RNS Number : 0296W
Capita Group PLC
05 June 2008
FOR IMMEDIATE RELEASE
5 June 2008
Not for release, publication or distribution in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do
so would constitute a violation of the relevant laws or regulations of such jurisdiction
Recommended Cash Offer of 187.85 pence per Share
for IBS OPENSystems plc ("IBS")
by The Capita Group Plc ("Capita")
Summary
* The boards of Capita and IBS have reached agreement on the terms of a recommended cash offer to acquire the IBS Shares at a price
of 187.85 pence per IBS Share, valuing the fully diluted ordinary share capital of IBS (excluding Treasury Shares) at approximately �77.7
million.
* In addition, IBS Shareholders on the register as at the close of business on 9 May 2008 were entitled to receive a final dividend
payment of 2.15 pence for each IBS Share; this Final Dividend was paid on 2 June 2008.
* Capita has received irrevocable undertakings and letters of intent to accept or procure the acceptance of the Offer in respect of
26,785,227 IBS Shares, representing approximately 70.12 per cent. of the issued share capital of IBS.
* Capita is a leading provider of business process outsourcing and professional support services. A FTSE 100 company, Capita is
quoted on the London Stock Exchange, with a market capitalisation of approximately �4.1 billion.
* IBS is a leading provider of software systems and related services for the management of social housing (commonly known as
'housing systems') and the collection and payment of revenues and benefits (commonly known as 'revenues' or 'revenues/benefits systems') to
local authorities and housing associations in the UK.
* IBS has built a customer base comprising more than 230 local authorities and housing associations in the UK. For the financial
year ended 31 December 2007, IBS reported turnover of �21.0 million and operating profit before amortisation of goodwill of �7.1 million.
* The acquisition of IBS by Capita will add to the breadth and depth of Capita's existing capabilities, particularly in the
provision of housing systems for local authorities and housing associations.
* The price of 187.85 pence for each IBS Share represents a premium of approximately:
o 37.1 per cent. to the Closing Price of 137.0 pence per IBS Share on 24 April 2008, being the last Business Day prior to IBS*s
announcement that it had received approaches from third parties which may or may not lead to an offer being made for IBS;
o 52.1 per cent. to the Closing Price of 123.5 pence per IBS Share on 23 April 2008, being the last Business Day prior to any
market rumours about a potential offer for IBS; and
o 65.5 per cent. to the average Closing Price of approximately 113.5 pence per IBS Share for the three months prior to 24 April
2008, being the last Business Day prior to IBS*s announcement that it had received approaches from third parties which may or may not lead
to an offer being made for IBS.
The IBS Board, which has been so advised by Numis, unanimously considers the terms of the Offer to be fair and reasonable for IBS
Shareholders as a whole. In providing advice to the IBS Board, Numis has taken into account the commercial assessments of the IBS Directors.
Accordingly, the IBS Directors will unanimously recommend that IBS Shareholders accept the Offer, as all the IBS Directors have irrevocably
undertaken to do (or procure to be done) in respect of their own and their related persons' beneficial holdings of IBS Shares, which amount
in aggregate to 180,179 IBS Shares, representing approximately 0.5 per cent. of the existing issued share capital of IBS.
Commenting on the Offer, Paul Pindar, Chief Executive of Capita, said:
"IBS's customer base and range of products and services add to our existing offerings for local authorities and housing associations.
This acquisition will give us greater breadth and depth of expertise with which to assist existing clients and attract new ones. In
addition, IBS works with a number of local authorities and housing associations which complement Capita's network of customers. We believe
that our established strength in the UK outsourcing market will add further credibility and scale to IBS, allowing it to service a wider
range of potential customers and projects."
Tim Curtis, Chairman of IBS, said:
"The IBS Board believes that the offer from Capita of 187.85 pence in cash per IBS Share provides both an attractive premium and
certainty of value for IBS Shareholders especially against the current backdrop of uncertainty in general economic conditions. We believe
that the Capita Group has the financial resources and expertise to invest actively in the future development of the IBS business, thus
enhancing IBS's market position for the benefit of its customers and employees."
Further information on the terms and conditions to which the Offer will be subject are contained in Appendix 1 to this announcement and
will be contained in the Offer Document, which Capita expects to post to IBS Shareholders shortly.
Strata Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for
Capita and no one else in connection with the Offer and will not be responsible to anyone other than Capita for providing the protections
afforded to clients of Strata Partners nor for providing advice in relation to the Offer, the contents of this announcement or any
transaction or arrangement referred to herein.
Numis, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for IBS and no
one else in connection with the Offer and will not be responsible to anyone other than IBS for providing the protections afforded to clients
of Numis nor for providing advice in relation to the Offer, the contents of this announcement or any transaction or arrangement referred to
herein.
This summary should be read in conjunction with the full text of the attached announcement. Appendix 1 to this announcement contains the
conditions of and certain further terms of the Offer. Appendix 2 to this announcement contains source notes relating to certain information
presented in this announcement. Terms used in this announcement shall have the meaning given to them in Appendix 3 to this announcement.
Enquiries:
The Capita Group Plc Tel: +44 (0)20 7799 1525
Paul Pindar, Chief Executive
Shona Nichols, Corporate Communications Director
Caroline Mooney, Capita Press Office
Strata Partners (financial adviser to Capita) Tel: +44 (0)20 7730 1200
Edward Roskill
IBS OPENSystems plc Tel: +44 (0)1635 550 088
Tim Curtis, Chairman
Richard Smith, Chief Executive
Numis (financial adviser, nominated adviser and Tel: +44 (0)20 7260 1000
corporate broker to IBS)
Jag Mundi
Brent Nabbs
James Black
Financial Dynamics (financial PR to Capita) Tel: +44 (0)20 7831 3113
Andrew Lorenz
Citigate Dewe Rogerson (financial PR to IBS) Tel: +44 (0)20 7638 9571
Sebastian Hoyle
Justin Griffiths
It is intended that the Offer Document and the Form of Acceptance will be posted to IBS Shareholders (other than those in the United
States, Canada, Japan or any Prohibited Jurisdiction) shortly. A further announcement in this regard will be made when posting has taken
place. The Offer Document and the Form of Acceptance will in any event be posted within 28 days of this announcement, unless otherwise
agreed with the Panel.
This announcement is not an offer to sell or an invitation to purchase any securities or the solicitation of any vote or approval in any
jurisdiction. The Offer will be made solely by means of the Offer Document, and, in respect of IBS Shares in certificated form, the Form of
Acceptance. Any acceptance or other response to the Offer should be made only on the basis of the information contained or referred to in
the Offer Document and the Form of Acceptance (if appropriate), which will contain the full terms and conditions of the Offer including
details of how it may be accepted. The Offer Document will be available for public inspection and will also be posted on IBS's website
www.ibsopensystems.com.
IBS Shareholders are advised to read carefully the formal documentation in relation to the Offer once it has been despatched.
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may
not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions
outside the UK.
The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the relevant
jurisdiction in which they are located. Persons who are not resident in the United Kingdom should therefore inform themselves about, and
observe, any applicable legal or regulatory requirements of the jurisdiction in which they are resident.
Unless otherwise determined by Capita and permitted by applicable law and regulation, the Offer is not being, and will not be, made,
directly or indirectly, in or into or from, or by the use of the mails of, or by any other means (including, without limitation, electronic
mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of,
or any facility of a national, state or other securities exchange of, the United States, Canada, Japan or of any Prohibited Jurisdiction
and, subject to certain exceptions, the Offer cannot be accepted by any such use, means, instrumentality or facility or from within the
United States, Canada, Japan or any Prohibited Jurisdiction. Accordingly, copies of this announcement, are not being, and must not be,
directly or indirectly, mailed, distributed, transmitted, forwarded or otherwise sent, in whole or in part, in, into or from the United
States, Canada, Japan or any Prohibited Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. Persons receiving this announcement (including, without limitation, custodians,
nominees and trustees) should not distribute, mail, transmit, forward or send them or any of them in, into or from the United States,
Canada, Japan or any Prohibited Jurisdiction or use such mails or any such means, instrumentality or facility for any purpose related to the
Offer.
Further details in relation to Overseas IBS Shareholders will be contained in the Offer Document.
In accordance with normal UK market practice, Capita or any person acting on its behalf may from time to time make certain market or
private purchases of, or make arrangements to purchase, directly or indirectly, IBS Shares other than pursuant to the Offer. Any information
about such purchases will be publicly announced as required by law or regulation in the UK.
