TIDMCIRC
RNS Number : 8467A
Toscafund Asset Management LLP
29 March 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
29 MARCH 2017
RECOMMED CASH OFFER
for
CIRCLE HOLDINGS PLC ("CIRCLE" OR THE "COMPANY")
by
DMWSL 849 LIMITED ("BIDCO")
Summary
-- The board of directors of Circle and the director of Bidco
are pleased to announce that they have reached agreement on the
terms of a recommended all cash offer to be made by Bidco for all
of the issued and to be issued share capital of Circle not already
owned, or agreed to be acquired, by Bidco (the "Offer").
-- Under the terms of the Offer, Circle Shareholders who accept
the Offer will be entitled to receive:
30 pence in cash for each Circle Share
-- The Offer, in aggregate, values the share capital of Circle
(excluding the Circle Shares held by the Tosca Investors and to be
acquired by Bidco under the Exchange Agreement) at approximately
GBP55.3 million and values the share capital of Circle (including
the Circle Shares held by the Tosca Investors and to be acquired by
Bidco under the Exchange Agreement) at approximately GBP75.2
million.
-- The Offer represents a premium of approximately:
-- 25.0 per cent. to the Closing Price per Circle Share of 24.0
pence on 28 March 2017 (being the last Business Day prior to the
Offer Period Commencement Date);
-- 35.0 per cent. to the average Closing Price per Circle Share
of 22.2 pence in the three months to 28 March 2017 (being the last
Business Day prior to the Offer Period Commencement Date); and
-- 42.7 per cent. to the average Closing Price per Circle Share
of 21.0 pence in the six months to 28 March 2017 (being the last
Business Day prior to the Offer Period Commencement Date).
-- Bidco is a newly incorporated company formed at the direction
of Tosca Penta and is wholly owned by the Tosca Penta Funds. The
Tosca Penta Funds are financing Bidco in order that Bidco can pay
the cash consideration under the Offer.
-- The Tosca Investors are together interested in 66,292,309
Circle Shares, representing approximately 26.75 per cent. of the
Voting Rights as at 28 March 2017. The Circle Shares held by the
Tosca Investors will not be acquired by way of the Offer. Instead,
the Tosca Investors will exchange all of their Circle Shares for
GBP19,887,692.70, in aggregate, of Rollover Loan Notes on the day
following the date of this announcement. Accordingly, Bidco has
unconditionally agreed to acquire 66,292,309 Circle Shares,
representing approximately 26.75 per cent. of the Voting Rights as
at 28 March 2017.
-- The Offer also extends to all Circle Shares held by the
Circle Trustee and to any Circle Shares unconditionally allotted or
issued fully paid (or credited as fully paid) to satisfy the
exercise of the CFO Options (and the subscription of additional
Ordinary Shares by the Circle Trustee in respect thereof) prior to
the date upon which the Offer ceases to be open for acceptance.
-- The Circle Directors, who have been so advised by Numis as to
the financial terms of the Offer, consider the terms of the Offer
to be fair and reasonable. In providing advice to the Circle
Directors, Numis has taken into account the commercial assessment
of the Circle Directors.
-- Accordingly, the Circle Board believes that the Offer is in
the best interests of Circle Shareholders, and the Circle Directors
recommend unanimously that all Circle Shareholders (other than the
Tosca Investors) accept the Offer as all of the Circle Directors
who hold Circle Shares have irrevocably undertaken to do, or
procure to be done, in respect of (i) their own beneficial holdings
of, in aggregate, 2,550,779 Ordinary Shares (including 1,181,233
Ordinary Shares which shall arise from the conversion of
Convertible Shares as soon as practicable following the publication
of this announcement (and, in any event, by no later than 3 April
2017)); and (ii) a further 3,450,000 Circle Shares which are to be
allotted, issued or transferred to them to satisfy the exercise of
options under the Circle Share Schemes or the CFO Options,
representing, in aggregate, approximately 2.40 per cent. of the
Voting Rights as at 28 March 2017 (assuming, for these purposes,
that the allotment and issue of Circle Shares to be issued pursuant
to the CFO Options and the subscription of additional Circle Shares
by the Circle Trustee in respect thereof have taken place). The
timings for certain acceptances under these irrevocable
undertakings are subject to the Offer becoming, or being declared,
unconditional in all respects (further details are set out at
Appendix III to this announcement).
-- Bidco has also received an irrevocable undertaking to accept
the Offer from the Circle Trustee in respect of (i) 13,500,453
Circle Shares; (ii) subject, inter alia, to not receiving contrary
instructions from the relevant Circle Beneficial Owners within 16
days following the posting of the Offer Document, up to a further
21,650,933 Circle Shares; (iii) any further Circle Shares which are
the subject of the exercise of options under the Circle Share
Schemes where the Circle Trustee has received an instruction from
the relevant optionholder to accept the Offer on behalf of such
optionholder (anticipated to be up to 7,361,684 Circle Shares);
(iv) any further Circle Shares which are allotted and issued to
satisfy the corresponding subscription of Ordinary Shares by the
Circle Trustee pursuant to the Circle Trust Relationship Agreement
following the exercise of the CFO Options (anticipated to be up to
705,770 Circle Shares); and (v) any further Circle Shares which
cease to be the subject of options under the Circle Share Schemes
following the lapse or surrender of any such option (anticipated to
be at least 17,673,306 Circle Shares), representing, in aggregate
(and based on certain assumptions set out at paragraph 2 of
Appendix III to this announcement), up to approximately 24.29 per
cent. of the Voting Rights as at 28 March 2017 (assuming, for these
purposes, that the allotment and issue of Circle Shares to be
issued pursuant to the CFO Options and the subscription of
additional Circle Shares by the Circle Trustee in respect thereof
have taken place). The timings for certain acceptances under this
irrevocable undertaking are subject to the Offer becoming, or being
declared, unconditional in all respects (further details are set
out at Appendix III to this announcement).
-- In addition to the irrevocable undertakings from the Circle
Directors and the Circle Trustee, Bidco has also received
irrevocable undertakings to accept the Offer from Lansdowne
Partners, Richard Griffiths and Balderton Capital in respect of, in
aggregate, 94,297,447 Ordinary Shares, representing, in aggregate,
approximately 37.61 per cent. of the Voting Rights as at 28 March
2017 (assuming, for these purposes, that the allotment and issue of
Circle Shares to be issued pursuant to the CFO Options and the
subscription of the additional Circle Shares by the Circle Trustee
in respect thereof have taken place).
-- Consequently and subject to the assumptions set out at
paragraph 2 of Appendices II and III to this announcement, Bidco
has received irrevocable undertakings to accept the Offer over an
aggregate of 161,190,372 Ordinary Shares, representing, in
aggregate, approximately 64.30 per cent. of the Voting Rights as at
28 March 2017 (assuming, for these purposes, that the allotment and
issue of Circle Shares to be issued pursuant to the CFO Options and
the subscription of additional Circle Shares by the Circle Trustee
in respect thereof have taken place).
-- The Offer will be implemented by means of a takeover offer
within the meaning of Part 18 of the Jersey Companies Law, further
details of which are contained in the full text of this
announcement. Bidco reserves the right to effect the Offer by way
of a Scheme under certain circumstances and subject to the Panel's
consent.
-- If the Offer becomes, or is declared, unconditional in all
respects and Bidco has acquired the requisite level of the Voting
Rights, Bidco intends to procure that Circle will make an
application to the London Stock Exchange for the cancellation of
the admission to trading on AIM of the Circle Shares.
-- Cancellation of admission to trading on AIM is likely to
reduce significantly the liquidity and marketability of any Circle
Shares in respect of which the Offer has not been accepted at such
time.
-- If the Offer becomes, or is declared, unconditional in all
respects and Bidco has acquired the requisite level of the Voting
Rights, Bidco will seek to re-register Circle as a Jersey private
limited company.
-- If the Offer becomes, or is declared, unconditional in all
respects and Bidco receives valid acceptances of the Offer in
respect of 90 per cent. or more in nominal value of the Circle
Shares to which the Offer relates, Bidco intends to exercise its
rights pursuant to Part 18 of the Jersey Companies Law to acquire
compulsorily, on the same terms as the Offer, the remaining Circle
Shares in respect of which the Offer has not at such time been
accepted.
-- The Company has 236,250,223 Ordinary Shares and 11,546,965
Convertible Shares in issue as at 28 March 2017 (being the last
Business Day prior to the Offer Period Commencement Date). The
Circle Board has resolved that, in accordance with the terms of the
Articles, the Convertible Shares shall convert automatically into
Ordinary Shares (on a one-for-one basis) as soon as practicable
following the publication of this announcement (and, in any event,
by no later than 3 April 2017). The Company will make an
application for such Ordinary Shares arising on conversion to be
admitted to trading on AIM. Following conversion, the Company will
have 247,797,188 Ordinary Shares in issue and no Convertible
Shares. Accordingly, the Offer shall be made to holders of Ordinary
Shares arising from the conversion of the Convertible Shares on the
same basis as the holders of other Ordinary Shares (other than the
Tosca Investors).
The Offer will be on the terms and subject to the Conditions set
out at Appendix I to this announcement and to the full terms and
conditions that will be set out in the Offer Document and, in
respect of Circle Shares held in certificated form, the Form of
Acceptance.
It is intended that the Offer Document and the Form of
Acceptance containing further details of the Offer will be
despatched to each Circle Shareholder (other than to persons in a
Restricted Jurisdiction) as soon as reasonably practicable
following the Ordinary Shares arising on conversion of the
Convertible Shares being admitted to trading on AIM and, in any
event, not later than 28 days after the date of this announcement
(unless agreed otherwise with the Panel).
Commenting on the Offer, Michael Kirkwood, Non-Executive
Chairman of Circle, said:
"Your Board believes this offer represents fair value for the
current stage of Circle's development. While much progress has been
made on many fronts, the need to scale the business to achieve
sustainable free cash flow and profitability is presently impacted
by capital constraints.
Under the single ownership of a well-resourced bidder, and
without the costs and distractions of a public listing, the
management team will have greater flexibility to accelerate the
growth opportunities that exist and, importantly, maintain the
company's primary goal of outstanding patient care and
outcomes."
Commenting on the Offer, Paolo Pieri, Chief Executive Officer of
Circle, said:
"The management team at Circle believe that it is a positive
endorsement to have such strong support from a shareholder with a
commitment to our future growth and ambitions, as well as a
demonstrated track record of investment in their companies."
Enquiries:
Whitman Howard Limited (financial Tel: +44(0)
adviser to Bidco) 207 659 1234
Nick Lovering
Francis North
Maitland (media enquiries for Toscafund
Asset Management LLP and Penta Tel: +44
Capital LLP) (0) 207 379 5151
Neil Bennett
Tom Eckersley
Numis (Rule 3 financial adviser, Tel: +44
NOMAD and corporate broker to Circle) (0) 207 260 1000
Michael Meade
Richard Thomas
Ben Stoop
Tel: +44
Circle Holdings PLC (0) 207 034 5258
Michael Kirkwood (Chairman)
Paolo Pieri (Chief Executive Officer)
This summary should be read in conjunction with the accompanying
full text of this announcement and the Appendices which set out
further details of the Offer and which form an integral part of
this announcement. Appendix I to this announcement contains the
Conditions to, and certain further terms of, the Offer. Appendix II
to this announcement contains the bases of calculations and sources
of information set out in this announcement. Appendix III to this
announcement contains further details of the irrevocable
undertakings. Appendix IV to this announcement contains further
details of the Distribution Policy and interests of the Circle
Directors and Circle PDMRs in Circle Shares. Appendix V to this
announcement contains definitions of terms used in this
announcement.
IMPORTANT NOTES
This announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer or
invitation or the solicitation of any offer to sell or purchase any
securities or the solicitation of any offer to otherwise acquire,
subscribe for, sell or otherwise dispose of any security pursuant
to the Offer or otherwise. The Offer will be made solely by means
of the Offer Document and, in respect of Circle Shares held in
certificated form, the Form of Acceptance, which will contain the
full terms and conditions of the Offer, including details of how
the Offer may be accepted. Any decision in respect of, or other
response to, the Offer should be made only on the basis of the
information contained in those documents.
This announcement does not constitute a prospectus or prospectus
equivalent document.
Important notices relating to financial advisers
Whitman Howard Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting as
financial adviser exclusively for Bidco and Tosca Penta and for
no-one else in connection with the matters set out in this
announcement and will not regard any other person as its client in
relation to the matters referred to in this announcement and will
not be responsible to anyone other than Bidco and Tosca Penta for
providing the protections afforded to clients of Whitman Howard
Limited, nor for providing advice in relation to the Offer or any
other matter or arrangement referred to in this announcement.
Numis, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for
Circle and for no-one else in connection with the matters set out
in this announcement and will not regard any other person as its
client in relation to the matters referred to in this announcement
and will not be responsible to anyone other than Circle for
providing the protections afforded to clients of Numis, nor for
providing advice in relation to the Offer or any other matter or
arrangement referred to in this announcement.
This announcement is not an offer of securities for sale in the
United States, Canada, Australia or Japan or in any other
jurisdiction in which such an offer is unlawful.
Overseas jurisdictions
The release, publication or distribution of this announcement
in, and the availability of the Offer to persons who are residents,
citizens or nationals of, jurisdictions other than the United
Kingdom or Jersey may be restricted by laws and/or regulations of
those jurisdictions. Therefore any persons who are subject to the
laws and regulations of any jurisdiction other than the United
Kingdom or Jersey should inform themselves about and observe any
applicable requirements in their jurisdiction. Any failure to
comply with the applicable requirements may constitute a violation
of the laws and/or regulations of any such jurisdiction.
In particular, copies of this announcement and any formal
documentation relating to the Offer are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any Restricted Jurisdiction. Unless
otherwise permitted by applicable law and regulation, the Offer may
not be made, directly or indirectly, in or into, or by the use of
mails or any means or instrumentality (including, but not limited
to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility
of a national, state or other securities exchange of any Restricted
Jurisdiction and the Offer may not be capable of acceptance by any
such use, means, instrumentality or facilities.
The receipt of cash pursuant to the Offer by Circle Shareholders
may be a taxable transaction under applicable national, state and
local, as well as foreign and other tax laws. Each Circle
Shareholder is urged to consult their independent professional
adviser regarding the tax consequences of accepting the Offer.
This announcement has been prepared for the purpose of complying
with English law and Jersey law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside of England and Wales or
Jersey.
Notice to US investors
The Offer will be made for securities in a company incorporated
under the laws of Jersey and Circle Shareholders in the United
States should be aware that this announcement, the Offer Document
and any other documents relating to the Offer have been, or will
be, prepared in accordance with the Code and UK and Jersey
disclosure requirements, format and style, all of which differ from
those in the United States. All financial information that is
included in this announcement or that may be included or referred
to in the Offer Document or any other documents relating to the
Offer, has been, or will be, prepared in accordance with
International Financial Reporting Standards adopted by the European
Union and therefore may not be comparable to financial statements
of US companies or companies whose financial statements are
prepared in accordance with US GAAP.
The Offer, if required to be made, will be made in the United
States pursuant to applicable exemptions under the US tender offer
rules and securities laws and otherwise in accordance with the
requirements of the Code, the Panel and the London Stock Exchange.
Accordingly, the Offer will be subject to disclosure and other
procedural requirements, including with respect to withdrawal
rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic
tender offer procedures and law. In the United States, the Offer
will be made solely by Bidco and not by its financial adviser.
