Wrap Text
Recommended Cash Offer for Lighthouse Group PLC
QUILTER PLC
(previously, Old Mutual Wealth Management Limited)
Incorporated under the Companies Act 1985 with registered number
06404270 and re-registered as a public limited company under the
Companies Act 2006)
ISIN CODE: GB00BDCXV269
JSE SHARE CODE: QLT
Quilter plc (the "Company")
LEI: 54930092XIVK28RZGM95
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS
OF THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
3 April 2019
RECOMMENDED CASH OFFER
for
LIGHTHOUSE GROUP PLC ("LIGHTHOUSE")
by
INTRINSIC FINANCIAL SERVICES LIMITED ("INTRINSIC")
a wholly-owned indirect subsidiary of Quilter plc ("Quilter")
to be effected by means of a Scheme of Arrangement under Part 26 of the Companies
Act 2006
Summary
- The Boards of Quilter, Intrinsic and Lighthouse are pleased to announce that they
have agreed the terms of a recommended cash offer to be made by Intrinsic for
Lighthouse pursuant to which Intrinsic will acquire the entire issued and to be issued
ordinary share capital of Lighthouse (the "Acquisition").
- Under the terms of the Acquisition, Lighthouse Shareholders will receive:
for each Lighthouse Share: 33 pence in cash
- The Acquisition values the entire issued and to be issued ordinary share capital of
Lighthouse at approximately £46.2m (£42.2m adjusted for approximately £4m of
excess cash held on Lighthouse's balance sheet as at 31 December 2018) and
represents a premium of approximately:
- 24.5 per cent. to the Closing Price of 26.5 pence per Lighthouse Share on
2 April 2019 (being the last Business Day prior to this Announcement);
- 30.4 per cent. to the volume-weighted average price of 25.3 pence per
Lighthouse Share for the three-month period ended 2 April 2019 (being the
last Business Day prior to this Announcement); and
- 25.6 per cent. to the volume-weighted average price of 26.3 pence per
Lighthouse Share for the six-month period ended 2 April 2019 (being the last
Business Day prior to this Announcement).
- In addition to the consideration payable in connection with the Acquisition,
Lighthouse Shareholders will also be entitled to receive the payment of the 2018 final
dividend by Lighthouse of up to 0.5 pence for each Lighthouse Share (the "Pre-Close
Dividend"), as announced on 26 February 2019.
- Intrinsic, a wholly owned subsidiary of Quilter, is a network of over 3,500 advisers,
including independent financial advisers, mortgage and protection advisers and over
1,600 restricted financial planners. Intrinsic provides ongoing advice to approximately
200,000 customers and is one of the largest restricted advice networks in the UK.
- Lighthouse is an AIM-quoted group of approximately 400 financial advisers
providing financial advice to retail and corporate customers across the UK through
three principal operating divisions: (i) its national affinity business, which is a market
leader for the provision of advice to members of affinity groups, with 23 contractual
relationships whose aggregate membership exceeds six million individuals; (ii) its
wealth advisory business, working with clients of approximately 40 accountancy and
professional connections and higher net worth customers across the South of England;
and (iii) appointed representatives servicing customers in their local communities.
- Quilter's strategy is to be the leading wealth manager across the UK, with face to face
advice forming a core priority for the group. Quilter has committed to growing its
controlled advice capabilities across its National and Network businesses. Quilter has
a high regard for Lighthouse's business, its management, staff and professional
advisers. It appreciates the value it would bring to the group, specifically Lighthouse's
client acquisition and business development expertise and capabilities.
- The Acquisition is expected to be effected by means of a Court-sanctioned scheme of
arrangement between Lighthouse and Lighthouse Scheme Shareholders under Part 26
of the Companies Act 2006, although Intrinsic reserves the right to effect the
Acquisition by way of a Takeover Offer, subject to the Panel's consent.
Lighthouse Recommendation
- The Lighthouse Directors, who have been so advised by Investec Bank plc
("Investec") as to the financial terms of the Acquisition, consider the terms of the
Acquisition to be fair and reasonable. In providing advice to the Lighthouse Directors,
Investec has taken into account the commercial assessments of the Lighthouse
Directors.
- The Lighthouse Directors intend to recommend unanimously that the Lighthouse
Shareholders vote in favour of the resolutions to be proposed at the Lighthouse
Meetings.
