComp with the Offeror; higher than
anticipated costs relating to the integration of LitComp or investment required
in LitComp to realise expected benefits and facts relating to LitComp that may
impact the timing or amount of benefit realised from the acquisition that are
unknown to the Offeror. Due to such uncertainties and risks, readers are
cautioned not to place undue reliance on such forward looking statements, which
speak only as of the date hereof. The Offeror and LitComp disclaim any
obligation to update any forward looking or other statements contained herein,
except as required by applicable law.
Dealing Disclosure Requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any
person is, or becomes, "interested" (directly or indirectly) in 1% or more of
any class of "relevant securities" of LitComp, all "dealings" in any "relevant
securities" of that company (including by means of an option in respect of, or a
derivative referenced to, any such "relevant securities") must be publicly
disclosed by no later than 3.30 pm (London time) on the London business day
following the date of the relevant transaction. This requirement will continue
until the date on which the Offer becomes, or is declared, unconditional as to
acceptances, lapses or is otherwise withdrawn or on which the "offer period"
otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an "interest" in "relevant
securities" of LitComp, they will be deemed to be a single person for the
purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant
securities" of LitComp by an offeror or LitComp, or by any of their respective
"associates", must be disclosed by no later than 12.00 noon (London time) on the
London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant
securities" "dealings" should be disclosed, and the number of such securities in
issue, can be found on the Takeover Panel's website at
www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic
exposure, whether conditional or absolute, to changes in the price of
securities. In particular, a person will be treated as having an "interest" by
virtue of the ownership or control of securities, or by virtue of any option in
respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the
Panel's website. If you are in any doubt as to whether or not you are required
to disclose a "dealing" under Rule 8, you should consult the Panel.
Not for release, publication or distribution, in whole or in part, in, into or
from any jurisdiction where to do so would constitute a violation of the
relevant laws of such jurisdiction
5 November 2009
LITCOMP PLC
RECOMMENDED CASH OFFER BY TORRIDON CAPITAL LIMITED
1. Introduction
Torridon Capital Limited and the Independent LitComp Directors are pleased to
announce that they have reached agreement on the terms of a recommended cash
offer to be made by the Torridon for the entire issued and to be issued share
capital of LitComp (excluding the share capital held by the Executive Directors
and their connected persons which is subject to the arrangements detailed in
paragraph 4 below).
2. The Offer
The Offer (which will be subject to the conditions and further terms set out
below, in Appendix I to this announcement and in the Offer Document and the Form
of Acceptance) will be made on the following terms:
for each LitComp Share 35 pence in cash
The Offer values the Fully Diluted Share Capital of LitComp at approximately
GBP5.48 million.
Loan Note Holders will receive an equivalent offer of GBP1.167 per GBP1 Loan
Note and continue to receive interest payable by the Company on the Loan Notes
up to the date of redemption, further details of which are set out in paragraph
15 below.
The Offer will, when formally made, be conditional upon the receipt of
acceptances in respect of LitComp Shares which will result in the Offeror
holding LitComp Shares carrying more than 90 per cent. of the voting rights then
normally exercisable at a general meeting of LitComp.
The LitComp Shares will be acquired pursuant to the Offer fully paid and free
from all liens, charges, equitable interests, encumbrances, rights of
pre-emption and any other rights and interests of any nature whatsoever and
together with all rights now and hereafter attaching thereto, including voting
rights and the right to receive and retain in full all dividends and other
distributions (if any) declared, made or paid on or after the date of this
announcement.
The Offer Document containing further details of the Offer and the Form of
Acceptance will be posted as soon as reasonably practicable and in any event
within 28 days of this announcement. The Offer will be subject to the
satisfaction or waiver of the conditions set out in Appendix I to this
announcement and in the Offer Document.
3. Background to and reasons for the Offer
Torridon is indirectly controlled by Maven and will, upon the Offer being
declared wholly unconditional, be controlled by Maven and Nigel Wray who,
between them, are significant Shareholders owning in aggregate 13.23 per cent.
of the current issued LitComp Shares. Maven and Nigel Wray were early investors
in the Company and have continued their support of the Company through its
listing on AIM in March 2006 and subsequent corporate and funding activities. In
addition Maven and Nigel Wray own approximately GBP1.4m of the Loan Notes
equating to approximately 55.9 per cent. of the Loan Notes currently
outstanding.
As announced on 31 October 2008, the Company sought, and was subsequently
granted, a twelve month extension to the redemption date for the Loan Notes
under the Trust Deed. However, in the absence of the Offer being declared
unconditional in all respects Maven and Nigel Wray have indicated to the
Directors that they would not agree to another extension to the redemption date
of the Loan Notes and would seek immediate redemption of their GBP1.4m Loan
Notes which (together with all other Loan Notes and interest thereon) were due
for repayment by LitComp on 31 October 2009. Furthermore any additional
regulatory and working capital required by the Company which would be provided
by the Offeror, subject to certain commercial conditions and due diligence, is
conditional on the Offer being declared unconditional in all respects and the
Company cancelling its quotation on AIM.
The Company was liable to redeem the Loan Notes on 31 October 2009 which, in the
event that all Loan Note Holders choose to be repaid rather than exercise their
rights of conversion into LitComp Shares, gives rise to a funding obligation of
approximately GBP2.5m. As at the 30 September 2009 the Company had cash
resources of GBP1.9 million.
The Loan Notes are secured by the Security. Since the Loan Notes were not
redeemed on the due date the Company is in default of the Trust Deed and actions
could be taken by the Loan Note Trustee, inter alia, at the request of 75% of
the Loan Note Holders to act upon the default under the Trust Deed and thereby
enforce the Security. Even if the Offer becomes or is declared unconditional,
the Company will be in breach of its obligation under the Trust Deed to redeem
the Loan Notes on 31 October 2009.
Accordingly, Maven and Nigel Wray have agreed to waive their rights for the
period prior to any lapse of the Offer to take action to seek enforcement of the
Security following non payment of redemption monies on 31 October 2009. The
equivalent offer to be made to the Loan Note Holders pursuant to the Offer
secures funding for the redemption of the Loan Notes.
4. Arrangements with the Offeror and the Executive Directors
It is essential to Torridon that the Executive Directors remain financially
involved in the management of the business and are appropriately incentivised.
It is for this reason that the management are being offered the right to roll
over their shareholdings (including those held by connected persons) and in
particular the continuing commitment of Jason Smart (the Company's Managing
Director), Paul Lavender (the Company's Finance Director) and Russell Smart (the
Company's Chief Operating Officer), have been key to Torridon's decision to
proceed with the Offer.
It is intended that Jason Smart, Paul Lavender and Russell Smart will manage the
business after completion of the Offer. The Executive Directors are thus being
offered the ability to receive shares in Torridon in exchange for their
shareholding and Loan Notes in LitComp.
To secure the ongoing commitment of the management, Torridon has proposed a
directors' incentivisation scheme (the "Scheme") for the Executive Directors.
The Scheme provides an opportunity to increase the Executive Directors'
proportion of proceeds of a sale or listing of Torridon by up to a maximum of
20 per cent of such proceeds. In order for the Executive Directors to benefit
from the Scheme, Nigel Wray and the funds managed by Maven must receive returns
of three times their investment into Torridon with an internal rate of return on
that investment of at least 30 per cent. The extent of the increase in the
Executive Directors' proportion of the proceeds is based on a sliding scale
dependent on the internal rate of return achieved by the funds managed by Maven
and Nigel Wray.
Astaire Securities considers the terms of the arrangements with the Offeror and
Executive Directors described in this paragraph 4 to be fair and reasonable so
far as the independent Shareholders are concerned.
The Offer is conditional on, inter alia, the Shareholders approving these
arrangements at a general meeting. Such approval must be obtained, as required
by Note 4 on Rule 16 of the City Code, by way of an ordinary resolution passed
by the independent Shareholders on a poll at a general meeting (or any
adjournment thereof) of LitComp. Accordingly, notice of the General Meeting will
be set out in the Offer Document.
5. The Independent LitComp Directors
The Board of LitComp has constituted an independent committee to consider the
Offer. This Independent Committee consists of Douglas Smith and Christopher
Collins.