Forward-looking statements
This announcement includes certain statements about IBS or Capita (and their respective groups and/or subsidiary undertakings) that are
or may be forward-looking statements. These statements are based on the current expectations of the management of IBS or Capita (as the case
may be) and are naturally subject to uncertainty and changes in circumstances. These forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "intend", "expect",
"anticipate", "target", "estimate", "goal", "believe", "will", "may", "should", "would", "could", "plan" or other words of similar meaning
or import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on
circumstances that will or may occur in the future. There are a number of factors that could cause actual results and developments to differ
materially from those expressed in, or implied by, such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the Offer, and the Capita
Group's ability successfully to integrate the operations and employees of IBS, as well as additional factors, such as changes in economic
conditions, changes in the level of capital investment, success of business and operating initiatives and restructuring objectives,
customers' strategies and stability, changes in the regulatory environment, fluctuations in interest and exchange rates, the outcome of
litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors
could cause actual results to differ materially from those in the forward-looking statements. Investors should not place undue reliance on
such forward-looking statements and neither IBS nor Capita undertakes any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Dealings disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or
more of any class of "relevant securities" of IBS, all "dealings" in any "relevant securities" of IBS (including by means of an option in
respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London
time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer
becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If
two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of IBS, they will be deemed to be a single person for the purpose of Rule 8.3 of the City Code.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of IBS by Capita or IBS, or by any of their
respective "associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to
whether or not you are required to disclose a "dealing" under Rule 8 of the City Code, you should contact the Panel.
If you are in any doubt as to what action you should take, or the contents of this announcement, you should immediately seek your own
personal financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent financial adviser
who, if you are taking advice in the United Kingdom, is authorised under the Financial Services and Markets Act 2000 and specialises in
advising on the acquisition of shares and other securities, or, if you are taking advice outside the United Kingdom, is an appropriately
authorised independent financial adviser with such a specialism.
FOR IMMEDIATE RELEASE
5 June 2008
Not for release, publication or distribution in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do
so would constitute a violation of the relevant laws or regulations of such jurisdiction
Recommended Cash Offer of 187.85 pence per Share
for IBS OPENSystems plc ("IBS")
by The Capita Group Plc ("Capita")
1. Introduction
The boards of Capita and IBS are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be
made by Capita for the IBS Shares at a price of 187.85 pence per IBS Share, valuing the fully diluted ordinary share capital of IBS
(excluding Treasury Shares) at approximately �77.7 million.
In addition, IBS Shareholders on the register as at the close of business on 9 May 2008 were entitled to receive a final dividend
payment of 2.15 pence for each IBS Share; this Final Dividend was paid on 2 June 2008.
2. The Offer
The Offer will be for the entire issued and to be issued share capital of IBS (excluding Treasury Shares) and will be subject to the
conditions and further terms contained in Appendix 1 to this announcement and to the conditions and further terms to be set out in the Offer
Document and, in respect of IBS Shares in certificated form, in the Form of Acceptance. Under the terms of the Offer, IBS Shareholders who
accept the Offer will receive:
187.85 pence in cash for each IBS Share
The terms of the Offer value the current issued and to be issued share capital of IBS (excluding Treasury Shares) at approximately �77.7
million, which represents a premium of approximately:
* 37.1 per cent. to the Closing Price of 137.0 pence per IBS Share on 24 April 2008, being the last Business Day prior to IBS's
announcement that it had received approaches from third parties which may or may not lead to an offer being made for IBS;
* 52.1 per cent. to the Closing Price of 123.5 pence per IBS Share on 23 April 2008, being the last Business Day prior to any market
rumours about a potential offer for IBS; and
* 65.5 per cent. to the average Closing Price of approximately 113.5 pence per IBS Share for the three months prior to 24 April
2008, being the last Business Day prior to IBS's announcement that it had received approaches from third parties which may or may not lead
to an offer being made for IBS.
The IBS Shares will be acquired pursuant to the Offer fully-paid and free from liens, equities, mortgages, charges, encumbrances, rights
of pre-emption and other third party rights or interests of any nature whatsoever and together with all rights now or hereafter attaching
thereto, including all voting rights and the right to receive and retain all dividends and other distributions announced, declared, made or
paid on or after the date of this announcement together with all interest accrued thereon.
3. Background to and reasons for recommending the Offer
IBS is a leading provider of software systems and related services for the management of social housing (commonly known as 'housing
systems') and the collection and payment of revenues and benefits (commonly known as 'revenues' or 'revenues/benefits systems') to local
authorities and housing associations in the UK.
IBS was admitted to AIM on 23 March 2005 at an issue price of 140 pence per IBS share. Since admission, IBS's turnover has grown
organically from �18.7 million in the financial year ended 31 December 2005 (on a pro forma basis) to �21.0 million in the financial year
ended 31 December 2007. Over the same period, operating profit before amortisation of goodwill has risen from �5.5 million in 2005 (on a pro
forma basis) to �7.1 million in 2007.
IBS has built a customer base comprising more than 230 local authorities and housing associations in the UK. While the IBS Directors
believe that further opportunities exist to continue growing the IBS Group, both organically and through acquisitions, they recognise that
such growth carries risks, while the Offer provides both an attractive premium and certainty of value for IBS Shareholders.
The Offer of 187.85 pence per IBS Share provides IBS Shareholders with an opportunity to realise their investment for an attractive cash
premium of approximately 65.5 per cent. over the average Closing Price of 113.5 pence per IBS Share for the three months prior to 24 April
2008, being the last Business Day prior to the announcement by IBS that it had received approaches from third parties which may or may not
lead to an offer being made for IBS.
The IBS Directors believe that IBS will benefit significantly from being part of the Enlarged Capita Group. In particular, Capita has
the financial resources and expertise to invest actively in the future development of the business, thus enhancing IBS's competitive
position for the benefit of its customers and employees.
4. Unanimous recommendation
The IBS Directors, who have been so advised by IBS's financial adviser, Numis, unanimously consider the terms of the Offer to be fair
and reasonable to IBS Shareholders as a whole. In providing its advice to the IBS Directors, Numis has taken into account the commercial
assessments of the IBS Directors.
Accordingly, the IBS Directors intend unanimously to recommend that IBS Shareholders accept the Offer, as all the IBS Directors have
irrevocably undertaken to do (or procure to be done) in respect of their own and their related persons' beneficial holdings of IBS Shares,
which amount in aggregate to 180,179 IBS Shares, representing approximately 0.5 per cent. of the existing issued share capital of IBS.
5. Background to and reasons for the Offer
Capita is a leading provider of business process outsourcing and professional support services. A FTSE 100 company, Capita is quoted on
the London Stock Exchange, with a market capitalisation of approximately �4.1 billion.
The Capita Directors believe that IBS's software systems and related services for housing associations and local authorities fit well
alongside Capita's own software and services offerings for such customers and will add greater scale to its operations.
In addition, the Capita Directors expect good growth prospects by leveraging Capita's established strength in the UK outsourcing market
to the IBS business, thereby enabling IBS to service a wider range of potential customers and projects.
Following the Offer becoming or being declared unconditional in all respects, Capita intends to combine IBS's operations with its own
businesses, offering software (and related services) and outsourcing services to housing associations and local authorities.
6. Undertakings to accept the Offer
Capita has received irrevocable undertakings and letters of intent to accept, or procure the acceptance of, the Offer in respect of, in
aggregate, 26,785,227 *IBS Shares, representing approximately 70.12 *per cent. of the existing issued share capital of IBS.
Irrevocable undertakings and letters of intent to accept the Offer have been received as follows:
(a) the IBS Directors have given irrevocable undertakings to accept the Offer in respect of 180,179 IBS Shares in which they have a
beneficial interest, representing approximately 0.5 per cent. of the existing issued share capital of IBS. These irrevocable undertakings
will remain binding in the event of a Competing Offer for IBS;
(b) irrevocable undertakings in respect of 4,786,066 IBS Shares (representing approximately 12.53 per cent. of the existing issued share
capital of IBS) which will lapse if a Competing Offer is made at a price of at least 110 per cent. of the Offer Price;
(c) irrevocable undertakings in respect of 2,615,320 IBS Shares (representing approximately 6.85 per cent. of the existing issued
share capital of IBS) which will lapse if a Competing Offer is made at a price greater than 204 pence per IBS Share (i.e. approximately
108.66 per cent. of the Offer Price);
(d) irrevocable undertakings in respect of 2,448,160 IBS Shares (representing approximately 6.41 per cent. of the existing issued share
capital of IBS) which will lapse if a Competing Offer is made at a price of at least 105 per cent. of the Offer Price;
(e) irrevocable undertakings in respect of 11,215,321 IBS Shares (representing approximately 29.36 per cent. of the existing issued
share capital of IBS) which will lapse if a Competing Offer is made; and
(f) letters of intent to accept the Offer in respect of 5,540,181 IBS Shares (representing approximately 14.50 per cent. of the
existing issued share capital of IBS).