Irrevocable Undertakings
- Intrinsic has received irrevocable undertakings to vote in favour (or procure a vote in
favour) of the Scheme at the Court Meeting and the Resolutions to be proposed at the
General Meeting from those Lighthouse Directors who hold Lighthouse Shares in
respect of their own beneficial shareholdings, totalling 4,539,063 Lighthouse Shares
representing approximately 3.55 per cent. of the issued ordinary share capital of
Lighthouse as at 2 April 2019, being the last Business Day before the date of this
Announcement. Further details are set out in Appendix 3 to this Announcement.
- In addition to the irrevocable undertakings received from Lighthouse Directors who
hold Lighthouse Shares, Intrinsic has received irrevocable undertakings from certain
Lighthouse Shareholders who hold, in aggregate, 50,966,963 Lighthouse Shares,
representing approximately 39.9 per cent. of the issued ordinary share capital of
Lighthouse as at 2 April 2019, being the last Business Day before the date of this
Announcement. Further details are set out in Appendix 3 to this Announcement.
- Intrinsic has therefore received irrevocable undertakings to vote in favour (or procure
a vote in favour) of the Scheme at the Court Meeting and the Resolutions to be
proposed at the General Meeting in respect of 55,506,026 Lighthouse Shares
representing approximately 43.5 per cent. of the issued ordinary share capital of
Lighthouse as at 2 April 2019, being the last Business Day before the date of this
Announcement.
General
- The Acquisition is subject to, among other things, approvals of the relevant
Lighthouse Shareholders, the sanction of the Scheme by the Court and the receipt of
FCA and certain antitrust approvals. The Acquisition is also subject to the other terms
and Conditions set out in Appendix 1 to this Announcement, and to the full terms and
conditions to be set out in the Scheme Document.
- Intrinsic reserves the right to reduce the consideration payable in respect of each
Lighthouse Share under the terms of the Acquisition to the extent that the Pre-Close
Dividend exceeds 0.5 pence per Lighthouse Share. If any dividend or other
distribution is announced, declared, made or paid, or becomes payable, in respect of
the Lighthouse Shares on or after the date of this Announcement and prior to the
Effective Date, other than the Pre-Close Dividend, Intrinsic reserves the right to
reduce the consideration payable in respect of each Lighthouse Share by the amount
of all or part of any such dividend or other distribution.
- The Scheme Document will include full details of the Scheme, together with notices
of the Court Meeting and the General Meeting and the expected timetable, and will
specify the actions to be taken by the Lighthouse Shareholders. The Scheme
Document will be posted to Lighthouse Shareholders as soon as practicable and, in
any event, within 28 days of this Announcement (unless Intrinsic and Lighthouse
otherwise agree, and the Panel consents, to a later date).
- The Acquisition is expected to complete during the second quarter of 2019, subject to
the satisfaction (or, where applicable, waiver) of the Conditions set out in Appendix 1
to this Announcement.
Comments on the Acquisition
Commenting on the Acquisition, Paul Feeney, Chief Executive Officer of Quilter, said:
"At Quilter, our focus is on delivering good client outcomes and that always starts with
advice. We are delighted to have agreed a recommended cash offer for Lighthouse and look
forward to their advisers joining the Quilter family. As the advice market consolidates, the
strategic acquisition of Lighthouse will help secure Quilter's position as the place to go for
trusted financial advice in the UK."
Commenting on the Acquisition, Andy Thompson, Chief Executive Officer of Quilter's
advice business, Intrinsic, said:
"Intrinsic and Lighthouse are highly compatible businesses with similar experiences,
complementary structures and a shared focus on delivering good customer outcomes. The
acquisition presents an opportunity to combine the expertise and capabilities of both
businesses to accelerate our ability to provide customers with quality controlled financial
advice. I look forward to working with Lighthouse's staff and advisers."
Commenting on the Acquisition, Richard Last, Chairman of Lighthouse, said:
"We have continued to make good financial and strategic progress in recent years despite
softening market conditions and a tougher regulatory backdrop. However, the Board believes
that Lighthouse will benefit significantly from becoming part of Intrinsic and the wider
Quilter group and will be better positioned to deliver an enhanced customer proposition and
offer increased opportunities to current staff and advisers that will be available within a
larger group. Furthermore, the Acquisition provides Lighthouse Shareholders with the
opportunity to realise their investment in full and in cash at an attractive premium to the
levels at which the share price has traded in recent months. The Board of Lighthouse is
therefore unanimously recommending Lighthouse Shareholders to vote in favour of the
Acquisition."
This summary should be read in conjunction with, and is subject to, the full text of the
following Announcement and its Appendices.
