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Not for release, publication or distribution, in whole or in part, directly or indirectly in,
into or from any jurisdiction where to do so would constitute a violation of the relevant
laws of such jurisdiction.
1 April 2015
Recommended Cash Offer
for
Nationwide Accident Repair Services plc (“NARS”)
by
Canaveral Bidco Limited (“CSP Bidco”)
(an indirect wholly owned subsidiary of CSP III AIV (Cayman), L.P.)
to be effected by way of a scheme of arrangement under
Part 26 of the Companies Act 2006
Summary
•
The Board of NARS and the Board of CSP Bidco are pleased to announce that
agreement has been reached on the terms of a recommended cash acquisition by CSP
Bidco of the entire issued and to be issued ordinary share capital of NARS.
•
It is intended that the Transaction will be implemented by way of a court-sanctioned
scheme of arrangement under Part 26 of the Companies Act 2006. The purpose of the
Scheme is to enable CSP Bidco to acquire the whole of the issued and to be issued
ordinary share capital of NARS.
•
Under the terms of the Scheme, which will be subject to the Conditions and other terms
set out in this announcement and to further terms to be set out in the Scheme Document,
NARS Ordinary Shareholders will receive 100 pence in cash for each NARS Share
held. The Offer values the entire issued ordinary share capital of NARS at
approximately £43.2 million and represents:
o
a premium of approximately 45 per cent. to the Volume Weighted Average
Price per NARS Share of 69.2 pence during the three month period to 31 March
2015 (being the latest practicable date prior to the publication of this
announcement); and
o
a premium of approximately 13 per cent. to the Closing Price per NARS Share
of 88.5 pence on 31 March 2015 (being the latest practicable date prior to the
publication of this announcement).
CSP Bidco is an indirect wholly owned subsidiary of CSP III AIV (Cayman), L.P., a limited
partnership fund affiliated with Carlyle Strategic Partners III, L.P., managed by its investment
adviser Carlyle Investment Management L.L.C. which together with affiliates do business as
‘The Carlyle Group’ (“Carlyle”). Carlyle is a global alternative asset manager with more than
$194 billion of assets under management in 128 funds and 142 fund of funds vehicles as of 31
December 2014. Carlyle invests across four segments – Corporate Private Equity, Global
Market Strategies, Real Assets and Investment Solutions – in Africa, Asia, Australia, Europe, the
Middle East, North America and South America. Carlyle has expertise in various industries,
including: aerospace, defence & government services, consumer & retail, energy & power,
financial services, healthcare, industrial, infrastructure, real estate, technology & business
services, telecommunications & media and transportation. Carlyle employs more than 1,650
people in 40 offices across six continents.
•
The NARS Independent Directors, who have been so advised by Westhouse Securities as to
the financial terms of the Offer, consider the financial terms of the Offer to be fair and
reasonable. In providing its advice to the NARS Independent Directors, Westhouse
Securities has taken into account the commercial assessments of the NARS Independent
Directors.
Accordingly, the NARS Independent Directors intend to unanimously
recommend that NARS Independent Shareholders vote in favour of all of the resolutions
relating to the Transaction at the Meetings, as Michael Marx, being the sole NARS
Independent Director holding NARS Ordinary Shares, has irrevocably undertaken to do in
respect of his own entire beneficial holdings of 30,000 NARS Ordinary Shares, representing
approximately 0.07 per cent. of NARS’s issued ordinary share capital on 31 March 2015
(being the last Business Day before the date of this announcement).
•
CSP Bidco has received an irrevocable undertaking from Michael Wilmshurst to submit and
undertake to the Court to be bound by the Scheme and to vote in favour of the resolutions to
be proposed at the Meetings (save for the resolution at the Court Meeting and the resolution
to approve the Management Arrangements on which he is not allowed to vote) in respect of
his 1,351,351 NARS Ordinary Shares in aggregate, representing approximately 3.13 per
cent. of NARS’s issued ordinary share capital on 31 March 2015 (being the last Business
Day before the date of this announcement).
•
CSP Bidco has also received irrevocable undertakings to vote in favour of the Scheme from
entities connected with Harwood Capital LLP, whose principal Christopher Mills is a nonexecutive director of NARS, which account for 13,395,414 NARS Ordinary Shares in
aggregate and represent approximately 31.01 per cent. of NARS’s issued ordinary share
capital. When combined with irrevocables from Michael Marx and other NARS
Shareholders (and excluding Michael Wilmshurst who is unable to vote at the Court
Meeting), CSP Bidco has received irrevocable undertakings to vote in favour of the Scheme
in respect of the beneficial holdings of NARS Shareholders totalling 26,173,837 NARS
Ordinary Shares in aggregate and representing approximately 60.59 per cent. of NARS’s
issued ordinary share capital.
Further details of the irrevocable undertakings of support received by CSP Bidco are set out in
Appendix 3 to this announcement, including the circumstances in which they cease to be
binding.
•
The Offer is subject to a number of Conditions and further terms, including the approval of
the Scheme by the NARS Shareholders at the Court Meeting, the passing of resolutions by
the NARS Shareholders at the NARS General Meeting by the requisite majorities and
customary regulatory conditions.
2
•
The Scheme Document, containing further information about the Offer and notices of the
Court Meeting and the NARS General Meeting, will be published as soon as practicable
and, in any event, within 28 days of this announcement.
Commenting on the Offer, Michael Marx, Chairman of NARS, said:
“The Board of Nationwide is pleased to announce that agreement has been reached with
Carlyle on the terms of a recommended cash offer for Nationwide. This Offer enables
Nationwide shareholders to realise value today in cash for their shares at a significant
premium to the recent historical share price and a meaningful premium to the company’s
share price immediately prior to the date of this announcement. It also provides the
business with the opportunity to realise its growth ambitions and build its UK presence in
an accelerated way. Carlyle has a well-respected track record in the automotive sector
and specific experience in the vehicle accident repair market. We believe that the Offer is
a good outcome for all Nationwide stakeholders.”
Summary information on NARS
NARS provides integrated automotive accident repair management services to the UK insurance
industry and to fleet and retail customers. With over 70 repair centres, it is the largest dedicated
provider of accident repair services in the UK. NARS is active throughout the UK with three
divisions: (i) Nationwide Crash Repair Centres, which provides vehicle body repair services; (ii)
Network Services, which provides accident management services, claim handling and
deployment for repair for insurance companies and fleet operators; and (iii) Motorglass, which
provides mobile motor glass repair and replacement. The NARS Group employs approximately
2,500 staff.
Enquiries:
NARS
Michael Marx
+44 (0)1993 701720
Westhouse Securities
(Financial adviser, Nominated Adviser and Corporate Broker to NARS)
Robert Finlay
Antonio Bossi
+44 (0)207 601 6100
KTZ Communications
(PR adviser to NARS)
Katie Tzouliadis
+44 (0)203 178 6378
Rothschild
(Financial adviser to Carlyle)
Ravi Gupta
Jonathan Slaughter
+44 (0)207 280 5000
Carlyle
(Carlyle External Affairs)
Catherine Armstrong
+44 (0)207 894 1200
3
This summary should be read in conjunction with the full text of the following
announcement, including the Appendices. The Conditions and further terms of the
Transaction are set out in Appendix 1 to this announcement and the full terms and conditions
will be set out in the Scheme Document. Appendix 2 to this announcement contains the
sources of information and bases of calculation of certain information contained in this
announcement. Appendix 3 contains a summary of the irrevocable undertakings received to
vote in favour of the Scheme, and Appendix 4 contains definitions of certain expressions used
in this summary and in this announcement.
Important notices
Westhouse Securities Limited, which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting as financial adviser, nominated adviser and broker to
NARS and no-one else in connection with the Offer and other matters described in this
announcement, and will not be responsible to anyone other than NARS for providing the
protections afforded to clients of Westhouse Securities Limited nor for providing advice in
relation to the Offer, the contents of this announcement or any other matter referred to herein.
Rothschild is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the UK. Rothschild is acting
exclusively as financial adviser to Carlyle and no one else in connection with the Offer and will
not be responsible to anyone other than Carlyle for providing the protections afforded to clients
of Rothschild nor for providing advice in connection with the Offer or any matter referred to
herein.
This announcement is for information purposes only and does not constitute an offer to sell or
an invitation to purchase any securities or the solicitation of an offer to buy any securities,
pursuant to the Offer or otherwise. The Offer will be made solely by means of the Scheme
Document or any document by which the Offer is made which will contain the full terms and
Conditions of the Offer, including details of how to vote in respect of the Transaction.
This announcement has been prepared for the purpose of complying with the laws of England
and Wales 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 the United Kingdom.
NARS will prepare the Scheme Document to be distributed to NARS Shareholders. NARS and
CSP Bidco urge NARS Shareholders to read the Scheme Document when it becomes available
because it will contain important information relating to the Offer.
This announcement does not constitute a prospectus or prospectus equivalent document.
Overseas Shareholders
The release, publication or distribution of this announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to
the laws of other jurisdictions should inform themselves of, and observe, any applicable
requirements. Any failure to comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law,
the companies and persons involved in the Offer disclaim any responsibility or liability for the
violation of such restrictions by any person.
Notice to US investors in NARS: the Transaction relates to the shares of an English company
and is being made by means of a scheme of arrangement provided for under English company
law. A transaction effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the
4
Transaction is subject to the disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement which differ from the disclosure requirements of United
States tender offer and proxy solicitation rules. If, in the future, CSP Bidco exercises the right
to implement the Transaction by way of a takeover offer and determines to extend the offer into
the United States, the Transaction will be made in compliance with applicable United States
laws and regulations. Financial information included in this announcement and the Scheme
Document has been or will have been prepared in accordance with accounting standards
applicable in the United Kingdom that may not be comparable to financial information of US
companies or companies whose financial statements are prepared in accordance with generally
accepted accounting principles in the United States. No US federal or state securities
commission has: (a) approved, disapproved, endorsed or recommended the Offer; (b) passed
upon the merits or fairness of the Offer; or (c) expressed a view on the adequacy of this
document. Any representation to the contrary is a criminal offence in the United States.
Unless otherwise determined by NARS or required by the Code, and permitted by applicable
law and regulation, the Offer will not be made available, directly or indirectly, in, into or from
a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no
person may vote in favour of the offer by any such use, means, instrumentality or form within a
Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the
laws of that jurisdiction. Accordingly, copies of this announcement and all documents relating
to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would
violate the laws in that jurisdiction, and persons receiving this announcement and all documents
relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise
distribute or send them in, into or from such jurisdictions where to do so would violate the laws
in that jurisdiction.
The receipt of cash pursuant to the Scheme by US Shareholders as consideration for the
transfer of their NARS Shares pursuant to the Scheme may be a taxable transaction for US
federal income tax purposes and under applicable US state and local, as well as foreign and
other, tax laws. Each NARS Shareholder (including US Shareholders) is urged to consult his
independent professional adviser immediately regarding the tax consequences of the Offer
applicable to him.
The availability of the Offer to NARS Shareholders who are not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves of, and observe, any
applicable requirements.
No steps have been taken, nor will any steps be taken, to extend the Offer into Japan, South
Africa or Australia and no regulatory clearances in respect of the Offer have been, or will be,
applied for in any other jurisdiction.
The Offer will be subject to the applicable requirements of the Code, the Panel, the London
Stock Exchange, the Financial Conduct Authority and the UK Listing Authority.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial
condition, results of operations and business of NARS and certain plans and objectives of CSP
Bidco with respect thereto. These forward-looking statements can be identified by the fact that
they do not relate only to historical or current facts. Forward-looking statements often use
words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”,
“believe”, “hope”, “aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other
5
words of similar or opposite meaning. These statements are based on assumptions and
assessments made by NARS and/or CSP Bidco in light of their experience and their perception
of historical trends, current conditions, future developments and other factors they believe
appropriate. By their nature, forward-looking statements involve risk and uncertainty, 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 and developments to differ materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such expectations
will prove to have been correct and you are therefore cautioned not to place undue reliance on
these forward-looking statements which speak only as at the date of this announcement. Neither
NARS nor CSP Bidco 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.