The IBS Directors have also undertaken that following the Offer being declared or becoming unconditional in all respects they will
accept the offer to be made under Rule 15 of the City Code in respect of their "in the money" options granted to them under the EMI Scheme.
Further details about the irrevocables are set out in Appendix 2 to this announcement.
7. Information on IBS and its current trading and prospects
IBS supplies local authorities and housing associations in the UK with comprehensive, integrated software systems (and related services)
for housing and revenues/benefits.
IBS's housing system, OPENHousing, provides management and administration services primarily in the areas of rent accounting and
arrears; property management, repairs and maintenance; and permanent and temporary property allocation and waiting lists. IBS's
revenues/benefits system, OPENRevenues, manages the administration and payment of claimant benefits, and collection of council tax and
commercial property rates. OPENContractor, contractor workforce and materials management, and OPENFinancials, financial accounting and
reporting systems, are also sold mainly to social housing customers, although both are available as standalone systems.
IBS had approximately 170 full time employees as at 31 December 2007 and has a customer base comprising more than 230 local authorities
and housing associations in the UK. IBS is a public limited company registered in England and Wales and is listed on AIM under the symbol
OPN-L.
For the financial year ended 31 December 2007, IBS reported turnover of �21.0 million and operating profit before amortisation of
goodwill of �7.1 million. IBS's net assets and cash at bank as at 31 December 2007 were approximately �62.6 million and �12.7 million,
respectively.
On 23 April 2008, IBS announced in its annual general meeting statement that its first quarter's revenue and operating profit were in
line with internal management expectations and ahead of those for the same period in 2007. New business wins for the IBS Group in the first
quarter, combined with the prospects of further sales of new software together with the strength of recurring revenues and professional
services from the IBS Group's installed base, give the IBS Board confidence of continuing organic revenue growth in 2008.
Since IBS's annual general meeting statement, trading of the IBS Group has been in line with the expectations of the IBS Directors and
the IBS Directors are not aware of any significant change to the financial and trading position of the IBS Group.
8. Information about Capita and its current trading and prospects
Capita is a leading provider of business process outsourcing and professional support services. The Capita Group's service capabilities
encompass customer services, insurance services, human resource services, software services, systems and strategic support and property
services delivered to both public sector and private organisations. Capita, a FTSE 100 company, is quoted on the London Stock Exchange, with
a market capitalisation of approximately �4.1 billion. For the year to 31 December 2007, Capita reported revenues of approximately �2,073
million (2006: �1,739 million), and profit before tax (stated before goodwill amortisation) of approximately �238 million (2006: �200
million). Capita's net assets at 31 December 2007 amounted to �332 million.
Capita has performed strongly in the first five months of 2008. The Capita Board believes that the businesses across the Capita Group
are trading well and the market for significant outsourcing opportunities remains buoyant. The Capita Board believes that the prospects for
Capita for the current year and thereafter remain strong.
9. Financing of the Offer
Full acceptance of the Offer would require a cash payment by Capita of approximately �77.7 million. The cash consideration payable under
the Offer will be funded from a facility agreement between Capita, Barclays Capital and Barclays Bank PLC and existing cash resources of
Capita. Capita is not intending to use the assets of IBS to satisfy the payment of interest due on such facility, to repay the principal
amount of such facility or to secure such facility.
Strata, as financial adviser to Capita, is satisfied that sufficient resources are available to satisfy in full the consideration
payable in the event of full acceptance of the Offer.
10. IBS management, employees and locations
Capita has given assurances to the IBS Board that, upon the Offer becoming or being declared unconditional in all respects, the existing
contractual employment rights of all employees of the IBS Group, including pension obligations, will be safeguarded.
Capita has confirmed to IBS that IBS's head office will continue to be based in Newbury, Berkshire.
Immediately following the Offer being declared unconditional in all respects, Capita intends to appoint new directors to the IBS Board
and the existing non-executive IBS Directors, namely Tim Curtis, Robert Horvath and Mark Loveland, will resign from the IBS Board from that
time.
11. Inducement Fee
IBS and Capita have entered into agreements under which IBS will pay to Capita an inducement fee of �777,271.96 (plus value added tax
thereon to the extent it is recoverable by IBS), equivalent to one per cent. of the fully diluted value of the Offer, in the event that: (a)
any IBS Director either withdraws or qualifies their recommendation of the Offer or modifies it in a manner which is adverse to Capita or
which reduces the likelihood of the Offer becoming wholly unconditional, and the Offer subsequently lapses or is withdrawn; or (b) prior to
the Offer becoming or being declared wholly unconditional, lapsing or being withdrawn, either a public announcement is made in respect of an
actual or contemplated Competing Offer and the Offer subsequently lapses or is withdrawn or any other Substantial Transaction is publicly
announced and the Offer subsequently lapses or is withdrawn.
12. IBS Share Schemes and Warrant Instrument
The Offer extends to any IBS Shares which are unconditionally allotted or issued fully-paid (or credited as fully-paid) before the date
on which the Offer ceases to be open for acceptance (or such earlier date as Capita, subject to the City Code, may decide) as a result of
the exercise of options or the vesting of awards granted under the IBS Share Schemes or the exercise of warrants under the Warrant
Instrument.
If the Offer becomes or is declared unconditional in all respects, appropriate proposals will in due course be made by Capita to
participants holding outstanding options or awards pursuant to the IBS Share Schemes or the holder of warrants pursuant to the Warrant
Instrument. Details of these proposals will be set out in separate letters to be sent to participants in the IBS Share Schemes and the
holder of warrants issued by IBS pursuant to the Warrant Instrument.
13. Disclosure of interests in IBS relevant securities
Save as set out in Appendix 2, neither Capita, nor (so far as Capita is aware) any person acting, or deemed to be acting, in concert
with Capita for the purposes of the Offer has:
(a) an interest in, or a right to subscribe for, IBS Shares or in any securities convertible or exchangeable into IBS Shares
(*Relevant IBS Securities*);
(b) any short position in Relevant IBS Securities (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; or
(c) borrowed or lent any Relevant IBS Securities (except for any borrowed IBS Shares which have been either on-lent or sold) or
has any arrangement in relation to Relevant IBS Securities.
For these purposes, 'arrangement' includes indemnity or option arrangements and any agreement or understanding, formal or informal, of
whatever nature, relating to Relevant IBS Securities which may be an inducement to deal or refrain from dealing in such securities. In the
interests of secrecy prior to this announcement, Capita has not made any enquiries in this respect of certain parties which are or may be
deemed to be acting in concert with it for the purposes of the Offer. If such enquiries, which are now being made, reveal any relevant
additional interests, this will be discussed with the Panel and, if appropriate, will be disclosed to IBS Shareholders.
14. De-listing and cancellation of trading on AIM and compulsory acquisition
Following the Offer becoming or being declared unconditional in all respects, Capita intends as soon as practicable and in accordance
with the AIM Rules to procure the making of an application by IBS to the London Stock Exchange for the cancellation of admission to trading
of IBS Shares on AIM and also intends that IBS be re-registered as a private company under the relevant provisions of the CA 1985. If this
cancellation of trading on AIM occurs, it will significantly reduce the liquidity and marketability of any IBS Shares not assented to the
Offer, and their value may be affected in consequence. It is anticipated that the cancellation of admission to trading on AIM will take
effect no earlier than 20 Business Days after the date on which the Offer becomes or is declared unconditional in all respects.
If Capita receives acceptances under the Offer in respect of, or otherwise acquires, 90 per cent. or more of the IBS Shares to which the
Offer relates, Capita intends to exercise its rights pursuant to the provisions of sections 979 to 982 inclusive of the Companies Act to
acquire compulsorily, on the same terms as the Offer, any outstanding IBS Shares in respect of which the Offer has not been accepted.
15. Further details of the Offer
There are no agreements or arrangements to which Capita is a party which relate to the circumstances in which it may or may not invoke
or seek to invoke a condition of the Offer.