Circle is a company incorporated under the laws of Jersey and
Bidco is a company incorporated under the laws of England and
Wales. All of the assets of the Circle Group and the Bidco Group
are located outside of the United States. As a result, it may not
be possible for Circle Shareholders in the United States to effect
service of process within the United States upon any member of the
Circle Group or any member of the Bidco Group or their respective
officers or directors or to enforce against any of them judgments
of the United States predicated upon the civil liability provisions
of the federal securities laws of the United States. It may not be
possible to sue any member of the Circle Group or any member of the
Bidco Group or their respective officers or directors in a non-US
court for violations of the US securities laws. There is also a
substantial doubt as to enforceability in the United Kingdom or in
Jersey in original actions, or in actions for the enforcement of
judgments of US courts, based on civil liability provisions of US
federal securities laws.
Cautionary note regarding forward-looking statements
This announcement, including the information included in this
announcement, contains certain forward-looking statements. These
statements are based on the current expectations of Bidco,
Toscafund, Penta and/or Circle (as the case may be) and are
naturally subject to uncertainty and changes in circumstances.
These forward-looking statements may include statements about the
expected effects on Bidco and/or Toscafund and/or Penta and/or
Circle of the Offer, the expected timing and scope of the Offer,
strategic options and all other statements in this announcement
other than historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "budget", "schedule", "forecast",
"project", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", "subject to", or other words of
similar meaning. By their nature, forward-looking statements
involve known and unknown risks and uncertainties, because they
relate to events and depend on circumstances that will occur in the
future and the factors described in the context of such
forward-looking statements in this announcement could cause actual
results, outcomes and developments to differ materially from those
expressed in or implied by such forward-looking statements and such
statements are therefore qualified in their entirety by the risks
and uncertainties surrounding these future expectations. Many of
these risks and uncertainties relate to factors that are beyond the
entities' ability to control or estimate precisely, such as, but
not limited to, general business and market conditions both
globally and locally, political, economic and regulatory forces,
industry trends and competition, future exchange and interest
rates, changes in government and regulation including in relation
to health and safety, the environment, labour relations and tax
rates and future business combinations or dispositions. Although it
is believed that the expectations reflected in such forward-looking
statements are reasonable, none of Bidco, Toscafund, Penta or
Circle can give any assurance, representation or guarantee that
such expectations will prove to have been correct and such
forward-looking statements should be construed in light of such
factors and you are therefore cautioned not to place reliance on
these forward-looking statements which speak only as at the date of
this announcement. None of Bidco, Toscafund, Penta or Circle
assumes any obligation to update or correct the information
contained in this announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law or regulations.
No profit forecasts or estimates
Nothing in this announcement is intended or shall be deemed to
be a forecast, projection or estimate of the future financial
performance of Circle or Bidco or Toscafund or Penta and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share of those entities (where relevant)
for the current or future financial periods would necessarily match
or exceed the historical published earnings or earnings per share
of those entities (where relevant).
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the Offer Period
Commencement Date and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10th Business Day
following the Offer Period Commencement Date and, if appropriate,
by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom
Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0) 20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Purchases outside the Offer
Bidco or its nominees or brokers (acting as agents) may purchase
Circle Shares otherwise than under the Offer, such as in the open
market or through privately negotiated purchases. Such purchases
shall comply with the Code, the AIM Rules and the rules of the
London Stock Exchange.
Publication on websites
A copy of this announcement and the other documents required to
be published pursuant to Rule 26 of the Code in connection with the
Offer will, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, be available by no later than
12.00 noon on 30 March 2017 and free of charge for inspection on
Toscafund's website at www.toscafund.com, on Penta's website at
www.pentacapital.com and on Circle's website at
www.circleholdingsplc.com during the Offer Period. The contents of
any website referred to in this announcement are not incorporated
into, and do not form part of, this announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, a person so entitled
may request a copy of this announcement and any information
incorporated into it by reference to another source in hard copy
form. A person may also request that all future documents,
announcements and information to be sent to that person in relation
to the Offer should be in hard copy form. For persons who receive a
copy of this announcement in electronic form or via a website
notification, a hard copy of this announcement will not be sent
unless so requested from Nick Lovering or Francis North at Whitman
Howard Limited during business hours on Tel: +44 (0) 207 659 1234
or by submitting a request in writing to either of them at Whitman
Howard Limited, First Floor, Connaught House, 1-3 Mount Street,
London W1K 3NB.
Information relating to Circle Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Circle Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Circle may be provided to Bidco, Toscafund and
Penta during the Offer Period as required under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
Rounding
Certain figures included in this announcement have been subject
to rounding adjustments.
Time
All times shown in this announcement are London times, unless
otherwise stated.
Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, Circle confirms that,
as at the date of this announcement, it has 236,250,223 Ordinary
Shares in issue and admitted to trading on the AIM Market of the
London Stock Exchange and 11,546,965 Convertible Shares. The
Ordinary Shares and the Convertible Shares each carry the right to
one vote and therefore the total number of voting rights to be used
for disclosure purposes under Rule 8 of the Code shall be
247,797,188. The Circle Board has resolved that, in accordance with
the terms of the Articles, the Convertible Shares shall convert
automatically into Ordinary Shares (on a one-for-one basis) as soon
as practicable following the release of this announcement (and, in
any event, by no later than 3 April 2017). The Company will make an
application for such Ordinary Shares arising on conversion to be
admitted to trading on AIM. Following conversion, the Company will
have 247,797,188 Ordinary Shares in issue and no Convertible
Shares. Circle does not hold any shares in treasury. The
International Securities Identification Number (ISIN) for the
Ordinary Shares is JE00B4V99J57.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
29 MARCH 2017
RECOMMED CASH OFFER
for
CIRCLE HOLDINGS PLC ("CIRCLE" OR THE "COMPANY")
by
DMWSL 849 LIMITED ("BIDCO")
1. Introduction
The board of directors of Circle and the director of Bidco are
pleased to announce that they have reached agreement on the terms
of a recommended all cash offer to be made by Bidco for all of the
issued and to be issued share capital of Circle not already owned,
or agreed to be acquired, by Bidco (the "Offer").
Bidco is a newly incorporated company formed at the direction of
Tosca Penta for the purpose of making and implementing the Offer.
Further information in relation to Bidco, Toscafund, Penta and the
Tosca Penta Funds is set out in paragraphs 7 and 8 of this
announcement.
2. The Offer
Under the terms of the Offer, which will be subject to the
Conditions and further terms set out in Appendix I to this
announcement and to the full terms and conditions to be set out in
the Offer Document and, in respect of Circle Shares held in
certificated form, the Form of Acceptance, Circle Shareholders who
accept the Offer shall be entitled to receive:
30 pence in cash for each Circle Share
The Offer, in aggregate, values the share capital of Circle
(excluding the Circle Shares held by the Tosca Investors and to be
acquired by Bidco under the Exchange Agreement) at approximately
GBP55.3 million and values the share capital of Circle (including
the Circle Shares held by the Tosca Investors and to be acquired by
Bidco under the Exchange Agreement) at approximately GBP75.2
million.
The Offer represents a premium of approximately:
-- 25.0 per cent. to the Closing Price per Circle Share of 24.0
pence on 28 March 2017 (being the last Business Day prior to the
Offer Period Commencement Date);
-- 35.0 per cent. to the average Closing Price per Circle Share
of 22.2 pence in the three months to 28 March 2017 (being the last
Business Day prior to the Offer Period Commencement Date); and
-- 42.7 per cent. to the average Closing Price per Circle Share
of 21.0 pence in the six months to 28 March 2017 (being the last
Business Day prior to the Offer Period Commencement Date).
The Offer extends to all Circle Shares held by the Circle
Trustee. The Offer also extends to any Circle Shares
unconditionally allotted or issued fully paid (or credited as fully
paid) to satisfy the exercise of the CFO Options (and the
subscription of additional Ordinary Shares by the Circle Trustee in
respect thereof) prior to the date upon which the Offer ceases to
be open for acceptance.
The Circle Shares held by the Tosca Investors will not be
acquired by way of the Offer.
The Circle 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. Bidco reserves the right to reduce the Offer
consideration by the amount of any dividend (or other distribution)
which is paid or becomes payable by Circle to the Circle
Shareholders (or any holder of Convertible Shares) on or after the
date of this announcement.
3. Background to and reasons for the Offer
Toscafund, through the Tosca Investors, has been an investor in
Circle since 9 April 2015 and has been supportive of the
organisation and its leadership. Tosca Penta values the culture and
ambition of Circle to deliver high quality care through the
empowerment of its clinicians and front-line staff. The making of
the Offer is a function of Tosca Penta's continued support for the
Company and its management, and a desire to provide an appropriate
structure for longer term growth.
Tosca Penta does not believe that operating in the public listed
markets is optimal for Circle in terms of the achievement of its
business plan and believes that a broader, more efficient range of
financial and strategic options would be available to Circle as a
private company, to the benefit of its patients, staff, and
management. Tosca Penta has the ability to provide, or assist in
the securing of, additional capital to Circle to help it deliver
its business plan more quickly.
4. Recommendation
The Circle Directors, who have been so advised by Numis as to
the financial terms of the Offer, consider the terms of the Offer
to be fair and reasonable. In providing advice to the Circle
Directors, Numis has taken into account the commercial assessments
of the Circle Directors.
In making its assessment of the merits of the Offer, the Circle
Board has determined that Circle could operate more effectively as
a private company. In particular, the structure of Circle's
existing shareholder base is highly concentrated, which the Circle
Board believes restricts the Circle Group's ability to attract new
investors who could provide further sources of capital. Whilst the
Circle Board does not believe that Circle's current plans require
additional funding in the near term, its growth aspirations are
constrained by the availability of capital. Bidco has the ability
to provide, or assist in the securing of, additional capital to
Circle to help it implement its strategy and realise its growth
potential more quickly.
Furthermore, the Circle Board has also taken into account:
-- the level of the Offer, providing Circle Shareholders an exit
opportunity with certainty of value at a 25.0 per cent. premium to
the Closing Price per Circle Share of 24 pence on 28 March 2017 and
a 35.0 per cent. and 42.7 per cent. premium to the average Closing
Price per Circle Share in the three months and six months prior to
28 March 2017, respectively;
-- that the business continues to be loss making and the
delivery of its plan is subject to a number of commercial risks,
including, inter alia, the potential expiry of multi-year clinical
services contracts in the short to medium term;
-- the lack of liquidity in Circle Shares and the fact that the
Offer provides Circle Shareholders with an opportunity to realise
their investment in the Circle Group wholly for cash; and
-- the confirmations received from Bidco regarding the
safeguarding of the existing employment rights of Circle Group
employees and its plans for the business of the Circle Group.
Accordingly, the Circle Board believes that the Offer is in the
best interests of Circle Shareholders, and the Circle Directors
recommend unanimously that all Circle Shareholders (other than the
Tosca Investors) accept the Offer as all of the Circle Directors
who hold Circle Shares have irrevocably undertaken to do, or
procure to be done, in respect of (i) their own beneficial holdings
of, in aggregate, 2,550,779 Ordinary Shares (including 1,181,233
Ordinary Shares which shall arise from the conversion of
Convertible Shares as soon as practicable following the publication
of this announcement (and, in any event, by no later than 3 April
2017)); and (ii) a further 3,450,000 Circle Shares which are to be
allotted, issued or transferred to them to satisfy the exercise of
options under the Circle Share Schemes or the CFO Options,
representing, in aggregate, approximately 2.40 per cent. of the
Voting Rights as at 28 March 2017 (assuming, for these purposes,
that the allotment and issue of Circle Shares to be issued pursuant
to the CFO Options and the subscription of additional Circle Shares
by the Circle Trustee in respect thereof have taken place). The
timings for certain acceptances under these irrevocable
undertakings are subject to the Offer becoming, or being declared,
unconditional in all respects (further details are set out at
Appendix III to this announcement).
5. Interests in Circle Shares and irrevocable undertakings
Bidco has entered into the Exchange Agreement which governs the
terms upon which Toscafund shall procure the sale of, and Bidco
will purchase, the 66,292,309 Circle Shares owned by the Tosca
Investors (representing approximately 26.75 per cent. of the Voting
Rights as at 28 March 2017) in exchange for GBP19,887,692.70, in
aggregate, of Rollover Loan Notes.
In addition to the irrevocable undertakings received from the
Circle Directors set out at paragraph 4 above, Bidco has also
received an irrevocable undertaking to accept the Offer from the
Circle Trustee in respect of (i) 13,500,453 Circle Shares; (ii)
subject, inter alia, to not receiving contrary instructions from
the relevant Circle Beneficial Owners within 16 days following the
posting of the Offer Document, up to a further 21,650,933 Circle
Shares; (iii) any further Circle Shares which are the subject of
the exercise of options under the Circle Share Schemes where the
Circle Trustee has received an instruction from the relevant
optionholder to accept the Offer on behalf of such optionholder
(anticipated to be up to 7,361,684 Circle Shares); (iv) any further
Circle Shares which are allotted and issued to satisfy the
corresponding subscription of Ordinary Shares by the Circle Trustee
pursuant to the Circle Trust Relationship Agreement following the
exercise of the CFO Options (anticipated to be up to 705,770 Circle
Shares); and (v) any further Circle Shares which cease to be the
subject of options under the Circle Share Schemes following the
lapse or surrender of any such option (anticipated to be at least
17,673,306 Circle Shares), representing, in aggregate (and based on
certain assumptions set out at paragraph 2 of Appendix III to this
announcement), up to approximately 24.29 per cent. of the Voting
Rights as at 28 March 2017 (assuming, for these purposes, that the
allotment and issue of Circle Shares to be issued pursuant to the
CFO Options and the subscription of additional Circle Shares by the
Circle Trustee in respect thereof have taken place). The timings
for certain acceptances under this irrevocable undertaking are
subject to the Offer becoming, or being declared, unconditional in
all respects (further details are set out at Appendix III to this
announcement).
In addition to the irrevocable undertakings to accept the Offer
from the Circle Directors and the Circle Trustee, Bidco has
received irrevocable undertakings to accept the Offer from
Lansdowne Partners, Richard Griffiths and Balderton Capital in
respect of, in aggregate, 94,297,447 Ordinary Shares, representing,
in aggregate, approximately 37.61 per cent. of the Voting Rights as
at 28 March 2017 (assuming, for these purposes, that the allotment
and issue of Circle Shares to be issued pursuant to the CFO Options
and the subscription of additional Circle Shares by the Circle
Trustee in respect thereof have taken place).
Consequently and subject to the assumptions set out at paragraph
2 of Appendices II and III to this announcement, Bidco has received
irrevocable undertakings to accept the Offer over an aggregate of
161,190,372 Ordinary Shares, representing, in aggregate,
approximately 64.30 per cent. of the Voting Rights as at 28 March
2017 (assuming, for these purposes, that the allotment and issue of
Circle Shares to be issued pursuant to the CFO Options and the
subscription of additional Circle Shares by the Circle Trustee in
respect thereof have taken place).
Certain of the irrevocable undertakings will cease to be binding
in certain circumstances as set out in Appendix III to this
announcement.
Further details of these irrevocable undertakings are set out in
Appendix III to this announcement.
6. Information relating to Circle
Circle is the AIM-listed holding company for Circle Health
Limited, the largest partnership of doctors, nurses and healthcare
professionals in the UK.
Circle currently operates two independent hospitals, CircleBath
and CircleReading, which opened in 2010 and 2012, respectively.