There are several factors which could cause actual results to differ materially from those
expressed or implied in forward-looking statements. Among the factors that could cause actual
results to differ materially from those described in the forward-looking statements are changes
in global, political, economic, business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future business combinations or
dispositions.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate for any period
and no statement in this announcement should be interpreted to mean that earnings or earnings
per share for NARS for the current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share for NARS.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 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
commencement of the Offer Period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position Disclosure must contain
details of the person’s interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later
than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer
Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 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
6
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 Panel’s website at http://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. If you are in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure, you should contact the Panel’s Market
Surveillance Unit on +44 (0)207 638 0129.
Electronic communications
Please be aware that addresses, electronic addresses and certain information provided by
NARS Shareholders, persons with information rights and other relevant persons for the receipt
of communications from CSP Bidco may be provided to CSP Bidco during the Offer Period as
requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.12(c) of the Code.
Publication on website
A copy of this announcement will be made available subject to certain restrictions relating to
persons
resident
in
Restricted
Jurisdictions
on
NARS’s
website
at
http://corporate.nationwiderepairs.co.uk/investor-relations/information-takeover by no later
than 12 noon (London time) on the day following this announcement. For the avoidance of
doubt, the contents of this website are not incorporated into and not do form part of this
announcement.
Requesting hard copy documents
In accordance with Rule 30.2 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 either
NARS by contacting Westhouse Securities on +44 (0)207 601 6100 or CSP Bidco by contacting
Rothschild on +44 (0)207 280 5000, as appropriate.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
that precede them.
7
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, NARS confirms that, as at the date of this
announcement, it has in issue and admitted to trading on the AIM market of the London Stock
Exchange 43,197,220 ordinary shares of 12.5 pence each (there are no ordinary shares held in
treasury). The International Securities Identification Number (ISIN) of the ordinary shares is
GB00B15RR673.
8
Not for release, publication or distribution, in whole or in part, directly or indirectly in,
into or from any jurisdiction where to do so would constitute a violation of the relevant
laws of such jurisdiction.
Recommended Cash Offer
for
Nationwide Accident Repair Services plc (“NARS”)
by
Canaveral Bidco Limited (“CSP Bidco”)
(an indirect wholly owned subsidiary of CSP III AIV (Cayman), L.P.)
to be effected by way of a scheme of arrangement under
Part 26 of the Companies Act 2006
1.
Introduction
The Board of NARS and the Board of CSP Bidco are pleased to announce that agreement has
been reached on the terms of a recommended cash acquisition by CSP Bidco of the entire issued
and to be issued ordinary share capital of NARS.
CSP Bidco is an indirect wholly owned subsidiary of CSP III AIV (Cayman), L.P., a limited
partnership fund affiliated with Carlyle Strategic Partners III, L.P., managed by its investment
adviser, Carlyle Investment Management L.L.C..
2.
The Transaction
It is intended that the Transaction will be implemented by way of a court-sanctioned scheme of
arrangement under Part 26 of the Companies Act 2006. The purpose of the Scheme is to enable
CSP Bidco to acquire the whole of the issued and to be issued ordinary share capital of NARS.
Under the terms of the Scheme, which will be subject to the Conditions and other terms set out
in this announcement and to further terms to be set out in the Scheme Document, NARS
Ordinary Shareholders will receive:
For each NARS Ordinary Share:
100 pence in cash
The Offer values the entire issued ordinary share capital of NARS at approximately £43.2
million and represents:
•
a premium of approximately 45 per cent. to the Volume Weighted Average Price
per NARS Share of 69.2 pence during the three month period to 31 March 2015
(being the latest practicable date prior to the publication of this announcement); and
•
a premium of approximately 13 per cent. to the Closing Price per NARS Share of
88.5 pence on 31 March 2015 (being the latest practicable date prior to the
publication of this announcement).
9
3.
Information relating to NARS
Originally established in 1908, NARS was formerly known as Perry Group plc and was
primarily involved in motor retail and after-sales. Between 1993 and 1994, the NARS Group set
up the Nationwide crash repair chain of UK accident repair centres (bodyshops). Following the
sale of the motor-dealer business, in 2001, NARS changed its name to Nationwide Accident
Repair Services plc and, in 2002, was acquired by Guinness Peat Group plc and J O Hambro
Capital Management Limited and delisted from the Official List. Between 2002 and 2006,
NARS acquired 16 crash repair sites, including Gemini Accident Repair Limited, which
operated a network of 11 bodyshops, primarily in the West Midlands. NARS was admitted to
trading on AIM in July 2006 and since then has continued to grow its service offering and its
network of accident repair centres, including through the acquisitions of:
•
Aquilo Motor Services Ltd (claims management services) in December 2006;
•
Exway Coachworks Ltd (seven bodyshops) in July 2013;
•
Howard Basford Ltd (eight bodyshops) in February 2014;
•
Derek Gladwin Ltd (eight bodyshops) in September 2014; and
•
Seward Accident Repair Centres Ltd (eight bodyshops) today, 1 April 2015.
Today NARS provides integrated automotive accident repair management services to the UK
insurance industry and to fleet and retail customers. With over 70 repair centres, it is the largest
dedicated provider of accident repair services in the UK. NARS is active throughout the UK
with three divisions: (i) Nationwide Crash Repair Centres, which provides vehicle body repair
services; (ii) Network Services, which provides accident management services, claim handling
and deployment for repair for insurance companies and fleet operators; and (iii) Motorglass,
which provides mobile motor glass repair and replacement. The NARS Group employs
approximately 2,500 staff.
As at 31 March 2015 (being the last practicable date prior to this announcement), NARS had a
market capitalisation of £38.2 million and, for the year to 31 December 2013, it reported
turnover of £156.6 million, profit before tax, non-recurring items and amortisation of £3.1
million, net profit of £1.2 million, underlying earnings per NARS Ordinary Share of 5.1p and a
reported loss per NARS Ordinary Share of 0.5 pence.
On 12 January 2015, NARS announced that unaudited revenue for the year ended 31 December
2014 was anticipated to be approximately £184.0m and unaudited net cash was approximately
£1.5m. NARS also announced that these encouraging results reflect the combined benefits of
increased volumes, improved operational efficiencies and economies of scale and that recent
acquisitions have all performed in line with management expectations and the major contracts
signed in 2014 contributed to the NARS Group's performance in the second half of the year.
NARS expects to announce audited results for the year ended 31 December 2014 on or prior to
the date of publication of the Scheme Document.
10
4.
Background to and reasons for the Transaction
NARS has successfully become the largest dedicated provider of accident repair services in the
UK and NARS’s management believes that the business has the ability to grow further both in
its existing activities and also related areas. The Board of NARS nevertheless, believes that the
development of the business as a publicly traded company is adversely affected by both the
historically declining size of the overall market for vehicle repairs and the existence of a
sizeable pension deficit.
The level of notified insurance claims in relation to vehicle repairs as a percentage of cars
insured has steadily declined in recent years, from 19.4 per cent. in 2000 to 12.5 per cent. in
2012. This has clearly reduced demand for bodyshop repair. Capacity in the bodyshop repair
market has also fallen significantly. Although there are presently some indications that there is a
better balance between supply and demand, there can be no certainty that this will be sustained
or that the overall size of the market will materially recover.
NARS operates a funded pension scheme in the UK with both defined benefit and defined
contribution sections. The defined benefit section has been closed to new members since 1
January 2002 and has ceased to accrue further benefits to active members since 31 July 2006.
The last full actuarial valuation of the scheme was carried out as at 31 December 2011 which
ultimately resulted in a defined benefit section scheme-specific deficit of £27.1 million as at 5
November 2014. NARS has been making significant contributions to the scheme as it seeks to
reduce the funding deficit. The amount contributed in 2014 was £2.6 million and contributions
at this level are expected to continue for at least the medium term. Despite contributions which
amounted to in excess of £20 million in the last eight years and reflecting the presently low
interest rate environment, based on recent, independent advice, the Board believes that the IAS
19 deficit has nevertheless grown to £22.1 million as at 31 December 2014. The Board believes
that the existence of this deficit, which is very sizeable in relation to NARS’s equity market
capitalisation, significantly reduces the attraction of the company to the potential equity
investors in the publicly traded markets, reduces liquidity in NARS’s shares and so also reduces
the ability of NARS to fund its long term growth.
Based on these factors and despite the recent satisfactory trading of the business, the NARS
Independent Directors believe that future development of the business can be best effected
under the ownership of a single private entity with access to substantial funding.
Carlyle has significant experience in the car repair handling sector and automotive industry
more generally. Until June 2014 Carlyle funds, including Carlyle Strategic Partners III, L.P.,
held a controlling interest in SK Holdco, LLC, the holding company of Service King, a provider
of car collision repair centres located in the United States. Carlyle funds, including Carlyle
Strategic Partners III, L.P., retain a non-controlling interest in SK Holdco, LLC. NARS is
recognised as a leading specialist provider of car repair solutions to the insurance industry and
the Carlyle Fund recognises the value of its domain expertise, product portfolio and customer
relationships, as well as the potential of NARS and the Managers to augment its growth through
innovation and further acquisitions. The Carlyle Fund is ideally placed to bring relevant
operational and industry expertise to NARS, as well as capital, to support a strategy to create
long term value. The Carlyle Fund believes that this strategy can best be pursued under private
ownership such that NARS can prioritise strategic development over the demands of a public
listing.
11
5.
Recommendation
The NARS Independent Directors, who have been so advised by Westhouse Securities as to the
financial terms of the Offer consider the financial terms of the Offer to be fair and reasonable. In
providing its advice to the NARS Independent Directors, Westhouse Securities has taken into
account the commercial assessments of the NARS Independent Directors. For the purpose of
Rule 16 of the Code, Westhouse Securities considers the terms of the Management
Arrangements described in paragraph 14 below to be fair and reasonable insofar as the NARS
Independent Shareholders are concerned.
Accordingly, the NARS Independent Directors intend to unanimously recommend that NARS
Independent Shareholders vote in favour of the resolutions relating to the Transaction at the
Meetings to approve the Scheme (or in the event that the Transaction is implemented by way of
a takeover offer, to accept or procure acceptance of such offer) as Michael Marx, the only
Independent Director who holds NARS Ordinary Shares, has irrevocably undertaken to do in
respect of his own beneficial holding of 30,000 NARS Ordinary Shares representing
approximately 0.07 per cent. of NARS’s issued ordinary share capital on 31 March 2015 (being
the last Business Day before the date of this announcement). The irrevocable undertaking given
by Michael Marx will remain in full force and effect if the Transaction is effected by way of a
takeover offer and will cease to be binding only if the Scheme and, if applicable, a takeover
offer lapses or is withdrawn and no new, revised or replacement scheme of arrangement or
takeover offer by CSP Bidco is or has been announced in accordance with Rule 2.7 of the Code.
Further details of this irrevocable undertaking are set out in Appendix 3 to this announcement.
CSP Bidco has also received irrevocable undertakings to vote in favour of the Scheme from
entities connected with Harwood Capital LLP, whose principal Christopher Mills is a nonexecutive director of NARS, which account for 13,395,414 NARS Ordinary Shares in aggregate
and represent approximately 31.01 per cent. of NARS’s issued ordinary share capital. When
combined with irrevocables from Michael Marx and other NARS Shareholders (and excluding
Michael Wilmshurst who is unable to vote at the Court Meeting), CSP Bidco has received
irrevocable undertakings to vote in favour of the Scheme in respect of the beneficial holdings of
NARS Shareholders totalling 26,173,837 NARS Ordinary Shares in aggregate and representing
approximately 60.59 per cent. of NARS’s issued ordinary share capital.
Further details of these irrevocable undertakings are set out in Appendix 3 to this
announcement, including the circumstances in which they cease to be binding.
6.
Information relating to Carlyle, the Carlyle Fund, CSP Bidco and CSP Holdco
CSP III AIV (Cayman), L.P. forms part of the third Carlyle Strategic Partners fund which
together with its affiliates do business as “The Carlyle Group”.
Carlyle is a global alternative asset manager with more than $194 billion of assets under
management in 128 funds and 142 fund of funds vehicles as of 31 December 2014. Carlyle
invests across four segments – Corporate Private Equity, Global Market Strategies, Real Assets
and Investment Solutions – in Africa, Asia, Australia, Europe, the Middle East, North America
and South America. Carlyle has expertise in various industries, including: aerospace, defence &
government services, consumer & retail, energy & power, financial services, healthcare,
industrial, infrastructure, real estate, technology & business services, telecommunications &
12
media and transportation. Carlyle employs more than 1,650 people in 40 offices across six
continents.