16. Overseas IBS Shareholders
The availability of the Offer to IBS Shareholders who are not resident in the United Kingdom may be affected by the laws of their
relevant jurisdiction. Such persons should inform themselves of, and observe, any applicable legal or regulatory requirements of their
jurisdiction.
Full details in relation to Overseas IBS Shareholders will be contained in the Offer Document.
17. Other matters
The Offer will be subject to the conditions and further terms set out in Appendix 1 to this announcement and to the conditions and
further terms to be set out in the Offer Document and, in respect of IBS Shares in certificated form, in the Form of Acceptance. Source
notes relating to certain information presented in this announcement are set out in Appendix 2 to this announcement. Certain terms used in
this announcement are defined in Appendix 3 to this announcement.
This announcement is not an offer to sell or an invitation to purchase any securities or the solicitation of any vote or approval in any
jurisdiction. The Offer will be made solely by means of the Offer Document and, in respect of IBS Shares in certificated form, the Form of
Acceptance. Any acceptance or other response to the Offer should be made only on the basis of the information contained or referred to in
the Offer Document and the Form of Acceptance (if appropriate), which will contain the full terms and conditions of the Offer including
details of how it may be accepted. The Offer Document will be available for public inspection and will also be posted on IBS's website
www.ibsopensystems.com.
IBS Shareholders are advised to read carefully the formal documentation in relation to the Offer once it has been despatched.
Strata Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for
Capita and no one else in connection with the Offer and will not be responsible to anyone other than Capita for providing the protections
afforded to clients of Strata Partners nor for providing advice in relation to the Offer, the contents of this announcement or any
transaction or arrangement referred to herein.
Numis, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for IBS and no
one else in connection with the Offer and will not be responsible to anyone other than IBS for providing the protections afforded to clients
of Numis nor for providing advice in relation to the Offer, the contents of this announcement or any transaction or arrangement referred to
herein.
Enquiries:
The Capita Group Plc Tel: +44 (0)20 7799 1525
Paul Pindar, Chief Executive
Shona Nichols, Corporate Communications Director
Caroline Mooney, Capita Press Office
Strata Partners (financial adviser to Capita) Tel: +44 (0)20 7730 1200
Edward Roskill
IBS OPENSystems plc Tel: +44 (0)1635 550 088
Tim Curtis, Chairman
Richard Smith, Chief Executive
Numis (financial adviser, nominated adviser and Tel: +44 (0)20 7260 1000
corporate broker to IBS)
Jag Mundi
Brent Nabbs
James Black
Financial Dynamics (financial PR to Capita) Tel: +44 (0)20 7831 3113
Andrew Lorenz
Citigate Dewe Rogerson (financial PR to IBS) Tel: +44 (0)20 7638 9571
Sebastian Hoyle
Justin Griffiths
This announcement has been prepared for the purpose of complying with English law and the City Code and the information disclosed may
not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions
outside the UK.
The availability of the Offer to persons who are not resident in the United Kingdom may be affected by the laws of the relevant
jurisdiction in which they are located. Persons who are not resident in the United Kingdom should therefore inform themselves about, and
observe, any applicable legal or regulatory requirements of the jurisdiction in which they are resident.
Unless otherwise determined by Capita and permitted by applicable law and regulation, the Offer is not being, and will not be, made,
directly or indirectly, in or into or from, or by the use of the mails of, or by any other means (including, without limitation, electronic
mail, facsimile transmission, telex, telephone, internet or other forms of electronic communication) of interstate or foreign commerce of,
or any facility of a national, state or other securities exchange of, the United States, Canada, Japan or of any Prohibited Jurisdiction
and, subject to certain exceptions, the Offer cannot be accepted by any such use, means, instrumentality or facility or from within the
United States, Canada, Japan or any Prohibited Jurisdiction. Accordingly, copies of this announcement, are not being, and must not be,
directly or indirectly, mailed, distributed, transmitted, forwarded or otherwise sent, in whole or in part, in, into or from the United
States, Canada, Japan or any Prohibited Jurisdiction. Doing so may render invalid any purported acceptance of the Offer. Persons receiving this announcement (including, without limitation, custodians,
nominees and trustees) should not distribute, mail, transmit, forward or send them or any of them in, into or from the United States,
Canada, Japan or any Prohibited Jurisdiction or use such mails or any such means, instrumentality or facility for any purpose related to the
Offer.
Further details in relation to Overseas IBS Shareholders will be contained in the Offer Document.
In accordance with normal UK market practice, Capita or any person acting on its behalf may from time to time make certain market or
private purchases of, or make arrangements to purchase, directly or indirectly, IBS Shares other than pursuant to the Offer. Any information
about such purchases will be publicly announced as required by law or regulation in the UK.
Forward-looking statements
This announcement includes certain statements about IBS or Capita (and their respective groups and/or subsidiary undertakings) that are
or may be forward-looking statements. These statements are based on the current expectations of the management of IBS or Capita (as the case
may be) and are naturally subject to uncertainty and changes in circumstances. These forward-looking statements can be identified by the
fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "intend", "expect",
"anticipate", "target", "estimate", "goal", "believe", "will", "may", "should", "would", "could", "plan" or other words of similar meaning
or import. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on
circumstances that will or may occur in the future. There are a number of factors that could cause actual results and developments to differ
materially from those expressed in, or implied by, such forward-looking statements. These factors include, but are not limited to, the satisfaction of the conditions to the Offer, and the Capita
Group's ability successfully to integrate the operations and employees of IBS, as well as additional factors, such as changes in economic
conditions, changes in the level of capital investment, success of business and operating initiatives and restructuring objectives,
customers' strategies and stability, changes in the regulatory environment, fluctuations in interest and exchange rates, the outcome of
litigation, government actions and natural phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors
could cause actual results to differ materially from those in the forward-looking statements. Investors should not place undue reliance on
such forward-looking statements and neither IBS nor Capita undertakes any obligation to update publicly or revise forward-looking
statements, whether as a result of new information, future events or otherwise, except to the extent legally required.
Dealings disclosure requirements
Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes, "interested" (directly or indirectly) in 1 per cent. or
more of any class of "relevant securities" of IBS, all "dealings" in any "relevant securities" of IBS (including by means of an option in
respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London
time) on the Business Day following the date of the relevant transaction. This requirement will continue until the date on which the Offer
becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If
two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in
"relevant securities" of IBS, they will be deemed to be a single person for the purpose of Rule 8.3 of the City Code.
Under the provisions of Rule 8.1 of the City Code, all "dealings" in "relevant securities" of IBS by Capita or IBS, or by any of their
respective "associates", must be disclosed by no later than 12.00 noon (London time) on the Business Day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of
such securities in issue, can be found on the Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the City Code, which can also be found on the Panel's website. If you are in any doubt as to
whether or not you are required to disclose a "dealing" under Rule 8 of the City Code, you should contact the Panel.
If you are in any doubt as to what action you should take, or the contents of this announcement, you should immediately seek your own
personal financial advice from your stockbroker, bank manager, solicitor, accountant, fund manager or other independent financial adviser
who, if you are taking advice in the United Kingdom, is authorised under the Financial Services and Markets Act 2000 and specialises in
advising on the acquisition of shares and other securities, or, if you are taking advice outside the United Kingdom, is an appropriately
authorised independent financial adviser with such a specialism.