6.Irrevocables
Irrevocable undertakings to accept the Offer have been received from Douglas
Smith one of the Independent Directors (Christopher Collins having no
shareholding), the Executive Directors and connected persons (if the Offer is
extended to them in the event that the Resolution is not passed at the General
Meeting), Maven and Nigel Wray. Irrevocable undertakings to vote in favour of
the Resolution at the General Meeting have been received from Douglas Smith one
of Independent Directors (Christopher Collins having no shareholding). The
undertakings (excluding those from the Executive Directors and their connected
persons) to accept the Offer are in aggregate in respect of 2,645,027 LitComp
Shares (representing approximately 41.2 per cent. of the Diluted Share Capital
of LitComp, excluding the Executive Directors and their connected persons).
The undertakings to vote in favour of the Resolution at the General Meeting are
in aggregate in respect of 68,083 LitComp Shares representing as at the date of
this announcement approximately 1.77 per cent of the LitComp Shares held by
shareholders entitled to vote on the Resolution. The irrevocable undertakings
provided by Douglas Smith one of the Independent Directors, the Executive
Directors, Maven and Nigel Wray, will continue to be binding in the event of a
higher offer being made for the LitComp Shares by a competing third party.
The Irrevocable Undertakings are summarised in Appendix III.
7.Recommendation
The Independent LitComp Directors, who have been so advised by Astaire
Securities, consider the terms of the Offer to be fair and reasonable. In
providing its advice to the Independent LitComp Directors, Astaire Securities
has taken into account the commercial assessments of the Independent LitComp
Directors. In addition, the Independent LitComp Directors consider the terms of
the Offer to be in the best interests of LitComp Shareholders as a whole. In
reaching their recommendation the Independent Directors have taken into account
the following factors:
* The commercial judgments of the Executive Directors, who are not independent for
the purposes of the Offer, as to the prospects for the business taking into
account the future working and regulatory capital requirements and the possible
implications of the Jackson and CJC Review on the Company;
* The redemption date for the Loan Notes having passed;
* The statement by Maven and Nigel Wray that they are unwilling to extend the
repayment term of the Loan Notes and to entertain any alternative scheme other
than the Offer for assisting with the refinancing of the Company;
* The inability of the Company to date to secure equity funding from alternative
sources other than the Offeror;
* The requirement for significant additional working and regulatory capital over
and above the requirement for the refinancing of the Loan Notes; and
* When comparing the cash value per share of the Offer with the potential likely
market value per share for an existing ordinary share after an equity
refinancing, assuming one were capable of being achieved, that a premium over
the value of the Offer is unlikely to be material or to represent an adequate
premium for the inherent risks of the ongoing business.
Accordingly, the Independent LitComp Directors recommend that LitComp
Shareholders accept the Offer and vote in favour of the Resolution at the
General Meeting as Douglas Smith, one of the Independent LitComp Directors
(Christopher Collins having no shareholding), has irrevocably undertaken to do
in respect of his own beneficial holdings of 68,083 LitComp Shares, representing
as at the date of this announcement, approximately 1.06 per cent. of the
existing issued share capital of LitComp on the terms of his irrevocable
undertaking and with respect to the Resolution, approximately 1.77 per cent. of
the LitComp Shares held by Shareholders entitled to vote on the Resolution.
8. Background to and reasons for the recommendation
In considering whether to recommend the terms of the Offer, the Independent
Directors have taken into account the following factors:
GBP2,501,200 Loan Notes fell due for redemption on 31 October 2009. The
Directors have been informed by Maven and Nigel Wray (who between them own
approximately GBP1.4 m of the Loan Notes) that unless the Offer is recommended
and accepted, they would not be prepared to extend the redemption date for the
Loan Notes beyond 31 October 2009 and nor would they be prepared to exercise
their rights to convert the Loan Notes but would seek to enforce their rights of
redemption in full. The Company therefore now has a funding obligation of
approximately GBP2.5m to meet should all the Loan Note Holders seek to enforce
their rights of redemption rather than exercise their rights of conversion into
LitComp Shares.
The Loan Notes are secured by the Security on, inter alia, the entire issued
share capital of Elite and are also subject to cross guarantees. As announced on
2 November the Company is now in default of the Trust Deed and actions could be
taken by the Loan Note Trustee (inter alia) at the request of the holders of 75%
of the Loan Note to act upon the default under the Trust Deed and thereby
enforce the Security. Even if the Offer becomes or is declared unconditional,
the Company will be in breach of its obligation under the Trust Deed to redeem
the Loan Notes on 31 October 2009. Accordingly Maven and Nigel Wray have agreed
to waive their rights to take action to seek enforcement of the Security upon
non payment of redemption monies on 31 October 2009, for the period prior to the
lapse of the Offer. The equivalent offer to be made to the Loan Note Holders
pursuant to the Offer secures funding for the redemption of the Loan Notes.
In addition to the immediate requirement to repay the Loan Notes the Company
also needs further working capital. As reported in the 31st March 2009 Accounts,
the company's cash position in the current year has been impacted by the
emphasis on deferred premiums and a number of significant claims are still
pending. An injection of capital into Elite is required to enable it to maintain
its underwriting capacity and support future growth, and avoid the risk of
significantly curtailing its underwriting activities. Further details are
provided in paragraph 11 "Current trading and prospects of LitComp."
Based on the Company's accessible cash resources as at today's date the Company
was unable to redeem the Loan Notes as they fell due on 31 October 2009.
Furthermore any payment of the redemption monies out of existing reserves would
require regulatory consent which could be withheld or subject to conditions
either of which would greatly impact the Company to such a degree that the
financing for the redemption of the Loan Notes may not be available from Elite
if it wished to continue trading.
Accordingly the Directors have for some time been seeking funding for the
redemption of the Loan Notes without success. Whilst the Directors obtained a
twelve month extension of the redemption date for the Loan Notes on 10 December
2008, it has not been successful in securing appropriate facilities from its
existing bankers or equity finance and have been advised that there is little
prospect in raising the requisite funds on AIM. The Offer provides the necessary
funding for the redemption of the Loan Notes and the Loan Note Holders who do
not exercise their rights of conversion into LitComp Shares during the Offer
Period, will under the terms of the equivalent offer made to them have their
Loan Notes redeemed as detailed in paragraph 15 below. In addition, Torridon
will further provide, be it directly or indirectly, the business with the
required funding support, subject to certain commercial conditions and due
diligence, which has not historically been available.
9. Information on the Offeror
Torridon Capital Limited is a newly incorporated Scottish company established
solely for the purposes of making the Offer and which is indirectly controlled
by Maven and upon the Offer being declared wholly unconditional will be
controlled by Maven and Nigel Wray. The directors of Torridon are Stella Panu,
Bill Nixon, both partners of Maven and Nigel Wray. The new company provides a
suitable structure for the making of the Offer and will also be an appropriate
vehicle to seek and receive further injections of capital going forward, which
have not been readily available to the Company in its listed structure.
10. Information on LitComp
LitComp plc (AIM:LIN), through its subsidiaries, supplies financial and legal
insurance products and litigation services in the United Kingdom. It also
provides "After-the-Event" and other specialist insurances, medico legal
reports, and psychological reports. LitComp's clients are principally United
Kingdom based solicitors.
11. Current trading and prospects of LitComp
The Company announced its audited annual results for the financial year ended 31
March 2009 on 30 September 2009. Group revenues for the ended 31 March 2009
increased by 157% from GBP11.45 million to GBP29.41 million and adjusted net
profit before taxation by 75 per cent. from GBP1.11 million to GBP1.94 million.
Headline earnings per share have increased by 77 per cent. from 12.80p to 22.62p
and fully diluted earnings per share by 70 per cent. from 5.83p to 9.92p
representing a strong performance in a difficult environment. Group cash was
GBP2.68 million which is required for the purposes of working capital by
Elite. As at 30 September 2009 the Company had cash resources of GBP1.9m.
However the Company's annual report and accounts contained the following going
concern statement in the notes to the financial statements under the heading
"accounting policies":
Going concern
The financial statements have been prepared on a going concern basis which the
Directors believe to be appropriate for the following reasons. As set out in
Note 19 and Note 21, the Group has financed its operations to date through a
variety of sources of external finance primarily and convertible Loan Notes.
There are currently GBP2,551,200 of 10% Secured Convertible Loan Notes
outstanding which can be converted on any date on which interest becomes
payable; the last date prior to maturity for conversion is 31 October 2009.