CSP Bidco is a newly incorporated English company which, as at the date of this
announcement, is a wholly-owned direct subsidiary of CSP Holdco. CSP Bidco was
incorporated for the sole purpose of effecting the Transaction. CSP Bidco does not conduct a
trade or business.
CSP Holdco is a newly incorporated English company which, as at the date of this
announcement, is a wholly-owned direct subsidiary of the Carlyle Fund. CSP Holdco was
incorporated for the sole purpose of effecting the Transaction. CSP Holdco does not conduct a
trade or business.
7.
Management, employees, locations and intentions regarding the NARS Group
The CSP Bidco Directors have indicated to the NARS Independent Directors that the skills,
knowledge and expertise of NARS’s workforce are valued and have given the NARS
Independent Directors assurances that the employment rights, including pension rights, of all
NARS employees will be fully safeguarded.
CSP Bidco has not sought to create a new strategic plan for NARS. Instead, CSP Bidco intends
to seek to realise growth opportunities and to support NARS and the Managers in executing a
long-term growth strategy for the NARS Group.
CSP Bidco intends to work with the Managers to carry out a strategic review of its operations
and business lines following completion of the Transaction. No decisions have been made by
CSP Bidco in relation to the strategic review. The strategic review may or may not result in
changes to the employee base, locations and operations of NARS. Save for its general intention
to implement a long-term growth strategy with the Managers, CSP Bidco has no current
intention of changing NARS’s strategic plans, the location of NARS’s operations or redeploying
NARS’s fixed assets or of effecting a material change to the operations of the business or any
conditions of employment of NARS employees.
CSP Bidco intends to put in place appropriate incentive arrangements for senior staff and
employees of NARS following completion of the Transaction.
CSP Bidco intends to begin discussions with the trustees of NARS’s defined benefit pension
scheme regarding the Transaction as soon as practicable following this announcement.
Each of the NARS Independent Directors has agreed to resign from the board of NARS
conditional upon, and with effect from, the Scheme becoming effective. The employment of
Stephen Thompson, the former Group Sales Director of NARS was terminated on 31 March
2015. Further details are given in paragraph 15 below.
8.
NARS Share Schemes
All of the outstanding options under the NARS Share Schemes have an exercise price which is
higher than the Offer Price. Accordingly, it is not expected that these options will be exercised
prior to the completion of the Offer. CSP Bidco has therefore agreed with the Panel that no
13
equivalent offer will be made to the holders of options in the NARS Share Schemes.
Participants in the NARS Share Schemes will receive further details on the effect of the Offer
on their outstanding options in the separate letters which will be despatched to them in due
course.
9.
Financing of the Transaction
The Cash Consideration payable to NARS Ordinary Shareholders pursuant to the Transaction
will be financed by monies to be invested by the Carlyle Fund.
Rothschild is satisfied that sufficient resources are available to CSP Bidco to satisfy in full the
Cash Consideration payable pursuant to the Transaction.
Further information on the financing of the Transaction will be set out in the Scheme Document.
10.
Transaction-related Arrangements
Confidentiality Agreement
CELF Advisors LLP (being a sub-adviser to the Carlyle Fund’s adviser, Carlyle Investment
Management L.L.C.) and NARS entered into a Confidentiality Agreement on 20 February 2015,
pursuant to which CELF Advisors LLP has undertaken to keep confidential information relating
to NARS and not to disclose it to third parties (other than permitted disclosees) unless required
by law or regulation or permitted pursuant to limited carve-outs to the obligations of
confidentiality. These confidentiality obligations will remain in force until the Scheme becomes
effective. The standstill provisions cease to apply upon publication of this announcement.
Equity Terms Letter
On 31 March 2015, CSP Bidco, CSP Holdco and each of Michael Wilmshurst and David Pugh
entered into an agreement regarding the terms of the Management Arrangements proposed to be
entered into between the Managers, CSP Bidco and CSP Holdco to incentivise the Managers in
connection with the future performance of the NARS Group following the Scheme becoming
effective. The terms of the Management Arrangements, which are subject to the approval of
NARS Independent Shareholders in accordance with Rule 16 of the Code, are further
summarised in paragraph 14 below.
11.
Disclosure of interests in NARS shares
Save in respect of the irrevocable undertakings referred to in paragraph 5 above, including the
shareholdings of Michael Wilmshurst, as disclosed in paragraph 13 below, as at the close of
business on 31 March 2015 (being the last Business Day before the date of this announcement)
neither CSP Bidco, nor any of its directors, nor, so far as CSP Bidco is aware, any person acting
in concert (within the meaning of the Code) with it has (i) any interest in or right to subscribe
for any relevant securities of NARS, nor (ii) any short positions in respect of relevant NARS
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
14
NARS Shares (including, for these purposes, any financial collateral arrangements of the kind
referred to in Note 4 on Rule 4.6 of the Code).
It has not been practicable for CSP Bidco to make enquiries of all of its concert parties in
advance of the release of this announcement. Therefore, all relevant details in respect of CSP
Bidco’s concert parties, including those of the Managers, will be included in CSP Bidco’s
Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the
Code.
12.
Scheme of Arrangement
It is intended that the Transaction will be effected by a court sanctioned scheme of arrangement
between NARS and the Scheme Shareholders under Part 26 of the Companies Act 2006. The
Scheme is an arrangement between NARS and the Scheme Shareholders and is subject to the
approval of the Court.
The purpose of the Scheme is to provide for CSP Bidco to become owner of the whole of the
issued and to be issued ordinary share capital of NARS. This is to be achieved by the transfer of
the Scheme Shares to CSP Bidco, in consideration of which the Scheme Shareholders will
receive Cash Consideration on the basis set out in paragraph 2 of this announcement.
The purpose of the Court Meeting is to seek the approval of NARS Independent Shareholders
for the Scheme and certain related matters.
The purpose of the NARS General Meeting is to consider and, if thought fit, pass the other
necessary resolutions to give effect to the Transaction, being:
• any resolution required in connection with and to facilitate the Scheme;
• a special resolution to approve the Amended NARS Articles, which shall make
amendments to NARS's existing articles of association to ensure that any NARS Shares
issued (other than to CSP Bidco or any other subsidiaries or nominees of CSP Bidco)
between approval of the Scheme at the Court Meeting and the Scheme Record Time will
be subject to the Scheme and that any NARS Shares issued after the Scheme Record
Time will automatically be acquired by CSP Bidco;
• a special resolution to approve the re-registration of NARS as a private limited company
conditional upon the Scheme becoming effective; and
• an ordinary resolution of Independent NARS Shareholders to be taken on a poll to
approve the proposed Management Arrangements.
The Transaction will be subject to the Conditions and further terms and conditions referred to in
Appendix 1 to this announcement and to be set out in the Scheme Document. The Conditions in
paragraph A of Appendix 1 to this announcement provide that the Transaction will lapse if, inter
alia:
•
approval is not received from Independent NARS Shareholders for the Management
Arrangements; and
15
•
the Scheme does not become effective by the Long Stop Date.
Mr Wilmshurst has agreed in his irrevocable undertaking in support of the Transaction and to be
bound by the terms of the Scheme. Neither Mr Wilmshurst nor Mr Pugh (in relation to
Management Arrangements) nor any person acting in concert with or connected with them, may
vote on the resolutions pursuant to Rule 16 of the Code that apply to their respective
arrangements. Rule 16 of the Code provides that, except with the consent of the Panel, an
offeror or persons acting in concert with it may not make any arrangements with shareholders
and may not deal or enter into arrangements to deal in shares of the offeree company, or enter
into arrangements which involve acceptance of an offer, either during an offer or when one is
reasonably in contemplation, if there are favourable conditions attached which are not being
extended to all shareholders. An arrangement made with a person who, while not a shareholder,
is interested in shares carrying voting rights in the offeree company will also be prohibited by
Rule 16 of the Code if favourable conditions are attached which are not being extended to the
shareholders.
The Management Arrangements outlined in paragraph 14 below constitute an arrangement with
a shareholder of the Company made when the Transaction was reasonably in contemplation and
to which favourable conditions are attached which are not being extended to all NARS
Shareholders.
The Panel has confirmed to Westhouse Securities that it consents to these arrangements with Mr
Wilmshurst and Mr Pugh provided that such arrangements are approved by Independent NARS
Shareholders (being the NARS Shareholders other than Mr Wilmshurst and Mr Pugh and any
person acting in concert with them or connected with them) in general meeting. The vote must
be taken on a poll.
Independent NARS Shareholders should note that completion of the Transaction will be
conditional upon passing of the resolution at the NARS General Meeting approving the
Management Arrangements.
To become effective, the Scheme requires the approval of NARS Independent Shareholders by
the passing of a resolution at the Court Meeting. The resolution must be approved by a majority
in number of the NARS Independent Shareholders present and voting (and entitled to vote),
either in person or by proxy, representing not less than 75 per cent. of the Scheme Shares held
by such NARS Independent Shareholders.
The Scheme is also conditional upon the passing of any resolutions at the NARS General
Meeting required to give effect to the Scheme including the approval by Independent NARS
Shareholders of the Management Arrangements by an ordinary resolution to be taken on a poll.
The NARS General Meeting will be held immediately after the Court Meeting. In respect of the
resolutions at the NARS General Meeting, NARS Shareholders who are permitted to vote on
such resolutions will be entitled to cast one vote for each NARS Ordinary Share held.
Once the necessary approvals from Shareholders have been obtained and the other Conditions
have been satisfied or (where applicable) waived, the Scheme must be approved by the Court.
The Scheme will then become effective upon delivery of the Court Order to the Registrar of
Companies. Subject to satisfaction of the Conditions, the Scheme is expected to become
effective in the second quarter of 2015.
16
Upon the Scheme becoming effective, it will be binding on all NARS Shareholders, irrespective
of whether or not they attended or voted at the Court Meeting, and the Cash Consideration due
under the Scheme will be despatched by, or on behalf of, CSP Bidco to Scheme Shareholders no
later than 14 days after the Effective Date.
The Scheme will contain a provision for CSP Bidco and NARS to jointly consent, on behalf of
all persons concerned, to any modification of or addition to the Scheme or to any condition that
the Court may approve or impose. NARS has been advised that the Court would be unlikely to
approve any modification of, or addition to, or impose a condition to the Scheme which might
be material to the interests of Scheme Shareholders unless Scheme Shareholders were informed
of such modification, addition or condition. It would be a matter for the Court to decide, in its
discretion, whether or not a further meeting of the NARS Independent Shareholders should be
held in these circumstances.
The Scheme Document will include full details of the Scheme, together with notices of the
Court Meeting and the NARS General Meeting and the expected timetable, and will specify the
action to be taken by Scheme Shareholders. The circular including the Scheme and notices of
the Meetings will be sent to NARS Shareholders as soon as reasonably practicable.
The Scheme will be governed by English law. The Scheme will be subject to the applicable
requirements of the Code. The bases and sources of certain information contained in this
announcement are set out in Appendix 2. Certain terms used in this announcement are defined in
Appendix 4.
13.
Irrevocable Undertakings
Michael Marx has irrevocably undertaken, in respect of his entire beneficial holding of 30,000
NARS Ordinary Shares representing approximately 0.07 per cent. of NARS’s issued ordinary
share capital on 31 March 2015 (being the last Business Day before the date of this
announcement), to vote in favour of the Scheme at the Court Meeting, and in respect of all of
the resolutions at the NARS General Meeting.
CSP Bidco has received an irrevocable undertaking from Michael Wilmshurst to submit and
undertake to the Court to be bound by the Scheme and to vote in favour of the resolutions to be
proposed at the Meetings (save for the resolution at the Court Meeting and the resolution to
approve the Management Arrangements on which he cannot vote) in respect of his 1,351,351
NARS Ordinary Shares in aggregate, representing approximately 3.13 per cent. of NARS’s
issued ordinary share capital on 31 March 2015 (being the last Business Day before the date of
this announcement).