APPENDIX 1
CONDITIONS OF THE OFFER AND FURTHER INFORMATION
PART A - CONDITIONS OF THE OFFER
The Offer is subject to the following conditions:
1. valid acceptances being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. (London time) on the First Closing
Date, being 26 June 2008 (or such later time(s) and/or date(s) as Capita may, with the consent of the Panel or in accordance with the rules
of the City Code, decide) in respect of not less than 90 per cent. (or such lower percentage as Capita may decide) of the IBS Shares to
which the Offer relates, provided that this condition will not be satisfied unless Capita and/or any of its wholly-owned subsidiaries shall
have acquired or agreed to acquire, whether pursuant to the Offer or otherwise, IBS Shares carrying, in aggregate, more than 50 per cent. of
the voting rights then exercisable at general meetings of IBS, including for this purpose (to the extent, if any, required by the Panel) any
voting rights attaching to any IBS Shares which are unconditionally allotted or issued before the Offer becomes or is declared unconditional
as to acceptances, whether pursuant to the exercise of conversion or subscription rights or otherwise); and for this purpose:
(a) the expression "IBS Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 (inclusive) of the
Companies Act; and
(b) IBS Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry
upon entry into the register of members;
2. no Relevant Authority (other than an authority in connection with, or relating to, Competition Law) having decided to take,
institute, implement or threaten any action, suit, proceeding, investigation, enquiry or reference, or made, proposed or enacted any
statute, regulation, decision or order or required any action to be taken or information to be provided or otherwise having taken or
refrained from having taken any other action other than pursuant to, or in connection with any Competition Law, and there not continuing to
be in force any statute, regulation, rule, order or decision that, in any such case, will or may reasonably be expected to:
(a) make the Offer or its implementation or the acquisition or proposed acquisition by Capita (or any other member of the Wider Capita
Group) of any IBS Shares or control or management of IBS or any member of the Wider IBS Group void, voidable, unenforceable or illegal under
the laws of any relevant jurisdiction other than pursuant to, or in connection with any Competition Law, or otherwise, directly or
indirectly, restrain, restrict, prohibit or delay, or impose additional or amended conditions or obligations with respect to, or otherwise
challenge or interfere with, any of the foregoing; or
(b) require, prevent, delay, restrict, or alter the proposed terms for the divestiture by any member of the Wider Capita Group or any
member of the Wider IBS Group of all or any part of their respective businesses, assets or properties or impose any limitation on the
ability of any of them to conduct or to own, use or operate all or any part of the respective businesses, assets or properties owned by, or
the use or operation of which is enjoyed by, any of them, or result in any of them ceasing to be able to carry on business, or being
restricted in its carrying on of business, under any name under which it currently does so; or
(c) impose any limitation on the ability of any member of the Wider Capita Group or any member of the Wider IBS Group, directly or
indirectly, to acquire or to hold or to exercise effectively any rights of ownership of shares or other securities (or the equivalent) in
any member of the Wider IBS Group or any member of the Wider Capita Group, or to exercise management or voting control over any member of
the Wider IBS Group or any member of the Wider Capita Group; or
(d) require any member of the Wider Capita Group or any member of the Wider IBS Group to acquire, or to offer to acquire, any shares or
other securities or indebtedness (or the equivalent) in or of any member of the Wider Capita Group or any member of the Wider IBS Group or
any shares or other securities or indebtedness (or the equivalent) in or of, or any asset owned by, any other person, or to dispose of or
repay, or to offer to dispose of or repay, any shares or other securities or indebtedness (or the equivalent) in or of, or any asset owned
by, any member of the Wider Capita Group or any member of the Wider IBS Group; or
(e) impose any limitation on the ability of any member of the Wider Capita Group or any member of the Wider IBS Group to integrate its
business, or any part of it, with any business of any member of the Wider Capita Group or any member of the Wider IBS Group to an extent
which is material to Capita in the context of the Offer or, as the case may be, in the context of the Wider IBS Group taken as a whole; or
(f) otherwise adversely affect the business, assets, financial or trading position or profits, prospects or value of any member of the
Wider IBS Group or any member of the Wider Capita Group to an extent which is material to Capita in the context of the Offer or, as the case
may be, in the context of the Wider IBS Group taken as a whole.
3. all filings (other than filings in connection with Competition Law) which Capita reasonably considers necessary having been made and
all statutory or regulatory obligations (other than such obligations in connection with Competition Law) in any jurisdiction having been
complied with, and all appropriate waiting or other time periods under any applicable legislation or regulations of any jurisdiction (other
than such regulation or legislation in respect of Competition Law) having expired, lapsed or been terminated, in each case in connection
with the Offer or the acquisition or proposed acquisition of any IBS Shares, or of control or management of IBS (or any other member of the
Wider IBS Group) by Capita (or any other member of the Wider Capita Group), and all Relevant Authorisations (other than Relevant
Authorisations in relation to Competition Law) deemed by Capita (or any other member of the Wider Capita Group) to be necessary or
appropriate for, or in respect of, the Offer or any acquisition or proposed acquisition of any IBS Shares, or of control or management of IBS (or any other member of the Wider IBS Group), by Capita (or any
other member of the Wider Capita Group) or to permit or enable Capita (or any other member of the Wider Capita Group) to carry on the
business of any member of the Wider IBS Group having been obtained in terms and in a form satisfactory to Capita, from all appropriate
Relevant Authorities (other than Relevant Authorities in relation to Competition Law) and from all appropriate persons, authorities or
bodies with whom any member of the Wider Capita Group or any member of the Wider IBS Group has entered into contractual arrangements, and
all such Relevant Authorisations (other than in relation to Competition Law) remaining in full force and effect, and there being no notice
or intimation of any intention to revoke, modify, restrict, suspend or not to renew any of them;
4. save as Disclosed, there being no provision of any Relevant Instrument which, in consequence of the making or implementation of the
Offer, the acquisition or proposed acquisition by any member of the Wider Capita Group of any IBS Shares or any change in the control or
management of IBS or any other member of the Wider IBS Group, or otherwise, provides for, or will or may reasonably be expected to, result
in (in any case to an extent which is or would be material in the context of the Offer or, as the case may be, the Wider IBS Group taken as
a whole) any of the following:
(a) any money borrowed by, or any other indebtedness (actual or contingent) of, any member of the Wider IBS Group being or becoming
repayable or capable of being declared repayable immediately or prior to their stated maturity, or the ability of any such member to borrow
monies or incur any indebtedness being withdrawn or inhibited; or
(b) the creation 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 Wider IBS Group or any such security (whenever arising or having arisen) becoming enforceable or being enforced; or
(c) any Relevant Instrument or any right, liability, obligation, interest or business of any member of the Wider IBS Group under such
Relevant Instrument (or any related arrangement) being terminated or modified or affected, or any action being taken, or any obligation
arising, under any Relevant Instrument; or
(d) any asset or right (including, without limitation, intellectual property rights) or interest of, or any asset or such right the use
or operation of which is enjoyed by, any member of the Wider IBS Group being or failing to be disposed of other than in the ordinary course
of business, or charged, or ceasing to be available to any such member, or any right arising under which any such asset or interest or such
right will or could be required to be disposed of or charged, or will or could cease to be so available; or
(e) the interest or business of any member of the Wider IBS Group in or with any company, firm, body or person, or any arrangements
relating to any such interest or business, being terminated or adversely modified or affected; or
(f) the creation of liabilities, whether actual or contingent, of any member of the Wider IBS Group, or the business, assets, financial
or trading position or profits, prospects or value of any member of the Wider IBS Group being prejudiced or adversely affected; or
(g) any member of the Wider IBS Group or any member of the Wider Capita Group being required to acquire, or to offer to acquire, any
shares or other securities or indebtedness (or the equivalent) in or of any member of the Wider IBS Group or any member of the Wider Capita
Group or any shares or other securities or indebtedness (or the equivalent) in or of, or any asset owned by, any other person or to dispose
of or repay, or to offer to dispose of or repay, any shares or other securities or indebtedness (or the equivalent) in or of, or any asset
owned by, any member of the Wider IBS Group or any member of the Wider Capita Group;
and no event having occurred which, under any provision of any Relevant Instrument, would or could reasonably be expected to result in
any of the events or circumstances referred to in sub-paragraphs (a) to (g) of this paragraph 4 to an extent which is material in the
context of the Offer or, as the case may be, the Wider IBS Group taken as a whole;
5. save as Disclosed, no member of the Wider IBS Group having, since 31 December 2007:
(a) made any alteration to its memorandum or articles of association or other constitutional document which is or could reasonably be
considered to be material; or
(b) recommended, declared, paid or made, or proposed the recommendation, declaration, paying or making of, any dividend, bonus issue or
other distribution, whether in cash or otherwise (other than to IBS or a wholly-owned subsidiary of IBS); or
(c) issued or agreed to issue, or authorised or proposed the issue, of additional shares of any class, or of securities convertible
into, or rights, warrants or options to subscribe for or acquire, any such shares or securities or any loan capital (other than issues to