The conditions to, and certain further terms of, the Acquisition are set out in Appendix
1. The bases and sources for certain financial information contained in this
Announcement are set out in Appendix 2. Details of irrevocable undertakings received
by Intrinsic are set out in Appendix 3. Certain definitions and terms used in this
Announcement are set out in Appendix 4.
Quilter and Intrinsic will hold a conference call for analysts and investors at 8:30 a.m.
(London time) on 3 April 2019 with a dial-in facility available on +44 (0) 3333 000 800. The
access code is 37709724.
Enquiries:
Intrinsic / Quilter
Intrinsic / Quilter
Kathleen Gallagher - Corporate Communications Manager Tel: +44 (0) 79 9000 4932
John-Paul Crutchley - Head of Investor Relations Tel: +44 (0) 20 7002 7016
J.P. Morgan Cazenove (financial adviser to Intrinsic and
Quilter)
Ed Squire / Rajesh Iyer Tel: +44 (0) 20 7742 4000
Kirshlen Moodley / Henry Capper
Lighthouse
Lighthouse
Richard Last - Chairman Tel: +44 (0) 20 7065 5640
Malcolm Streatfield - Chief Executive Officer
Peter Smith - Finance Director
Investec Bank plc (financial adviser to Lighthouse)
Andrew Pinder Tel: +44 (0) 20 7597 5970
William Godfrey
David Bickerstaffe
Allen & Overy LLP is retained as legal adviser to Intrinsic. DLA Piper UK LLP is retained as
legal adviser to Lighthouse.
Further information
This Announcement is for information purposes only and is not intended to, and does not,
constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe
for, sell or otherwise dispose of, any securities or the solicitation of any vote or approval in
any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely
through the Scheme Document (and the accompanying forms of proxy), which will contain
the full terms and conditions of the Acquisition, including details of how to vote in respect of
the Acquisition. Any vote or other response to the Acquisition should be made only on the
basis of the information in the Scheme Document.
This Announcement does not constitute a prospectus or prospectus equivalent document.
Intrinsic reserves the right to elect, with the consent of the Panel (where necessary), to
implement the Acquisition by way of a Takeover Offer. In such event, the Takeover Offer will
be implemented on substantially the same terms, so far as applicable, as those which would
apply to the Scheme, subject to the Takeover Code and to any appropriate amendments to
reflect the change in method of effecting the Acquisition.
Important notices relating to financial advisers
J.P. Morgan Securities plc, which conducts its U.K. investment banking business as J.P.
Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the
PRA and regulated by the PRA and the FCA. J.P. Morgan Cazenove is acting as financial
adviser exclusively for Intrinsic and Quilter and no one else in connection with the matters
set out in this Announcement and will not regard any other person as its client in relation to
the matters set out in this Announcement and will not be responsible to anyone other than
Intrinsic and Quilter for providing the protections afforded to clients of J.P. Morgan
Cazenove or its affiliates, or for providing advice in relation to any matter referred to herein.
Investec Bank plc ("Investec"), which is authorised by the PRA and regulated in the United
Kingdom by the FCA and the PRA, is acting exclusively for Lighthouse and no one else in
relation to the Acquisition and/or other matters set out in this Announcement and will not be
responsible to anyone other than Lighthouse for providing the protections afforded to clients
of Investec or for providing advice in relation to the Acquisition, the contents of this
Announcement or any other matter or arrangement referred to herein.
Overseas Shareholders
This Announcement has been prepared in accordance with English law, the Takeover Code,
the Market Abuse Regulation, the AIM Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which would have been
prepared in accordance with the laws of jurisdictions outside England.
Copies of this Announcement and any formal documentation relating to the Acquisition are
not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not mail or otherwise forward, distribute
or send it in or into or from any Restricted Jurisdiction. If the Acquisition is implemented by
way of a Takeover Offer (unless otherwise determined by Intrinsic and permitted by
applicable law and regulation), the Takeover Offer may not be communicated, directly or
indirectly, in or into or by the use of the mails of, or by any other means or instrumentality
(including, without limitation, by mail, telephonically or electronically by way of internet or
otherwise) of interstate or foreign commerce of, or any facilities of a national, state or
securities exchange of, any Restricted Jurisdiction and the Takeover Offer may not be
capable of acceptance by any such use, means, instrumentality or otherwise.
The Acquisition will be subject to the applicable requirements of the Takeover Code, the
Panel, AIM and the FCA.
Further details in relation to Lighthouse Shareholders in overseas jurisdictions will be
contained in the Scheme Document.