The irrevocable undertakings given by each of Michael Marx and Michael Wilmshurst will
remain in full force and effect if the Transaction is effected by way of a takeover offer and will
cease to be binding only if the Scheme and, if applicable, an Offer lapses or is withdrawn and no
new, revised or replacement scheme of arrangement or takeover offer by CSP Bidco is or has
been announced in accordance with Rule 2.7 of the Code. Further details of these irrevocable
undertakings are set out in Appendix 3 to this announcement.
CSP Bidco has also received irrevocable undertakings to vote in favour of the Scheme from
entities connected with Harwood Capital LLP, whose principal Christopher Mills is a non17
executive director of NARS, which account for 13,395,414 NARS Ordinary Shares in aggregate
and represent approximately 31.01 per cent. of NARS’s issued ordinary share capital. When
combined with irrevocables from Michael Marx and other NARS Shareholders (and excluding
Michael Wilmshurst who is unable to vote at the Court Meeting), CSP Bidco has received
irrevocable undertakings to vote in favour of the Scheme in respect of the beneficial holdings of
NARS Shareholders totalling 26,173,837 NARS Ordinary Shares in aggregate and representing
approximately 60.59 per cent. of NARS’s issued ordinary share capital.
Further details of these irrevocable undertakings (including further details of the circumstances
in which they will lapse) are set out in Appendix 3 of this announcement.
14.
Summary of the Management Arrangements
CSP Bidco believes that the ongoing participation of the Managers in the NARS Group is a very
important element of the Transaction. Accordingly, CSP Bidco and its direct parent company,
CSP Holdco, intend to put in place certain incentivisation arrangements for the Managers and
other senior employees of the NARS Group with effect from and/or following completion of the
Transaction.
To incentivise Mr Wilmshurst in connection with the future business of NARS under the
ownership of CSP Bidco, Mr Wilmshurst will be entitled to subscribe for ‘sweet equity’ at
nominal value in the form of B ordinary shares of £0.01 each and a premium of £0.99 each in
the share capital of CSP Holdco. In addition, Mr Wilmshurst will be entitled to subscribe for A
ordinary shares of £0.01 each and a premium of £0.99 each in the share capital of CSP Holdco
and approximately £835,000 of manager loan notes in CSP Bidco on the terms summarised
below on completion of the Transaction.
To incentivise Mr Pugh in connection with the future business of NARS under the ownership of
CSP Bidco, Mr Pugh will be entitled to subscribe for ‘sweet equity’ at nominal value in the form
of B ordinary shares of £0.01 each and a premium of £0.99 each in the share capital of CSP
Holdco and B1 ordinary shares of £0.01 each (with no premium) in the share capital of CSP
Holdco on the terms summarised below on completion of the Transaction.
Mr Wilmshurst shall subscribe for the following (funded by way of (a) all proceeds of the Offer
due to Mr Wilmshurst or his connected persons that are in excess of £1.0 million and (b) 100 per
cent. of any net transaction related bonus received by Mr Wilmshurst from the NARS Group):
1. such number of A ordinary shares to be issued on completion of the Transaction by CSP
Holdco as represents approximately 1.5 per cent. of the fully-diluted nominal share
capital of CSP Holdco on the date of completion of the Transaction;
2. such number of B ordinary shares to be issued on completion of the Transaction by CSP
Holdco as represents approximately 8.4 per cent. of the fully-diluted nominal share
capital of CSP Holdco on the date of completion of the Transaction. The B ordinary
shares issued by CSP Holdco shall, in certain circumstances, be subject to time-vesting
up to a maximum of 60 per cent. (other than on an exit, and 40 per cent. of such B
ordinary shares shall not be subject to time-vesting arrangements in such circumstances)
over a two year period following completion of the Transaction on the following basis:
18
a. 20 per cent. vesting on completion of the Transaction;
b. 20 per cent. vesting on the first anniversary of completion of the Transaction (a
total of 40 per cent. in aggregate); and
c. 20 per cent. vesting on the second anniversary of completion of the Transaction
(a total of 60 per cent. in aggregate).
3. 100 per cent. of the manager loan notes with an interest free period in the first two years
and a 10.5 per cent. PIK coupon in each yearly interest period thereafter (compounding
annually) to be issued by CSP Bidco.
Mr Pugh shall subscribe for the following:
1. such number of B ordinary shares and B1 ordinary shares to be issued on completion of
the Transaction by CSP Holdco as represents (in aggregate) approximately 5.2 per cent.
of the fully-diluted nominal share capital of CSP Holdco on the date of completion of
the Transaction, and which, in the case of the B ordinary shares only, shall, in certain
circumstances, be subject to time-vesting up to a maximum of 60 per cent. (other than
on an exit, and 40 per cent. of such B ordinary shares shall not be subject to timevesting arrangements in such circumstances) over a two year period following
completion of the Transaction on the following basis:
a. 20 per cent. vesting on completion of the Transaction;
b. 20 per cent. vesting on the first anniversary of completion of the Transaction (a
total of 40 per cent. in aggregate); and
c. 20 per cent. vesting on the second anniversary of completion of the Transaction
(a total of 60 per cent. in aggregate).
Such number of B ordinary shares to be issued by CSP Holdco as represents approximately 3
per cent. of the fully-diluted nominal share capital of CSP Holdco following issue shall also be
held in reserve and issued post-completion of the Transaction to other senior employees of the
NARS Group as the board of CSP Holdco may determine from time to time (with the consent of
the Carlyle Fund).
Mr Wilmshurst and Mr Pugh shall each provide post-exit restrictive covenants with a duration
of two years from cessation of their employment with the NARS Group.
In addition, the Managers have each agreed to enter into new service agreements with the
NARS Group from completion of the Transaction, with any prior arrangements with the NARS
Group being terminated with effect from completion of the Transaction. The terms of new
service agreements are to be agreed with CSP Bidco. In summary:
1. Mr Wilmshurst shall receive a salary of £390,000 plus employer pension contributions
of 8 per cent. of his salary; and
19
2. Mr Pugh shall receive a salary of £190,000, but otherwise his new employment
agreement shall reflect his current benefits.
As a result of their respective interests in the Management Arrangements, Mr Wilmshurst and
Mr Pugh are not considered to be independent for the purposes of the Code and each of Mr
Wilmshurst and Mr Pugh (and their respective connected persons) will not be entitled to vote on
the resolution in respect of the Management Arrangements at the NARS General Meeting. Mr
Pugh does not hold any NARS Ordinary Shares. Mr Wilmshurst has irrevocably undertaken to
be bound by the Scheme in respect of his entire shareholding of NARS Ordinary Shares.
Westhouse Securities has confirmed that, in its opinion, the terms of the Management
Arrangements are fair and reasonable so far as NARS Independent Shareholders are concerned.
15.
Management Transaction Bonuses and termination payment
NARS has agreed to pay transaction bonuses to Mr Wilmshurst and Mr Pugh which will be
payable in the event of completion of the Transaction, as follows:
•
Mr Wilmshurst – the bonus payment will be £1,000,000, and is on similar terms to a
previously agreed bonus arrangement originally entered into in 2011 which expired on
31 December 2014 between Mr Wilmshurst and NARS in connection with any future
sale of the Company. The Board of NARS had been planning to renew the scheme
when the approach from Carlyle was received; and
•
Mr Pugh - the bonus payment will be £150,000.
CSP Bidco has consented to these proposed transaction bonus payments for the purpose of Rule
21 of the Code. For the purpose of Rule 16 of the Code, Westhouse Securities considers the
terms of the bonus payment to Michael Wilmshurst to be fair and reasonable insofar as the
NARS Independent Shareholders are concerned.
NARS has separately also been in negotiations with its former executive director, Stephen
Thompson, regarding a settlement agreement to terminate his employment contract and
directorships with the NARS Group and for his waiver of any and all claims against the NARS
Group. The settlement agreement was entered into by NARS and Stephen Thompson on 31
March 2015 and provides for Mr Thompson to receive an amount of £405,300 in aggregate in
respect of the termination of his employment.
CSP Bidco has consented to the termination payment for Mr Thompson for the purpose of Rule
21 of the Code.
16.
AIM cancellation
On completion of the Transaction, the Company will become a wholly-owned subsidiary of CSP
Bidco. Prior to the Scheme becoming effective, a request will be made to the London Stock
Exchange to cancel trading in the NARS Shares on AIM immediately following completion of
the Transaction without seeking the separate approval of NARS Shareholders under Rule 41 of
the AIM Rules for Companies.
Following the AIM cancellation, NARS Shares will not be quoted on any publicly quoted
market in the United Kingdom or elsewhere.
Share certificates in respect of NARS Shares will cease to be valid and should be destroyed
20
upon the Scheme taking effect. In addition, entitlements held within CREST to NARS Shares
will be cancelled upon, or shortly after, the Scheme taking effect. As soon as possible after
completion of the Transaction, it is intended that NARS will be re-registered as a private limited
company.
17.
NARS Share Schemes
All of the outstanding options under the NARS Share Schemes have an exercise price which is
significantly higher than the cash consideration per NARS Share under the Cash Offer.
Accordingly, it is not expected that these options will be exercised prior to the completion of the
Transaction. NARS has therefore agreed with the Panel that no equivalent offer will be made to
the holders of the Option Schemes.
Participants in the NARS Share Schemes will receive further details on the effect of the
Transaction on their outstanding options in the separate letters which will be despatched to them
in due course.
18.
NARS 2014 Dividend
The NARS Board will not declare or recommend a final dividend in respect of the financial year
ending 31 December 2014 on the basis and assuming that the Scheme becomes effective (or, if
applicable, the Offer becomes or is declared unconditional in all respects). The NARS Board
expects to declare such a dividend if the Scheme does not become effective or, if applicable, if
the Offer does not become or is not declared unconditional in all respects.
19.
Documents on display
Copies of the following documents will by no later than 12 noon (London time) on 2 April 2015
be published on NARS’s website at http://corporate.nationwiderepairs.co.uk/investorrelations/information-takeover until the end of the Offer Period:
20.
•
this announcement;
•
the irrevocable undertakings listed in Appendix 3;
•
the Confidentiality Agreement; and
•
the Equity Terms Letter.
General
CSP Bidco reserves the right, subject to receiving the consent of the Panel, to elect to implement
the Transaction by way of a takeover offer for the entire issued and to be issued ordinary share
capital of NARS not already held by CSP Bidco as an alternative to the Scheme. In such event,
the Offer will be implemented on substantially the same terms (subject to appropriate
amendments, including an acceptance condition set at 90 per cent. of the shares to which such
offer relates or such lesser percentage, being more than 50 per cent., as CSP Bidco may decide
or the Panel may require), so far as applicable, as those which would apply to the Scheme.
21
If the Transaction is effected by way of a takeover offer and such Offer becomes or is declared
unconditional in all respects and sufficient acceptances are received, CSP Bidco intends to
exercise its rights to apply the provisions of Chapter 3 of Part 28 of the Companies Act 2006 to
acquire compulsorily the remaining NARS Ordinary Shares in respect of which the Offer has
not been accepted.
The Transaction will be subject to the Conditions and other terms set out in Appendix 1 to this
announcement and set out in the Scheme Document and the forms of proxy for the Meetings.
The Scheme Document will include full details of the Scheme, together with notices of the
Court Meeting and the NARS General Meeting and the expected timetable of the Transaction.
The Transaction will be governed by English law and will be subject to the jurisdiction of the
courts of England and Wales and subject to the applicable requirements of the Code.
The bases and sources of certain financial information contained in this announcement are set
out in Appendix 2. Details of irrevocable commitments are listed in Appendix 3. Certain
defined terms used in this announcement are defined in Appendix 4.
Enquiries:
NARS
Michael Marx
+44 (0)1993 701720
Westhouse Securities
(Financial adviser, Nominated Adviser and Corporate Broker to NARS)
Robert Finlay
+44 (0)207 601 6100
Antonio Bossi
KTZ Communications
(PR adviser to NARS)
Katie Tzouliadis
Rothschild
(Financial adviser to Carlyle)
Ravi Gupta
Jonathan Slaughter
Carlyle
(Carlyle External Affairs)
Catherine Armstrong
+44 (0)203 178 6378
+44 (0)207 280 5000
+44 (0)207 894 1200
22
Important notices
Westhouse Securities Limited, which is authorised and regulated in the United Kingdom by the
Financial Conduct Authority, is acting as financial adviser, nominated adviser and broker to
NARS and no-one else in connection with the Offer and other matters described in this
announcement, and will not be responsible to anyone other than NARS for providing the
protections afforded to clients of Westhouse Securities Limited nor for providing advice in
relation to the Offer, the contents of this announcement or any other matter referred to herein.