IBS or a wholly-owned subsidiary of IBS, and save for IBS Shares allotted on the exercise of any options granted under the IBS Share
Schemes, the Warrant Instrument or as Disclosed) or redeemed, purchased or reduced, or authorised or proposed the redemption, purchase or
reduction of any part of its share capital; or
(d) (other than to IBS or a wholly-owned subsidiary of IBS) issued, authorised or proposed the issue of any debentures or loan
securities or, save in the ordinary course of business, increased any indebtedness or contingent liability; or
(e) entered into, varied, implemented, or authorised, proposed or announced its intention to enter into, vary or implement, any
contract, scheme, transaction, commitment or other arrangement which is outside the ordinary course of trading or which is, will or could be
restrictive on the business of any member of the Wider Capita Group or any member of the Wider IBS Group or which involves or will or could
involve an obligation of a loss making, long term, onerous or unusual nature or magnitude in each case to an extent which is material in the
context of the Wider IBS Group taken as a whole; or
(f) authorised, proposed or effected any merger, demerger, reconstruction or amalgamation, or any acquisition or disposal or transfer
of, or any charge or security interest or other encumbrance in respect of, any asset or any right, title or interest in any share or asset
(other than in the ordinary course of trading) which is material in the context of the Wider IBS Group taken as a whole; or
(g) authorised, proposed or effected any mortgage, charge, grant of security interest or other third party right or encumbrance over
any asset or any right, title or interest in any shares or other asset (other than in the ordinary course of trading); or
(h) entered into, or varied (other than in respect of increases in remuneration required under the terms of the relevant agreement, in
the ordinary course of business and consistent with past practice) the terms of, any service contract or agreement or other arrangement with
any of the directors, senior executives or senior employees of any member of the Wider IBS Group; or
(i) been unable, or threatened in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or a substantial part thereof or ceased or threatened to cease carrying on all or a substantial part
of its business; or
(j) taken or proposed any action or had any proceedings instituted, threatened or proposed for its winding-up (voluntarily or
otherwise), dissolution or reorganisation (save for any such winding-up or dissolution whilst solvent) or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar or analogous officer of all or any of its assets or revenues or for any similar
or analogous matters in any jurisdiction; or
(k) waived or compromised any claim, other than in the ordinary course of business which in any case is material in the context of the
Wider IBS Group taken as a whole; or
(l) entered into any commitment, agreement or arrangement, or passed any resolution or made any offer, with respect to, or announced an
intention to effect or to propose, any of the transactions, matters or events referred to in this paragraph 5;
6. save as Disclosed, since 31 December 2007:
(a) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits, prospects or
value of any member of the Wider IBS Group which is material in the context of the Wider IBS Group taken as a whole;
(b) no litigation, arbitration proceedings, prosecution or other legal proceedings to which any member of the Wider IBS Group is or may
become a party (whether as a claimant, defendant or otherwise), and no investigation or enquiry by, or complaint or reference to, any
Relevant Authority against or in respect of any member of the Wider IBS Group, having been instituted, announced or threatened or remaining
outstanding which is material in the context of the Wider IBS Group taken as a whole;
(c) no steps having been taken which will result in, or could reasonably be expected to result in, the withdrawal, cancellation,
termination or adverse modification of any licence or permit held by any member of the Wider IBS Group which is material in the context of
the Wider IBS Group taken as a whole; and
(d) no contingent or other liability having arisen or increased or become apparent to Capita which might be likely adversely to affect
any member of the Wider IBS Group which is material in the context of the Wider IBS Group taken as a whole; and
7. Capita not having discovered, except as Disclosed:
(a) that any financial or business or other information concerning the Wider IBS Group as contained in the information publicly
disclosed at any time by or on behalf of any member of the Wider IBS Group, or disclosed at any time by or on behalf of any member of the
Wider IBS Group in writing in connection with the Offer to any member of the Capita Group or its agents or advisers, is misleading or
contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading which is
material to Capita in the context of the Offer or, as the case may be, in the context of the Wider IBS Group taken as a whole; or
(b) any information which materially affects the import of any such information as is mentioned in sub-paragraph 7(a) of this paragraph
7; or
(c) any circumstance exists whereby a person or class of persons would be likely to have any claim or claims against any past or
present member of the Wider IBS Group which claim or claims would be likely to be material in the context of the Wider IBS Group taken as a
whole;
Capita reserves the right, subject to the requirements of the Panel, to waive all or any of the above conditions in whole or in part,
except the condition set out at paragraph 1 above. The conditions set out in paragraphs 2 to 7 must be fulfilled or waived by 11.59 p.m.
(London time) on the 21st day after the later of the First Closing Date and the date on which the condition set out in paragraph 1 is
fulfilled (or such later date as Capita may, with the consent of the Panel, decide). Capita shall be under no obligation to waive or treat
as satisfied any of the other conditions by a date earlier than the latest date specified above for the satisfaction thereof (or, if no such
date is specified, the date when the Offer, if such be the case, shall become or be declared unconditional in all respects) notwithstanding
that the other conditions of the Offer may, at an earlier date, have been waived or fulfilled and that there are, at such earlier date, no
circumstances indicating that any of such conditions may not be capable of fulfilment.
The Offer will lapse unless the conditions set out above (other than the condition set out at paragraph 1 above) are fulfilled or (if
capable of waiver) waived or, where appropriate, have been determined by Capita to be or to remain satisfied no later than midnight on the
21st day after the later of the First Closing Date and the date on which the Offer becomes or is declared unconditional as to acceptances,
or such later date as Capita may, with the consent of the Panel, decide.
If Capita is required by the Panel to make an offer for IBS Shares under the provisions of Rule 9 of the City Code, Capita may make such
alterations to any of the conditions (including, without limitation, the condition set out at paragraph 1 above) or any of the terms of the
Offer as are necessary to comply with the provisions of that Rule.
If the Offer lapses, it will cease to be capable of further acceptance and persons accepting the Offer and Capita shall then cease to be
bound by acceptances submitted before the time the Offer lapses.
The Offer will be governed by English law and be subject to the jurisdiction of the English courts, to the conditions set out above and
in the formal Offer Document and related Form of Acceptance.
PART B - FURTHER INFORMATION
Certain further terms of the Offer
The formal Offer by Capita will be subject to the terms and conditions as set out in this Appendix 1 and as will be set out in the Offer
Document and accompanying Form of Acceptance, or as may be required to comply with the provisions of the City Code.
The Offer will extend to any IBS Shares unconditionally allotted or issued while the Offer remains open for acceptance (or before such
earlier date as Capita may, subject to the City Code, decide, not being earlier than the date on which the Offer becomes or is declared
unconditional as to acceptances or, if later, the First Closing Date), whether pursuant to the IBS Share Schemes or otherwise.
The IBS Shares are to be acquired fully-paid and free from all liens, charges and encumbrances, rights of pre-emption and any other
third party rights or interests and together with all rights attaching thereto, including the right to receive and retain all dividends or
other distributions declared, paid or made on or after the date of this announcement.
The Offer will lapse if the Acquisition is referred to the Competition Commission in the United Kingdom before 3:00 p.m. (London time)
on the First Closing Date or the time and date on which the Offer becomes or is declared unconditional as to acceptances, whichever is the
later. If the Offer lapses, the Offer will cease to be capable of further acceptance and accepting IBS Shareholders and Capita will
thereupon cease to be bound by any Form of Acceptance submitted before the time when the Offer lapses.
Overseas IBS Shareholders
The making of the Offer to Overseas IBS Shareholders may be prohibited or affected by the laws of the relevant overseas jurisdictions.
Such Overseas IBS Shareholders should inform themselves about and observe any applicable legal requirements. It is the responsibility of any
Overseas IBS Shareholder wishing to accept the Offer to satisfy himself as to the full observance of the laws of the relevant jurisdiction
in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required, compliance
with other formalities needing to be observed and the payment of any issue, transfer or other taxes due in such jurisdiction. Any such
Overseas IBS Shareholder will be responsible for payment of any issue, transfer or other taxes, duties or other requisite payment(s) due in
such jurisdiction(s) by whomsoever payable, and Capita (and any person acting on its behalf) shall be entitled to be fully indemnified and
held harmless by such Overseas IBS Shareholder for any issue, transfer or other taxes or duties or other requisite payments as Capita or any person acting on behalf of Capita may be required
to pay in respect of the Offer insofar as they relate to such Overseas IBS Shareholder.
This announcement is not an offer of securities for sale or purchase in the United States, Canada, Japan or any other Prohibited
Jurisdiction. 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
of interstate or foreign commerce of, or any facilities of a securities exchange of, the United States, or in or into Canada, Japan or any
Prohibited Jurisdiction, and, subject to certain exceptions, the Offer will not be capable of acceptance by any such use, means or
instrumentality or facilities or from or within the United States, Canada, Japan or any Prohibited Jurisdiction.