Circle also operates the Nottingham treatment centre, the UK's
largest day case facility treating NHS-funded patients pursuant to
a five-year services contract with NHS Rushcliffe CCG. The Circle
Group has provided services at the Nottingham treatment centre
since 2008 and its current contract is due for renewal or expiry in
July 2018.
The Circle Group also manages a five-year integrated
musculoskeletal service contract (MSK) on behalf of Bedfordshire
CCG. This contract ends in March 2019. On 24 March 2017, the
Company announced that it had entered into a five-year contract
with the Greenwich CCG to provide integrated MSK in Greenwich.
On 23 December 2016, the Company announced that Circle Health
Limited had entered into a joint venture agreement with VAMED
Management und Service GmbH to provide a new model of specialised,
in-patient and out-patient rehabilitation services in the UK. The
initial project for the joint venture is co-located at Circle
Reading hospital in Berkshire, which began offering services in Q1
2017.
On 1 February 2017, Circle announced the disposal of its land in
Manchester to the Department for Communities and Local Government
for cash consideration of GBP9.1 million plus VAT.
Circle announced its preliminary results earlier today for the
financial year ended 31 December 2016. These reported a loss before
tax of GBP3.1 million (2015: a loss before tax of GBP4.9 million)
on turnover of GBP133.6 million (2015: GBP127.8 million).
7. Information relating to Bidco
Bidco is a private limited company which was incorporated in
England and Wales on 30 December 2016 under the Companies Act with
registered number 10543098. It has its registered office at Level
13, Broadgate Tower, 20 Primrose Street, London EC2A 2EW.
The sole director of Bidco is Torquil Macnaughton.
Bidco is a newly incorporated company formed at the direction of
Tosca Penta for the purpose of implementing the Offer.
Bidco is currently owned 100 per cent. by Tosca Penta Healthco
Limited Partnership, Tosca Penta Healthco II Limited Partnership
and Tosca Penta Healthco III Limited Partnership (together, the
"Tosca Penta Funds"). The Tosca Penta Funds are each managed by
Penta and Penta TPH LLP (a wholly owned subsidiary of Penta) is the
general partner of each fund.
The principal activity of Bidco, in the event of completion of
the Offer, will be to act as a holding company for Circle and to
provide certain management and strategic services to the Circle
Group. Bidco's principal investment is the proposed acquisition of
Circle Shares pursuant to the Offer or otherwise.
Save for activities in connection with the making,
implementation and financing of the Offer, the Subscription
Agreement and the Exchange Agreement, Bidco has not carried on any
business prior to the date of this announcement, nor has it entered
into any obligations. Bidco has not paid any dividends or prepared
any historical financial accounts. In the event that the Offer
becomes, or is declared, unconditional in all respects, Circle will
be the only direct subsidiary of Bidco and the Circle Group will
therefore represent all or substantially all of the earnings,
assets and liabilities of Bidco, save for the liabilities incurred
in connection with the Offer.
8. Information relating to Toscafund, Penta and the Tosca Penta Funds
Toscafund
Toscafund is part of the Old Oak Group, a financial services
group based in London, which is engaged in asset management and
private equity activities. It was founded in 2000 by Martin Hughes,
its Chief Executive. The holding company for the Old Oak Group is
Old Oak Holdings Limited, a company established and owned by Martin
Hughes. As at 28 February 2017, the Old Oak Group had combined
assets under management of approximately US$3 billion.
Toscafund's primary activity is to act as an investment
manager/adviser to a number of investment funds and accounts that
follow primarily equity investment strategies. It was incorporated
in England and Wales on 13 June 2006 and has been authorised by the
FCA to conduct investment business since 31 October 2006. It is
also registered as an investment adviser with the US Securities and
Exchange Commission. Its principal place of business is at 7th
Floor, 90 Long Acre, London WC2E 9RA.
Toscafund acts as the investment manager to the three Tosca
Investors which will exchange their interests in 66,292,309 Circle
Shares (representing, in aggregate, approximately 26.75 per cent.
of the Voting Rights as at 28 March 2017) for GBP19,887,692.70, in
aggregate, of Rollover Loan Notes on 30 March 2017 pursuant to the
Exchange Agreement. Upon the Offer becoming, or being declared,
unconditional in all respects, the Rollover Loan Notes will be
contributed by the Tosca Investors to Tosca Penta Healthco II
Limited Partnership in exchange for partnership interests in that
partnership. It is anticipated that, thereafter, when the Offer has
closed, all or a significant proportion of the Rollover Loan Notes
held by Tosca Penta Healthco II Limited Partnership will be
capitalised into shares in Bidco. The same three Tosca Investors
hold partnership interests in Tosca Penta Healthco III Limited
Partnership.
Full acceptance of the Offer will have no effect on the earnings
and assets and liabilities of Toscafund. Penta
Penta is an active private equity investor in UK mid-market
companies, which is authorised by the FCA to conduct investment
business.
Penta was established in 1999 and is majority owned by its
partners. Old Oak Holdings Limited, the ultimate parent company of
Toscafund, acquired an interest of approximately 39 per cent. in
Penta in November 2007, as part of its strategy to establish a
broad based asset management group, and since then Penta has
operated as the private equity arm of Toscafund. In addition to
Toscafund's ownership interest, Penta is able to draw on resources
of Toscafund to assist it with transaction origination and aspects
of its investment process and analysis. Toscafund also provides
cornerstone funding for, and introductions to potential investors
in, private equity funds raised by Penta.
Since November 2007, Penta has completed 14 transactions
investing approximately GBP460 million, and it has exited from six
of those investments realising approximately GBP800 million.
As at 28 February 2017, Penta had assets under management of
approximately GBP220 million across a portfolio of nine
investments. This portfolio does not include any business which
operates in the same industry as the Circle Group.
Torquil Macnaughton, a founder partner of Penta, has been
appointed a director of Bidco and brings significant experience of
financing and managing private equity investments.
Tosca Penta Funds
The Tosca Penta Funds are three new Scottish limited
partnerships which have been established by Penta. Tosca Penta
Healthco Limited Partnership and Tosca Penta Healthco III Limited
Partnership have been established to fund the consideration payable
under the Offer and an aggregate of GBP58 million has been
committed to these partnerships by the limited partners, which
comprise the Tosca Investors and Bridgemere Securities Limited.
Upon the Offer becoming, or being declared, unconditional in all
respects, the Tosca Investors will contribute the Rollover Loan
Notes which they will acquire pursuant to the Exchange Agreement to
Tosca Penta Healthco II Limited Partnership. The limited partners
of each of the Tosca Penta Funds are excluded from the management
or control of the relevant partnership's business or affairs. The
general partner of each of the Tosca Penta Funds is Penta TPH LLP
which is wholly owned by Penta. The general partner has appointed
Penta as the FCA authorised investment management firm to manage
and operate each of the Tosca Penta Funds.
Penta has arranged the finance to fund the consideration payable
under the Offer and is the investment manager of the Tosca Penta
Funds. This is in the ordinary course of business for Penta. Penta
will receive an arrangement fee from Bidco of up to GBP1,740,000.
Full acceptance of the Offer will increase the funds under Penta's
management and consequently the fees and income arising from such
funds under management. Other than the entitlement to receive the
arrangement fee of up to GBP1,740,000 and ongoing management fees,
full acceptance of the Offer will not have any effect on the
earnings, assets or liabilities of Penta.
9. Management, employees and locations
Bidco attaches great importance to the skills, expertise and
knowledge of the existing leadership and employees of Circle and
expects them to play a leading role in growing its business. Bidco
intends to build on the success of the Circle Group's existing
management team.
Although Bidco has not had detailed discussions with the
management team of Circle about the operational management of
Circle Group's operations going forward, it is the current belief
of Bidco that, if the Offer becomes, or is declared, unconditional
in all respects, Bidco does not anticipate carrying out any
material restructuring of Circle's business or relocation of its
personnel or other significant cost saving exercise, nor any
changes to the principal locations of Circle's business or any
redeployment of its fixed assets.
Bidco confirms that if the Offer becomes, or is declared,
unconditional in all respects, it intends to safeguard fully the
existing employment and pension rights of all Circle's management
and employees in accordance with applicable law and to comply with
Circle's pension obligations for existing employees and members of
Circle's pension schemes. Bidco's current plans for Circle do not
involve any material change in the conditions of employment of
Circle's employees.
It is expected that each of Lorraine Baldry, Justin Jewitt and
Andrew Shilston will cease to be directors of Circle on the date on
which, following the Offer becoming, or being declared,
unconditional in all respects, the Company's application to the
London Stock Exchange to cancel the admission of the Circle Shares
from trading on AIM becomes effective.
10. The Convertible Shares
The Company has 236,250,223 Ordinary Shares and 11,546,965
Convertible Shares in issue as at 28 March 2017 (being the last
Business Day prior to the Offer Period Commencement Date). The
Circle Board has resolved that, in accordance with the terms of the
Articles, the Convertible Shares shall convert automatically into
Ordinary Shares (on a one-for-one basis) as soon as practicable
following the publication of this announcement (and, in any event,
by no later than 3 April 2017). The Company will make an
application for such Ordinary Shares arising on conversion to be
admitted to trading on AIM. Following conversion, the Company will
have 247,797,188 Ordinary Shares in issue and no Convertible
Shares. Accordingly, the Offer shall be made to holders of Ordinary
Shares arising from the conversion of the Convertible Shares on the
same basis as the holders of other Ordinary Shares (other than the
Tosca Investors).
11. The Circle Trustee and the Circle Share Schemes Shares held by the Circle Trustee
The Circle Trustee held 48,639,411 Ordinary Shares and
11,546,965 Convertible Shares as at 23 March 2017 (being the latest
practicable date prior to the publication of this announcement) on
behalf of the Circle Trust as follows:
-- 10,103,968 Ordinary Shares on trust for certain Circle Beneficial Owners;
-- 11,546,965 Convertible Shares (which shall convert
automatically into Ordinary Shares (on a one-for-one basis) as soon
as practicable following the publication of this announcement (and,
in any event, by no later than 3 April 2017)) on trust for certain
Circle Beneficial Owners;
-- 1,934,261 Ordinary Shares which are subject to vested options
under the PIP where the Offer Price is higher than the relevant PIP
exercise price;
-- 5,427,423 Ordinary Shares which are subject to unvested
options under the PIP where the Offer Price is higher than the
relevant PIP exercise price (where the relevant 'performance
conditions' have been met but not the applicable 'service
period');
-- 5,426,054 Ordinary Shares which are subject to vested or
unvested options under the PIP where the Offer Price is lower than
the relevant PIP exercise price;
-- 12,247,252 Ordinary Shares which are subject to unvested options under the MIP; and
-- 13,500,453 unallocated Ordinary Shares (which were reserved
for future option awards under the Circle Share Schemes).
Circle Beneficial Owners
The Circle Beneficial Owners of certain Ordinary Shares held by
the Circle Trustee (including any Ordinary Shares which shall arise
following the conversion of the Convertible Shares following the
publication of this announcement) will be contacted in due course
regarding how they can, inter alia, instruct the Circle Trustee to
accept or reject the Offer on their behalf.
The Circle Trustee has, pursuant to the terms of its irrevocable
undertaking (further details of which are set out at paragraph 5
above and Appendix III to this announcement) and in accordance with
the terms of the Articles, agreed to accept the Offer on behalf of
Circle Beneficial Owners who, inter alia, do not instruct the
Circle Trustee to reject the Offer.
'In the money' PIP options
The Circle Remuneration Committee has resolved: (i) to treat the
Offer becoming, or being declared, unconditional in all respects
and the control of Circle passing to Bidco as a 'Transaction Event'
for the purposes of the Circle Share Schemes; and (ii)
conditionally upon such events occurring, to waive any outstanding
'service period' for unvested options under the PIP.
Holders of:
-- vested options under the PIP; and
-- unvested options under the PIP where the Circle Remuneration
Committee has conditionally agreed to waive any outstanding
'service period',
where the Offer Price is higher than the relevant PIP exercise
price, will be contacted regarding how they can, conditionally upon
the Offer becoming, or being declared, unconditional in all
respects and the control of Circle passing to Bidco, exercise their
options on a cashless basis. If such holders do not exercise their
options, they will lapse, in due course, following the Offer
becoming, or being declared, unconditional in all respects and the
control of Circle passing to Bidco.
'Underwater' and/or unvested PIP options and MIP options
Holders of 'underwater' and/or unvested PIP options and MIP
options will be contacted regarding the effect of the Offer on
their rights under the relevant Circle Share Scheme. If such
holders do not exercise their options (to the extent they are
able), they will lapse, in due course, following the Offer
becoming, or being declared, unconditional in all respects and the
control of Circle passing to Bidco.
Holders of MIP options over 5,216,349 Ordinary Shares have
agreed to surrender their MIP options for nil consideration upon
the Offer becoming, or being declared, unconditional in all
respects and the control of Circle passing to Bidco.
Unallocated Ordinary Shares
The Circle Trustee holds, as at 23 March 2017 (being the latest
practicable date prior to the publication of this announcement),
13,500,453 unallocated Ordinary Shares on behalf of the Circle
Trust. These Ordinary Shares were reserved for future option awards
under the Circle Share Schemes. The number of unallocated Ordinary
Shares will increase to the extent that any PIP options and MIP
options lapse or are surrendered in respect of recent and/or future
leavers and following the allotment and issue of Ordinary Shares to
the Circle Trustee following the exercise of the CFO Options (see
paragraph 13 below).
The Circle Remuneration Committee has recommended that the
Circle Trustee adopts the Distribution Policy with respect to any
surplus assets of the Circle Trust following the Offer becoming, or
being declared, unconditional in all respects and the Offer being
accepted. The Circle Trustee has agreed to follow such
recommendation.
12. The Circle Trust Loan Agreement
In December 2014 the Company lent the Circle Trustee
GBP9,587,150.22 pursuant to the terms of the Circle Trust Loan
Agreement. The Trustee used the proceeds of the loan to subscribe
for 38,855,367 Ordinary Shares on behalf of the Circle Trust for
the purpose of satisfying options granted under the Circle Share
Schemes.
Following acceptance of the Offer by the Circle Trustee in
accordance with the terms of its irrevocable undertaking (see
paragraph 5 of this announcement for further details) and assuming
the Offer becomes, or is declared, unconditional in all respects at
the current Offer Price and control of Circle passes to Bidco, the
Circle Trustee will repay approximately GBP5.9 million to Circle
under the terms of the Circle Trust Loan Agreement and the balance
will be written off.
13. The CFO Options
On 21 October 2014, Circle granted to its then chief financial
officer (now chief executive officer), Paolo Pieri, options to
subscribe for 2,200,000 Ordinary Shares at an exercise price of
GBP0.02 per Ordinary Share. The CFO Options are fully vested. At
the time of grant, it was the intention of Circle that the Ordinary
Shares to be allotted and issued upon exercise of the CFO Options
should not dilute the Circle Trust's interest in Circle.
Accordingly, the Circle Trust Relationship Agreement provides that,
upon exercise of the CFO Options, Circle shall issue to the Circle
Trust (at par value) such number of additional Ordinary Shares as
is required to ensure that the interest of the Circle Trust in
Circle (as a percentage) immediately prior to such exercise remains
the same following the allotment and issue of such Ordinary Shares
in respect of the exercise of the CFO Options.