Additional information for US investors
US holders of Lighthouse Shares should note that the Acquisition relates to the securities of a
UK company admitted to trading on AIM and is proposed to be implemented pursuant to 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 Acquisition will be subject to
UK procedural and disclosure requirements and practices applicable to a scheme of
arrangement involving a target company in England admitted to trading on AIM, which are
different from the disclosure requirements of the US tender offer and proxy solicitation rules.
The financial information included in this Announcement and other documentation related to
the Acquisition has been or will have been prepared in accordance with International
Financial Reporting Standards and thus 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 US. If Intrinsic exercises its right, in the
circumstances provided for in this Announcement, to implement the Acquisition by way of a
Takeover Offer, such Takeover Offer will only be made in the United States if an exemption
from the registration requirements of the US Securities Act is available.
None of the securities referred to in this Announcement have been approved or disapproved
by the SEC, any state securities commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the adequacy or accuracy of
the information contained in this document. Any representation to the contrary is a criminal
offence in the United States.
It may be difficult for US holders of Lighthouse Shares to enforce their rights and claims
arising out of the US federal securities laws, since Intrinsic and Lighthouse are located in
countries other than the United States, and some or all of their officers and directors may be
residents of countries other than the United States. US holders of Lighthouse Shares may not
be able to sue a non-US company or its officers or directors in a non-US court for violations
of US securities laws. Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's judgement.
Forward-looking statements
This Announcement (including information incorporated by reference in this Announcement),
oral statements made regarding the Acquisition, and other information published by Intrinsic
and Lighthouse contain statements which are, or may be deemed to be, "forward-looking
statements". All statements, other than statements of historical fact are, or may be deemed to
be, forward-looking statements. Forward-looking statements are prospective in nature and
are not based on historical facts, but rather on assumptions, expectations, valuations, targets,
estimates, forecasts and projections of Intrinsic and Lighthouse about future events, and are
therefore subject to risks and uncertainties which could cause actual results, performance or
events to differ materially from those expressed or implied by the forward-looking statements.
The forward-looking statements contained in this Announcement include statements relating
to the expected effects of the Acquisition on the Intrinsic Group, the Lighthouse Group and
the Enlarged Group, the expected timing and scope of the Acquisition and other statements
other than historical facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "plans", "expects", "budget",
"targets", "aims", "scheduled", "estimates", "forecast", "intends", "anticipates", "seeks",
"prospects", "potential", "possible", "assume" or "believes", or variations of such words and
phrases or statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Although Intrinsic and Lighthouse
believe that the expectations reflected in such forward-looking statements are reasonable,
Intrinsic and Lighthouse can give no assurance that such expectations will prove to be
correct. By their nature, forward-looking statements involve risks (known and unknown) and
uncertainties (and other factors that are in many cases beyond the control of Intrinsic and/or
Lighthouse) because they relate to events and depend on circumstances that may or may not
occur in the future.
There are a number of factors that could affect the future operations of the Intrinsic Group,
the Lighthouse Group and/or the Enlarged Group and that could cause actual results and
developments to differ materially from those expressed or implied by such forward-looking
statements. These factors include the satisfaction (or, where permitted, waiver) of the
Conditions, as well as additional factors, such as: domestic and global business and
economic conditions; asset prices; market related risks such as fluctuations in interest rates
and exchange rates, industry trends, competition, changes in government and regulation,
changes in the policies and actions of governments and/or regulatory authorities (including
changes related to capital and tax), changes in political and economic stability (including
exposures to terrorist activities, the repercussions of the UK's referendum vote to leave the
European Union (EU), the UK's exit from the EU (including any changes to the UK
currency), Eurozone instability, any referendum on Scottish independence), disruption in
business operations due to reorganisation activities, interest rate, inflation, deflation and
currency fluctuations, the timing impact and other uncertainties of future or planned
acquisitions or disposals or offers, the inability of the Enlarged Group to realise successfully
any anticipated synergy benefits when the Acquisition is implemented (including changes to
the board and/or employee composition of the Enlarged Group), the inability of the Intrinsic
Group to integrate successfully the Lighthouse Group's operations and programmes when the
Acquisition is implemented, the Enlarged Group incurring and/or experiencing unanticipated
costs and/or delays (including IT system failures, cyber-crime, fraud and pension scheme
liabilities), or difficulties relating to the Acquisition when the Acquisition is implemented.
Other unknown or unpredictable factors could affect future operations and/or cause actual
results to differ materially from those in the forward-looking statements. Such forward-
looking statements should therefore be construed in the light of such factors.