Thereafter the Company can still accept conversions although interest continues
to be payable if the Loan Notes are not converted or redeemed on that date.
As set out in note 27 below Directors are in advanced discussions regarding
arrangements for potential funding of the redemption of the Loan Notes. If these
discussions do not conclude successfully Directors expect that a majority of
Loan Note Holders, including Directors, will convert or extend their Loan Notes
leaving the remaining Loan Note Holders to be redeemed from the Group's internal
cash resources. Use of internal cash resources for this purpose is likely to
reduce underwriting capacity, and thus profitability.
Although Elite does have significant cash reserves it is not the Directors
present intention to utilise these for the repayment of Loan Notes. At the
present time a material reduction in Elite's cash reserves will reduce its
underwriting capacity and consequently the volume of business which it can write
and would thus reduce its profitability. However the Group's, and Elite's,
substantial net assets and current nil gearing should enable suitable funding to
be arranged. Accordingly the financial statements are prepared on a going
concern basis.
Any future trading will be materially impacted by the outcome of the redemption
or otherwise of the approximately GBP2.5m of Loan Notes outstanding at the time
of this announcement.
In order for the Company to diversify its range of insurance products it will
need additional solvency capital. Therefore, taking the cash position of the
Group and the restrictions on growth that it represents together with the
unknown risks represented by the pending Jackson and CJC Review, in the absence
of significant access to funds over and above the requirement to repay the Loan
Notes, the Directors would consider the prospects of the LitComp to be
challenging. However, in the context of the proposed funding that may be
required to grow the business that Torridon can make available or have access
to, subject to certain commercial conditions and due diligence, following the
Offer, the Directors believe, the prospects remain positive and the board does
not consider there to be any material threat to the ongoing business save for
the usual risks associated with it and those beyond its control.
12. Delisting and Compulsory Acquisition
If the Offeror receives acceptances under the Offer in respect of, and/or
otherwise acquires, 90 per cent. or more by nominal value and voting rights of
the LitComp Shares to which the Offer relates and assuming all other conditions
of the Offer have been satisfied or waived (if they are capable of being
waived), the Offeror intends to exercise its rights pursuant to the provisions
of Part 28 of the Companies Act 2006 to acquire compulsorily the remaining
LitComp Shares to which the Offer relates on the same terms as the Offer.
Upon the Offer becoming or being declared unconditional in all respects and
subject to any applicable requirements of the London Stock Exchange, the Offeror
intends to procure that LitComp will apply to the London Stock Exchange for the
cancellation of the LitComp Shares from trading on AIM. Provided the Offeror has
acquired, by virtue of its shareholdings and acceptances of the Offer, LitComp
Shares carrying more than 75 per cent. of the voting rights of LitComp and
provided the Offer has become or has been declared unconditional in all
respects, it is anticipated that such cancellation will take effect no earlier
than 20 business days after the Offeror has acquired or agreed to acquire 75 per
cent. of the voting rights attaching to the LitComp Shares to which the Offer
relates. The cancellation of trading of LitComp Shares on AIM will significantly
reduce the liquidity and marketability of any LitComp Shares not assented to the
Offer.
It is also intended that, following the Offer becoming unconditional in all
respects and after the cancellation of admission of the LitComp Shares from AIM,
the Offeror will seek to re-register LitComp as a private limited company.
Further details of the Offer will be contained in the Offer Document.
13. Management and employees
The Offeror attaches great importance to the skills and experience of the
existing management and employees of LitComp and the Offeror expects that
LitComp's employees will play an important role in the future structure of the
Company.
The Offeror has given the board of LitComp assurances that, following completion
of the Offer, the existing employment rights, including pension rights, of the
management and employees of LitComp will be safeguarded. The Offeror's plans for
LitComp do not involve any material change in the conditions of employment of
LitComp's employees although it is intended that the Offeror will review the
strategic options for the current business operations of LitComp after the Offer
has become or been declared wholly unconditional. The Independent Directors will
resign as soon as reasonably practical following the the Offer becoming, or
being declared wholly unconditional.
14. LitComp Share Schemes
Participants in the LitComp Share Schemes will be contacted regarding the effect
of the Offer on their rights under those schemes and appropriate proposals will
be made to such participants in due course. Further details of these proposals
will be set out in separate letters to be sent to participants in the LitComp
Share Schemes.
15.LitComp Plc 10 per cent. Convertible Secured Loan Stock 2008
In accordance with the terms of the Trust Deed, during the Offer Period, the
Loan Note Holders may exercise their rights to convert their Loan Notes into
LitComp Shares at a conversion price of 30p per share. Interest on such Loan
Notes will only be payable by the Company up to the date of conversion whereas
if they are not converted interest will be payable by the Company up to the date
of their purchase pursuant to the equivalent offer to the Loan Note holders.
Those Loan Note Holders who do not exercise their rights to convert their Loan
Notes into Litcomp Shares during the Offer Period will receive an equivalent
offer of GBP1.167 per GBP1 Loan Note representing a 16.7 per cent. premium to
the value of the Loan Note and will continue to receive interest payable by the
Company on the Loan Notes up to the date of redemption.
The Independent Directors, who have been so advised by Astaire Securities,
consider the terms of the equivalent offer to the Loan Note Holders to be fair
and reasonable.
Further details of these proposals will be set out in the Offer Document which
will be sent in any event, within 28 days of the date of this announcement.
16. Financing
The cash consideration payable by the Offeror under the terms of the Offer will
be funded using the Offeror's cash resources.
Shore Capital and Corporate Limited, financial adviser to the Offeror, is
satisfied that sufficient resources are available to satisfy the cash
consideration payable to LitComp Shareholders under the terms of the Offer and
to satisfy the cash repayable to the Loan Note Holders upon their acceptance of
the terms of the equivalent offer to Loan Note Holders.
17. Disclosure of interests in LitComp
As at 4 November 2009, the last practicable date before this announcement, and
save for the irrevocable undertakings referred to in paragraph 6 above, Torridon
and persons acting in concert with Torridon owned or controlled the
following LitComp Shares:
+---------------+------------+--------------+--------------------+-----------------+
| Name | Ordinary | Ordinary | Ordinary Shares | Per Cent of the |
| | shares | Shares from | from conversion of | issued share |
| | | conversion | Options under the | capital (prior |
| | | of Loan | LitComp Share | to conversion) |
| | | Notes | Schemes | |
+---------------+------------+--------------+--------------------+-----------------+
| Maven (held | 249,444 | 1,333,333 | Nil | 3.91 |
| as detailed | | | | |
| below) | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Aberdeen | 132,889 | Nil | Nil | 2.08 |
| Growth | | | | |
| Opportunities | | | | |
| VCT plc | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Aberdeen | 116,555 | Nil | Nil | 1.83 |
| Growth | | | | |
| Opportunities | | | | |
| VCT plc ("C" | | | | |
| SharePool) | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Aberdeen | Nil | 333,333 | Nil | N/A |
| Growth | | | | |
| Opportunities | | | | |
| VCT 2 plc | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Talisman | Nil | 166,667 | Nil | N/A |
| First VCT | | | | |
| plc | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Aberdeen | Nil | 833,333 | Nil | N/A |
| Growth VCT1 | | | | |
| plc | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Nigel | 595,000 | 3,333,333 | Nil | 9.32 |
| Wray (held | | | | |
| where | | | | |
| applicable | | | | |
| as detailed | | | | |
| below) | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| Pershing | 595,000 | | Nil | 9.32 |
| Nominees | | | | |
| Limited | | | | |
+---------------+------------+--------------+--------------------+-----------------+
| TOTAL | 844,444 | 4,666,666 | Nil | 13.23 |
+---------------+------------+--------------+--------------------+-----------------+
As at 4 November 2009, the last practicable date before this announcement, and
save as disclosed above, neither the Offeror nor any Offeror Directors nor, so
far as the Offeror is aware, any party acting in concert with the Offeror, has
any short position (whether conditional or absolute and whether in the money or
otherwise) including short positions under derivatives or arrangement in
relation to LitComp Securities. For these purposes, "arrangement" includes any
indemnity or option arrangement or any agreement or understanding, formal or
informal, of whatever nature, relating to LitComp Securities which may be an
inducement to deal or refrain from dealing in such securities. In the interests
of secrecy prior to this announcement, the Offeror has not made any enquiries in
this respect of the matters referred to in this paragraph of certain parties who
may be deemed by the Panel to be acting in concert with them for the purposes of
the Offer. Enquiries of such parties will be made as soon as practicable
following the date of this announcement and any material disclosure in respect
of such parties will be included in the Offer Document.