Mr. Pieri has exercised the CFO Options (conditionally upon the
Offer becoming, or being declared, unconditional in all respects)
and, accordingly, the Offer will extend to any Ordinary Shares
which are unconditionally allotted and issued to satisfy the
exercise of the CFO Options and the corresponding subscription of
Ordinary Shares by the Circle Trustee pursuant to the Circle Trust
Relationship Agreement.
14. Interests of Circle Directors and Circle PDMRs and the new grant of options
The interests of the Circle Directors and the Circle PDMRs
following the implementation of the arrangements described at
paragraphs 10 to 13 above and directly below are set out at Part B
of Appendix IV to this announcement.
Following the Company ceasing to be in a 'closed period' as of
today, the Circle Trustee has made a grant of further options over
existing Circle Shares to certain Circle Directors, Circle
employees and Circle PDMRs. Such options are exercisable at GBP0.02
per Circle Share for a period of seven years, subject to the
satisfaction of certain performance conditions. Such options shall
vest and become exercisable automatically upon the Offer becoming,
or being declared, unconditional in all respects and the control of
Circle passing to Bidco. The following options are included in the
interests of the Circle Directors and Circle PDMRs set out in Part
B of Appendix IV to this announcement.
Number of new PIP options in
Circle Director/PDMR respect of Circle Shares
Paolo Pieri 750,000
Dr. Massoud Keyvan-Fouladi 500,000
Nick Boyle 125,000
Sarah Marston 125,000
In addition to the above PIP options, the Circle Directors and
Circle PDMRs will each receive, in accordance with the Distribution
Policy, an amount of the surplus assets of the Circle Trust
following the Offer becoming, or being declared, unconditional in
all respects and the Offer being accepted by the Circle Trustee.
Further details of these amounts are set out at Part B of Appendix
IV to this announcement.
15. Share warrants
As at 28 March 2017 (being the last Business Day prior to the
Offer Period Commencement Date), Balderton, Lansdowne, BlueCrest,
JCAM and Health Partners Limited hold Share Warrants that entitle
them to subscribe for up to a total of 3,623,005 Ordinary Shares in
the Company at any time at an exercise price of GBP1.52 (in the
case of 3,384,075 Share Warrants) or GBP10.31 (in the case of
238,930 Share Warrants). None of the existing Share Warrants has
been exercised on 28 March 2017 (being the last Business Day prior
to the Offer Period Commencement Date).
All unexercised Share Warrants will lapse following a sale of
the entire issued share capital of the Company. The holders of the
Share Warrants will be contacted regarding the effect of the Offer
on their warrant rights.
16. Financing arrangements of Bidco and confirmation of sufficient cash resources
Bidco will be funded through subscriptions for Subscription Loan
Notes by Tosca Penta Healthco Limited Partnership and Tosca Penta
Healthco III Limited Partnership in order that Bidco can pay the
cash consideration to the Circle Shareholders.
Exchange Agreement
On 28 March 2017, Bidco and Toscafund entered into an exchange
agreement, which governs (amongst other things) the terms upon
which Toscafund shall procure the sale of, and Bidco will purchase,
66,292,309 Circle Shares in exchange for GBP19,887,692.70, in
aggregate, of Rollover Loan Notes (the "Exchange Agreement"). The
Circle Shares which are the subject of the Exchange Agreement are
those Circle Shares held by the Tosca Investors. The sale of Circle
Shares to Bidco under the Exchange Agreement will take place on the
day following the date of this announcement. Accordingly, Bidco has
unconditionally agreed, under the Exchange Agreement, to acquire in
aggregate 66,292,309 Circle Shares held by the Tosca Investors
(representing approximately 26.75 per cent. of the Voting Rights as
at 28 March 2017).
Rollover Loan Note Instrument
On 28 March 2017, Bidco executed a loan note instrument under
which it constituted the Rollover Loan Notes to be issued to the
Tosca Investors pursuant to the Exchange Agreement (the "Rollover
Loan Note Instrument"). The Rollover Loan Notes will be unsecured,
non-interest bearing and repayable on demand by any noteholder.
Subscription Agreement
On 28 March, Bidco and the Tosca Penta Funds entered into a
subscription agreement in respect of Bidco, which governs the terms
upon which (i) the Tosca Penta Funds subscribed for ordinary shares
in Bidco and (ii) the terms upon which Tosca Penta Healthco Limited
Partnership and Tosca Penta Healthco III Limited Partnership shall
subscribe for Subscription Loan Notes for a cash subscription of up
to GBP57,965,963.70 in aggregate (the "Subscription Agreement").
The purpose of the cash subscription under the Subscription
Agreement is to finance the cash consideration payable under the
Offer (and, if relevant, any market purchases made by Bidco) and to
pay certain fees, costs and other expenses in connection with the
Offer.
Subscription Loan Note Instrument
On 28 March 2017, Bidco executed a loan note instrument under
which it constituted the Subscription Loan Notes to be issued to
Tosca Penta Healthco Limited Partnership and Tosca Penta Healthco
III Limited Partnership pursuant to the Subscription Agreement (the
"Subscription Loan Note Instrument"). The Subscription Loan Notes
will be unsecured, non-interest bearing and repayable on demand by
any noteholder on or after the final closing date of the Offer.
Capitalisation of Rollover Loan Notes and Subscription Loan
Notes
Once the Offer has closed, all or a significant proportion of
the Rollover Loan Notes and the Subscription Loan Notes subscribed
by or contributed to the Tosca Penta Funds will be capitalised into
ordinary shares and preference shares in the capital of Bidco. The
Bidco preference shares will have no fixed dividend right and will
be redeemable only at the option of Bidco.
Confirmation of sufficient cash resources
Whitman Howard Limited, financial adviser to Bidco, is satisfied
that sufficient cash resources are available to Bidco to enable it
to satisfy in full the cash consideration payable to Circle
Shareholders under the terms of the Offer.
17. Offer related arrangements
Circle and Circle Health Limited entered into a confidentiality
agreement with Tosca Penta dated 13 May 2016 (the "Confidentiality
Agreement") pursuant to which each of the parties thereto
undertakes to keep confidential information relating to the other
party and not to disclose it to third parties (other than those to
which disclosure is permitted in terms of the Confidentiality
Agreement) unless required by law or regulation. These
confidentiality obligations will remain in force until 13 May 2018
(or, if earlier, such date that the confidential information ceases
to be of a confidential nature).
18. Further terms and conditions of the Offer
The Offer will be effected by means of a takeover offer within
the meaning of Part 18 of the Jersey Companies Law. Bidco reserves
the right to elect to implement the Offer, with the consent of the
Panel and the Circle Directors, by way of a Scheme which would be
implemented on the same terms (subject to appropriate amendment) as
the Offer. In the event of such an election by Bidco, those Circle
Shareholders who have given irrevocable undertakings to accept the
Offer have agreed to vote in favour of the shareholder resolutions
required in connection with the Scheme. Further details of these
undertakings are set out in paragraphs 4 and 5 above and in
Appendix III to this announcement. References to the Offer and the
Offer Document in this announcement shall include, where
applicable, such Scheme.
The Offer will be subject to the Conditions and further terms
set out in this announcement and to the full terms and conditions
to be set out in the Offer Document and, in respect of Circle
Shares held in certificated form, the Form of Acceptance.
Appendix II to this announcement contains bases of calculation
and sources of certain information contained in this announcement.
Appendix V to this announcement contains the definitions of terms
used in this announcement.
The Offer and acceptances thereof will be governed by English
law and subject to the jurisdiction of the English courts. The
Offer will be subject to the applicable requirements of the Code,
the Panel, the London Stock Exchange, the FCA and the AIM
Rules.
19. Cancellation of admission to trading on AIM, compulsory acquisition and re-registration
If the Offer becomes, or is declared, unconditional in all
respects and Bidco has acquired, before or during the Offer Period
(whether pursuant to the Offer or otherwise), Circle Shares which
carry, in aggregate, at least 75 per cent. of the Voting Rights,
including for this purpose (except to the extent otherwise agreed
by the Panel) any such Voting Rights attaching to Circle 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, Bidco intends to procure that the
Company will make an application to the London Stock Exchange for
the cancellation of the admission to trading on AIM of the Circle
Shares.
If such an application is made, it is expected that such
cancellation will take effect no earlier than 20 Business Days
after the date on which the relevant 75 per cent. threshold has
been reached, subject to the consent of the London Stock Exchange.
Bidco will procure that Circle makes a regulatory announcement when
the necessary 75 per cent. threshold has been reached confirming
that the notice period has commenced and the anticipated date of
cancellation.
Cancellation of admission to trading on AIM is likely to reduce
significantly the liquidity and marketability of any Circle Shares
in respect of which the Offer has not been accepted at such
time.
It is also intended that, if the Offer becomes, or is declared,
unconditional in all respects, and Bidco has acquired, or agreed to
acquire, before or during the Offer Period (whether pursuant to the
Offer or otherwise) Circle Shares which carry, in aggregate, not
less than two-thirds majority of the Voting Rights, Bidco will seek
to re-register Circle as a Jersey private limited company pursuant
to the Jersey Companies Law.
If the Offer becomes, or is declared, unconditional in all
respects and Bidco receives acceptances of the Offer in respect of
90 per cent. or more in nominal value of the Circle Shares to which
the Offer relates, Bidco intends to exercise its rights pursuant to
Part 18 of the Jersey Companies Law to acquire compulsorily, on the
same terms as the Offer, the remaining Circle Shares in respect of
which the Offer has not at such time been accepted.
20. Overseas Shareholders
The availability of the Offer to Circle Shareholders who are not
resident in the UK or Jersey may be affected by the laws and/or
regulations of their relevant jurisdiction. Therefore, any persons
who are subject to the laws and/or regulations of any jurisdiction
other than the UK or Jersey should inform themselves about and
observe any applicable legal or regulatory requirements in their
jurisdiction. Further details in relation to overseas shareholders
will be set out in the Offer Document. If you are in any doubt, you
should consult your professional adviser in the relevant
jurisdiction without delay.
21. Expected timetable
It is intended that the Offer Document and the Form of
Acceptance containing further details of the Offer will be
despatched to each Circle Shareholder (other than to persons in a
Restricted Jurisdiction) as soon as reasonably practicable
following the Ordinary Shares arising on conversion of the
Convertible Shares being admitted to trading on AIM and, in any
event, not later than 28 days after the date of this announcement
(unless agreed otherwise with the Panel).
22. Opening Position Disclosures and interests
Save in respect of the irrevocable undertakings referred to in
paragraphs 4 and 5 above, the Exchange Agreement referred to in
paragraph 16 above and as disclosed below, as at the close of
business on 28 March 2017 (being the last Business Day prior to the
Offer Period Commencement Date) neither Bidco, nor its director,
nor, so far as Bidco is aware, any person acting in concert (within
the meaning of the Code) with it had (i) any interest in or right
to subscribe for any relevant securities of Circle; nor (ii) any
short positions in respect of relevant Circle Shares (whether
conditional or absolute and whether in the money or otherwise),
including any short position under a derivative, any agreement to
sell or any delivery obligation or right to require another person
to purchase or take delivery; nor (iii) borrowed or lent any
relevant Circle Shares (including, for these purposes, any
financial collateral arrangements of the kind referred to in Note 4
on Rule 4.6 of the Code).
The Tosca Investors hold, in aggregate, 66,292,309 Circle Shares
representing approximately 26.75 per cent. of the Voting Rights as
at 28 March 2017 (being the last Business Day prior to the Offer
Period Commencement Date).
23. General
Your attention is drawn to the further information contained in
the Appendices to this announcement, which form part of, and should
be read in conjunction with, this announcement.
Please be aware that addresses, electronic addresses and certain
other information provided by Circle Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Circle may be provided to Bidco, Toscafund and
Penta during the Offer Period as required under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
The Offer will be governed by English law. The Offer will be
subject to the applicable requirements of the Code, the Panel, the
London Stock Exchange, the FCA and the AIM Rules.
24. Documents on display
In accordance with Rule 26.2 of the Code, copies of the
following documents will, to the extent not already published
there, by no later than 12 noon on the Business Day following the
date of this announcement, be published on Toscafund's website at
www.toscafund.com, on Penta's website at www.pentacapital.com and
on Circle's website at www.circleholdingsplc.com during the Offer
Period:
-- the irrevocable undertakings referred to in paragraphs 4 and 5 above;
-- the Rollover Loan Note Instrument and the Subscription Loan
Note Instrument referred to in paragraph 16 above;
-- the Exchange Agreement referred to in paragraph 16 above;
-- the Subscription Agreement referred to in paragraph 16 above;
-- the Confidentiality Agreement referred to in paragraph 17 above; and
-- a copy of this announcement.
Enquiries:
Whitman Howard Limited (Financial Tel: +44
Adviser to Bidco) (0) 207 659 1234
Nick Lovering
Francis North
Maitland (media enquiries for Toscafund Tel: +44
Asset Management LLP and (0) 207 379 5151
Penta Capital LLP)
Neil Bennett
Tom Eckersley
Numis (Rule 3 financial adviser, Tel: +44
NOMAD and corporate broker to Circle) (0) 207 260 1000
Michael Meade
Richard Thomas
Ben Stoop
Tel: +44
Circle Holdings PLC (0) 207 034 5258
Michael Kirkwood (Chairman)
Paolo Pieri (Chief Executive Officer)
IMPORTANT NOTES
This announcement is for information purposes only. It is not
intended to and does not constitute, or form part of, an offer or
invitation or the solicitation of any offer to sell or purchase any
securities or the solicitation of any offer to otherwise acquire,
subscribe for, sell or otherwise dispose of any security pursuant
to the Offer or otherwise. The Offer will be made solely by means
of the Offer Document and, in respect of Circle Shares held in
certificated form, the Form of Acceptance, which will contain the
full terms and conditions of the Offer, including details of how
the Offer may be accepted. Any decision in respect of, or other
response to, the Offer should be made only on the basis of the
information contained in those documents.
This announcement does not constitute a prospectus or prospectus
equivalent document. Further Information
Whitman Howard Limited, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting as
financial adviser exclusively for Bidco and Tosca Penta and for
no-one else in connection with the matters set out in this
announcement and will not regard any other person as its client in
relation to the matters referred to in this announcement and will
not be responsible to anyone other than Bidco and Tosca Penta for
providing the protections afforded to clients of Whitman Howard
Limited, nor for providing advice in relation to the Offer or any
other matter or arrangement referred to in this announcement.
Numis, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively for
Circle and for no-one else in connection with the matters set out
in this announcement and will not regard any other person as its
client in relation to the matters referred to in this announcement
and will not be responsible to anyone other than Circle for
providing the protections afforded to clients of Numis, nor for
providing advice in relation to the Offer or any other matter or
arrangement referred to in this announcement.
Overseas jurisdictions
The release, publication or distribution of this announcement
in, and the availability of the Offer to persons who are residents,
citizens or nationals of, jurisdictions other than the United
Kingdom or Jersey may be restricted by laws and/or regulations of
those jurisdictions. Therefore any persons who are subject to the
laws and regulations of any jurisdiction other than the United
Kingdom or Jersey should inform themselves about and observe any
applicable requirements in their jurisdiction. Any failure to
comply with the applicable requirements may constitute a violation
of the laws and/or regulations of any such jurisdiction.
In particular, copies of this announcement and any formal
documentation relating to the Offer are not being, and must not be,
directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and
trustees) must not mail or otherwise forward, distribute or send
them in or into or from any Restricted Jurisdiction. Unless
otherwise permitted by applicable law and regulation, the Offer may
not be made, directly or indirectly, in or into, or by the use of
mails or any means or instrumentality (including, but not limited
to, facsimile, e-mail or other electronic transmission, telex or
telephone) of interstate or foreign commerce of, or of any facility
of a national, state or other securities exchange of any Restricted
Jurisdiction and the Offer may not be capable of acceptance by any
such use, means, instrumentality or facilities.