Rothschild is authorised by the Prudential Regulation Authority and regulated by the Financial
Conduct Authority and the Prudential Regulation Authority in the UK. Rothschild is acting
exclusively as financial adviser to Carlyle and no one else in connection with the Offer and will
not be responsible to anyone other than Carlyle for providing the protections afforded to clients
of Rothschild nor for providing advice in connection with the Offer or any matter referred to
herein.
This announcement is for information purposes only and does not constitute an offer to sell or
an invitation to purchase any securities or the solicitation of an offer to buy any securities,
pursuant to the Offer or otherwise. The Offer will be made solely by means of the Scheme
Document or any document by which the Offer is made which will contain the full terms and
Conditions of the Offer, including details of how to vote in respect of the acquisition.
This announcement has been prepared for the purpose of complying with the laws of England
and Wales 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 the United Kingdom.
NARS will prepare the Scheme Document to be distributed to NARS Shareholders. NARS and
CSP Bidco urge NARS Shareholders to read the Scheme Document when it becomes available
because it will contain important information relating to the Offer.
This announcement does not constitute a prospectus or prospectus equivalent document.
Overseas Shareholders
The release, publication or distribution of this announcement in certain jurisdictions may be
restricted by law. Persons who are not resident in the United Kingdom or who are subject to
the laws of other jurisdictions should inform themselves of, and observe, any applicable
requirements. Any failure to comply with the applicable restrictions may constitute a violation
of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law,
the companies and persons involved in the Offer disclaim any responsibility or liability for the
violation of such restrictions by any person.
Notice to US investors in NARS: the Transaction relates to the shares of an English company
and is being made by means of a scheme of arrangement provided for under English company
law. A transaction effected by means of a scheme of arrangement is not subject to the tender
offer rules or the proxy solicitation rules under the US Exchange Act. Accordingly, the
Transaction is subject to the disclosure requirements and practices applicable in the United
Kingdom to schemes of arrangement which differ from the disclosure requirements of United
States tender offer and proxy solicitation rules. If, in the future, CSP Bidco exercises the right
to implement the Transaction by way of a takeover offer and determines to extend the offer into
the United States, the Transaction will be made in compliance with applicable United States
laws and regulations. Financial information included in this announcement and the Scheme
Document has been or will have been prepared in accordance with accounting standards
23
applicable in the United Kingdom that may not be comparable to financial information of US
companies or companies whose financial statements are prepared in accordance with generally
accepted accounting principles in the United States. No US federal or state securities
commission has: (a) approved, disapproved, endorsed or recommended the Offer; (b) passed
upon the merits or fairness of the Offer; or (c) expressed a view on the adequacy of this
document. Any representation to the contrary is a criminal offence in the United States.
Unless otherwise determined by NARS or required by the Code, and permitted by applicable
law and regulation, the Offer will not be made available, directly or indirectly, in, into or from
a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no
person may vote in favour of the offer by any such use, means, instrumentality or form within a
Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the
laws of that jurisdiction. Accordingly, copies of this announcement and all documents relating
to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise
forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would
violate the laws in that jurisdiction, and persons receiving this announcement and all documents
relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise
distribute or send them in, into or from such jurisdictions where to do so would violate the laws
in that jurisdiction.
The receipt of cash pursuant to the Scheme by US Shareholders as consideration for the
transfer of their NARS Shares pursuant to the Scheme may be a taxable transaction for US
federal income tax purposes and under applicable US state and local, as well as foreign and
other, tax laws. Each NARS Shareholder (including US Shareholders) is urged to consult his
independent professional adviser immediately regarding the tax consequences of the Offer
applicable to him.
The availability of the Offer to NARS Shareholders who are not resident in the United Kingdom
may be affected by the laws of the relevant jurisdictions in which they are resident. Persons
who are not resident in the United Kingdom should inform themselves of, and observe, any
applicable requirements.
No steps have been taken, nor will any steps be taken, to extend the Offer into Japan, South
Africa or Australia and no regulatory clearances in respect of the Offer have been, or will be,
applied for in any other jurisdiction.
The Offer will be subject to the applicable requirements of the Code, the Panel, the London
Stock Exchange, the Financial Conduct Authority and the UK Listing Authority.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial
condition, results of operations and business of NARS and certain plans and objectives of CSP
Bidco with respect thereto. These forward-looking statements can be identified by the fact that
they do not relate only to historical or current facts. Forward-looking statements often use
words such as “anticipate”, “target”, “expect”, “estimate”, “intend”, “plan”, “goal”,
“believe”, “hope”, “aims”, “continue”, “will”, “may”, “should”, “would”, “could”, or other
words of similar or opposite meaning. These statements are based on assumptions and
assessments made by NARS and/or CSP Bidco in light of their experience and their perception
of historical trends, current conditions, future developments and other factors they believe
appropriate. By their nature, forward-looking statements involve risk and uncertainty, 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
24
actual results and developments to differ materially from those expressed in or implied by such
forward-looking statements. Although it is believed that the expectations reflected in such
forward-looking statements are reasonable, no assurance can be given that such expectations
will prove to have been correct and you are therefore cautioned not to place undue reliance on
these forward-looking statements which speak only as at the date of this announcement. Neither
NARS nor CSP Bidco 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.
There are several factors which could cause actual results to differ materially from those
expressed or implied in forward-looking statements. Among the factors that could cause actual
results to differ materially from those described in the forward-looking statements are changes
in global, political, economic, business, competitive, market and regulatory forces, future
exchange and interest rates, changes in tax rates and future business combinations or
dispositions.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate for any period
and no statement in this announcement should be interpreted to mean that earnings or earnings
per share for NARS for the current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share for NARS.
Disclosure requirements of the Code
Under Rule 8.3(a) of the Code, any person who is interested in 1 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
commencement of the Offer Period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening Position Disclosure must contain
details of the person’s interests and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An
Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later
than 3.30 pm (London time) on the 10th Business Day following the commencement of the Offer
Period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day
following the announcement in which any securities exchange offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 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
25
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 Panel’s website at http://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. If you are in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure, you should contact the Panel’s Market
Surveillance Unit on +44 (0)207 638 0129.
Electronic communications
Please be aware that addresses, electronic addresses and certain information provided by
NARS Shareholders, persons with information rights and other relevant persons for the receipt
of communications from CSP Bidco may be provided to CSP Bidco during the Offer Period as
requested under Section 4 of Appendix 4 of the Code to comply with Rule 2.12(c) of the Code.
Publication on website
A copy of this announcement will be made available subject to certain restrictions relating to
persons
resident
in
Restricted
Jurisdictions
on
NARS’s
website
at
http://corporate.nationwiderepairs.co.uk/investor-relations/information-takeover by no later
than 12 noon (London time) on the day following this announcement. For the avoidance of
doubt, the contents of this website are not incorporated into and not do form part of this
announcement.
Requesting hard copy documents
In accordance with Rule 30.2 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 either
NARS by contacting Westhouse Securities on +44 (0)207 601 6100 or CSP Bidco by contacting
Rothschild on +44 (0)207 280 5000, as appropriate.
Rounding
Certain figures included in this announcement have been subjected to rounding adjustments.
Accordingly, figures shown for the same category presented in different tables may vary slightly
and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures
that precede them.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, NARS confirms that, as at the date of this
announcement, it has in issue and admitted to trading on the AIM market of the London Stock
Exchange 43,197,220 ordinary shares of 12.5 pence each (there are no ordinary shares held in
treasury). The International Securities Identification Number (ISIN) of the ordinary shares is
GB00B15RR673.
26
APPENDIX 1
CONDITIONS TO AND CERTAIN FURTHER TERMS OF THE TRANSACTION
The Transaction will comply with the rules and regulations of the Code to the extent applicable.
Part A:
Conditions of the Transaction
1.
The Transaction will be conditional upon the Scheme becoming effective, subject to the
Code, by no later than the Long Stop Date or such later date (if any) as CSP Bidco and
NARS may, with the consent of the Panel and (if required) the Court, agree.
2.
The Scheme will be subject to the following conditions:
(A)
its approval by a majority in number representing not less than 75 per cent. in value of
the NARS Independent Shareholders who are on the register of members of NARS at
the Voting Record Time, and who are present and vote, whether in person or by proxy,
at the Court Meeting or at any adjournment thereof on or before the 22nd day after the
expected date of the Court Meeting to be set out in the Scheme Document (or such later
date (if any) selected by NARS as CSP Bidco may agree and the Court may allow);
(B)
any resolution in connection with or required to approve and implement the Scheme
being duly passed by the NARS Shareholders by the requisite majority at a General
Meeting or at any adjournment thereof on or before the 22nd day after the expected date
of the Court Meeting to be set out in the Scheme Document (or such later date (if any)
selected by NARS as CSP Bidco may agree and the Court may allow);
(C)
the resolution to approve the Management Arrangements being duly passed by NARS
Independent Shareholders representing a majority of the votes cast on a poll (either in
person or by proxy) at the NARS General Meeting or at any adjournment thereof on or
before the 22nd day after the expected date of the NARS General Meeting to be set out
in the Scheme Document (or such later date as may be agreed between CSP Bidco and
NARS and the Court may allow); and
(D)
the sanction of the Scheme by the Court (with or without modification but subject to
any modification being on terms acceptable to NARS and CSP Bidco) and the delivery
of a copy of the Scheme Court Order to the Registrar of Companies.
3.