18.General
The Offer will be made on the terms and subject to the conditions and further
terms set out herein and in Appendix I to this announcement and to be set out in
the Offer Document and the Form of Acceptance. The Offer Document will include
full details of the Offer, together with notice of the General Meeting and the
expected timetable of the Offer. The Offer Document and the Form of Acceptance
will be dispatched to LitComp Shareholders in due course. The Offer will be
subject to the applicable requirements of the City Code, the Panel, the London
Stock Exchange and the Financial Services Authority.
Appendix II to this announcement contains details of the sources of information
and bases of calculations set out in this announcement. Appendix III to this
announcement contains details of the irrevocable undertakings that have been
provided to the Offeror. Appendix IV to this announcement contains definitions
of certain expressions used in this announcement.
This announcement does not constitute an offer to sell or an invitation to
purchase or subscribe for any securities. This announcement also does not
constitute a prospectus or prospectus equivalent document.
APPENDIX I
CONDITIONS AND FURTHER TERMS OF THE OFFER
Part A: Conditions of the Offer to LitComp Shareholders
The Offer will be conditional upon the Offer becoming unconditional by not later
than four months from the date that the Offer Document is posted or such later
date (if any) as LitComp and the Offeror may agree and (if required) the Panel
may allow.
1The Offer will be conditional upon:
1.1valid acceptances of the Offer being received (and not, where permitted,
withdrawn) by not later than 1.00 p.m. (London time) on the first closing date
of the Offer (or such later time(s) and/or date(s) as the Offeror may, subject
to the rules of the Code or with the consent of the Panel, decide) in respect of
not less than 90 per cent. of such LitComp Shares to which the Offer relates and
not less than 90 per cent. (or such lower percentage as the Offeror may decide)
of the voting rights carried by the LitComp Shares to which the Offer relates,
provided that, unless agreed by the Panel, this condition will not be satisfied
unless the Offeror (together with its wholly owned subsidiaries) shall have
acquired or agreed to acquire (whether pursuant to the Offer or otherwise)
directly or indirectly LitComp Shares carrying in aggregate more than 50 per
cent. of the voting rights then normally exercisable at general meetings of
LitComp, including for this purpose (except to the extent otherwise agreed by
the Panel) any such voting rights attaching to LitComp Shares that are
unconditionally allotted or issued before the Offer becomes or is declared
unconditional as to acceptances, whether pursuant to the exercise of any
outstanding subscription or conversion rights or otherwise.
For the purposes of this condition:
1.1.1LitComp Shares which have been unconditionally allotted but not issued
shall be deemed to carry the voting rights they will carry upon issue;
1.1.2 the expression "LitComp Shares to which the Offer relates" shall be
construed in accordance with Part 28 of the Companies Act 2006; and
1.1.3 valid acceptances shall be deemed to have been received in respect of any
LitComp Shares which the Offeror shall, pursuant to section 977(1) or sections
979(8) to (10) of the Companies Act 2006 be treated as having acquired or
contracted to acquire by virtue of acceptance of the Offer.
2The passing at the General Meeting (or at any adjournment thereof) of an
ordinary Resolution of Shareholders approving the arrangements between Torridon
and the Executive Directors as required by the City Code. The full text of the
Resolution will be set out in the Offer Document.
3In addition, LitComp and the Offeror have agreed that, subject as stated in
Part B below, the Offer will also be conditional upon:
3.1no central bank, government or governmental, quasi-governmental, state or
local government, supranational, statutory, environmental, administrative,
investigative or regulatory body, agency, court, association, institution or any
other person or body in any jurisdiction (a "Relevant Authority") having taken,
instituted, implemented or threatened any action, proceeding, suit,
investigation or enquiry, or enacted, made or proposed any statute, regulation
order, decision, changed a published position or otherwise taken any other step
that would or might be reasonably expected to:
3.1.1require, prevent or delay the divestiture or alter the terms envisaged for
any proposed divestiture by any member of the Wider Offeror Group or any member
of the Wider LitComp Group of all or any portion of their respective businesses,
assets or properties or delay any disposal of all or any portion of such
businesses, assets or properties or otherwise impose any material limitation or
restriction (other than those arising under general law) on the ability of any
member of the Wider Offeror Group or the LitComp Group to conduct their
respective businesses (or any part of them) or to own or control any of their
respective assets or properties or any part of them which, in any such case, is
material in the context of the Wider LitComp Group taken as a whole or in the
context of the Offer;
3.1.2require any member of either the Wider Offeror Group or LitComp Group
(other than pursuant to the implementation of the Offer) to acquire or make an
offer to acquire or repay any shares or other securities in and/or indebtedness
of any member of the Wider LitComp Group owned by any third party; or
3.1.3impose any material limitation on, or result in a material delay in, the
ability of the Offeror or the Wider Offeror Group directly or indirectly to
acquire or to hold or to exercise effectively directly or indirectly all or any
rights of ownership in respect of shares or loans or securities convertible into
shares or any other securities (or the equivalent) in LitComp or the ability of
the Offeror to hold or exercise effectively any rights of ownership of shares,
loans or other securities in, or to exercise management control over any member
of the Wider LitComp Group which, in any such case, is material in the context
of the Wider LitComp Group taken as a whole or in the context of the Offer;
3.1.4otherwise adversely affect any or all of the business, assets, liabilities,
financial or trading position, profits or prospects of any member of the LitComp
Group in each case to an extent which is material in the context of the Wider
LitComp Group taken as a whole or in the context of the Offer;
3.1.5result in any member of the Wider LitComp Group ceasing to be able to carry
on business under any name under which it presently does so to an extent which
is material in the context of the Wider LitComp Group taken as a whole or in the
context of the Offer;
3.1.6make the Offer or its implementation or the acquisition of any shares or
other securities in, or control of the Wider LitComp Group, by any member of the
Wider Offeror Group, void, unenforceable, illegal and/or prohibited in or under
the laws of any jurisdiction or otherwise in a material way restrict, restrain,
prohibit, prevent, delay or otherwise interfere with the implementation of, or
impose additional conditions or obligations with respect to, or require
amendment of, or otherwise challenge or interfere with, the Offer to an extent
which is material in the context of the Offer; or
3.1.7impose any material limitation on the ability of any member of the Wider
Offeror Group or the LitComp Group to integrate or co-ordinate its business, or
any material part of it, with the business of the Wider Offeror Group or the
Wider LitComp Group,
and all applicable waiting and other time periods during which any such Relevant
Authority could decide to take, institute, implement or threaten any such
action, proceedings, suit, investigation, enquiry or reference or take any other
step under the laws of any jurisdiction having expired, lapsed or been
terminated;
3.2all necessary filings, applications and/or notifications which are necessary
in connection with the Offer having been made and all appropriate waiting or
other time periods (including any extensions thereof) in respect of the Offer
under any applicable legislation or regulation of any jurisdiction having
expired, lapsed or been terminated and all statutory or regulatory obligations
in any jurisdiction having been complied with in each case as may be necessary
in connection with the Offer or its implementation or the acquisition by any
member of the Wider Offeror Group of any shares or other securities in, or
control of, any member of the Wider LitComp Group, in each case to the extent
the absence thereof would have a material adverse effect in the context of the
Wider LitComp Group or the Wider Offeror Group in each case taken as a whole and
all authorisations, orders, grants, recognitions, confirmations, licences,
consents, clearances, permissions and approvals ("authorisations") necessary in
any jurisdiction for or in respect of the Offer and the proposed acquisition of
any shares or other securities in, or control or management of, LitComp by the
Offeror or any member of the Wider Offeror Group being obtained in terms and in
a form satisfactory to Offeror, acting reasonably, from appropriate Relevant
Authorities or from any persons or bodies with whom any member of the Wider
Offeror Group or the LitComp Group has entered into contractual arrangements
where the absence of such authorisations would have a material adverse effect on
the Wider LitComp Group taken as a whole and such authorisations together with
all authorisations necessary for any member of the Wider LitComp Group to carry