The receipt of cash pursuant to the Offer by Circle Shareholders
may be a taxable transaction under applicable national, state and
local, as well as foreign and other tax laws. Each Circle
Shareholder is urged to consult their independent professional
adviser regarding the tax consequences of accepting the Offer.
This announcement has been prepared for the purpose of complying
with English law and Jersey law and the Code and the information
disclosed may not be the same as that which would have been
disclosed if this announcement had been prepared in accordance with
the laws of jurisdictions outside of England and Wales or
Jersey.
This announcement is not an offer of securities for sale in the
United States, Canada, Australia or Japan or in any other
jurisdiction in which such an offer is unlawful.
Notice to US investors
The Offer will be made for securities in a company incorporated
under the laws of Jersey and Circle Shareholders in the United
States should be aware that this announcement, the Offer Document
and any other documents relating to the Offer have been, or will
be, prepared in accordance with the Code and UK and Jersey
disclosure requirements, format and style, all of which differ from
those in the United States. All financial information that is
included in this announcement or that may be included or referred
to in the Offer Document or any other documents relating to the
Offer, has been, or will be, prepared in accordance with
International Financial Reporting Standards adopted by the European
Union and therefore may not be comparable to financial statements
of US companies or companies whose financial statements are
prepared in accordance with US GAAP.
The Offer, if required to be made, will be made in the United
States pursuant to applicable exemptions under the US tender offer
rules and securities laws and otherwise in accordance with the
requirements of the Code, the Panel and the London Stock Exchange.
Accordingly, the Offer will be subject to disclosure and other
procedural requirements, including with respect to withdrawal
rights, offer timetable, settlement procedures and timing of
payments that are different from those applicable under US domestic
tender offer procedures and law. In the United States, the Offer
will be made solely by Bidco and not by its financial adviser.
Circle is a company incorporated under the laws of Jersey and
Bidco is a company incorporated under the laws of England and
Wales. All of the assets of the Circle Group and the Bidco Group
are located outside of the United States. As a result, it may not
be possible for Circle Shareholders in the United States to effect
service of process within the United States upon any member of the
Circle Group or any member of the Bidco Group or their respective
officers or directors or to enforce against any of them judgments
of the United States predicated upon the civil liability provisions
of the federal securities laws of the United States. It may not be
possible to sue any member of the Circle Group or any member of the
Bidco Group or their respective officers or directors in a non-US
court for violations of the US securities laws. There is also a
substantial doubt as to enforceability in the United Kingdom or in
Jersey in original actions, or in actions for the enforcement of
judgments of US courts, based on civil liability provisions of US
federal securities laws.
Cautionary note regarding forward-looking statements
This announcement, including the information included in this
announcement, contains certain forward-looking statements. These
statements are based on the current expectations of Bidco,
Toscafund, Penta and/or Circle (as the case may be) and are
naturally subject to uncertainty and changes in circumstances.
These forward-looking statements may include statements about the
expected effects on Bidco, and/or Toscafund and/or Penta and/or
Circle of the Offer, the expected timing and scope of the Offer,
strategic options and all other statements in this announcement
other than historical or current facts. Forward-looking statements
often use words such as "anticipate", "target", "expect",
"estimate", "intend", "plan", "budget", "schedule", "forecast",
"project", "goal", "believe", "hope", "aims", "continue", "will",
"may", "should", "would", "could", "subject to", or other words of
similar meaning. By their nature, forward-looking statements
involve known and unknown risks and uncertainties, because they
relate to events and depend on circumstances that will occur in the
future and the factors described in the context of such
forward-looking statements in this announcement could cause actual
results, outcomes and developments to differ materially from those
expressed in or implied by such forward-looking statements and such
statements are therefore qualified in their entirety by the risks
and uncertainties surrounding these future expectations. Many of
these risks and uncertainties relate to factors that are beyond the
entities' ability to control or estimate precisely, such as, but
not limited to, general business and market conditions both
globally and locally, political, economic and regulatory forces,
industry trends and competition, future exchange and interest
rates, changes in government and regulation including in relation
to health and safety, the environment, labour relations and tax
rates and future business combinations or dispositions. Although it
is believed that the expectations reflected in such forward-looking
statements are reasonable, none of Bidco, Toscafund, Penta or
Circle can give any assurance, representation or guarantee that
such expectations will prove to have been correct and such
forward-looking statements should be construed in light of such
factors and you are therefore cautioned not to place reliance on
these forward-looking statements which speak only as at the date of
this announcement. None of Bidco, Toscafund, Penta or Circle
assumes any obligation to update or correct the information
contained in this announcement (whether as a result of new
information, future events or otherwise), except as required by
applicable law or regulations.
No profit forecasts or estimates
Nothing in this announcement is intended or shall be deemed to
be a forecast, projection or estimate of the future financial
performance of Circle or Bidco or Toscafund or Penta and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share of those entities (where relevant)
for the current or future financial periods would necessarily match
or exceed the historical published earnings or earnings per share
of those entities (where relevant).
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in
one per cent. or more of any class of relevant securities of an
offeree company or of any securities exchange offeror (being any
offeror other than an offeror in respect of which it has been
announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the Offer Period
Commencement Date and, if later, following the announcement in
which any securities exchange offeror is first identified.
An Opening Position Disclosure must contain details of the
person's interests and short positions in, and rights to subscribe
for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror(s). An Opening Position
Disclosure by a person to whom Rule 8.3(a) applies must be made by
no later than 3.30 pm (London time) on the 10th Business Day
following the Offer Period Commencement Date and, if appropriate,
by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any securities exchange offeror
is first identified. Relevant persons who deal in the relevant
securities of the offeree company or of a securities exchange
offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in one per cent. or more of any class of relevant
securities of the offeree company or of any securities exchange
offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the
dealing concerned and of the person's interests and short positions
in, and rights to subscribe for, any relevant securities of each of
(i) the offeree company and (ii) any securities exchange offeror,
save to the extent that these details have previously been
disclosed under Rule 8. A Dealing Disclosure by a person to whom
Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the Business Day following the date of the relevant
dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0) 20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
Purchases outside the Offer
Bidco or its nominees or brokers (acting as agents) may purchase
Circle Shares otherwise than under the Offer, such as in the open
market or through privately negotiated purchases. Such purchases
shall comply with the Code, the AIM Rules and the rules of the
London Stock Exchange.
Publication on websites
A copy of this announcement and the other documents required to
be published pursuant to Rule 26 of the Code in connection with the
Offer will, subject to certain restrictions relating to persons
resident in Restricted Jurisdictions, be available by no later than
12.00 noon on 30 March 2017 and free of charge for inspection, on
Toscafund's website at www.toscafund.com, on Penta's website at
www.pentacapital.com and on Circle's website at
www.circleholdingsplc.com during the Offer Period. The contents of
any website referred to in this announcement are not incorporated
into, and do not form part of, this announcement.
Requesting hard copy documents
In accordance with Rule 30.3 of the Code, a person so entitled
may request a copy of this announcement and any information
incorporated into it by reference to another source in hard copy
form. A person may also request that all future documents,
announcements and information to be sent to that person in relation
to the Offer should be in hard copy form. For persons who receive a
copy of this announcement in electronic form or via a website
notification, a hard copy of this announcement will not be sent
unless so requested from Nick Lovering or Francis North at Whitman
Howard Limited during business hours on Tel: +44 (0) 207 659 1234
or by submitting a request in writing to either of them at Whitman
Howard Limited, First Floor, Connaught House, 1-3 Mount Street,
London W1K 3NB.
Information relating to Circle Shareholders
Please be aware that addresses, electronic addresses and certain
information provided by Circle Shareholders, persons with
information rights and other relevant persons for the receipt of
communications from Circle may be provided to Bidco, Toscafund and
Penta during the Offer Period as required under Section 4 of
Appendix 4 of the Code to comply with Rule 2.11(c) of the Code.
Rounding
Certain figures included in this announcement have been subject
to rounding adjustments.
Time
All times shown in this announcement are London times, unless
otherwise stated. Rule 2.9 Disclosure
In accordance with Rule 2.9 of the Code, Circle confirms that,
as at the date of this announcement, it has 236,250,223 Ordinary
Shares in issue and admitted to trading on the AIM Market of the
London Stock Exchange and 11,546,965 Convertible Shares. The
Ordinary Shares and the Convertible Shares each carry the right to
one vote and therefore the total number of voting rights to be used
for disclosure purposes under Rule 8 of the Code shall be
247,797,188. The Circle Board has resolved that, in accordance with
the terms of the Articles, the Convertible Shares shall convert
automatically into Ordinary Shares (on a one-for-one basis) as soon
as practicable following the release of this announcement (and, in
any event, by no later than 3 April 2017). The Company will make an
application for such Ordinary Shares arising on conversion to be
admitted to trading on AIM. Following conversion, the Company will
have 247,797,188 Ordinary Shares in issue and no Convertible
Shares. Circle does not hold any shares in treasury. The
International Securities Identification Number (ISIN) for the
Ordinary Shares is JE00B4V99J57.
APPIX I
THE CONDITIONS AND CERTAIN FURTHER TERMS OF THE OFFER
PART A - THE CONDITIONS
1. Acceptance Condition
The Offer will be conditional upon valid acceptances being
received (and not, where permitted, withdrawn) by not later than
1.00 p.m. (London time) on the First Closing Date (or such later
time(s) and/or date(s) as Bidco may, subject to the rules of the
Code or with the consent of the Panel decide) in respect of such
number of the Circle Shares which, together with the Circle Shares
(excluding those Circle Shares to be acquired by Bidco under the
Exchange Agreement) acquired, or agreed to be acquired, by Bidco
during the Offer Period (whether pursuant to the Offer or
otherwise) will result in Bidco holding Circle Shares which
constitute, in aggregate, 75 per cent. or more (or such lower
percentage as Bidco may, subject to the Code, decide) in nominal
value of the Circle Shares to which the Offer relates, provided
that this condition will not be satisfied unless Bidco and/or its
wholly owned subsidiaries have acquired, or agreed to acquire,
before or during the Offer Period (whether pursuant to the Offer or
otherwise) Circle Shares which carry, in aggregate, more than 50
per cent. of the Voting Rights, including for this purpose (except
to the extent otherwise agreed by the Panel) any such Voting Rights
attaching to the Circle 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: (i) the expression "Circle
Shares to which the Offer relates" shall be construed in accordance
with Part 18 of the Jersey Companies Law; (ii) Circle Shares which
have been unconditionally allotted but not 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, shall be deemed to carry the voting
rights they will carry on issue; and (iii) valid acceptances shall
be deemed to have been received in respect of any Circle Shares
(excluding those Circle Shares to be acquired by Bidco under the
Exchange Agreement) that Bidco shall have acquired, or contracted
to acquire, pursuant to Article 117(8) of the Jersey Companies
Law.
2. The Offer will be subject to the following conditions (as amended, if appropriate):
In addition, subject as stated in Part B of this Appendix I and
to the requirements of the Panel in accordance with the Code, the
Offer will be conditional upon the following Conditions (as amended
if appropriate) being satisfied or, where relevant, waived:
Notifications, waiting periods and authorisations
2.1. all material notifications, filings or applications which
are necessary or considered appropriate or desirable by Bidco
(acting reasonably) in connection with the Offer having been made
and all necessary waiting periods (including any extensions
thereof) under any applicable legislation or regulation of any
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory and regulatory obligations in any
jurisdiction having been complied with in each case in respect of
the Offer and its implementation and all material authorisations,
orders, recognitions, grants, consents, clearances, confirmations,
certificates, licences, permissions and approvals
("Authorisations") which are necessary or considered appropriate or
desirable by Bidco (acting reasonably) in any jurisdiction for, or
in respect of, the Offer or the proposed acquisition of any shares
or other securities in, or control of, Circle by Bidco or any
member of the Circle Group by any member of the Bidco Group having
been obtained in terms and in a form reasonably satisfactory to
Bidco from any appropriate central bank, government or
governmental, quasi-governmental, supranational, statutory,
regulatory, environmental or investigative body or authority,
court, trade agency, professional association, institution,
employee representative body or any other body or person whatsoever
in any jurisdiction (a "Third Party") or (without prejudice to the
generality of the foregoing) from any person or body with whom any
member of the Circle Group or the Bidco Group has entered into
contractual arrangements and all such Authorisations necessary,
appropriate or desirable to carry on the business of any member of
the Circle Group in any jurisdiction having been obtained and all
such Authorisations remaining in full force and effect at the time
at which the Offer becomes otherwise unconditional in all respects
and there being no notice or written intimation of an intention to
revoke, suspend, restrict, modify or not to renew such
Authorisations;
General antitrust and regulatory
2.2. no Third Party having given notice of a decision to take,
institute, implement or threaten any action, proceeding, suit,
investigation, inquiry or reference (and in each case, not having
withdrawn the same), or having required any action to be taken or
otherwise having done anything, or having enacted, made or proposed
any statute, regulation, decision, order or change to published
practice (and in each case, not having withdrawn the same) and
there not continuing to be outstanding any statute, regulation,
decision or order which would or might reasonably be expected to
(in any case which is material in the context of the Offer):
2.2.1. require, prevent or materially delay or affect the
divestiture or materially prejudice or alter the terms envisaged
for such divestiture by any member of the Circle Group or the Bidco
Group of all or any material part of their respective businesses,
assets or property or of any Circle Shares or other securities in
Circle or impose any limitation on the ability of all or any of
them to conduct their respective businesses (or any part thereof)
or to own, control or manage any of their respective assets or
properties (or any part thereof) to an extent which is material in
the context of the Circle Group, taken as a whole;
2.2.2. other than pursuant to the implementation of the Offer
require any member of the Bidco Group or any member of the Circle
Group to acquire or offer to acquire any shares, other securities
(or the equivalent) or interest in any member of the Circle Group
or any asset owned by any Third Party;
2.2.3. impose any material limitation on, or result in a
material delay in, the ability of any member of the Bidco Group,
directly or indirectly, to acquire, or to hold or to exercise
effectively all or any rights of ownership in respect of shares or
other securities in Circle (or any member of the Circle Group) or
on the ability of any member of the Circle Group or any member of
the Bidco Group, directly or indirectly, to hold or exercise
effectively all or any rights of ownership in respect of shares or
other securities (or the equivalent) in, or to exercise voting or
management control over, any member of the Circle Group, in each
case, to an extent which is material in the context of the Circle
Group, taken as a whole;
2.2.4. otherwise adversely affect the business, assets,
financial or trading position, profits or prospects of any member
of the Circle Group or the Bidco Group to an extent which is
material in the context of the Circle Group taken as a whole or the
Bidco Group taken as a whole;
2.2.5. result in any member of the Circle Group ceasing to be
able to carry on business under any name under which it presently
carries on business to an extent which is material in the context
of the Circle Group taken as a whole;
2.2.6. make the Offer or its implementation, or the acquisition
or proposed acquisition of any shares or other securities in, or
control of, Circle by Bidco, void, unenforceable and/or illegal
under the laws of any relevant jurisdiction, or otherwise, directly
or indirectly, materially prevent or prohibit, restrict, restrain
or delay or otherwise interfere with the Offer or its
implementation, or impose material additional conditions or
obligations with respect to, or otherwise materially impede,
interfere or require material amendment of the Offer or the
acquisition of any shares or other securities in, or control of,
Circle by Bidco to an extent which is material in the context of
the Offer;
2.2.7. require, prevent or materially delay a divestiture by
Bidco or any member of the Circle Group of any shares or other
securities convertible into shares (or the equivalent) in any
member of the Circle Group to an extent which is material in the
context of the Circle Group or any member of the Circle Group taken
as a whole; or
2.2.8. impose any limitation on the ability of any member of the
Bidco Group or any member of the Circle Group to conduct, integrate
or co-ordinate all or any part of its business with all or any part
of the business of the Bidco Group and/or the Circle Group to an
extent which is material in the context of the Circle Group or the
Bidco Group (as the case may be) taken as a whole,
and all applicable waiting and other time periods (including any
extensions thereof) during which any such Third Party could decide
to take, institute, implement or threaten any such action,
proceeding, suit, investigation, enquiry or reference or take any
other step under the laws of any jurisdiction in respect of the
Offer having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement,
agreement, etc.