Each forward-looking statement speaks only as of the date of this Announcement. Neither
Intrinsic Group nor Lighthouse Group, nor any of their respective associates or directors,
officers or advisers, provides any representation, warranty, assurance or guarantee that the
occurrence of the events expressed or implied in any forward-looking statements in this
Announcement will actually occur. Forward-looking statements involve inherent risks and
uncertainties. All forward-looking statements contained in this Announcement are expressly
qualified in their entirety by the cautionary statements contained or referred to in this
section. Readers are cautioned not to place undue reliance on these forward-looking
statements. Other than in accordance with their legal or regulatory obligations (including
under the Takeover Code, the Market Abuse Regulations, the AIM Rules and the Disclosure
Guidance and Transparency Rules), neither the Intrinsic Group nor the Lighthouse Group is
under or undertakes any obligation, and each of the foregoing expressly disclaims any
intention or obligation, to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts or estimates
Nothing in this Announcement is intended, or is to be construed, as a profit forecast or to be
interpreted to mean that earnings per Lighthouse Share for the current or future financial
years, will necessarily match or exceed the historical published earnings per Lighthouse
Share.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. or
more of any class of relevant securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure
following the 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 on the 10th business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm 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 Takeover Code, any person who is, or becomes, interested in one
per cent. or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities exchange offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), 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 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 www.thetakeoverpanel.org.uk, including details of the
number of relevant securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
Publication on a website
This Announcement and the documents required to be published pursuant to Rule 26 of the
Takeover Code will be available, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on Quilter's website at www.quilter.com/Lighthousegroupoffer and
on Lighthouse's website at www.lighthousegroup.plc.uk/investor-relations/ promptly and in
any event by no later than 12 noon on 4 April 2019.
Neither the content of the websites referred to in this Announcement nor the content of any
website accessible from hyperlinks is incorporated into, or forms part of, this Announcement.
Request for hard copies
Lighthouse Shareholders may, subject to applicable securities laws, request a hard copy of
this Announcement (and any information incorporated into it by reference to another source)
by contacting Lighthouse's registrars, Link Asset Services during business hours on 0371 664
0300 within the United Kingdom or on +44 (0) 371 664 0300 from overseas or by submitting
a request in writing to shareholderenquiries@linkgroup.co.uk or 34 Beckenham Rd,
Beckenham BR3 4TU, United Kingdom, with an address to which the hard copy may be sent.
Calls are charged at the standard geographic rate and will vary by provider. Calls from
outside of the United Kingdom will be charged at the applicable international rate. Unless
you make such a request, a hard copy of this Announcement (and any information
incorporated by reference to another source) will not be sent to you. Lighthouse
Shareholders may, subject to applicable securities laws, also request that all future
documents, Announcements and information to be sent in relation to the Acquisition should
be in hard copy form.
Information relating to Lighthouse Shareholders
Please be aware that addresses, electronic addresses and certain information provided by
Lighthouse Shareholders, persons with information rights and other relevant persons for the
receipt of communications from Lighthouse may be provided to Intrinsic during the Offer
Period as required under section 4 of Appendix 4 to the Takeover Code.
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 2.9 of the Code
For the purposes of Rule 2.9 of the Takeover Code, Lighthouse confirms that, as at
2 April 2019, it had in issue 127,700,298 ordinary shares of 1 pence each in issue admitted to
trading on AIM. The International Securities Identification Number for Lighthouse Shares is
GB0009779116.
General
If you are in any doubt about the contents of this Announcement or the action you should
take, you are recommended to seek your own independent financial advice immediately from
your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly
authorised under the Financial Services and Markets Act 2000 (as amended) if you are
resident in the United Kingdom or, if not, from another appropriately authorised independent
financial adviser
Time
All times shown in this Announcement are London times, unless otherwise stated.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
3 April 2019
RECOMMENDED CASH OFFER
for
LIGHTHOUSE GROUP PLC ("LIGHTHOUSE")
by
INTRINSIC FINANCIAL SERVICES LIMITED ("INTRINSIC")
a wholly-owned indirect subsidiary of Quilter plc ("Quilter")
to be effected by means of a Scheme of Arrangement under Part 26 of the Companies
Act 2006
1. Introduction
The Boards of Quilter, Intrinsic and Lighthouse are pleased to announce that they
have agreed the terms of a recommended cash offer to be made by Intrinsic for
Lighthouse pursuant to which Intrinsic will acquire the entire issued and to be issued
ordinary share capital of Lighthouse (the "Acquisition").