on its business remaining in full force and effect and all filings necessary for
such purpose having been made and there being no notice or intimation of any
intention to revoke, suspend, restrict or amend or not renew the same, and there
being no indication that the renewal costs of any such authorisation might be
higher than the renewal costs for the current authorisation to an extent
material in the context of the Wider LitComp Group or the Wider Offeror Group in
each case taken as a whole and all necessary statutory or regulatory obligations
in any jurisdiction having been complied with where the absence of such
compliance would have a material adverse effect on the Wider LitComp Group taken
as a whole;
3.3save as fairly disclosed in the Annual Report or as Publicly Announced or
fairly disclosed in writing to the Offeror or its advisers by or on behalf of
LitComp in the course of the negotiations relating to the Offer, in each case
prior to the date of this announcement, there being no provision of any
arrangement, agreement, lease, licence, permit or other instrument to which any
member of the LitComp Group is a party or by or to which any such member or any
of its assets is or may be bound or subject which, as a consequence of the Offer
or the acquisition by the Offeror or any member of the Wider Offeror Group of
any shares or other securities (or the equivalent) in LitComp or because of a
change in the control or management of any member of the Wider LitComp Group or
otherwise, would be expected to result in, in any case to an extent which is
material in the context of the Wider LitComp Group taken as a whole or in the
context of the Offer in:
3.3.1any monies borrowed by, or any other indebtedness or liabilities, actual or
contingent, of, or any grant available to, any member of the Wider LitComp Group
which is not already payable on demand, being or becoming repayable, or being
capable of being declared repayable immediately or prior to their or its stated
maturity, or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn or inhibited or becoming capable of being withdrawn
or inhibited;
3.3.2the creation or enforcement of any mortgage, charge or other security
interest, over the whole or any part of the business, property, interests or
assets of any member of the LitComp Group or any such mortgage, charge or other
security interest (whenever created, arising or having arisen) becoming enforced
or enforceable;
3.3.3any arrangement, agreement, lease, licence, permit or other instrument or
the rights, liabilities, obligations or interests or any member of the Wider
LitComp Group under any such arrangement, agreement, lease, licence, permit or
instrument (or any arrangement, agreement, lease, licence, permit or instrument
relating to any such right, liability, obligation or interest) or the interests
or business of any such member in or with any other person, firm, company or
body being, or becoming capable of being, terminated or adversely modified or
affected or any onerous obligation or liability arising or any material adverse
action being taken thereunder;
3.3.4any assets or interests of any member of the Wider LitComp Group being or
falling to be disposed of or charged (otherwise than in the ordinary course of
trading) or any right arising under which any such asset or interest could be
required to be disposed of or charged or could cease to be available to any
member of the Wider LitComp Group (otherwise than in the ordinary course of
trading);
3.3.5any such member of the Wider LitComp Group ceasing to be able to carry on
business under any name under which it presently does so;
3.3.6the value, financial or trading position, profits or prospects of LitComp
or any member of the LitComp Group being prejudiced or adversely affected;
3.3.7the creation of any material liability (actual or contingent) of any member
of the Wider LitComp Group to make severance, termination, bonus or other
payment to any of its directors or officers; or
3.3.8the creation of any liability (actual or contingent) by any member of the
LitComp Group other than in the ordinary course of business, and no event having
occurred which under any provision of any arrangement, agreement, lease,
licence, permit or other instrument to which any member of the Wider LitComp
Group is a party or by or to which any such member or any of its assets is or
may be bound or subject, would or might reasonably be expected to result in any
of the events or circumstances which are referred to in conditions 3.3.1. to
3.3.7;
3.4save as fairly disclosed in the Annual Report or as Publicly Announced or
fairly disclosed in writing to the Offeror or its advisers by or on behalf
LitComp in the course of the negotiations relating to the Offer, in each case
prior to the date of this announcement, no member of the Wider LitComp Group
having since 31 March 2009:
3.4.1issued or agreed to issue or authorised or proposed or announced its
intention to authorise or propose the issue of additional shares or securities
of any class, or securities convertible into, or exchangeable for, or rights,
warrants or options to subscribe for or acquire, any such shares, securities or
convertible securities (save as between LitComp and wholly-owned subsidiaries of
LitComp and save for the issue of the LitComp Shares pursuant to or in
connection with rights granted before the date of this announcement under, or
the grant of rights before such date under, LitComp Share Schemes) or redeemed,
purchased, repaid or reduced or proposed the redemption, purchase, repayment or
reduction of any part of its share capital or any other securities;
3.4.2recommended, declared, paid or made or proposed to recommend, declare, pay
or make any bonus issue, dividend or other distribution whether payable in cash
or otherwise other than dividends (or other distributions whether payable in
cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of
LitComp to LitComp or any of its wholly-owned subsidiaries;
3.4.3other than pursuant to the implementation of the Offer (and save for
transactions between LitComp and its wholly-owned subsidiaries and transactions
in the ordinary course of business) implemented, effected, authorised, proposed
or announced its intention to implement, effect, authorise or propose any
merger, demerger, reconstruction, arrangement, assignment, composition,
amalgamation, scheme, commitment or acquisition or disposal or transfer of
assets or shares (or the equivalent thereof) or any right, title or interest in
any assets or shares or other transaction or arrangement in respect of itself or
another member of the Wider LitComp Group which in each case would be material
in the context of the Wider LitComp Group taken as a whole, its share or loan
capital or in the context of the Offer;
3.4.4(save for transactions between LitComp and its wholly-owned subsidiaries
and save for transactions in the ordinary course of business) disposed of, or
transferred, mortgaged or charged, or created any other security interest over,
any asset or shares or any right, title or interest in any material asset or
shares that is material in the context of the Wider LitComp Group taken as a
whole or authorised, proposed or announced any intention to do so;
3.4.5made, authorised, proposed or announced an intention to propose any change
in its loan capital which is material in the context of the Wider LitComp Group;
3.4.6(save for transactions between LitComp and its wholly-owned subsidiaries)
issued, authorised or proposed or announced an intention to authorise or
propose, the issue of any debentures or (save for transactions under existing
credit arrangements or in the ordinary course of business) incurred any
indebtedness or contingent liability which is material in the context of the
Wider LitComp Group as a whole or in the context of the Offer;
3.4.7entered into, varied or terminated, or authorised, proposed or announced
its intention to enter into, vary, terminate or authorise any contract,
arrangement, agreement, transaction or commitment (other than in the ordinary
course of business and whether in respect of capital expenditure or otherwise)
which is of a loss-making, long term, unusual or onerous nature or magnitude or
which involves or is reasonably likely to involve an obligation of such a nature
or magnitude which is, in each case material in the context of the Wider LitComp
Group or in the context of the Offer;
3.4.8entered into any contract, arrangement, agreement, transaction or
commitment which would be restrictive on the business of any member of the Wider
LitComp Group, or the Wider Offeror Group or which is or could involve
obligations which would or might reasonably be expected to be so restrictive
which is material in the context of the Wider LitComp Group as a whole or in the
context of the Offer;
3.4.9entered into or varied to a material extent or authorised, proposed or
announced its intention to enter into or vary to a material extent the terms of,
or make any offer (which remains open for acceptance) to enter into or vary to a
material extent the terms of, any service agreement with any director or senior
executive of any member of the Wider LitComp Group;
3.4.10proposed, agreed to provide or modified the terms of any share option
scheme, incentive scheme or other benefit relating to the employment or
termination of employment of any person employed by the Wider LitComp Group save
as agreed by the Offeror in writing;
3.4.11purchased, redeemed or repaid or announced a proposal to purchase, redeem
or repay any of its own shares or other securities (or the equivalent) or
reduced or made any other change to or proposed the reduction or other change to
any part of its share capital, save for any shares the allotment of shares in