Subject as stated in Part B below and to the requirements of the Panel, the Transaction is
conditional upon the following Conditions and, accordingly, the necessary actions to
make the Scheme effective will not be taken unless such Conditions (as amended if
appropriate) have been satisfied and continue to be satisfied immediately prior to the
Court hearing to sanction the Scheme or, where relevant, waived by CSP Bidco
immediately prior to the Court hearing to sanction the Scheme:
(A)
no regulatory authority or Third Party having decided or given notice of a decision to
take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry
or reference, or having required any action to be taken, or otherwise having done
anything, or having enacted, made or proposed and there not continuing to be
27
outstanding any statute, regulation, decision or order which would or might reasonably
be expected to:
(i)
make the Transaction or its implementation or the acquisition or
proposed acquisition by CSP Bidco of all or any NARS Shares, or the
acquisition or proposed acquisition of control of NARS by any member
of the Wider CSP Bidco Group, void, illegal and/or unenforceable under
the laws of any relevant jurisdiction, or otherwise, directly or indirectly,
restrain, restrict, prohibit, challenge, delay, hinder or otherwise interfere
with the same, or impose additional conditions or obligations with
respect thereto, or otherwise challenge or require amendment to the
terms of the Transaction or any such acquisition;
(ii)
require, prevent or delay the divestiture, or alter the terms envisaged for
any proposed divestiture, by any member of the Wider CSP Bidco
Group or by any member of the Wider NARS Group of all or any
portion of their respective businesses, assets or properties or impose any
limitation on the ability of any of them to conduct their respective
businesses (or any part of them) or to own, control or manage their
respective assets or properties (or any part of them);
(iii)
impose any limitation on, or result in a delay in, the ability of any
member of the Wider CSP Bidco Group, directly or indirectly, to
acquire or to hold or to exercise effectively all or any rights of
ownership in respect of shares, loans, securities convertible into shares
or any other securities (or the equivalent) in any member of the Wider
NARS Group or to exercise management control over any such
member;
(iv)
otherwise adversely affect any or all of the businesses, assets, liabilities,
profits or prospects of any member of the Wider CSP Bidco Group or
any member of the Wider NARS Group (including any action which
would or might adversely affect or prejudice any of the status, licences,
authorisations, exemptions or consents of any member of the Wider
CSP Bidco Group or of the Wider NARS Group);
(v)
require, prevent or delay a divestiture by any member of the Wider CSP
Bidco Group of any shares or other securities (or the equivalent) in any
member of the Wider NARS Group;
(vi)
limit the ability of any member of the Wider CSP Bidco Group or the
Wider NARS Group to co-ordinate or integrate its business, or any part
of it, with the business or any part of the business of any other member
of the Wider CSP Bidco Group or of the Wider NARS Group; or
(vii)
result in any member of the Wider NARS Group or the Wider CSP
Bidco Group ceasing to be able to carry on business under any name
which it presently does so,
28
(viii)
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 under the laws of any relevant
jurisdiction or enact any such statute, regulation, order or decision or
take any steps having expired, lapsed or been terminated;
(B)
all notifications, notices, filings or applications in connection with the Transaction or
any aspect of the Transaction or its financing, that are necessary having been made and
all authorisations, orders, recognitions, grants, consents, licences, confirmations,
clearances, certificates, exemptions, permissions and approvals (“Authorisations”)
necessary or appropriate in any jurisdiction for or in respect of the Transaction or the
proposed acquisition of all or any NARS Shares or other securities in, or control of,
NARS by any member of the Wider CSP Bidco Group having been obtained on terms
and in a form reasonably satisfactory to each of CSP Bidco from all appropriate Third
Parties or persons with whom any member of the Wider NARS Group has entered into
contractual arrangements where the absence of such Authorisations would have a
material adverse effect on the Wider CSP Bidco Group or the Wider NARS Group, in
either case taken as a whole, or in the context of the Transaction, and all such
Authorisations, together with all Authorisations necessary or appropriate to carry on the
business of any member of the Wider NARS Group where such business is material in
the context of the Wider NARS Group taken as a whole, or in the context of the
Transaction, remaining in full force and effect at the time at which the Transaction
becomes otherwise unconditional and there being no notice or indication of any
intention to revoke, withdraw, suspend, restrict, withhold or modify or not to grant or
renew any of the same;
(C)
all necessary notifications, filings or applications having been made in connection with
the Transaction, and all appropriate waiting and other time periods (including extensions
thereof) in respect of the Transaction or its implementation under any applicable
legislation or regulations in any jurisdiction having expired, lapsed or been terminated
(as appropriate) and all necessary statutory or regulatory obligations in any jurisdiction
having been complied with in connection with the Transaction or the acquisition by any
member of the Wider CSP Bidco Group of any shares or other securities in, or control
of, NARS, in each case, where the absence of such notifications, filings or applications,
or the failure of such waiting or other time periods to have expired, lapsed or been
terminated, taken as a whole, would have a material adverse effect on the Wider CSP
Bidco Group or the Wider NARS Group, in either case taken as a whole, or in the
context of the Transaction;
(D)
save as Fairly Disclosed there being no provision of any agreement, authorisation,
arrangement, lease, licence, permit or other instrument to which any member of the
Wider NARS Group is a party or by or to which any such member or any of its assets
may be bound, entitled or subject, which as a consequence of the Transaction or the
proposed acquisition by CSP Bidco or any member of the Wider CSP Bidco Group of
any shares or other securities (or the equivalent) in NARS or because of a change in the
control or management of NARS or any member of the Wider NARS Group, or
otherwise, would or might reasonably be expected to result in, to an extent which is
29
material in the context of the Wider NARS Group taken as a whole, or in the context of
the Transaction:
(i)
any monies borrowed by or any other indebtedness (actual or
contingent) of, or grant available to, any member of the Wider NARS
Group, being or becoming repayable or being capable of being declared
repayable immediately or prior to their or its stated maturity date or
repayment date or the ability of any such member to borrow monies or
incur any indebtedness being withdrawn, prohibited or inhibited or
becoming capable of being withdrawn, prohibited or inhibited;
(ii)
any such agreement, authorisation, arrangement, lease, licence, permit
or other instrument or the rights, liabilities, obligations or interests of
any member of the Wider NARS Group thereunder being or becoming
capable of being terminated or adversely modified or affected or any
obligation or liability arising or any adverse action being taken or
arising thereunder;
(iii)
any assets or interests of any member of the Wider NARS Group being
disposed of or charged or ceasing or failing to be available to any such
member or any right arising under which any such asset or interest
could be required to be disposed of or charged or cease to be available
to any member of the Wider NARS Group otherwise than, in any such
case, in the ordinary course of business;
(iv)
the creation or enforcement of any mortgage, charge or other security
interest over the whole or any part of the business, property interest or
assets or interest of any member of the Wider NARS Group, or any such
mortgage, charge or other security interest (whenever arising or having
arisen) becoming enforceable or being enforced;
(v)
the rights, liabilities, obligations or interests of any member of the
Wider NARS Group in, or the business of any such member with, any
person, company, firm or body (or any arrangements or agreements
relating to any such interest or business) being terminated, or adversely
modified or affected;
(vi)
the value of any member of the Wider NARS Group or its financial or
trading position or profits or prospects being prejudiced or adversely
affected;
(vii)
any member of the Wider NARS Group ceasing to be able to carry on
business under any name under which it presently does so;
(viii)
any liability of any member of the Wider NARS Group to make any
severance, termination, bonus, or other payment to any of its directors
or senior executives with an annual salary in excess of £100,000 (save
in respect of the agreement between NARS and any of the Managers
30
and/or Stephen Thompson (and to be entered into in accordance with
Rule 21.1 of the Code));
(E)
(ix)
the creation or assumption of any liability, actual or contingent, by any
member of the Wider NARS Group other than in the ordinary course;
and
(x)
no event having occurred which, under any provision of any agreement,
authorisation, arrangement, lease, licence, permit or other instrument to
which any member of the Wider NARS Group is a party or by or to
which any such member or any of its assets are bound, entitled or
subject, would be reasonably likely to result in any of the events or
circumstances referred to in sub-paragraph (i) to (ix) of this paragraph
(D);
save as Fairly Disclosed, no member of the Wider NARS Group having, since 31
December 2013:
(i)
save as between NARS and wholly-owned subsidiaries of NARS or for
NARS Shares issued pursuant to the exercise of options granted under
the NARS Share Schemes, issued or agreed to issue, authorised or
proposed the issue of additional shares of any class or securities
convertible into, or exchangeable for, shares of any class or rights,
warrants or options to subscribe for, or acquire, any such shares or
convertible securities;
(ii)
save for NARS Shares held in treasury and sold or transferred pursuant
to the exercise of options granted under the NARS Share Schemes prior
to Announcement Date, sold or transferred any NARS Shares held in
treasury;
(iii)
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other distribution
whether payable in cash or otherwise other than dividends (or other
distributions whether payable in cash or otherwise) lawfully paid or
made by any wholly-owned subsidiary of NARS to NARS or any of its
wholly-owned subsidiaries;
(iv)
other than pursuant to the Transaction, merged or demerged with any
body corporate or other entity or acquired or disposed of or transferred,
mortgaged or charged or created any security interest over any asset or
any right, title or interest in any asset (including shares and trade
investments) or authorised, proposed or announced an intention to
propose any such merger, demerger, acquisition, disposal, transfer,
mortgage, charge or security interest, other than, in the case of the
acquisition or disposition of assets, in the ordinary course of business;
(v)
save as between NARS and its Subsidiaries, made, authorised, proposed
or announced an intention to propose any change in its loan capital;
31
(vi)
save as between transactions between NARS and Subsidiaries, issued,
authorised, proposed or announced an intention to propose the issue of
or made any change in or to the terms of any debentures or, save in the
ordinary course of business, become subject to any contingent liability
or incurred or increased any indebtedness;
(vii)
purchased, redeemed, repaid or announced an intention to purchase,
redeem or repay any of its own shares or other securities or reduced or,
save in respect of the matters mentioned in sub-paragraph (i) above,
made any other change to any part of its share capital;
(viii)
entered into, implemented,
announced an intention
amalgamation, or scheme,
transaction or arrangement
business;
(ix)
entered into or varied or terminated, or authorised, proposed or
announced an intention to propose any variation or termination of, any
contract, arrangement, agreement, transaction or commitment (whether
in respect of capital expenditure or otherwise) which is of a long term,
onerous or unusual nature or magnitude or which is or is likely to be
restrictive on the business of any member of the Wider NARS Group
which involves or is likely to involve an obligation of such a nature or
magnitude or which is other than in the ordinary course of business;
(x)
save for the Management Arrangements or as otherwise Fairly
Disclosed, entered into or varied in any material respect the terms of
any contract, service agreement or arrangement with any director or
employees with an annual salary in excess of £100,000 of any member
of the Wider NARS Group;
(xi)
terminated or varied the terms of any agreement or arrangement
between any member of the Wider NARS Group and any other person
in a manner which would or might reasonably be expected to have a
material adverse effect on the financial position, business, assets,
financial or trading position or profits or prospects or operational
performance of the Wider NARS Group taken as a whole;
(xii)
entered into a contract, transaction or arrangement which is or would be
restrictive on the business of any member of the Wider NARS Group or
which (as a consequence of the implementation of the Transaction) or
the acquisition by any member of the Wider CSP Bidco Group of
control of NARS would be restrictive on the business of any member of
the Wider CSP Bidco Group, and which is material in the context of the
Wider NARS Group or the Wider CSP Bidco Group, in each case taken
as whole (other than to a nature and extent which is normal in the
context of the business concerned), or in the context of the Transaction;
32
effected, varied, authorised, proposed or
to implement (A) any reconstruction,
or (B) any other commitment or other
otherwise than in the ordinary course of
(xiii)
save for the Management Arrangements, proposed, agreed to provide or
modified the terms of any share option scheme or incentive scheme
relating to any person employed by the Wider NARS Group or entered
into or changed the terms of any contract with any director or
employees with an annual salary in excess of £100,000;
(xiv)
save in relation to changes made or agreed as a result of, or arising
from, changes to legislation made or agreed or consented to any change
to: (a) the terms of the trust deeds and rules constituting the pension
scheme(s) established for its directors, employees or their dependants;
(b) the contributions payable to any such scheme(s) or to the benefits
which accrue or to the pensions which are payable thereunder; (c) the
basis on which qualification for, or accrual or entitlement to, such
benefits or pensions are calculated or determined; (d) the basis upon
which the liabilities (including pensions) of such pension schemes are
funded, valued or made, or agreed or consented to; or (e) the trustees,
including the appointment of a trust corporation;
(xv)
been unable, or admitted in writing that it is unable, to pay its debts or
having stopped or suspended (or threatened to stop or suspend) payment
of its debts generally or ceased or threatened to cease to carry on all or a
substantial part of its business;
(xvi)
(other than in respect of a member of the Wider NARS Group which is
dormant and was solvent at the relevant time) taken or proposed any
corporate action, or had any legal proceedings threatened or instituted
against it for its winding-up (voluntarily or otherwise), dissolution or
reorganisation or for the appointment of a receiver, administrative
receiver, administrator, trustee or similar officer of all or any part of its
assets or revenues or any analogous or equivalent steps or proceedings
in any relevant jurisdiction having been taken or had any such person
appointed;
(xvii) waived or compromised or settled any claim otherwise than in the
ordinary course of business;
(xviii) made any alteration to its memorandum or articles of association or
other constitutional documents;