Under the terms of the Acquisition, which will be subject to the conditions set out
below and in Appendix 1 and to the further terms to be set out in the Scheme
Document, Lighthouse Scheme Shareholders will be entitled to receive:
for each Lighthouse Share: 33 pence in cash
- The Acquisition values the entire issued and to be issued ordinary share capital of
Lighthouse at approximately £46.2m (£42.2m adjusted for approximately £4m of
excess cash held on Lighthouse's balance sheet as at 31 December 2018) and
represents a premium of approximately:
- 24.5 per cent. to the Closing Price of 26.5 pence per Lighthouse Share on
2 April 2019 (being the last Business Day prior to this Announcement);
- 30.4 per cent. to the volume-weighted average price of 25.3 pence per
Lighthouse Share for the three-month period ended 2 April 2019 (being the
last Business Day prior to this Announcement); and
- 25.6 per cent. to the volume-weighted average price of 26.3 pence per
Lighthouse Share for the six-month period ended 2 April 2019 (being the last
Business Day prior to this Announcement).
- In addition to the consideration payable in connection with the Acquisition,
Lighthouse Scheme Shareholders will also be entitled to receive the payment of the
2018 final dividend by Lighthouse of up to 0.5 pence for each Lighthouse Share (the
"Pre-Close Dividend"), as announced on 26 February 2019.
- Intrinsic reserves the right to reduce the consideration payable in respect of each
Lighthouse Share under the terms of the Acquisition to the extent that the Pre-Close
Dividend exceeds 0.5 pence per Lighthouse Share. If any dividend or other
distribution is announced, declared, made or paid, or becomes payable, in respect of
the Lighthouse Shares on or after the date of this Announcement and prior to the
Effective Date, other than the Pre-Close Dividend, Intrinsic reserves the right to
reduce the consideration payable in respect of each Lighthouse Share by the amount
of all or part of any such dividend or other distribution. If Intrinsic exercises this right
or makes such a reduction in respect of a dividend or other distribution that has not
been paid, Lighthouse Shareholders will be entitled to receive and retain that dividend
or other distribution.
- The Acquisition is expected to be effected by means of a Court-sanctioned scheme of
arrangement between Lighthouse and Lighthouse Scheme Shareholders under Part 26
of the Companies Act 2006, although Intrinsic reserves the right to effect the
Acquisition by way of a Takeover Offer, subject to the Panel's consent.
- It is currently expected that the Scheme Document will be published as soon as
practicable and, in any event (save with the consent of the Panel), within 28 days of
this Announcement. It is expected that the Scheme will become effective in the
second quarter of 2019.
- Intrinsic intends to finance the Acquisition from its existing cash resources.
2. Background to and reasons for the Acquisition
The Board of Intrinsic considers the Acquisition of Lighthouse to be an opportunity
to:
- grow its national advice business, adding experienced advisers and
complementary customer segments in order to build mass in the highly
attractive affluent client segment;
- add scale and operational strength to Intrinsic's existing Network business,
combining Intrinsic's adviser network, which is the second largest financial
advice network in the UK, with Lighthouse's Communities Network business;
- combine Lighthouse's successful affinity-based advisory business with
Intrinsic's depth of advice capability to augment Intrinsic's strong growth
prospects, leveraging the breadth of combined market reach with increased
capacity to deliver on customer needs;
- deliver Quilter's fully established investment solutions business to
Lighthouse's existing and future client base, subject to individual suitability,
bringing an enhanced set of investment opportunities for the benefit of
customers and advisers; and
- build upon Intrinsic's and Lighthouse's belief in face-to-face advice and the
benefits that it provides for customers.
The acquisition of firms such as Lighthouse is a key component of Quilter's overall
strategy to become the UK's leading wealth manager. Quilter has invested
significantly over the last few years to grow its controlled advice capability combined
with investments in new platform technology, discretionary investment management
and the creation of a multi-asset business. This Acquisition would further strengthen
Quilter's and Intrinsic's capabilities and support this growth strategy to better serve the
combined customers and stakeholders.
Intrinsic expects there to be approximately £2m of annualised cost savings from the
Acquisition by the end of the second fiscal year following completion of the
Acquisition. These savings are expected to be generated through the elimination of
administrative costs associated with Lighthouse's current status as a listed company
and the rationalisation of duplicated functions. Taking into account these savings on a
run-rate basis, the terms of the Acquisition would represent an acquisition multiple of
approximately 10 times Lighthouse's profit after tax (on an excess cash-adjusted
basis) for the financial year ended 31 December 2018. The combination of expected
cost savings and revenue growth resulting from the combination of Lighthouse with
Intrinsic's Adviser & Wealth business means that Quilter's management's previous
guidance on operating margin improvement from optimisation announced with the
full year results is unchanged.