connection with the LitComp Share Schemes pursuant to rights granted before the
date of this announcement or as between LitComp and wholly-owned subsidiaries
of LitComp;
3.4.12(other than in respect of claims between LitComp and wholly-owned
subsidiaries of LitComp) waived, compromised or settled or authorised any such
waiver or compromise of any claim which is material in the context of the Wider
LitComp Group taken as a whole;
3.4.13(save as disclosed on publicly available registers prior to the date of
the announcement or as envisaged in accordance with the terms of the Offer) made
any alteration to its memorandum or articles of association;
3.4.14save to the extent agreed by the Offeror in writing, made or agreed or
consented to any significant change to the terms of the trust deeds constituting
the pension schemes established for its directors and/or employees and/or their
dependants or any material favourable change to the benefits which accrue, or to
the pensions which are payable (including contributions payable to any such
schemes), thereunder, or to the basis on which qualification for or accrual or
entitlement to such benefits or pensions are calculated or determined or to the
basis upon which the liabilities (including pensions) of such pension schemes
are funded or made, or agreed or consented to any change to the trustees
involving the appointment of a trust corporation;
3.4.15been unable, or admitted in writing that it is unable, to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment of its
debts generally or ceased or threatened to cease carrying on all or any part of
any business or proposed or entered into any composition or voluntary
arrangement with its creditors (or any class of them) or the filing at court of
documentation in order to obtain a moratorium prior to a voluntary arrangement
or, by reason of actual or anticipated financial difficulties, commenced
negotiations with one or more of its creditors with a view to rescheduling any
of its indebtedness which is material in the context of the Wider LitComp Group
as a whole or in the context of the Offer;
3.4.16(other than in respect of a company which is dormant and was solvent at
the relevant time) taken or proposed any corporate action or had any action or
proceedings or other steps threatened or instituted against it for its
winding-up (voluntary or otherwise), dissolution, striking off or reorganisation
or for the appointment of a receiver, administrator, administrative receiver,
trustee or similar officer of all or any material part of its assets or revenues
or any analogous proceedings or steps in any jurisdiction for the appointment of
any analogous person in any jurisdiction; or
3.4.17entered into any contract, agreement, arrangement or commitment or passed
any resolution or made any proposal or announcement with respect to, or to
effect, any of the transactions, matters or events referred to in this condition
3.4;
3.5save as fairly disclosed in the Annual Report or as Publicly Announced or
fairly disclosed in writing to the Offeror or its advisers by or on behalf of
LitComp in the course of negotiations relating to the Offer, in each case prior
to the date of this announcement, since 31 March 2009 there having been:
3.5.1no adverse change or deterioration in the business, assets, financial or
trading position or profits or prospects of any member of the Wider LitComp
Group other than as a result of a change in economic conditions affecting
similar businesses generally, which is material in the context of the Wider
LitComp Group taken as a whole or in the context of the Offer;
3.5.2no litigation, arbitration proceedings, prosecution or other legal
proceedings having been threatened, announced or instituted by or against or
remaining outstanding against or in respect of any member of the Wider LitComp
Group and which would have a material adverse effect on the Wider LitComp Group
taken as a whole or in the context of the Offer;
3.5.3no enquiry or investigation by or complaint or reference to any Relevant
Authority or other investigative body, threatened, announced, implemented or
instituted or remaining outstanding by, against or in respect of any member of
the LitComp Group which would have a material adverse effect on the Wider
LitComp Group taken as a whole in the context of the Offer;
3.5.4no contingent or other liability having arisen or become apparent to any
member of the Wider Offeror Group or increased which would or might be
reasonably be expected to adversely affect any member of the Wider LitComp Group
and which in any such case is material in the context of the Wider LitComp Group
taken as a whole or in the context of the Offer; and
3.5.5no steps taken and no omissions made which are likely to result in the
withdrawal, cancellation, termination or modification of any licence held by any
member of the Wider LitComp Group which is necessary for the proper carrying on
of its business, which is material in the context of the Wider LitComp Group
taken as a whole or in the context of the Offer;
3.6save as fairly disclosed in the Annual Report or as Publicly Announced or
fairly disclosed in writing to the Offeror or its advisers by or on behalf of
LitComp in the course of negotiations relating to the Offer, in each case prior
to the date of this announcement, the Offeror not having discovered:
3.6.1that the financial, business or other information concerning the Wider
LitComp Group which is Publicly Announced or disclosed at any time by or on
behalf of any member of the Wider LitComp Group contains a material
misrepresentation of fact or omits to state a fact necessary to make the
information contained therein not misleading and which was not subsequently
corrected by 4 November 2009 by disclosure either publicly or otherwise to the
Offeror, which is, in any case, material in the context of the Wider LitComp
Group or in the context of the Offer;
3.6.2that any member of the Wider LitComp Group, partnership, company or other
entity in which any member of the Wider LitComp Group has a significant economic
interest and which is not a subsidiary undertaking of the Wider LitComp Group
is, otherwise than in the ordinary course of business, subject to any liability,
contingent or otherwise, which is material in the context of the Wider LitComp
Group taken as a whole or in the context of the Offer;
3.6.3any information which affects the import of any information disclosed at
any time by or on behalf of any member of the Wider LitComp Group to an extent
which is material in the context of the Wider LitComp Group as a whole or in the
context of the Offer;
3.6.4that any past or present member of the Wider LitComp Group, partnership,
company or entity in which any member of the Wider LitComp Group has an economic
interest and which is not a subsidiary undertaking of the Wider LitComp Group,
has breached any trade marks, service marks, trade names, domain names, logos,
get-up, patents, inventions, registered and unregistered design rights,
copyrights, semi-conductor topography rights, database rights and all other
similar rights in any part of the world (including, where such rights are
obtained or enhanced by registration, any registration of such rights and
applications and rights to apply for such registrations) of any third party to
an extent which is material in the context of the Wider LitComp Group taken as a
whole or in the context of the Offer.
Part B: Waiver of conditions and further terms of the Offer
Subject to the requirements of the Panel, the Offeror reserves the right to
waive, in whole or in part, all or any of the above conditions 2 and 3.1 to 3.6
(inclusive).
If the Offeror is required by the Panel to make an offer for LitComp Shares
under the provisions of Rule 9 of the City Code, the Offeror may make such
alteration to any of the above conditions, including Condition 1, as are
necessary to comply with the provisions of that Rule.
The Offeror shall be under no obligation to waive (if capable of waiver), to
determine to be or remain satisfied or to treat as fulfilled any of conditions 2
and 3.1 to 3.6 (inclusive) by a date earlier than the latest date for the
fulfilment of that condition notwithstanding that the other conditions of the
Offer may at such earlier date have been waived or fulfilled and that there are
at such earlier date no circumstances indicating that any of such conditions may
not be capable of fulfilment.
The Offer will lapse and will not proceed unless all the above conditions have
been fulfilled or, where permitted, waived or, where appropriate, have been
determined by the Offeror to be or remain satisfied, by not later than four
months from the date the offer is posted or such later date (if any) as LitComp
and the Offeror may agree and (if required) the Panel may allow.
Part C: Certain further terms of the Offer
The Offeror reserves the right to elect to implement the Offer by way of a
scheme of arrangement under Part 26 of the Companies Act 2006. In such event,
the scheme of arrangement will be implemented on the same terms (subject to
appropriate amendments), so far as applicable, as those which would apply to the
Offer.
APPENDIX II
SOURCES OF INFORMATION AND BASES OF CALCULATION
(i) The value placed by the Offer on the Fully Diluted Share Capital of
LitComp is based on the total shares in issue and to be issued of 15,663,266
(not including ordinary shares held in treasury) on a fully diluted basis.
(ii) The closing share price on 23 September 2009 is the mid-market price
taken from Bloomberg.
(iii) The International Securities Identification Number for LitComp Shares
is GB00B0ZQ8D12.
(iv) The International Securities Identification Number for LitComp's
Convertible Secured Loan Stock 2008 is GB00B0Y5LY13.