(xix)
taken or proposed to take any action which requires, or would require,
the consent of the Panel or the approval of NARS Shareholders in
general meeting in accordance with, or as contemplated by, Rule 21.1 of
the Code; or
(xx)
entered into any contract, agreement, commitment or arrangement or
passed any resolution or made any offer (which remains open for
acceptance) with respect to or announced any intention to, or to propose
to, effect any of the transactions, matters or events referred to in this
condition in any material respect;
33
(F)
(G)
save as Fairly Disclosed, since 31 December 2013;
(i)
no adverse change or deterioration having occurred (or circumstances
having arisen which would or might be expected to result in any adverse
change or deterioration) in the business, assets, liabilities, financial or
trading position or profits or prospects or operational performance of
any member of the Wider NARS Group which is material in the context
of the Wider NARS Group taken as a whole or in the context of the
Transaction;
(ii)
no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider NARS Group is or may
become a party (whether as a claimant, defendant or otherwise) and no
enquiry, review or investigation by any Third Party against or in respect
of any member of the Wider NARS Group having been instituted,
commenced, announced or threatened by or against or remaining
outstanding in respect of any member of the Wider NARS Group, in
each case, which is material in the context of the Wider NARS Group
taken as a whole or in the context of the Transaction;
(iii)
no contingent or other liability having arisen or increased or become
apparent to any member of the Wider CSP Bidco Group which would or
might reasonably be expected to adversely affect any member of the
Wider NARS Group, to and to the extent in any such case is material in
the context of the Wider NARS Group taken as a whole or in the
context of the Transaction; and
(iv)
no steps having been taken and no omissions having been made which
are likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Wider NARS
Group, which is necessary or appropriate for the proper carrying on of
its business and is material in the context of the Wider NARS Group
taken as a whole or in the context of the Transaction;
save as Fairly Disclosed CSP Bidco not having discovered:
(i)
that any financial, business or other information concerning the Wider
NARS Group publicly announced or disclosed at any time by or on
behalf of any member of the Wider NARS Group is materially
misleading, contains a material misrepresentation of any fact or omits to
state a fact necessary to make that information not materially
misleading (in each case, to an extent material in the context of the
Wider NARS Group or in the context of the Transaction);
(ii)
that any member of the Wider NARS Group is subject to any liability,
contingent, which is not disclosed in the annual report and accounts for
NARS for the year ending 31 December 2013 which is material in the
context of the Wider NARS Group or in the context of the Transaction;
34
(iii)
that any past or present member of the Wider NARS Group has not
complied with any and/or all applicable legislation, regulations or other
requirements of any jurisdiction with regard to the use, treatment,
storage, disposal, discharge, spillage, release, leak or emission of any
waste or hazardous substance or any substance likely to impair the
environment or harm human health, or otherwise relating to
environmental matters or that there has otherwise been an emission,
discharge, disposal, spillage, release or leak of waste or hazardous
substance or any substance likely to impair the environment or harm
human health (whether or not the same constituted a non-compliance by
any person with any such legislation or regulations, and wherever the
same may have taken place) on or from any land or property of any
description or other asset now or previously owned, occupied or made
use of by any past or present member of the Wider NARS Group or in
which any such member may now or previously have had an interest
which, in any case, is material in the context of the Wider NARS Group
or in the context of the Transaction;
(iv)
that there is or is likely to be any liability (whether actual or contingent)
on the part of any past or present member of the Wider NARS Group to
make good, repair, reinstate or clean up any property or any controlled
waters of any description or other asset now or previously owned,
occupied or made use of by any past or present member of the Wider
NARS Group, or in which any such member may now or previously
have had an interest, under any environmental legislation, regulation,
common law, notice, authorisation, circular or order of any Third Party,
which, in any case, is material in the context of the Wider NARS Group
or in the context of the Transaction;
(v)
that circumstances exist (whether as a result of the consummation of the
Transaction or otherwise) which would be likely to lead to any Third
Party instituting, (or whereby any member of the Wider NARS Group
would be likely to be required to institute), an environmental audit or
take any steps which would in any such case be 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 other asset now or previously owned, occupied or
made use of by any member of the Wider NARS Group, or in which
any such member may now or previously have had an interest, or any
controlled waters, which, in any case, is material in the context of the
Wider NARS Group or in the context of the Transaction;
(vi)
that circumstances exist whereby a person or class of persons would be
likely to have any claim or claims in respect of any product or process
of manufacture or materials used therein now or previously held, used,
sold, manufactured or carried out by any past or present member of the
Wider NARS Group which, in any case, is material in the context of the
Wider NARS Group or in the context of the Transaction;
35
(vii)
that circumstances have arisen or events have occurred since the date of
this announcement in relation to any intellectual property owned, used
or licensed by the Wider NARS Group or to any third parties, including:
(a)
any member of the Wider NARS Group losing its title to any
intellectual property or any intellectual property owned by the
Wider NARS Group being revoked, cancelled or declared
invalid;
(b)
any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider NARS Group being
terminated or varied; or
(c)
any claim being filed suggesting that any member of the Wider
NARS Group infringed the intellectual property rights of a third
party or any member of the Wider NARS Group being found to
have infringed the intellectual property rights of a third party,
in each case, which is material in the context of the Wider NARS Group
taken as a whole or in the context of the Transaction; or
(viii)
that any past or present member of the Wider NARS Group or any
employee or agent acting on behalf of the foregoing, has:
(a)
paid or agreed to pay any bribe including any 'inducement fee',
given or agreed to give any similar gift or benefit or paid or
agreed to pay to a concealed bank account or fund to or for the
account of, any customer, supplier, governmental official or
employee, representative of a political party, or other person for
the purpose of obtaining or retaining business, or otherwise
engaged in any activity or done such things (or omitted to do
such things) in contravention of applicable law or regulation
addressing bribery or corruption (including without limitation
the Organisation for Economic Co-operation and
Development’s Convention on Combating Bribery of Foreign
Public Officials in International Business Transactions and any
laws implementing the same, the UK Bribery Act 2010 and the
U.S. Foreign Corrupt Practices Act of 1977); or
(b)
engaged in any business with or made any investments in, or
made any payments to (i) any government, entity or individuals
with which US persons are prohibited from engaging in
activities or doing business by US laws or regulations, including
the economic sanctions administered by the United States
Office of Foreign Assets Control or (ii) any government, entity
or individual targeted by any of the economic sanctions of the
United Kingdom and administered by the Bank of England.
36
For the purposes of these Conditions the “Wider NARS Group” means NARS and its
subsidiary undertakings, associated undertakings and any other undertaking in which NARS
and/or such undertakings (aggregating their interests) have a significant interest and the “Wider
CSP Bidco Group” means CSP Bidco and its subsidiary undertakings, associated undertakings
and any other undertaking in which CSP Bidco and/or such undertakings (aggregating their
interests) have a significant interest and for these purposes “subsidiary undertaking” and
“undertaking” have the meanings given by sections 1162 and 1161 Companies Act 2006
respectively, “associated undertaking” has the meaning given by paragraph 19 of Schedule 6
to the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations
2008 other than paragraph 19(1)(b) of Schedule 6 to those Regulations which shall be excluded
for this purpose, and “significant interest” means a direct or indirect interest in ten per cent. or
more of the equity share capital (as defined in the Companies Act 2006).
Part B: Certain further terms of the Transaction
1. CSP Bidco reserves the right to waive, in whole or in part, all or any of Conditions 3(A)
to (F) inclusive. Conditions 3(A) to (F) must be satisfied as at, or waived prior to, the
commencement of the Court Hearing, failing which the Transaction will lapse and the
Scheme will not proceed. CSP Bidco shall be under no obligation to waive (if capable
of waiver), to determine to be or remain satisfied or treat as fulfilled any of the
Conditions 3(A) to (F) (inclusive) at any time prior to the Long Stop Date,
notwithstanding that the other Conditions (or any of them) may at an earlier date have
been waived (if capable of waiver), satisfied or fulfilled and that there are, at such
earlier date, no circumstances indicating that any such Condition may not be capable of
satisfaction or fulfilment.
2. The Transaction will lapse and the Scheme will not proceed if, prior to the date of the
Court Meeting and the NARS General Meeting, there is a CMA Phase 2 Reference or if
Phase 2 European Commission proceedings are initiated or if, following a referral of the
Transaction 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 CMA
Phase 2 Reference in respect of the Transaction, or any matter arising from the
Transaction.
3. If CSP Bidco is required by the Panel to make an offer for NARS Shares under the
provisions of Rule 9 of the Code, CSP Bidco may make such alterations to the above
conditions of the Transaction as are necessary to comply with the provisions of that
Rule.
4. CSP Bidco reserves the right to elect (with the consent of the Panel) to implement the
Transaction by way of a takeover offer (as defined in Part 28 of the Companies Act
2006). In such event, such offer will be implemented on substantially the same terms,
so far as applicable, as those which would apply to the Scheme, subject to appropriate
amendments to reflect the change in method of effecting the Transaction, including
(without limitation and subject to the consent of the Panel) an acceptance condition that
is set at 90 per cent. of the shares to which such offer relates or such lesser percentage,
being more than 50 per cent., as CSP Bidco may decide or the Panel may require), so far
as applicable, as those which would apply to the Scheme.
37
5. The availability of the Transaction to persons not resident in the United Kingdom may
be affected by the laws of the relevant jurisdictions. Persons who are not resident in the
United Kingdom should inform themselves about and observe any applicable
requirements.
6. This Transaction will be governed by English law and be subject to the jurisdiction of
the English courts, to the conditions set out below and in the Scheme Document. The
Transaction will comply with the applicable rules and regulations of the FCA, the
London Stock Exchange and the Code.
7. Each of the Conditions will be regarded as a separate Condition and will not be limited
by reference to any other Condition.
38
APPENDIX 2
SOURCES OF INFORMATION AND BASES OF CALCULATION
In this announcement:
1.
The value of the Offer is calculated on the basis of the issued share capital of NARS as
set out in paragraph 2 below.
2.
The fully diluted ordinary share capital of NARS (being 43,197,220 NARS Ordinary
Shares) is calculated on the basis of:
•
43,197,220 NARS Ordinary Shares in issue on 31 March 2015; and
•
no further NARS Ordinary Shares being issued on or after the date of this
announcement as a result of the exercise of options or under the NARS Share
Schemes.
3.
Closing Prices for NARS Shares are taken from the London Stock Exchange.
4.
Unless otherwise stated, financial information relating to the NARS Group has been
extracted or derived (without any adjustment) from the audited annual report and
accounts for NARS for the year ended 31 December 2013, prepared in accordance with
IFRS.
5.
Volume Weighted Average Prices for NARS Shares are derived from Bloomberg.
39
APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
Directors
The NARS Directors have given irrevocable undertakings in relation to the Transaction as
follows:
Name of NARS Director
giving undertaking
Michael Marx
Number of NARS Ordinary
Shares in respect of which
undertaking is given*
Percentage of existing
NARS issued ordinary share
capital
30,000
0.07%
Michael Wilmshurst
1,351,351
3.13%
Total
1,381,351
3.20%
*The undertakings and the numbers referred to in this table refer only to those NARS Ordinary
Shares to which the relevant director is beneficially entitled and any share such director is
otherwise able to control the exercise of in terms of the rights attaching to such share, including
the ability to procure the transfer of such share. The numbers referred to in this table exclude
any award that may be outstanding under the NARS Share Schemes, however any such shares
awarded would be included in the scope of the undertakings.
These irrevocable undertakings include undertakings from the NARS Directors who hold NARS
Ordinary Shares in respect of their entire beneficial holdings of NARS Ordinary Shares and any
NARS Ordinary Shares which may be issued under the NARS Share Schemes:
(i)
to cast, or, where applicable, procure the casting of, all voting rights attaching to such
NARS Ordinary Shares in favour of any resolutions required to give effect to the
Scheme at the NARS General Meeting or the Court Meeting;
(ii)
if CSP Bidco exercises its right to structure the Transaction as a takeover offer, to accept
or procure the acceptance of such Offer; and
(iii)
not to accept any offer made or proposed to be made in respect of the NARS Ordinary
Shares by any person other than CSP Bidco, or, where applicable, to procure that no
such offer is accepted,
In the case of Michael Wilmshurst, the undertaking referred to at (i) above is subject to him
being permitted to vote on the resolution in question. The undertaking from Michael
Wilmshurst contains an agreement that he will, in all circumstances, be bound by the terms of
the Scheme.
40
These irrevocable undertakings would have ceased to be binding if this announcement had not
been released by 5pm (London time) on 1 April 2015 or such later date as CSP Bidco and
NARS had agreed.
Other NARS Ordinary Shareholders
The following NARS Ordinary Shareholders have given irrevocable undertakings in relation
to the Transaction as follows:
Name of NARS Ordinary
Shareholder giving
undertaking
Number of NARS Ordinary
Shares in respect of which
undertaking is given*
Percentage of existing
NARS issued ordinary share
capital
Clients of Harwood Capital
LLP**
2,595,414
6.01%
North Atlantic Small
Companies Investment Trust
plc**
10,000,000
23.15%
Oryx International Growth
Fund Limited**
800,000
1.85%
Miton Asset Management
Limited
5,300,000
12.27%
River and Mercantile Asset
Management LLP
2,500,000
5.79%
Henderson Alternative
Investment Advisor Limited
4,948,423
11.46%
26,143,837
60.52%
Total
* The undertakings and the numbers referred to in this table refer only to those NARS Ordinary
Shares to which the relevant NARS Ordinary Shareholder is beneficially entitled and any share
such NARS Ordinary Shareholder is otherwise able to control the exercise of in terms of the
rights attaching to such share, including the ability to procure the transfer of such share.