3. Lighthouse recommendation
The Lighthouse Directors, who have been so advised by Investec as to the financial
terms of the Acquisition, consider the terms of the Acquisition to be fair and
reasonable. In providing advice to the Lighthouse Directors, Investec has taken into
account the commercial assessments of the Lighthouse Directors.
Accordingly, the Lighthouse Directors intend to recommend unanimously that
Lighthouse Shareholders vote in favour of the resolutions relating to the Acquisition
at the Lighthouse Meetings (or in the event that the Acquisition is implemented by
Takeover Offer, to accept or procure acceptance of such offer).
4. Irrevocable undertakings
Intrinsic has received irrevocable undertakings to vote in favour (or procure a vote in
favour) of the Scheme at the Court Meeting and the Resolutions to be proposed at the
General Meeting from those Lighthouse Directors who hold Lighthouse Shares in
respect of their own beneficial shareholdings, totalling 4,539,063 Lighthouse Shares,
representing approximately 3.55 per cent. of the issued ordinary share capital of
Lighthouse as at 2 April 2019, being the last Business Day before the date of this
Announcement.
In addition to the irrevocable undertakings received from Lighthouse Directors who
hold Lighthouse Shares, Intrinsic has received irrevocable undertakings from certain
Lighthouse Shareholders who hold, in aggregate, 50,966,963 Lighthouse Shares,
representing approximately 39.9 per cent. of the issued ordinary share capital of
Lighthouse as at 2 April 2019, being the last Business Day before the date of this
Announcement.
Intrinsic has therefore received irrevocable undertakings in respect of 55,506,026
Lighthouse Shares representing 43.5 per cent, of the issued ordinary share capital of
Lighthouse as at 2 April 2019, being the last Business Day before the date of this
Announcement.
Further details of these irrevocable undertakings are set out in Appendix 3.
5. Background to and reasons for the recommendation of the Acquisition
In its 2018 Annual Report, Lighthouse outlined that it is reviewing its strategy for the
next five years to identify those areas (such as the affinity and professional
connections markets) which are most likely to produce future earnings growth. It also
highlighted that additional accelerated investment may be required in adviser
recruitment, lead generation and marketing to deliver this growth. This is set against a
backdrop of current uncertainty within the UK retail financial services market as a
result of the UK electorate voting to leave the EU in a public referendum on 23 June
2016 and corrections in UK and global financial markets in recent months as well as
increased regulation. These factors inevitably mean upward pressure on costs, in
particular in the areas of compliance, technology and professional indemnity
insurance procurement. The current market dynamics seen in the UK retail financial
services market mean that significant advantages can be achieved through scale and
increased distribution capability.
Lighthouse has continued to make good progress throughout 2018 and into 2019,
delivering a resilient performance in challenging trading conditions and continues to
focus on improving its operational efficiency and delivering first-class services to its
customers by developing innovative solutions. With an ongoing focus on increasing
business derived from affinity relationships, by introducing new and enhanced
financial solutions for customers and increasing cost efficiency, the Board believes
that Lighthouse is well placed to take advantage of the opportunities available.
Against this backdrop, Lighthouse has reached an important stage in its development
given the current state of the market and the likely requirement for additional
accelerated investment to deliver future earnings growth. The Board of Lighthouse
has also considered the merits of being part of a larger, complementary group with
enhanced scale and a wider range of capabilities to service its key customers.
Accordingly, the Board of Lighthouse has evaluated the Acquisition and concluded
that its terms are fair and reasonable for the following reasons:
- the Acquisition represents an opportunity for Lighthouse Shareholders to
realise value for their investment in cash at an attractive premium to the
current share price;
- Intrinsic represents a natural partner for Lighthouse and there is a strong
strategic and commercial rationale for a combination of the two
complementary businesses;
- the Acquisition accelerates the potential strategic development of Lighthouse
as part of a large and diversified wealth management business; and
- it enhances the prospects of Lighthouse for the benefit of all of its
stakeholders, including Lighthouse's customers and employees.
6. Strategic plans and intentions with regard to management, employees and places
of business
Intrinsic values Lighthouse's business and, in particular, its focus on developing and
maintaining high quality customer relationships. Intrinsic believes the UK population
currently faces a significant need for financial advice, creating opportunities to
provide high quality advisory solutions which satisfy this customer need. Intrinsic
considers that Lighthouse's business is complementary to that of Intrinsic's, and that
the Acquisition presents an opportunity to combine the expertise and capabilities of
both businesses to accelerate business development opportunities and to provide more
customers with controlled, quality financial advice.