APPENDIX III
DETAILS OF IRREVOCABLE UNDERTAKINGS
The following holders of LitComp Shares have given irrevocable undertakings to
accept the Offer (where applicable), to consent to non-payment of the Loan Notes
on 31 October 2009, to waive their rights in respect of such non-payment and to
and vote in favour of the Resolution at a General Meeting (where applicable):
Executive Directors, management of LitComp and their connected parties
+--------------+--------------+--------------+--+--------------+-----------+
| Name | Number of | % of the | | Number of | % of |
| | LitComp | Issued Share | | LitComp | Diluted |
| | Shares | Capital | | Shares | Share |
| | | | | arising on | Capital |
| | | | | conversion | |
| | | | | of Loan | |
| | | | | Notes | |
+--------------+--------------+--------------+--+--------------+-----------+
| Jason Smart | 874,639 | 13.6 | | 275,000 | 13.3 |
+--------------+--------------+--------------+--+--------------+-----------+
| Paul | 9,775 | 0.15 | | 60,000 | 0.8 |
| Lavender | | | | | |
+--------------+--------------+--------------+--+--------------+-----------+
| Russell | 190,000 | 2.97 | | 166,667 | 4.1 |
| Smart | | | | | |
+--------------+--------------+--------------+--+--------------+-----------+
| Loretta | 626,121 | 9.8 | | Nil | 7.3 |
| Dunsford | | | | | |
| (wife of | | | | | |
| Russell | | | | | |
| Smart) | | | | | |
+--------------+--------------+--------------+--+--------------+-----------+
| Total | 1,700,535 | 26.64 | | 501,667 | 25.55 |
+--------------+--------------+--------------+--+--------------+-----------+
These undertakings cease to be binding if the Offer Document is not posted by 30
November 2009 (or such later date as the Panel may agree) or the Offer lapses or
does not complete before the date falling four months after the date that the
Offer Document is posted and will remain binding in the event of a higher
competing offer being made for LitComp, unless the Offer lapses or is withdrawn.
The Executive Directors have also irrevocably undertaken to exercise their
rights to convert certain of their Loan Notes, subject to the provisions of Rule
9 of the Code, and have further agreed to waive their rights to any options they
may be entitled to under the LitComp Share Schemes.
The Independent Directors
+--------------+--------------+--------------+--+--------------+-----------+
| Name | Number of | % of the | | Number of | % of |
| | LitComp | Issued Share | | LitComp | Diluted |
| | Shares | Capital | | Shares | Share |
| | | | | arising on | Capital |
| | | | | conversion | |
| | | | | of Loan | |
| | | | | Notes | |
+--------------+--------------+--------------+--+--------------+-----------+
| Douglas | 68,083 | 1.06 | | Nil | 0.78 |
| Smith | | | | | |
+--------------+--------------+--------------+--+--------------+-----------+
| Christopher | Nil | n/a | | Nil | n/a |
| Collins | | | | | |
+--------------+--------------+--------------+--+--------------+-----------+
| Total | 68,083 | 1.06 | | Nil | 0.78 |
+--------------+--------------+--------------+--+--------------+-----------+
These undertakings cease to be binding if the Offer Document is not posted by 30
November 2009 (or such later date as the Panel may agree) or the Offer lapses or
does not complete before the date falling four months after the date that the
Offer Document is posted and will remain binding in the event of a higher
competing offer being made for LitComp, unless the Offer lapses or is withdrawn.
The Offeror
+--------------+--------------+--------------+--+---------------+-----------+
| Name | Number of | % of the | | Number of | % of |
| | LitComp | Issued Share | | LitComp | Diluted |
| | Shares | Capital | | Shares | Share |
| | | | | arising on | Capital |
| | | | | conversion of | |
| | | | | Loan Notes | |
+--------------+--------------+--------------+--+---------------+-----------+
| Maven | 249,444 | 3.91 | | 520,000 (out | 8.9 |
| | | | | of a total | |
| | | | | entitlement | |
| | | | | of | |
| | | | | 1,333,333) | |
+--------------+--------------+--------------+--+---------------+-----------+
| Nigel Wray | 595,000 | 9.32 | | 1,212,500 | 21 |
| | | | | (out of a | |
| | | | | total | |
| | | | | entitlement | |
| | | | | of | |
| | | | | 3,333,333) | |
+--------------+--------------+--------------+--+---------------+-----------+
| Total | 844,444 | 13.23 | | 1,732,500 | 29.9 |
| | | | | (out of a | |
| | | | | total | |
| | | | | entitlement | |
| | | | | of | |
| | | | | 4,666,666) | |
+--------------+--------------+--------------+--+---------------+-----------+
This undertakings cease to be binding if the Offer Document is not posted by 30
November 2009 (or such later date as the Panel may agree) or the Offer lapses
or does not complete before the date falling four months after the date that the
Offer Document is posted and will remain binding in the event of a higher
competing offer being made for LitComp, unless the Offer lapses or is withdrawn.
Maven and Nigel Wray have also irrevocably undertaken to exercise their rights
to convert certain of their Loan Notes, subject to the provisions of Rule 9 of
the Code.
APPENDIX IV
DEFINITIONS
The following definitions apply throughout this announcement unless the context
requires otherwise.
+----------------------------+---------------------------------------------+-------+
| "AIM" | the AIM market operated by the London Stock |
| | Exchange; |
+----------------------------+-----------------------------------------------------+
| "Annual Report" | the annual report and accounts of LitComp for the |
| | year ended 31 March 2008; |
+----------------------------+-----------------------------------------------------+
| "Astaire Securities" | Astaire Securities of 30 Old Broad Street, London, |
| | EC2N 1HT; |
+----------------------------+-----------------------------------------------------+
| "ATE" | After the Event insurance; |
+----------------------------+-----------------------------------------------------+
| "Business Day" | a day (other than Saturdays, Sundays and public |
| | holidays in the UK) on which banks are open for |
| | business (other than solely for trading and |
| | settlement in Euros) in the City of London; |
+----------------------------+-----------------------------------------------------+
| "City Code" or "Code" | the City Code on Takeovers and Mergers; |
+----------------------------+-----------------------------------------------------+
| "Diluted Share Capital" | the issued LitComp Shares and the to be issued |
| | LitComp Shares assuming the exercise of certain of |
| | the Loan Notes and the Executive Directors waiving |
| | of their rights under the LitComp Share Schemes |
| | under the irrevocable commitments entered into by |
| | the Executive Directors and the Offeror as detailed |
| | in Appendix III; |
+----------------------------+-----------------------------------------------------+
| "Elite" | Elite Insurance Company Limited, a wholly owned |
| | subsidiary of the Company; |
+----------------------------+-----------------------------------------------------+
| "Exchange Act" | the United States Securities Exchange Act of 1934 |
| | (as amended) and the rules and regulations |
| | promulgated thereunder; |
+----------------------------+-----------------------------------------------------+
| "Fully Diluted Share | the issued LitComp Shares and theoretically to be |
| Capital of LitComp" | issued LitComp Shares assuming exercise of the |
| | outstanding 20,000 options and 921,607 warrants |
| | (not including those options or warrants that the |
| | Executive Directors have waived their rights to or |
| | are not "in the money" for the purposes of the |
| | Offer) under the LitComp Share Schemes and |
| | GBP2,501,200 Loan Notes (convertible into 8,337,333 |
| | LitComp Shares); |
+----------------------------+-----------------------------------------------------+
| "Forms of Acceptance" | the form of acceptance, election and authority for |
| | use by LitComp Shareholders in connection with the |
| | Offer which will accompany the Offer Document when |
| | issued; |
+----------------------------+-----------------------------------------------------+
| "Financial Services | the Financial Services Authority in its capacity as |
| Authority" | the competent authority for the purposes of Part VI |
| | of the Financial Services and Markets Act 2000; |
+----------------------------+-----------------------------------------------------+
| "General Meeting" | the general meeting of LitComp Shareholders (and |
| | any adjournment thereof) to be convened in |
| | connection with the Offer, the notice of which will |
| | be set out in the Offer Document; |
+----------------------------+-----------------------------------------------------+
| "IFRS" | International Financial Reporting Standards; |
+----------------------------+-----------------------------------------------------+
| "Independent LitComp | Douglas Smith and Christopher Collins; |
| Directors" or the | |
| "Independent Committee" | |
+----------------------------+-----------------------------------------------------+
| "Irrevocable Undertakings" | the irrevocable undertakings of the Executive |
| | Directors (including their connected parties), |
| | Independent Directors, the Offeror as set out in |
| | Appendix III to this announcement; |
+----------------------------+-----------------------------------------------------+
| "Jackson and CJC Review" | a governmental review by Sir Robert Jackson into |
| | Civil Justice Costs process and changes to the |
| | conduct of low value road traffic accident cases |
| | due to come into force in April 2010; |
+----------------------------+-----------------------------------------------------+
| "LitComp" or the "Company" | LitComp Plc a company incorporated in England and |