** Each being an entity connected with Harwood Capital LLP (each for the purpose of this
Appendix 3 a “Harwood Entity”).
These irrevocable undertakings include undertakings from the relevant NARS Ordinary
Shareholder in respect of their entire beneficial holdings of NARS Ordinary Shares and any
NARS Ordinary Shares which they are otherwise able to control the exercise of in terms of the
rights attaching to such share, including the ability to procure the transfer of such share:
41
(i)
to cast, or, where applicable, procure the casting of, all voting rights attaching to such
NARS Ordinary Shares in favour of any resolutions in favour of the Scheme or required
to give effect to the Scheme at the NARS General Meeting or the Court Meeting,
including the votes of the NARS Independent Shareholders approving the Management
Arrangements;
(ii)
if CSP Bidco exercises its right to structure the Transaction as a takeover offer, to accept
or procure the acceptance of such Offer; and
(iii)
not to accept any offer made or proposed to be made in respect of the NARS Ordinary
Shares by any person other than CSP Bidco.
These irrevocable undertakings would have ceased to be binding if this announcement had not
been released by 5pm (London time) on 1 April 2015.
The irrevocable undertakings from NARS Ordinary Shareholders shall lapse and cease to be
binding if the Scheme lapses or is withdrawn and no new, revised or replacement Scheme or
Offer has been announced, in accordance with Rule 2.7 of the Code, in its place or is
announced, in accordance with Rule 2.7 of the Code, at the same time.
The irrevocable undertakings from each Harwood Entity and River and Mercantile Asset
Management LLP shall lapse and cease to be binding if a third party in accordance with the
Code, announces a firm intention to make, or makes a general offer to acquire the whole or a
majority of the NARS Ordinary Shares on terms which represent an improvement of no less
than fifteen (15) per cent. of the value of the consideration offered under the Scheme as at the
date on which such offer is announced and CSP Bidco does not increase the consideration
offered under the Scheme to an amount which is a higher value of consideration within seven
(7) days of the date of the third party’s announcement.
The irrevocable undertakings from Miton Asset Management Limited and Henderson Global
Investors shall lapse and cease to be binding if a third party in accordance with the Code,
announces a firm intention to make, or makes a general offer to acquire the whole or a majority
of the NARS Ordinary Shares on terms which represent an improvement of no less than ten (10)
per cent. of the value of the consideration offered under the Scheme as at the date on which such
offer is announced and CSP Bidco does not increase the consideration offered under the Scheme
to an amount which is a higher value of consideration within seven (7) days of the date of the
third party’s announcement.
42
APPENDIX 4
DEFINITIONS
“AIM”
the AIM Market of the London Stock Exchange
“Amended NARS Articles”
the articles of association of NARS as at the
Announcement Date, as amended to include provisions,
in terms approved by CSP Bidco, that avoid any person
(other than CSP Bidco or its nominee(s)) remaining as
a holder of NARS Shares after the Effective Date, such
proposed amendments to be set out in full in the notice
of the NARS General Meeting
“Announcement Date”
1 April 2015
“Board”
the board of directors of the relevant company
“Business Day”
a day, (other than a Saturday, Sunday, public or bank
holiday) on which banks are generally open for business
in London other than solely for trading and settlement in
Euro
“Carlyle”
has the meaning given on page 2 of this announcement
“Carlyle Fund”
CSP III AIV (Cayman), L.P. a Cayman Islands limited
partnership registered under number WK – 72521
“Cash Consideration”
the entitlement of the Scheme Shareholders to receive
100 pence in cash consideration for each Scheme Share
“Cash Offer”
the offer by CSP Bidco to the Scheme Shareholders to
acquire their Scheme Shares for the Cash Consideration
“Closing Price”
the closing middle market price of a NARS Share on a
particular trading day as derived from the London
Stock Exchange
“CMA Phase 2 Reference”
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 Enterprise and Regulatory
Reform Act 2013
“Code”
the City Code on Takeovers and Mergers
“Competition and Markets
Authority”
a UK statutory body established under the Enterprise
and Regulatory Reform Act 2013
“Conditions”
the conditions of the Transaction set out in Appendix 1
to this announcement
43
“Confidentiality Agreement”
the confidentiality and standstill agreement entered into
between NARS and CELF Advisors LLP on 20
February 2015
“Court”
the High Court of Justice in England and Wales
“Court Meeting”
the meeting of the NARS Independent Shareholders
convened by order of the Court pursuant to section 899
of the Companies Act 2006 for the purpose of
considering and, if thought fit, approving the Scheme
(with or without amendment) and any adjournment
thereof
“Court Order”
the order of the Court sanctioning the Scheme
“CREST”
the system for the paperless settlement of trades in
securities and the holding of uncertificated
securities operated by Euroclear
“CSP Bidco”
Canaveral Bidco Limited, incorporated in England and
Wales with registered number 09511818
“CSP Bidco Directors”
members of the Board of CSP Bidco
“CSP Holdco”
Canaveral Holdco Limited, incorporated in England
and Wales with registered number 09511186
“Dealing Arrangement”
an arrangement of the kind referred to in Note 11(a) on
the definition of acting in concert in the Code
“Dealing Disclosure”
has the same meaning as in Rule 8 of Code
“Effective Date”
the date on which the Scheme becomes effective in
accordance with its terms
“Equity Terms Letter”
the agreement entered into between parties including
the Managers, CSP Bidco and CSP Holdco on 31
March 2015
“Euroclear”
Euroclear UK and Ireland Limited
“Fairly Disclosed”
means (i) publicly announced by or on behalf of NARS
through a Regulatory Information Service on or before
the date of this announcement or (ii) made available in
the electronic data room established by NARS for the
Transaction or (iii) otherwise fairly disclosed in writing
or verbally in meetings or other conversations
requested by any member of the CSP Group, by any
member of the Wider NARS Group or any of its
professional advisers, including but not limited to any
of its legal advisers and any of its financial advisers, to
44
a member of the Wider CSP Bidco Group or any of its
professional advisers, including but not limited to any
of its legal advisers and any of its financial advisers,
before the date of this announcement or (iv) as
disclosed in NARS’s annual report and accounts for the
year ended 31 December 2013 or (v) filed and
displayed at Companies House in relation to a member
of the NARS Group on 16 March 2015
“IAS”
International Accounting Standards
“London Stock Exchange”
the London Stock Exchange plc
“Long Stop Date”
31 August 2015 or such later date (if any) as CSP
Bidco and NARS may agree and (if required) the Panel
and the Court may allow
“Managers”
means Michael Wilmshurst and David Pugh
“Management Arrangements”
mean the arrangements set out in the Equity Terms
Letter, and as further described in paragraph 14 of this
announcement and to be set out in the Scheme
Document
“Meetings”
the Court Meeting and the NARS General Meeting
“NARS”
Nationwide Accident Repair Services plc, incorporated
in England and Wales with registered number 966807
“NARS Directors”
the Board of NARS
“NARS General Meeting”
the general meeting of NARS Shareholders to be
convened to consider and if thought fit pass, inter alia,
any required resolution in relation to the Scheme and
the Transaction and the resolution to be taken on a poll
of NARS Independent Shareholders in relation to
Management Arrangements
“NARS Group”
NARS and its Subsidiary and associated undertakings
“NARS Independent Directors"
the Board of NARS excluding Michael Wilmshurst and
David Pugh
“NARS Independent Shareholders"
the NARS Shareholders excluding Michael Wilmshurst
and David Pugh and their connected persons
“NARS Ordinary Shareholders"
the holders of NARS Ordinary Shares
“NARS Ordinary Shares”
the ordinary shares of 12.5 pence each in the capital of
NARS
45
“NARS Shares”
means the NARS Ordinary Shares
“NARS Shareholders”
means NARS Ordinary Shareholders
“NARS Share Schemes”
means the Nationwide Accident Repair Services plc
Share Option Plan adopted on 31 May 2006
“Offer”
the recommended cash offer being made by CSP Bidco
to acquire the issued and to be issued share capital of
NARS to be effected by means of the Scheme (or,
subject to the consent of the Panel, by way of a
takeover offer as defined in Chapter 3 of Part 28 of the
Companies Act 2006) and, where the context admits,
any subsequent revision, variation, extension or
renewal of such offer
“Offer Period”
the offer period (as defined by the Code) relating to
NARS, which commenced on 1 April 2015
“Offer Price”
consideration payable under the Offer in respect of a
NARS Share
“Official List”
The official list maintained by the London Stock
Exchange
“Opening Position Disclosure”
has the same meaning as in Rule 8 of the Code
“Overseas Shareholders”
NARS Shareholders (or nominees of, or custodians or
trustees for NARS Shareholders) not resident in, or
nationals or citizens of the United Kingdom
“Panel”
the Panel on Takeovers and Mergers
“Registrar of Companies”
the Registrar of Companies in England and Wales;
“Regulation”
has the meaning given to it in paragraph 3(A) of
Appendix 1 to this Announcement
“Regulatory Information Service”
any information service authorised from time to time
by the Financial Conduct Authority for the purpose of
disseminating regulatory announcements
“Restricted Jurisdiction”
United States, Japan, South Africa, Australia or any
other jurisdiction where local laws or regulations may
result in a significant risk of civil, regulatory or
criminal exposure if information concerning the
Transaction is sent or made available to NARS
Shareholders in that jurisdiction
46
“Rothschild”
N M Rothschild & Sons Limited
“Scheme”
the proposed scheme of arrangement under Part 26 of
the Companies Act 2006 between NARS and Scheme
Shareholders to implement the Transaction
“Scheme Court Hearing”
the hearing of the Court to sanction the Scheme under
section 899 of the Companies Act 2006
“Scheme Court Order”
the order of the Court sanctioning the Scheme under
section 899 of the Companies Act 2006
“Scheme Document”
the document to be dispatched to Scheme Shareholders
including the particulars required by section 897 of the
Companies Act 2006
“Scheme Record Time”
6.00p.m. (London time) on the business day
immediately preceding the date of the Scheme Court
Hearing
“Scheme Shareholder”
holders of Scheme Shares
“Scheme Shares”
1. the NARS Ordinary Shares in issue at the date of
the Scheme Document;
2. any NARS Ordinary Shares issued after the date of
the Scheme Document and prior to the Voting
Record Time; and
3. any NARS Ordinary Shares issued at or after the
Voting Record Time and prior to 6.00 p.m. on the
day before the date on which the Court Order is
made in respect of which the original or any
subsequent holder thereof is bound by the Scheme,
or shall by such time have agreed in writing to be
bound by the Scheme
“Subsidiary” or “Subsidiaries”
has the meaning given in section 1159 of the
Companies Act 2006
“Third Party”
each of a central bank, government or governmental,
quasi-governmental,
supranational,
statutory,
regulatory, environmental, administrative, fiscal or
investigative body, court, trade agency, association,
institution or any other body or person whatsoever in
any jurisdiction (each a “Third Party” and all
collectively “Third Parties”)
47
“Transaction”
the proposed acquisition of the entire issued and to be
issued ordinary share capital of NARS by CSP Bidco,
to be effected by the Scheme as described in this
announcement and in the Scheme Document to be
dispatched to the Scheme Shareholders (or by a
takeover offer under certain circumstances described in
this announcement)
“UK” or “United Kingdom”
the United Kingdom of Great Britain and Northern
Ireland
“US” or “United States”
the United States of America, its territories and
possessions, any state of the United States of America
and the District of Columbia
“US Exchange Act”
the US Securities Exchange Act of 1934, as amended
“Volume Weighted Average Price”
volume weighted average price, calculated in
accordance with paragraph (5) of Appendix 2 of this
Announcement
“Voting Record Time”
6.00 p.m. (London time) on the day prior to the day
immediately before the Court Meeting or any
adjournment thereof (as the case may be)
“Westhouse Securities”
Westhouse Securities Limited
“Wider CSP Bidco Group”
shall have the meaning set out in paragraph (F) of Part
A of Appendix 1
“Wider NARS Group”
shall have the meaning set out in paragraph (F) of Part
A of Appendix 1
48