Any person (including, without limitation, nominees, trustees or custodians) who are overseas persons or who would, or otherwise intend
to, forward this announcement, the Offer Document, the Form of Acceptance or any related document to any jurisdiction outside the United
Kingdom or to any overseas person should seek appropriate advice before taking any action.
APPENDIX 2
BASES AND SOURCES OF INFORMATION AND FURTHER INFORMATION
Unless otherwise stated:
(a) financial information relating to IBS has been extracted or derived (without adjustment) from the consolidated audited annual reports
and accounts for IBS for the years ended 31 December 2005, 2006 and 2007;
(b) financial information relating to Capita has been extracted or derived (without adjustment) from the consolidated audited annual
report and accounts for Capita for the years ended 31 December 2006 and 2007; and
(c) the total equity value of the Offer is calculated based on a fully diluted share capital of IBS of 41,377,267IBS Shares. This in
turn is calculated on the basis of there being 38,200,000 IBS Shares in issue; and the 3,177,267 *in the money* options, awards or warrants
outstanding under the IBS Share Schemes and the Warrant Instrument (and which are expected to become exercisable as a consequence of the
Offer). Treasury Shares have been excluded from this calculation.
Concert parties:
The persons acting, or deemed to be acting, in concert with Capita for the purposes of the Offer include Strata Partners.
Disclosure of interests in IBS
(a) IBS Directors and their related persons have the following interests in IBS Shares:
Name Number of IBS Shares Percentage of IBS existing issued
share capital
Tim Curtis1 80,750 0.21%
Mark Loveland2 34,286 0.09%
Richard Smith 30,000 0.08%
Robert Horvath3 25,000 0.07%
William Loughrey 5,143 0.01%
Karl Pott 5,000 0.01%
Notes:
(1) The shareholding of Tim Curtis includes 10,000 IBS Shares held by
Cecilia Curtis (Mr Curtis*s spouse). The IBS Shares in which Tim Curtis
and Cecilia Curtis are interested are registered in the name of Smith &
Williamson Nominees Limited
(2) The IBS Shares in which Mark Loveland is interested are registered in
the name of Sinjul Nominees Mr Loveland & Mrs AM Loveland SIPP
(3) The IBS Shares in which Robert Horvath is interested are jointly held by
Robert Horvath and Mrs Louise Gina Bosnar-Horvath (Mr Horvath*s spouse)
(b) Persons who may be deemed to be acting in concert with Capita have the following interests in IBS Shares:
Name Number of IBS Shares Percentage of IBS existing
issued share capital
ESW Roskill of Strata Partners 60,745 0.16%
and related persons*
* Various holdings of IBS Shares and derivatives referenced to IBS Shares
Irrevocable undertakings
As at the date of this document, Capita has received irrevocable undertakings and letters of intent to accept the Offer in respect of a
total 26,785,227 IBS Shares, representing approximately 70.12 *per cent. of the existing issued share capital of IBS. The irrevocable
undertakings and letters of intent received by Capita are as follows.
Irrevocable undertakings from IBS Directors
(a) Provided that the Announcement was made not later than 8.00 a.m. (London time) on 5 June 2008 and this Offer Document is posted to
the IBS Shareholders within 28 days (or such longer period as the Panel may agree) of the date of the Announcement, the IBS Directors have
given irrevocable undertakings to accept the Offer and, use all reasonable endeavours to procure the acceptance by their related persons,
(unless Capita has already acquired the IBS Shares the subject of such irrevocable undertakings) in respect of 180,179 IBS Shares in which
they have a beneficial interest, representing approximately 0.5 per cent. of the existing issued share capital of IBS. The number of IBS
Shares to which each undertaking relates is stated below (and the relative percentages of the existing issued share capital of IBS
represented by such IBS Shares):
Name Number of IBS Shares Percentage of IBS existing issued
share capital
Tim Curtis 80,750 0.21%
Mark Loveland 34,286 0.09%
Richard Smith 30,000 0.08%
Robert Horvath 25,000 0.07%
William Loughrey 5,143 0.01%
Karl Pott 5,000 0.01%
These irrevocable undertakings will remain binding in the event of a Competing Offer for IBS.
(b) Provided that the Announcement was made not later than 8.00 a.m. (London time) on 5 June 2008 and the Offer Document is posted to
the IBS Shareholders within 28 days (or such longer period as the Panel may agree) of the date of the Announcement, and following the Offer
being declared or becoming wholly unconditional, Richard Smith, William Loughrey and Karl Pott have each given irrevocable undertakings to,
at their election, either:
(i) exercise their respective ''in the money'' options and accept the Offer in respect of their respective resulting IBS Shares; or
(ii) provided that (I) the IBS Shares are no longer admitted to trading on AIM, and (II) IBS has confirmed to the relevant IBS Director
in writing that his resignation as a director will not prejudice any of his rights of employment under his service agreement with IBS
(letters to this effect have now been provided to the relevant IBS Directors) in each case on or before the date that is 23 Business Days
after the Offer has become or is declared unconditional in all respects, then he shall resign as a director of IBS and accept the offer to
be made under Rule 15 of the City Code in respect of his ''in the money'' options granted to him under the EMI Scheme as follows:
Name Number of *in the Percentage of IBS existing
money* options over issued share capital
IBS Shares
Richard Smith 550,000 1.44%
William Loughrey 246,730 0.65%
Karl Pott 140,762 0.37%
These irrevocable undertakings will remain binding in the event of a Competing Offer for IBS.
Irrevocable undertaking from former CEO of IBS
(c) Malcolm Carter, former CEO of IBS, has irrevocably undertaken to accept the Offer in respect of 350,235 *IBS Shares representing
approximately 0.92 per cent. of the existing issued share capital of IBS. This undertaking will cease to be binding if a Competing Offer for
IBS is made which represents a value of not less than 110 per cent. of the Offer Price.
Irrevocable undertakings from institutional shareholders
(d) The following institutional shareholders have irrevocably undertaken to accept the Offer in relation to the number of IBS Shares set
out next to their names representing in aggregate approximately 24.87 per cent. of the existing issued share capital of IBS. These
undertakings will cease to be binding if a Competing Offer is made for IBS which represents a value of not less than the amount specified in
the table below:
Shareholder Number of IBS Shares Percentage of Irrevocable undertaking lapses
existing issued if value of Competing Offer is:
share capital
Octopus Investments Nominees 2,282,870 5.98% * 110% of Offer Price
Limited A/C ITS
Gartmore Investment Limited 1,148,629 3.01% * 110% of Offer Price
MPC Investors Limited 1,004,332 2.63% * 110% of Offer Price
Majedie Asset Management 2,615,320 6.85% >204 pence
Morley Fund Management Limited 2,448,160 6.41% * 105% of Offer Price
(e) The following institutional shareholders have irrevocably undertaken to accept the Offer in relation to the number of IBS Shares set
out next to their names representing in aggregate approximately 29.36 per cent. of the existing issued share capital of IBS. These
undertakings will cease to be binding if a Competing Offer is made for IBS at a value which is not less than the Offer Price:
Shareholder Number of IBS Shares Percentage of existing issued share capital
BlackRock Investment 5,819,321 15.23%
Management (UK) Limited
Herald Investment Management 3,875,000 10.14%
Limited
Montanaro Holdings Limited 1,521,000 3.98%
(f) The following institutional shareholders have advised in writing that they intend to accept the Offer in respect of the number of
IBS Shares set out next to their names representing in aggregate approximately 14.50 per cent. of the existing issued share capital of IBS.