2.3. except as Disclosed, there being no provision of any
arrangement, agreement, lease, licence, franchise, permit or other
instrument to which any member of the Circle Group is a party or by
or to which any such member or any of its assets is, or may be,
bound, entitled or subject, or any event or circumstance which, as
a consequence of the Offer or the proposed acquisition by Bidco of
any shares or other securities in Circle or because of the change
in the control of Circle or any other member of the Circle Group
represented by the Offer, would, or might reasonably be expected
to, result in (in any case to an extent which is, or would
reasonably be expected to be, material in the context of the Circle
Group, taken as a whole):
2.3.1. any monies borrowed by, or any other indebtedness,
whether actual or contingent, of, or any grant available to, any
member of the Circle Group being or becoming repayable, or capable
of being declared repayable, immediately or prior to its or their
stated maturity date or repayment date, or the ability of any such
member to borrow monies or incur any indebtedness being withdrawn
or inhibited or being capable of becoming or being withdrawn or
inhibited;
2.3.2. the creation or enforcement of any mortgage, charge or
other security interest over the whole, or any part, of the
business, property or assets of any member of the Circle Group or
any such mortgage, charge or other security interest (whenever
created, arising or having arisen) being enforced or becoming
enforceable;
2.3.3. any liability of any member of the Circle Group to make
any severance, termination, bonus or other payment to any of its
directors or other officers;
2.3.4. the rights, liabilities, obligations, interests or
business of any member of the Circle Group or any member of the
Bidco Group under any such arrangement, agreement, lease, licence,
franchise, permit or other instrument, or the interests or business
of any member of the Circle Group or any member of the Bidco Group
in or with any other person, body, firm or company (or any
agreement or arrangement relating to any such interests or
business) being, or becoming capable of being, terminated, or
adversely modified or affected or any onerous obligation or
liability arising or any adverse action being taken thereunder;
2.3.5. any member of the Circle Group ceasing to be able to
carry on business under any name under which it presently carries
on business;
2.3.6. the value of, or the financial or trading position or
prospects of, any member of the Circle Group being prejudiced or
adversely affected; or
2.3.7. the creation or acceleration of any liability (actual or
contingent) by any member of the Circle Group other than trade
creditors or other liabilities incurred in the ordinary course of
business;
Certain events occurring since 31 December 2015
2.4. except as Disclosed, no member of the Circle Group having since 31 December 2015:
2.4.1. issued or agreed to issue, or authorised or proposed or
announced its intention to authorise or propose the issue of,
additional new shares of any class or securities or securities
convertible into, or exchangeable for, or rights, warrants or
options to subscribe for or acquire, any such new shares,
securities or convertible securities or transferred or sold, or
agreed to transfer or sell, or authorised or proposed the transfer
or sale of Circle Shares out of treasury (except, where relevant,
as between Circle and wholly owned subsidiaries of Circle or
between the wholly owned subsidiaries of Circle), including as a
result of any amendment to the CFO Options, the Circle Trust
Relationship Agreement or the terms of the Share Warrants as more
particularly described at paragraph 14 of this announcement, except
for in each case: (i) the issue of Circle Shares pursuant to the
exercise of employee share options or the vesting of employee share
awards in the ordinary course under the Circle Share Schemes; (ii)
the issue of Circle Shares on the exercise of the CFO Options on
the terms of such options as they apply as at the date of this
announcement and the corresponding subscription of Ordinary Shares
by the Circle Trust pursuant to the terms of the Circle Trust
Relationship Agreement as it applies as at the date of this
announcement or (iii) the exercise of Share Warrants (on the terms
of such warrants as they apply as at the date of this announcement)
as more particularly described at paragraph 14 of this
announcement;
2.4.2. recommended, declared, paid or made or proposed to
recommend, declare, pay or make any bonus, dividend or other
distribution (whether payable in cash or otherwise) save for
dividends (or other distributions whether payable in cash or
otherwise) lawfully paid or made by any wholly owned subsidiary of
Circle to Circle or any of its wholly owned subsidiaries;
2.4.3. other than pursuant to the Offer (and except for
transactions between Circle and its wholly owned subsidiaries or
between the wholly owned subsidiaries of Circle and transactions in
the ordinary course of business) implemented, effected, authorised
or proposed or announced its intention to implement, effect,
authorise or propose any merger, demerger, reconstruction,
amalgamation, scheme, commitment, acquisition or disposal of assets
or shares or loan capital (or the equivalent thereof) in any
undertaking or undertakings, in any such case, to an extent which
is material in the context of the Circle Group, taken as a
whole;
2.4.4. (except for transactions between Circle and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Circle and except for transactions in the ordinary course of
business) disposed of, or transferred, mortgaged or created any
security interest over any material asset or any right, title or
interest in any material asset or authorised, proposed or announced
any intention to do so which, in any case, is material in the
context of the Circle Group, taken as a whole;
2.4.5. (except for transactions between Circle and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Circle) issued, authorised or proposed or announced an intention to
authorise or propose the issue of, or made any change in or to the
terms of, any debentures or, except in the ordinary course of
business, become subject to any contingent liability or incurred or
increased any indebtedness which, in any case, is material in the
context of the Circle Group, taken as a whole;
2.4.6. entered into or varied or authorised, proposed or
announced its intention to enter into or vary any material contract
(including, for the avoidance of doubt, the Circle Trust Loan
Agreement and/or the Circle Trust Relationship Agreement),
arrangement, agreement, transaction or commitment (whether in
respect of capital expenditure or otherwise) except in the ordinary
course of business which is of a long term, unusual or onerous
nature or magnitude or which involves an obligation of a nature or
magnitude which is reasonably likely to be restrictive on the
business of any member of the Circle Group and which, in any case,
is material in the context of the Circle Group, taken as a
whole;
2.4.7. (except for salary increases, bonuses or variations of
terms in the ordinary course) entered into or varied the terms of,
or made any offer (which remains open for acceptance) to enter into
or vary to a material extent the terms of, any contract, service
agreement, commitment or arrangement with any director or senior
executive of any member of the Circle Group, save as agreed by
Bidco;
2.4.8. proposed, agreed to provide or modified to a material
extent the terms of any share option scheme, incentive scheme or
other benefit relating to the employment, or termination of
employment, of any employee of the Circle Group save as agreed by
Bidco or which is required pursuant to the implementation of the
Offer otherwise than in the ordinary course of business and which
in any case, is material in the context of the Circle Group, taken
as a whole;
2.4.9. purchased, redeemed or repaid or announced any proposal
to purchase, redeem or repay any of its own shares or other
securities or reduced or, except in respect of the matters
mentioned in Condition 2.4.1, made any other change to any part of
its share capital, save as agreed by Bidco or which is required
pursuant to the implementation of the Offer;
2.4.10. waived, compromised or settled any claim (other than in
the ordinary course of business or between Circle and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Circle) which is material in the context of the Circle Group, taken
as a whole;
2.4.11. terminated, or varied the terms of, any agreement or
arrangement between any member of the Circle Group and any other
person in a manner which would have a material adverse effect on
the financial position of the Circle Group, taken as a whole;
2.4.12. other than pursuant to the Offer and as envisaged in
accordance with the terms of the Offer, made any material
alteration to its memorandum or articles of association or other
incorporation documents, in each case, which is material in the
context of the Offer;
2.4.13. except in relation to changes made or agreed as a result
of, or arising from, changes to legislation, made or agreed or
consented to any material change to the terms of the trust deeds or
rules or policy or any other governing documents constituting
pension scheme(s) established by any member of the Circle Group for
its directors, employees or their dependants or any material change
to the contributions payable to any such scheme or to the benefits
which accrue, or to the pensions which are payable, thereunder, or
to the basis on which qualification for, or accrual or entitlement
to, such benefits 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, in
each case, which is material in the context of the Circle Group,
taken as a whole;
2.4.14. been unable, or admitted in writing that it is unable,
to pay its debts as they fall due or commenced negotiations with
one or more of its creditors with a view to rescheduling or
restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts
generally or ceased, or threatened to cease, carrying on all, or a
substantial part of, its business, in each case, which is material
in the context of the Circle Group, taken as a whole;
2.4.15. (other than in respect of a member of the Circle Group
which is dormant and was solvent at the relevant time) taken or
proposed any steps, corporate action or had any legal proceedings
instituted or threatened against it in relation to the suspension
of payments, a moratorium of any indebtedness, its winding-up
(voluntary or otherwise), dissolution, reorganisation or for the
appointment of a receiver, administrator, manager, administrative
receiver, trustee or similar officer of all, or any material part
of, its assets or revenues or any analogous or equivalent steps or
proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed, in each case,
which is material in the context of the Circle Group, taken as a
whole;
2.4.16. (except for transactions between Circle and its wholly
owned subsidiaries or between the wholly owned subsidiaries of
Circle) made, authorised, proposed or announced an intention to
propose any change in its loan capital other than pursuant to the
Circle Trust Loan Agreement (on the terms as they apply as at the
date of this announcement), in each case, which is material in the
context of the Circle Group, taken as a whole;
2.4.17. entered into, implemented or authorised the entry into,
any joint venture, asset or profit sharing arrangement, partnership
or merger of business or corporate entities, in each case, which is
material in the context of the Circle Group, taken as a whole;
or
2.4.18. entered into any agreement, arrangement, commitment or
contract or passed any resolution or made any offer (which remains
open for acceptance) with respect to, or announced an intention to,
or to propose to, effect any of the transactions, matters or events
referred to in this Condition 2.4;
No adverse change, litigation, regulatory enquiry or similar
2.5. except as Disclosed, since 31 December 2015 there having been:
2.5.1. no adverse change, and no circumstance having arisen
which would or would be reasonably expected to result in any
adverse change, in the business, assets, financial or trading
position or profits or prospects or operational performance of any
member of the Circle Group which, in any case, is material in the
context of the Circle Group, taken as a whole or in the context of
the Offer;
2.5.2. no litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened in writing,
announced or instituted by or against or remaining outstanding
against or in respect of, any member of the Circle Group or to
which any member of the Circle Group is, or could reasonably be
expected to become, a party (whether as claimant, defendant or
otherwise), in each case, which would or would be reasonably
expected to have a material adverse effect on the Circle Group,
taken as a whole, or in the context of the Offer;
2.5.3. no enquiry, review or investigation by, or complaint or
reference to, any Third Party against or in respect of any member
of the Circle Group having been threatened in writing, announced or
instituted or remaining outstanding by, against or in respect of
any member of the Circle Group, in each case which would or would
be reasonably expected to have a material adverse effect on the
Circle Group, taken as a whole, or in the context of the Offer;
2.5.4. no contingent or other liability having arisen or become
apparent to Bidco or increased other than in the ordinary course of
business which would, or would reasonably be expected to, adversely
affect the business, assets, financial or trading position or
profits or prospects of any member of the Circle Group to an extent
which is material in the context of the Circle Group, taken as a
whole, or in the context of the Offer; or
2.5.5. no steps having been taken and no omissions having been
made which are reasonably likely to result in the withdrawal,
cancellation, termination or modification of any licence held by
any member of the Circle Group which is necessary for the proper
carrying on of its business and the withdrawal, cancellation,
termination or modification of which would reasonably be expected
to have a material adverse effect on the Circle Group, taken as a
whole, or in the context of the Offer;
No discovery of certain matters regarding information,
liabilities and environmental issues 2.6. except as Disclosed,
Bidco not having discovered:
2.6.1. that any financial, business or other information
concerning the Circle Group publicly announced prior to the date of
this announcement or disclosed at any time to any member of the
Bidco Group or to any of its advisers by or on behalf of any member
of the Circle Group prior to the date of this announcement is
misleading, contains a misrepresentation of any fact, or omits to
state a fact necessary to make that information not misleading, to
an extent which, in any such case, is material in the context of
the Circle Group, taken as a whole or in the context of the
Offer;
2.6.2. that any member of the Circle Group or any partnership,
company or other entity in which any member of the Circle Group has
a significant economic interest and which is not a subsidiary
undertaking of Circle is, otherwise than in the ordinary course of
business, subject to any liability, contingent or otherwise, and
which is material in the context of the Circle Group, taken as a
whole, or in the context of the Offer;
2.6.3. that any past or present member of the Circle Group has
not complied in any material respect with all applicable
legislation, regulations or other requirements of the relevant
jurisdiction or any Authorisations relating to the use, treatment,
storage, carriage, disposal, discharge, spillage, release, leak or
emission of any waste or hazardous substance or any substance
likely to impair the environment (including any property) or harm
human or animal health or otherwise relating to environmental
matters or the health and safety of humans, which non-compliance
would be likely to give rise to any material liability including
any penalty for non-compliance (whether actual or contingent) on
the part of any member of the Circle Group which, in any case, is
material in the context of the Circle Group, taken as a whole;
2.6.4. that there has been a material disposal, discharge,
spillage, accumulation, release, leak, emission or the migration,
production, supply, treatment, storage, transport or use of any
waste or hazardous substance or any substance likely to impair the
environment (including any property) or harm human or animal health
which (whether or not giving rise to non-compliance with any law or
regulation), would be likely to give rise to any material liability
(whether actual or contingent) on the part of any member of the
Circle Group which in any case is material in the context of the
Circle Group, taken as a whole;
2.6.5. that there is, or is reasonably likely to be, any
material obligation or liability (whether actual or contingent) or
requirement to make good, remediate, repair, reinstate or clean up
any property or asset currently or previously owned, occupied,
operated or made use of or controlled by any past or present member
of the Circle Group (or on its behalf), or in which any such member
may have, or previously have had or be deemed to have had, an
interest, under any environmental legislation, common law,
regulation, notice, circular, Authorisation or order of any Third
Party in any jurisdiction or to contribute to the cost thereof or
associated therewith or indemnify any person in relation thereto,
which, in any case, is material in the context of the Circle Group,
taken as a whole;
2.6.6. that circumstances exist (whether as a result of the
making of the Offer or otherwise) which would be reasonably likely
to lead to any Third Party instituting (or whereby any member of
the Circle Group would be likely to be required to institute) an
environmental audit or take any steps which would in any such case
be reasonably likely to result in any actual or contingent
liability to improve or install new plant or equipment or to make
good, repair, reinstate or clean up any property of any description
or any asset now or previously owned, occupied or made use of by
any past or present member of the Circle Group (or on its behalf)
or by any person for which a member of the Circle Group is or has
been responsible, or in which any such member may have, or
previously have had or be deemed to have had, an interest, which,
in any case, is material in the context of the Circle Group, taken
as a whole;
2.6.7. that Circle or any member of the Circle Group is subject
to any liability, actual or contingent and which has arisen
otherwise than in the ordinary course of business, which is not
disclosed in the annual report and accounts of Circle or any member
of the Circle Group for the period ended 31 December 2015 and which
is material in the context of the Circle Group, taken as a
whole;
2.6.8. that circumstances exist whereby a person has, or class
of persons has, or is reasonably likely to have, any legitimate
claim or claims against any member of the Circle Group in respect
of any product or process, or materials used therein, now or
previously manufactured, sold, supplied or carried out by any past
or present member of the Circle Group, which, in each case, is
material in the context of the Circle Group, taken as a whole;
2.6.9. any adverse change, or any circumstance having arisen
which would or would be reasonably expected to result in any
adverse change, in the business, assets, financial or trading
position or profits or prospects or operational performance of the
Circle Trustee or the assets of the Circle Trust which results, or
could reasonably be expected to result in the Circle Trustee being
unable to meet its obligations under the Circle Trust Loan
Agreement which, in any case, is material in the context of the
Circle Group, taken as a whole or in the context of the Offer;
or
2.6.10. any litigation, arbitration proceedings, prosecution or
other legal proceedings having been threatened in writing,
announced or instituted by or against or remaining outstanding
against or in respect of, the Circle Trustee or to which the Circle
Trustee is, or could reasonably be expected to become, a party
(whether as claimant, defendant or otherwise) which results, or
could reasonably be expected to result in the Circle Trustee being
unable to meet its obligations under the Circle Trust Loan
Agreement which, in any case, is material in the context of the
Circle Group, taken as a whole or in the context of the Offer;
Anti-corruption and criminal property
2.7. except as Disclosed, Bidco not having discovered that:
2.7.1. any member of the Circle Group or any person that
performs or has performed services for or on behalf of any such
member is or has engaged in any activity, practice or conduct which
would constitute an offence under the UK Bribery Act 2010 or any
other applicable anti-corruption legislation;
2.7.2. any member of the Circle Group is ineligible to be
awarded any contract or business under section 57 of the UK Public
Contracts Regulations 2015 (as amended); or
2.7.3. any past or present member of the Circle Group has
engaged in any activity or business with, or made any investments
in, or made any payments to any government, entity or individual
covered by any of the economic sanctions administered by the United
Nations or the European Union (or any of their respective member
states) or the United States Office of Foreign Assets Control or
any other governments or supranational body or authority in any
jurisdiction.