| | Wales under the Companies Act 1985 with registered |
| | number 4336531, having as its registered office |
| | Newton Chambers, Newton Business Park, Isaac Newton |
| | Way, Grantham, NG31 9RT; |
+----------------------------+-----------------------------------------------------+
| "LitComp Directors" or | means the directors of LitComp as at the date of |
| "Directors" | this announcement; |
+----------------------------+-----------------------------------------------------+
| "LitComp Group" | LitComp, its subsidiaries and subsidiary |
| | undertakings; |
+----------------------------+-----------------------------------------------------+
| "LitComp Securities" | securities convertible or exchangeable into LitComp |
| | Shares; |
+----------------------------+-----------------------------------------------------+
| "LitComp Shares" | the existing unconditionally allotted or issued and |
| | fully paid ordinary shares of 10 pence each in the |
| | capital of LitComp and any further such ordinary |
| | shares which are unconditionally allotted or issued |
| | (including pursuant to the exercise of outstanding |
| | options granted under the LitComp Share Schemes) at |
| | or prior to the time which the Offer closes for |
| | acceptances (or, subject to the provisions of the |
| | Code, such earlier time and/or date, not being |
| | earlier than the date on which the Offer becomes |
| | unconditional as to acceptances or, if later, the |
| | first closing date of the Offer, as the Offeror may |
| | decide); |
+----------------------------+-----------------------------------------------------+
| "LitComp Share Schemes" | the options and warrants granted and issued by the |
| | Company between 14 February 2004 and 31 May 2008 |
| | representing in total 2,426,607 LitComp Shares; |
+----------------------------+-----------------------------------------------------+
| "LitComp Shareholders" or | the holders of LitComp Shares; |
| "Shareholders" | |
+----------------------------+-----------------------------------------------------+
| "Loan Notes" | the outstanding 10 per cent Convertible Secured |
| | Loan Stock 2008 in the Company constituted under |
| | the Trust Deed; |
+----------------------------+-----------------------------------------------------+
| "Loan Note Holders" | holders of the Loan Notes; |
+----------------------------+-----------------------------------------------------+
| "Loan Note Trustee" | the Continental Trust Company Limited, trustee |
| | under the Trust Deed; |
+----------------------------+-----------------------------------------------------+
| "London Stock Exchange" | the London Stock Exchange plc; |
+----------------------------+---------------------------------------------+
| "Maven" | Maven Capital Partners UK LLP; |
+----------------------------+---------------------------------------------+
| "Non-Independent LitComp | Jason Smart, Paul Lavender and Russell |
| Directors", "Executive | Smart; |
| Directors" or "Management" | |
+----------------------------+---------------------------------------------+
| "Offer" | the proposed recommended offer of 35 pence |
| | in cash per LitComp Share to be made by the |
| | Offeror to acquire the entire issued and to |
| | be issued ordinary share capital LitComp by |
| | means of an offer or, should it so elect, |
| | by means of a scheme of arrangement; |
+----------------------------+---------------------------------------------+
| "Offer Document" | the document to be sent to the LitComp |
| | Shareholders, containing and setting out |
| | the Offer and incorporating a notice |
| | convening the General Meeting; |
+----------------------------+---------------------------------------------+
| "Offer Period" | the offer period (as defined in the Code) |
| | relating to LitComp, which commenced on 24 |
| | September 2009; |
| | |
+----------------------------+---------------------------------------------+
| "Offer Price" | 35 pence in cash per LitComp Share; |
+----------------------------+---------------------------------------------+
| "Offeror" or "Torridon" | Torridon Capital Limited, a company |
| | incorporated in England and Wales under the |
| | Companies Act 1985 with registered number |
| | SC365705 having as its registered office is |
| | Dalmore House, 310 St Vincent Street, |
| | Glasgow G2 5QR; |
+----------------------------+---------------------------------------------+
| "Offeror Directors" | Stella Panu, Bill Nixon and Nigel Wray; |
+----------------------------+---------------------------------------------+
| "Panel" | The Panel on Takeovers and Mergers; |
+----------------------------+---------------------------------------------+
| "Publicly Announced" | means fairly disclosed in any public |
| | announcement by LitComp to any Regulatory |
| | Information Service; |
+----------------------------+---------------------------------------------+
| "Regulatory Information | a service approved by the London Stock |
| Service" | Exchange for the distribution to the public |
| | of AIM announcements and included within |
| | the list maintained on the London Stock |
| | Exchange's website, |
| | www.londonstockexchange.com; |
+----------------------------+---------------------------------------------+
| "Resolution" | the single resolution to be proposed at the |
| | General Meeting of the Company whereby the |
| | Executive Directors (and their connected |
| | persons) will receive shares in Torridon in |
| | exchange for their of their anticipated |
| | holdings in the Company following |
| | conversion of their Loan Note into LitComp |
| | Shares including the arranagements for the |
| | Executive Directors incentivisation scheme, |
| | the full details of which will be provided |
| | in the Offer Document and are summarised at |
| | paragraph 4; |
+----------------------------+---------------------------------------------+
| "Restricted Jurisdiction" | any jurisdiction where extension or |
| | acceptance of the Offer would violate the |
| | law of that jurisdiction; |
+----------------------------+---------------------------------------------+
| "Security" | debentures and cross guarantees from each |
| | member of the LitComp Group except Elite, a |
| | share charge over the entire issued share |
| | capital of Elite granted by Fairmont |
| | Holdings Limited and a share charge over |
| | the entire issued share capital of Fairmont |
| | Holdings Limited granted by LitComp given |
| | as security for the Loan Notes; |
+----------------------------+---------------------------------------------+
| "Shore Capital" | Shore Capital and Corporate Limited, of |
| | Bond Street House, 14 Clifford Street, |
| | London W1S 4JU; |
+----------------------------+---------------------------------------------+
| "Seymour Pierce" | Seymour Pierce Limited, of 20 Old Bailey, |
| | London EC4M 7EN; |
+----------------------------+---------------------------------------------+
| "Trust Deed" | the trust deed dated 6 October 2005, (as |
| | amended on 20 March 2006 and 10 December |
| | 2008) made between LitComp Plc as the |
| | Company and Continental Trust Company |
| | Limited as the Trustee pursuant to which |
| | the Loan Notes have been constituted; |
+----------------------------+---------------------------------------------+
| "Unconditional Date" | the date on which the Offer becomes wholly |
| | unconditional as to acceptances in all |
| | respects pursuant to its terms or, should |
| | the Offeror elect to implement the Offer by |
| | way of a scheme of arrangement, the date on |
| | which the scheme becomes or is effective; |
+----------------------------+---------------------------------------------+
| "United Kingdom" or "UK" | the United Kingdom of Great Britain and |
| | Northern Ireland; |
+----------------------------+---------------------------------------------+
| "United States" or "US" | the United States of America, its |
| | territories and possessions, any State of |
| | the United States of America and the |
| | District of Columbia; |
+----------------------------+---------------------------------------------+
| "Wider Offeror Group" | the Offeror, its subsidiaries, subsidiary |
| | undertakings and associated undertakings |
| | and any other body corporate, partnership, |
| | joint venture or person in which the |
| | Offeror and such undertakings (aggregating |
| | their interests) have a direct or indirect |
| | interest of 20 per cent. or more of the |
| | voting or equity capital or equivalent; and |
+----------------------------+---------------------------------------------+
| "Wider Offeree Group" | LitComp, its subsidiaries, subsidiary |
| | undertakings and associated undertakings |
| | and any other body corporate, partnership, |
| | joint venture or person in which LitComp |
| | and such undertakings (aggregating their |
| | interests) have a direct or indirect |
| | interest of 20 per cent. or more of the |
| | voting or equity capital or the equivalent. |
+----------------------------+---------------------------------------------+-------+
For the purposes of this announcement, "subsidiary", "subsidiary undertaking"
and "undertaking" have the respective meanings given thereto by the Companies
Act 2006 and "associated undertaking" shall have the meaning set out in
Paragraph 19, Part 1, Schedule 6 of the Small Companies and Groups (Accounts and
Directors' Report) Regulations 2008/409, ignoring for this purpose paragraph
19(1)(b).
All the times referred to in this announcement are London times unless otherwise
stated.
References to the singular include the plural and vice versa.
GBP and pence (or penny) means pounds and pence sterling, the lawful currency of
the United Kingdom.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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