These statements of intent are not legally binding:
Shareholder Number of IBS Shares Percentage of existing issued share capital
Schroder Investment Management 2,982,143 7.81%
Limited
Henderson Global Investors 2,558,038 6.70%
Limited
APPENDIX 3
DEFINITIONS
The following definitions apply throughout this announcement unless the context requires otherwise:
*Acquisition* the proposed acquisition of IBS by Capita pursuant to the Offer
*acting in concert* has the same meaning as in the City Code
*AIM* the market of that name operated by the London Stock Exchange
*AIM Rules* the *AIM Rules for Companies* as published by the London Stock
Exchange from time to time
*Announcement* the announcement (made pursuant to Rule 2.5 of the City Code) of
the Offer by Capita to acquire the IBS Shares (excluding Treasury
Shares), released to a Regulatory Information Service on 5 June
2008
*Business Day* a day, not being a public holiday, Saturday or Sunday, on which
clearing banks in London are open for normal business
*CA 1985* the Companies Act 1985 (as amended)
*Canada* Canada, its provinces and territories and all areas under its
jurisdiction and political sub-divisions thereof
*Capita* The Capita Group Plc, a public limited company incorporated in
England and Wales under the CA 1985 with registered number
2081330
*Capita Board* the board of directors of Capita
*Capita Director(s)* a director or some or all of the directors of Capita
*Capita Group* Capita and its subsidiary undertakings
*certificated* or *in an IBS Share which is not in uncertificated form (that is, not in
certificated form* CREST)
*City Code* the City Code on Takeovers and Mergers
*Closing Price* the closing middle market quotation of an IBS Share as derived
from the AIM appendix to the Daily Official List on any
particular day
*Companies Act* the Companies Act 2006
*Competing Offer* an offer made or to be made by a third party for all or the
majority of the ordinary issued and to be issued share capital of
IBS or any other proposal made or to be made by a third party
having substantially the effect of a merger of IBS into or with
any other entity
*Competition Commission* the UK Competition Commission
*Competition Law* any applicable laws, regulations, rules or other enactments
whatever dealing (without limitation) with anti-competitive
agreements decisions or concerted practices, monopolies, abuse of
dominant position, other anti-competitive behaviour arising as a
result of the proposed acquisition of IBS by Capita, and the
requirements of any equivalent special regulatory regime to which
IBS may be subject in any area of its activities in the UK, EU,
EEA or any other jurisdiction in which IBS's business is carried
on
*CREST* the relevant system (as defined in the CREST Regulations) to
facilitate the transfer of title to shares in uncertificated form
in respect of which Euroclear is the Operator (as defined in the
CREST Regulations)
*Daily Official List* the Daily Official List of the London Stock Exchange
*Disclosed* (a) disclosed in the annual report and accounts of IBS for the
year ended 31 December 2007; (b) disclosed in any other public
announcement made by IBS via a Regulatory Information Service in
the period ending on the Business Day immediately preceding the
Announcement; or (c) as otherwise fairly disclosed in writing by
or on behalf of IBS to Capita in connection with the Offer prior
to the Announcement
*EMI Scheme* the IBS Enterprise Management Incentive Scheme adopted by the IBS
Board on 21 April 2005 as updated or amended
*Enlarged Capita Group* the Capita Group as enlarged by the acquisition of IBS
*Final Dividend* the final dividend of 2.15 pence for each IBS Share paid on 2
June 2008 to IBS Shareholders on the register as at the close of
business on 9 May 2008
*First Closing Date* the twenty-first day after the posting of this document
*Form of Acceptance* the form of acceptance and authority to be issued in connection
with the Offer, and which will accompany the Offer Document
*IBS* IBS OPENSystems plc, a public company incorporated in England and
Wales with registered number 5301595
*IBS Board* the board of directors of IBS
*IBS Director(s)* a director or some or all of the directors of IBS
*IBS Group* IBS and its subsidiary undertakings
*IBS Share(s)* includes: (a) the existing unconditionally allotted or issued and
fully-paid ordinary shares of 5 pence each in the capital of IBS;
and (b) any further ordinary shares of 5 pence each in the
capital of IBS which are unconditionally allotted or issued
(including, pursuant to the exercise of options granted under the
IBS Share Schemes and the Warrant Instrument) before the date on
which the Offer ceases to be open for acceptances (or before such
earlier date as, subject to the City Code, Capita may determine
in accordance with the terms of the Offer), but excludes Treasury
Shares
*IBS Shareholders* registered holders of IBS Shares
*IBS Share Schemes* the two Inland Revenue approved share incentives schemes
comprising the EMI Scheme and a Save as You Earn scheme, of which
all members of staff, including executive directors are potential
beneficiaries, operated by the IBS Group
*Japan* Japan, its cities, prefectures, territories and possessions
*Listing Rules* the listing rules of the UK Listing Authority made under Part VI
of the Financial Services and Markets Act 2000
*London Stock Exchange* London Stock Exchange plc
*Numis* Numis Securities Limited
*Offer* the recommended offer to be made by Capita to acquire the IBS
Shares on the terms and subject to the conditions to be set out
in the Offer Document and the Form of Acceptance (including where
the context so requires, any subsequent revision, variation,
extension or renewal thereof)
*Offer Document* the formal offer document to be sent to IBS Shareholders
containing the Offer
*Offer Period* the period beginning on and including 25 April 2008 and ending on
the later of (i) 1.00 p.m. (London time) on 26 June 2008, (ii)
the time and date on which the Offer becomes or is declared
unconditional as to acceptances and (iii) the time and date on
which the Offer lapses or is withdrawn
*Offer Price* 187.85 pence in cash per IBS Share
*Overseas IBS Shareholders* an IBS Shareholder who is an overseas person including any US
Person who holds IBS Shares
*overseas person* any person who is not resident in the United Kingdom, or who is a
citizen, resident or national of a jurisdiction outside the
United Kingdom, or who is a nominee of, or custodian or trustee
for, any citizen(s), resident(s) or national(s) of any country
other than the United Kingdom
*Panel* the Panel on Takeovers and Mergers
*Pound Sterling* or *�* the lawful currency of the United Kingdom (and references to
*pence* shall be construed accordingly)
*Prohibited Jurisdiction* any jurisdiction where local laws or regulations may result in a
risk of civil, regulatory or criminal exposure to prosecution if
information concerning the Offer is sent or made available to IBS
Shareholders in that jurisdiction
*Regulatory Information a service approved by the London Stock Exchange which has the
Service* meaning given to that expression in the AIM Rules
*related person* in relation to a director his: (i) spouse; (ii) infant children;
(iii) trusts of which he is, or his spouse or any of his infant
children is, an actual or potential beneficiary or a trustee
(*related trusts*); and (iv) any company which he and/or his
spouse and/or his infant children and/or their related trusts,
control or in respect of which he and/or they exercise one third
or more of the voting rights
*Relevant Authorisation* a material authorisation, order, grant, recognition,
confirmation, determination, consent, licence, clearance,
permission, allowance or approval
*Relevant Authority* any government, government department or governmental,
quasi-governmental, supranational, statutory, regulatory or
investigative body or authority, or any court or tribunal in each
case in any jurisdiction
*Relevant Instrument* any material agreement, arrangement, licence, permit, lease or
other instrument or obligation to which any member of the Wider
IBS Group is a party or by or to which any such member or any of
its assets is bound, entitled or subject
*Strata* or *Strata Partners* Strata Technology Partners LLP
*Substantial Transaction* a transaction which would constitute a Class 1 transaction or
reverse takeover in relation to IBS for the purpose of chapter 10
of the Listing Rules (if the Listing Rules applied to IBS
ignoring any waiver or relaxation of the rules in that chapter)
*Treasury Shares* ordinary shares in the capital of IBS held or which become held
by IBS in treasury save to the extent that any such shares cease
to be held in treasury before the date on which the Offer ceases
to be open for acceptances (or before such earlier date as,
subject to the City Code, Capita may determine in accordance with
the terms of the Offer)
*United Kingdom* or *UK* the United Kingdom of Great Britain and Northern Ireland and its
dependent territories
*United States* or *US* the United States of America, its territories and possessions,
any state of the United States of America and the District of
Columbia and all other areas subject to its jurisdiction
*US Person* as defined in regulation S under the US Securities Act
*US Securities Act* the US Securities Act of 1933 (as amended by the rules and
regulations promulgated thereunder)
*Warrant Instrument* the warrant instrument dated 17 March 2005 between IBS AB and IBS
pursuant to which IBS AB has the right to subscribe for 1,200,000
IBS Shares at an exercise price of 140 pence per IBS Share
exercisable at any time (in whole or part) prior to 23 March 2009
*Wider Capita Group* Capita and its subsidiary undertakings and any other undertaking
in which Capita and such subsidiary undertakings (aggregating
their interests) have a substantial interest
*Wider IBS Group* IBS and its subsidiary undertaking and any other undertakings in
which IBS and such subsidiary undertakings (aggregating their
interests) have a substantial interest
All references to legislation in this announcement are to English legislation unless the contrary is indicated. Any reference to any
provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.
Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the
feminine or neutral gender.
For the purposes of this announcement, "subsidiary", "subsidiary undertaking", "undertaking" and "parent undertaking" have the
respective meanings given to them by the Companies Act and "substantial interest" means the direct or indirect interest of 20 per cent. or
more of the equity share capital (as defined in the Companies Act) of any undertaking.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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