PART B - CERTAIN FURTHER TERMS OF THE OFFER
1. Subject to the requirements of the Panel in accordance with
the Code, Bidco reserves the right to
waive, in whole or in part, all or any of the above Conditions
2.1 to 2.7 (inclusive). Each of the Conditions 2.1 to 2.7
(inclusive) shall be regarded as a separate Condition and shall not
be limited by reference to any other condition.
2. Bidco 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 2.1 to 2.7
(inclusive) by a date earlier than the latest date for the
fulfilment of that Condition notwithstanding that the other
Conditions 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.
3. If Bidco is required by the Panel to make an offer for Circle
Shares under the provisions of Rule 9 of
the Code, Bidco may make such alterations to any of the above
Conditions and terms of the Offer as are necessary to comply with
the provisions of that Rule.
4. The Offer will lapse, and will not proceed, if there is a
Phase 2 CMA Reference or if Phase 2 European
Commission proceedings are initiated or if, following a referral
of the Offer by the European Commission under Article 9(1) of the
European Council Merger Regulation to a competent authority in the
United Kingdom, there is a Phase 2 CMA Reference, in any such case
before 1.00 p.m. (London time) on the First Closing Date or the
time and date at which the Offer becomes, or is declared,
unconditional as to acceptances (whichever is the later).
5. The effect of the Offer lapsing is that the Offer will cease
to be capable of further acceptance and that
Bidco and any Circle Shareholders, who have accepted the Offer,
will cease to be bound by prior acceptances of the Offer.
6. The availability of the Offer to persons not resident in the
United Kingdom or Jersey may be affected
by the laws of the relevant jurisdictions. Persons who are not
resident in the United Kingdom or Jersey should inform themselves
about and observe any applicable requirements.
7. The Offer will not be made, directly or indirectly, in or
into, or by use of the mails of, or by any means
or instrumentality (including, without limitation, facsimile
transmission, telex, telephone, internet or e-mail) of interstate
or foreign commerce of, or of any facility of a national securities
exchange of, any Restricted Jurisdiction and the Offer will not be
capable of acceptance by any such use, means, instrumentality or
facility or from within any Restricted Jurisdiction (unless
otherwise determined by Bidco).
8. Circle Shares which will be acquired under the Offer will be
acquired fully paid and free from all
liens, equities, charges, encumbrances, options, rights of
pre-emption and any other third party rights and interests of any
nature and together with all rights now or hereafter attaching or
accruing to them, 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.
9. Insofar as a dividend or other distribution and/or a return
of capital is proposed, declared, made, paid
or payable by Circle in respect of a Circle Share or any
Convertible Share on or after the date of this announcement, Bidco
reserves the right to reduce the price payable under the Offer in
respect of a Circle Share by the amount of such dividend and/or
distribution and/or return of capital, except in so far as the
relevant Circle Share is or will be transferred pursuant to the
Offer on a basis which entitles Bidco alone to receive the dividend
and/or distribution and/or return of capital, but if that reduction
to the price has not been effected the person to whom the Offer
Price is paid in respect of that Circle Share will be obliged to
account to Bidco for the amount of such dividend and/or
distribution and/or return of capital. If Bidco exercises its right
to reduce the Offer consideration by all or part of the amount of
such dividend and/or distribution and/or return of capital that has
not been paid, the relevant Circle Shareholders will be entitled to
receive and retain that dividend and/or distribution and/or return
of capital.
Furthermore, Bidco reserves the right to reduce the
consideration payable under the Offer in respect of a Circle Share
in such circumstances as are, and by such amount as is, permitted
by the Panel.
Any exercise by Bidco of its rights referred to in this
paragraph will be the subject of an announcement and, for the
avoidance of doubt, will not be regarded as constituting any
revision or variation of the Offer.
10. Under Rule 13.5 of the Code, Bidco may not invoke a
condition to the Offer so as to cause the Offer not to proceed, to
lapse or to be withdrawn unless the circumstances which give rise
to the right to invoke the condition are of material significance
to Bidco in the context of the Offer. The Condition contained in
paragraph 1 of Part A of this Appendix I and paragraph 4 of this
Part B of this Appendix I are not subject to this provision of the
Code.
11. The Offer will be governed by English law and will be
subject to the jurisdiction of the English courts and to the
Conditions and further terms set out in this Appendix I and to be
set out in the Offer Document and, in respect of Circle Shares held
in certificated form, the Form of Acceptance.
12. The Offer will be subject to applicable requirements of the
Code, the Panel, the London Stock Exchange, the FCA and the AIM
Rules.
APPIX II
BASES OF CALCULATION AND SOURCES OF INFORMATION
In this announcement, unless otherwise stated or the context
otherwise requires, the bases of calculation and sources of
information used are as described below.
1. Unless otherwise stated, financial information relating to
the Circle Group has been extracted or derived (without any
adjustment) from the Preliminary Results for the year ended 31
December 2016.
2. The value of the Offer is calculated on the basis of
184,410,649 Circle Shares being in issue. This (a) assumes that
2,200,000 Circle Shares are to be allotted and issued in respect of
the CFO Options and 705,770 Circle Shares are to be allotted and
issued to the Circle Trustee pursuant to the Circle Trust
Relationship Agreement (this number of Circle Shares shall reduce
in proportion to any reduction in the total number of Circle Shares
held by the Circle Trustee before the exercise of the CFO Options),
(b) assumes that 11,546,965 Convertible Shares have converted into
the same number of Ordinary Shares as more particularly described
in paragraph 10 of this announcement, (c) unless otherwise
specified in this announcement, excludes the 66,292,309 Circle
Shares held by the Tosca Investors which will not be acquired by
way of the Offer and (d) excludes the Circle Shares capable of
arising on the exercise of the Share Warrants.
3. Unless otherwise stated, all Closing Prices have been derived
from the Daily Official List.
APPIX III
SCHEDULE OF IRREVOCABLE UNDERTAKINGS
1. Circle Directors' irrevocable undertakings
The following Circle Directors have given irrevocable
undertakings to accept the Offer in respect of their own beneficial
holdings (or those Circle Shares over which they have control) of
Circle Shares and options over Circle Shares:
Percentage
of Voting
Rights
following
exercise
of the
CFO Options Percentage
of
(excluding Voting
Rights
Number Number Circle following
of options of options Shares exercise
held of
Name of Circle Number of over existing over new by the the CFO
Tosca
Director Circle Shares(1) Circle Circle Investors)(1),(2) Options(1),(2)
Shares Shares
Michael Kirkwood 94,157 - - 0.05% 0.04%
Lorraine Baldry 47,078 - - 0.03% 0.02%
Andrew Shilston 47,078 - - 0.03% 0.02%
Dr. Massoud
Keyvan-Fouladi 2,362,466(1) 500,000(3) - 1.55% 1.14%
Paolo Pieri - 750,000(3) 2,200,000(4) 1.60% 1.18%
Total: 2,550,779 1,250,000 2,200,000 3.26% 2.40%
Notes
(1) Includes the Ordinary Shares arising on conversion of the
Convertible Shares following the release of this announcement.
(2) Includes the subscription of additional Ordinary Shares by
the Circle Trustee following exercise of the CFO Options. See
paragraph 13 and Appendix II to this announcement for further
details.
(3) Consisting of unvested 'in the money' options under the PIP
which accelerate upon the Offer becoming, or being declared,
unconditional in all respects and control of Circle passing to
Bidco. Exercise of these options and acceptances of the Offer in
respect of the resulting Ordinary Shares will be made following the
Offer becoming, or being declared, unconditional in all respects
and the control of Circle passing to Bidco. No irrevocable
undertaking has been given in respect of any 'underwater' options
under the MIP, and any such options have been surrendered
conditionally upon the Offer becoming, or being declared,
unconditional in all respects and the control of Circle passing to
Bidco.
(4) Consisting of the Ordinary Shares to be issued following the
allotment and issue of Circle Shares pursuant to the CFO Options.
The allotment and issue of these Circle Shares and acceptances of
the Offer in respect thereof will be made following the Offer
becoming, or being declared, unconditional in all respects and the
control of Circle passing to Bidco.
The undertakings shall lapse and cease to have effect on and
from the earlier of the following occurrences:
a) the Offer Document is not published within 28 days of the
date of this announcement (or such later date as the Panel may
agree);
b) the Offer lapses in accordance with its terms unless Bidco
makes a public announcement that it intends to implement the Offer
by way of a Scheme or otherwise; and
c) Bidco announces, with the consent of the Panel, that it does
not intend to proceed with the Offer.
2. The Circle Trustee's irrevocable undertaking
Bidco has also received an irrevocable undertaking to accept the
Offer from the Circle Trustee in respect of:
Percentage
of Voting
Rights
following
exercise
of the
CFO Options Percentage
of
(excluding Voting
Circle Rights
Shares following
held by exercise
the
Number of Tosca of the
CFO
Description of Circle Shares Circle Shares(1) Investors)1),(2) Options(1),(2)
Circle Shares held on trust
for certain Circle Beneficial
Owners(3) Up to 21,650,933 Up to 11.74% Up to 8.64%
Circle Shares the subject Up to 7,361,684 Up to 3.99% Up to 2.94%
of exercised PIP Options(4)
Unallocated Circle Shares
(as at 23 March 2017)(5) 13,500,453 7.32% 5.39%
Additional unallocated Circle
Shares(2),(6) 18,379,076 9.97% 7.33%
Total: Up to 60,892,146 Up to 33.02% Up to 24.29%
Notes:
(1) Includes the Ordinary Shares arising on conversion of the
Convertible Shares following the release of this announcement.
(2) Includes the subscription of additional Ordinary Shares by
the Circle Trustee following exercise of the CFO Options. See
paragraph 13 and Appendix II to this announcement for further
details.
(3) The number of Circle Shares will be lower to the extent that
the Circle Trustee receives instructions from Circle Beneficial
Owners instructing the Circle Trustee to decline to accept the
Offer. In accordance with the terms of the Articles, the Circle
Trustee has agreed to accept the Offer on behalf of Circle
Beneficial Owners who, inter alia, do not instruct the Circle
Trustee to reject the Offer within 16 days of the Offer Document
being published.
(4) Assuming all of the options under the PIP in respect of
which the Offer Price is higher than the relevant PIP exercise
price are exercised.
(5) The Circle Trustee holds unallocated Ordinary Shares on
behalf of the Circle Trust. These Ordinary Shares were reserved for
future option awards under the Circle Share Schemes.
(6) The number of additional unallocated Ordinary Shares assumes
that all Ordinary Shares which are subject to vested or unvested
options under the PIP where the Offer Price is lower than the
relevant PIP exercise price and all options under the MIP will
either be surrendered or lapse in accordance with the terms of the
rules of the relevant Circle Share Scheme and 705,770 Circle Shares
are allotted and issued to the Circle Trustee pursuant to the
Circle Trust Relationship Agreement (this number of Circle Shares
shall reduce in proportion to any reduction in the total number of
Circle Shares held by the Circle Trustee before the exercise of the
CFO Options).
The undertaking shall lapse on the same basis as the Circle
Directors' irrevocable undertakings save that, in respect of the
Circle Trustee, in the event of (a) prior to the Offer becoming, or
being declared, unconditional as to acceptances, an announcement is
made by a third party in accordance with Rule 2.7 of the Code of a
competing offer which is a general offer for all of the issued and
to be issued shares of the Company which includes cash
consideration equal to or exceeding 110 per cent. of the value of
the cash consideration per Ordinary Share available under the terms
of the Offer and which the Circle Trustee determines is more
attractive than the overall value attributable under the Offer
having regard to the total consideration of the Offer and the
competing offer and (b) Bidco does not, within ten days of such
announcement of such competing offer referred to in (a), announce a
revised offer which the Circle Trustee determines values each
Ordinary Share at a price equal to or greater than the value of
consideration per Ordinary Share under the relevant competing
offer, then the Circle Trustee may notify Bidco in writing within
two days of the expiry of such ten day period referred to in (b)
that the terms of the irrevocable undertaking will lapse (which
will allow the Circle Trustee to accept the competing offer).
3. Irrevocable undertakings from certain Circle Shareholders
Percentage
of Voting
Rights following
exercise Percentage
of the CFO of Voting
Options (excluding Rights following
Circle Shares exercise
Number held by the of the CEO
of Circle Tosca Investors) Options
Name of Circle Shareholder Shares (1) (2) (1) (2)
Lansdowne Partners 54,167,008 29.37% 21.61%
Richard Griffiths 23,373,905 12.67% 9.32%
Balderton Capital 16,756,534 9.09% 6.68%
Total: 94,297,447 51.13% 37.61%
Notes:
(1) Includes the Ordinary Shares arising on conversion of the
Convertible Shares following the release of this announcement.
(2) Includes the subscription of additional Ordinary Shares by
the Circle Trustee following exercise of the CFO Options. See
paragraph 13 and Appendix II to this announcement for further
details.
The undertakings referred to above comprise undertakings to
accept the Offer.
The undertakings shall lapse on the same basis as the Circle
Trustee's irrevocable undertaking as set out above, save that the
irrevocable undertaking from Lansdowne Partners will lapse
automatically in respect of the relevant competing offer referred
to above.
For the avoidance of doubt, but without prejudice to the above,
none of the irrevocable undertakings referred to in this Appendix
III shall lapse if Bidco, with the consent of the Panel, announces
publicly that it is implementing the Offer by way of a Scheme,
having previously proceeded with the implementation of the Offer by
way of a takeover offer.
APPIX IV
PART A - THE DISTRIBUTION POLICY
The Circle Trustee holds, as at 23 March 2017 (being the latest
practicable date prior to the Offer Period Commencement Date),
13,500,453 unallocated Ordinary Shares on behalf of the Circle
Trust. These Ordinary Shares were reserved for future option awards
under the Circle Share Schemes. The number of unallocated Ordinary
Shares will increase to the extent that any PIP options and MIP
options lapse or are surrendered and following the allotment and
issue of Ordinary Shares to the Circle Trustee following exercise
of the CFO Options.
The Circle Remuneration Committee has recommended that the
Circle Trustee distributes (and the Circle Trustee has agreed to so
distribute) any surplus assets of the Circle Trust, following the
Offer becoming, or being declared, unconditional in all respects
and the Offer being accepted in respect of the unallocated Ordinary
Shares, to employees who are engaged in the business of the Circle
Group as at the date of this announcement on a pro rata basis by
reference to the aggregate number of Ordinary Shares and
Convertible Shares and options over Circle Shares each such
employee held as at the date of this announcement.
PART B - INTERESTS OF CIRCLE DIRECTORS AND CIRCLE PDMRs
1. Circle Directors
Distribution
of balance
of Ordinary
Shares
held
by the
Ordinary MIP PIP CFO Circle
Name Shares(1) options(2) options Options Trust(3) Total
Michael
Kirkwood 94,157 - - - - 94,157
Lorraine
Baldry 47,078 - - - - 47,078
Andrew Shilston 47,078 - - - - 47,078
Lord Hutton - - - - - -
of Furness
Justin Jewitt - - - - - -
Dr. Massoud
Keyvan-Fouladi 2,362,466 - 500,000 - 2,761,697 5,624,163
Paolo Pieri - - 750,000 2,200,000 2,432,686 5,382,686
Notes:
(1) Includes the Ordinary Shares arising on conversion of the
Convertible Shares following the release of this announcement.
(2) All MIP options will lapse following the Offer becoming, or
being declared, unconditional in all respects and control of Circle
passing to Bidco.
(3) Assuming all 'in the money' PIP options are exercised and no
'underwater' PIP options are exercised. Calculated on the basis of
such assumptions in accordance with the Distribution Policy set out
above. Circle Directors will receive the net proceeds of the Offer
(being 28 pence per Circle Share subject to applicable tax and
national insurance contributions) rather than a transfer of the
underlying Circle Shares.
2. Circle PDMRs
Name Ordinary MIP PIP CFO Distribution Total
Shares(1) options(2) options Options of balance
of Ordinary
Shares
held
by the
Circle
Trust(3)
Nick Boyle 418,560 - 125,000 - 943,915 1,487,475
Sarah Marston - - 185,545 - 123,059 308,604
Notes:
(1) Includes the Ordinary Shares arising on conversion of the
Convertible Shares following the release of this announcement.
(2) All MIP options will lapse following the Offer becoming, or
being declared, unconditional in all respects and control of Circle
passing to Bidco.
(3) Assuming all 'in the money' PIP options are exercised and no
'underwater' PIP options are exercised. Calculated on the basis of
such assumptions in accordance with the Distribution Policy set out
above. Circle PDMRs will receive the net proceeds of the Offer
(being 28 pence per Circle Share subject to applicable tax and
national insurance contributions) rather than a transfer of the
underlying Circle Shares.
APPIX V
DEFINITIONS
The following definitions apply throughout this announcement,
unless otherwise stated or the context otherwise requires.
"AIM" means AIM, a market of the London Stock Exchange;
"AIM Rules" means the AIM Rules for Companies published by the
London
Stock Exchange;
"Articles" means the articles of association of Circle in force
from time-to--time;
"Balderton" means Balderton Capital III, L.P.;
"Bidco" means DMWSL 849 Limited, a private limited company,
incorporated in England and Wales with registered number
10543098;
"Bidco Group" means Bidco and its subsidiary and associated
undertakings as such terms are defined in the Companies Act;
"BlueCrest" means BlueCrest Capital International Master Fund
Limited;
"Business Day" means a day (other than a Saturday, Sunday,
public or bank holiday) on which banks are generally open for
business in London and Jersey;
"CCG" means Clinical Commissioning Group, being clinically-led
statutory NHS bodies responsible for the planning and commissioning
of health care services for their local area;
"certificated" or "in certificated means a share or other
security which is not held in uncertificated
form" form (that is, not in CREST);
"CFO Options" means the options to subscribe for 2,200,000
Ordinary Shares granted by Circle on 21 October 2014 to Mr Paolo
Pieri;
"Circle" or the "Company" means Circle Holdings plc, a public
limited company incorporated in Jersey with registered number
10016;
"Circle Beneficial Owners" means the beneficial owners of
certain Ordinary Shares and Convertible Shares (which shall convert
automatically into Ordinary Shares (on a one-for-one basis) as soon
as practicable following the publication of this announcement (and,
in any event, by no later than 3 April 2017)) held by the Circle
Trustee;
"Circle Board" or "Circle means the board of directors of Circle;
Directors"
"Circle Credo" means the set of shared beliefs of the Circle
Group to build a great company dedicated to its patients, a summary
of which can be found at
www.circlehealth.co.uk/about-circle/the-circle-credo;
"Circle Group" means Circle and its subsidiary undertakings, as
such terms are
defined in the Jersey Companies Law, and each of Circle Harmony
Health Limited and Shanghai Circle Harmony Hospital Management
Limited;
"Circle PDMRs" means Nick Boyle and Sarah Marston, being the
'persons discharging managerial responsibilities' of Circle;
"Circle Remuneration Committee" means the remuneration committee of the Circle Directors;
"Circle Shareholders" means the holders of Circle Shares and
"Circle Shareholder" shall
be construed accordingly;
"Circle Shares" means the Ordinary Shares and "Circle Share"
shall be construed accordingly;
"Circle Share Schemes" means the PIP and the MIP;
"Circle Trust" means Circle Partnership Benefit Trust;
"Circle Trustee" means Circle Partnership Trustee Limited, in
its capacity as trustee of the Circle Trust;
"Circle Trust Loan Agreement" means the amended and restated
loan agreement dated 28 March 2017 entered into between Circle and
the Circle Trustee;
"Circle Trust Relationship means the amended and restated
relationship agreement dated
Agreement" 28 March 2017 entered into between Circle and the
Circle Trustee;
"Closing Price" means the closing middle market price of an
Ordinary Share on a
particular trading day, as derived from the Daily Official
List;
"Code" means the UK City Code on Takeovers and Mergers;
"Companies Act" means the UK Companies Act 2006, as amended from
time to time;
"Conditions" means the conditions of the Offer set out in
Appendix I to this
announcement;
"Confidentiality Agreement" has the meaning given to it in
paragraph 17 of this announcement;
"Convertible Shares" means the convertible (36 months) shares of
GBP0.02 each in the
capital of Circle and "Convertible Share" shall be construed
accordingly;
"CREST" means the securities system for paperless settlement of
trades in
securities and the holding of uncertificated securities operated
by Euroclear;
"Daily Official List" means the London Stock Exchange Daily
Official List published by
the London Stock Exchange;
"Disclosed" means (i) disclosed in the annual report and
accounts for Circle for
the period ended 31 December 2015, (ii) Publicly Disclosed,
including but not limited to the Preliminary Results (iii)
disclosed in this announcement, or (iv) fairly disclosed to Bidco
or Bidco's financial, accounting, tax or legal advisers
(specifically as Bidco's advisers in relation to the Offer) by or
on behalf of Circle prior to the date of this announcement;
"Distribution Policy" means the distribution policy recommended by the Circle
Remuneration Committee and adopted by the Circle Trustee
relating to any surplus assets of the Circle Trust following the
Offer becoming, or being declared, unconditional in all respects
and control of Circle passing to Bidco;
"Euroclear" means Euroclear UK & Ireland Limited, the
operator of CREST;
"Exchange Agreement" means the agreement dated 28 March 2017 between Bidco and
Toscafund as described in paragraph 16 of this announcement;
"FCA" means the Financial Conduct Authority;
"First Closing Date" means the date which falls 21 days after
the posting of the Offer
Document;
"Form of Acceptance" means the form of acceptance and authority
relating to the Circle
Shares, which will accompany the Offer Document;
"JCAM" means JCAM Global Fund (Master) LP;
"Jersey Companies Law" means the Companies (Jersey) Law 1991, and the regulations
promulgated thereunder as each may be amended from time to
time;
"Lansdowne" means Lansdowne Development Markets Master Fund and
Lansdowne Developed Markets Strategic Investment Master Fund
Limited;
"London Stock Exchange" means London Stock Exchange plc;
"MIP" means the Management Incentive Plan of Circle;
"Numis" means Numis Securities Limited;
"Offer" means the cash offer to be made by Bidco at the Offer
Price in
accordance with Part 18 of the Jersey Companies Law to acquire
all of the issued and to be issued share capital of Circle not
already owned, or agreed to be acquired, by Bidco, on the terms and
subject to the conditions set out in this announcement and to be
set out in the Offer Document and, in the case of Circle Shares
held in certificated form, the Form of Acceptance and, where the
context admits, any subsequent revision, variation, extension or
renewal of such offer;
"Offer Document" means the document to be sent to Circle
Shareholders which will
contain, amongst other things, the terms and conditions of the
Offer;
"Offer Period" means the offer period (as defined by the Code)
relating to Circle,
commencing on the Offer Period Commencement Date and ending on
the earlier of the date on which the Offer becomes, or is declared,
unconditional as to acceptances and/or the date on which the Offer
lapses or is withdrawn (or such other date as the Panel may
decide);
"Offer Period Commencement Date" means 29 March 2017;
"Offer Price" means 30 pence per Circle Share;
"Opening Position Disclosure" means an announcement containing
details of interests or short
positions in, or rights to subscribe for, any relevant
securities of a party to the offer if the person concerned has such
a position;
"Ordinary Shares" means all of the issued and fully paid (or
credited as fully paid)
ordinary shares of GBP0.02 each in the capital of Circle and
"Ordinary Share" shall be construed accordingly and any further
such shares which are issued (or created upon the conversion of
Convertible Shares as soon as practicable following the publication
of this announcement (and, in any event, by no later than 3 April
2017)) and fully paid (or credited as fully paid) before the time
and date on which the Offer ceases to be open for acceptance (or
such earlier time and/or date as Bidco may, subject to the Code,
decide);
"Panel" or "Takeover Panel" means the Panel on Takeovers and Mergers;
"Penta" means Penta Capital LLP, a limited liability partnership
registered
in Scotland with registered number SO302035;
"Phase 2 CMA Reference" means a reference of the Offer to the
Chair of the Competition and
Markets Authority for the constitution of a group under Schedule
4 to the UK Enterprise and Regulatory Reform Act 2013;
"Phase 2 European Commission means proceedings initiated by the European Commission under
proceedings" Article 6(1)(c) of Council Regulation 139/2004/EC
in respect of the
Offer;
"PIP" means the Partnership Incentive Plan of Circle;
"Preliminary Results" means the preliminary results for the year
ended 31 December 2016
announced by Circle on 29 March 2017;
"Publicly Disclosed" means fairly disclosed in any public
announcement by Circle to any
Regulatory Information Service;
"Regulatory Information Service" means any of the services
authorised from time to time by the FCA for the purposes of
disseminating regulatory announcements;
"Restricted Jurisdiction" means any jurisdiction where the
relevant laws or regulations of
such jurisdiction may result in a significant risk of civil,
regulatory or criminal exposure if information or documentation
concerning the Offer is sent, published or made available to Circle
Shareholders in that jurisdiction (in accordance with Rule 30.4 of
the Code);
"Richard Griffiths" means Richard Griffiths together with Oak
Trust Limited and Seren
Investment Management Limited;
"Rollover Loan Note Instrument" means the loan note instrument constituting the Rollover Loan
Notes executed by Bidco on 28 March 2017 as described in
paragraph 16 of this announcement;
"Rollover Loan Notes" means unsecured 'rollover' loan notes with
a nominal value of 30p
each to be issued by Bidco;
"Scheme" means a scheme of arrangement effected in accordance
with
Article 125 of the Jersey Companies Law;
"Share Warrants" means the share warrants held by Balderton, Lansdowne,
BlueCrest, JCAM and Health Partners Limited that entitle them to
subscribe for up to an aggregate of 3,623,005 Ordinary Shares, as
more particularly described in paragraph 14 of this
announcement;
"Subscription Agreement" means the agreement dated 28 March 2017
between Bidco and the
Tosca Penta Funds as described in paragraph 16 of this
announcement;
"Subscription Loan Note means the loan note instrument
constituting the Subscription Loan
Instrument" Notes executed by Bidco on 28 March 2017 as
described in
paragraph 16 of this announcement;
"Subscription Loan Notes" means unsecured 'subscription' loan
notes with a nominal value of 30p each to be issued by Bidco;
"Third Party" has the meaning given to it in paragraph 2.1 of
Part A of Appendix I
to this announcement;
"Toscafund" means Toscafund Asset Management LLP, a limited
liability
partnership registered in England and Wales with registered
number OC320318;
"Tosca Investors" means Tosca Mid Cap, Tosca Opportunity and The
Pegasus Fund
Limited being funds managed by Toscafund;
"Tosca Penta" means, together, Toscafund and Penta;
"Tosca Penta Funds" means Tosca Penta Healthco Limited
Partnership, Tosca Penta
Healthco II Limited Partnership and Tosca Penta Healthco III
Limited Partnership;
"UK" or "United Kingdom" means the United Kingdom of Great
Britain and Northern Ireland;
"US" or "United States" means the United States of America, its
territories and possessions,
any state of the United States of America and the District of
Columbia;
"US GAAP" means generally accepted accounting principles in the
US; and
"Voting Rights" means all the voting rights attributable to
Circle's share capital from
time to time and which are exercisable at a general meeting of
Circle.
References to "pounds", "pounds Sterling", "Sterling", "GBP",
"pence", "penny" and "p" are to the lawful currency of the United
Kingdom. References to "US$" are references to the lawful currency
of the United States.
All the times referred to in this announcement are London times
unless otherwise stated. References to the singular include the
plural and vice versa.
References in this announcement to any English legal term shall
in respect of any jurisdiction other than England or in respect of
any member of the Circle Group or the Bidco Group which is
incorporated or operating in a jurisdiction other than England be
deemed to include what most nearly approximates in that
jurisdiction to the English legal term.
References in this announcement to any Jersey legal term shall
in respect of any jurisdiction other than Jersey or in respect of
any member of the Circle Group which is incorporated or operating
in a jurisdiction other than Jersey be deemed to include what most
nearly approximates in that jurisdiction to the Jersey legal
term.
All references to statutory provision or law or to any order or
regulation shall be construed as a reference to that provision,
law, order or regulation as extended, modified, replaced or
re-enacted from time to time and all statutory instruments,
regulations and orders from time to time made thereunder or
deriving validity therefrom.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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