At this stage, Intrinsic has had limited interaction with Lighthouse's management for
the purposes of integration planning. However, given Intrinsic's experience in
acquiring and integrating other similar businesses, it is familiar with the advice
business operating model and is confident in its ability to integrate the Lighthouse
business successfully, minimising disruption to Lighthouse's customers, advisers and
staff.
Intrinsic expects to commence its integration processes shortly after the Effective
Date with the aim of finalising any integration planning within six to nine months of
the Effective Date. Intrinsic intends to take a 'best of both' approach in optimising the
Enlarged Group through integration planning. As part of its integration activities,
Intrinsic intends to transition the Lighthouse Group's employees and advisers onto
some of its own systems, processes and procedures. Intrinsic also intends to use
Lighthouse's current brand until it can be aligned with Quilter's rebranding
programme, at the appropriate time.
National advice business
Quilter's vision is to be the most trusted wealth manager in the UK and, as part of this
vision, it has an ambition to build the UK's leading national advice business, focused
on delivering quality solutions to its customers through controlled advice, a consistent
brand and high quality experience. The Lighthouse Group's advisory channels,
LighthouseCarrwood and Lighthouse Financial Advice, display strong alignment with
Intrinsic's National Advice Business and are expected to significantly contribute to the
delivery of Quilter's vision.
Intrinsic expects Lighthouse's current business development capabilities to add value
to the Enlarged Group, specifically through supporting organic growth from existing
successful affinity relationships and partnerships with regional accountancy firms
across the UK. Intrinsic expects to be able to further those relationships through
access to an increased number of financial advisers including its capability to develop
new financial advisers through its Financial Adviser School. In addition, Intrinsic
expects the Lighthouse Group's advisers to benefit from the additional support and
business development capabilities offered through the Enlarged Group.
Network model
Intrinsic expects the Lighthouse Group's Communities and Wealth advisory channels
to join Intrinsic's current adviser network, one of the largest in the UK, supporting
over 3,500 advisers, including independent financial advisers, mortgage and
protection advisers and over 1,600 restricted financial planners. Lighthouse Group's
customers and advisers are expected to benefit from Intrinsic's high quality customer
proposition and experienced oversight and control environment. Lighthouse Group's
advisers will benefit from Intrinsic's value-added offerings such as business
development support, relationship management systems, access to Quilter's training
programmes (such as its Financial Adviser School) and access to Intrinsic's Practice
Buyout Scheme.
Central functions and places of business
Quilter currently has offices in a number of locations across the UK, including
London, Southampton, Manchester, Swindon and Newcastle. Lighthouse currently
supports a similar geographic footprint with key locations in Stockport, Brighton and
London. Intrinsic intends to conduct a review of the Enlarged Group's property
portfolio after completion of the Acquisition, which may result in the rationalisation
of the Enlarged Group's property portfolio to remove duplication of geographical
reach over time. Intrinsic expects this to include accommodating Lighthouse's staff
and advisers currently based in Lighthouse's London headquarters within
Intrinsic/Quilter's London office.
Until the integration planning work has been completed (which is expected to be
within six to nine months of the Effective Date), the precise impact of the Acquisition
on the places of business of the Enlarged Group will not be known. However,
consistent with Intrinsic's 'best of both' approach, where practicable, Intrinsic's aim
will be to relocate staff in nearby locations of the Enlarged Group.
Intrinsic does not have any intention to make material changes to the fixed assets of
the Lighthouse Group other than pursuant to the potential rationalisation of
Lighthouse's property portfolio referred to above.
Management and employees
Intrinsic expects that the non-executive directors and chairman of Lighthouse will
step down from the board of Lighthouse and are expected to be replaced by members
of Intrinsic's executive management team. It also expects that, after a suitable period
of transition following the Acquisition, Lighthouse's executive directors' roles will not
be required.
As a result of the expected overlap in operational and support functions between
Intrinsic and Lighthouse, Intrinsic expects to merge duplicative operational and
support functions. These functions are expected to include Compliance, Finance,
Company Secretarial, Fee and Commission Processing, Internal Audit and
Technology. Intrinsic expects between 15-30 full time equivalent employees of the
Enlarged Group to be affected by this rationalisation, and intends to adopt a 'best of
both' approach in identifying where headcount reductions will be made.
The finalisation and implementation of any rationalisation or de-duplication activities
would be subject to comprehensive planning and engagement with the affected
members of staff and/or representatives. Any affected employees from either
organisation would be treated fairly and in an equitable manner, consistent with
Quilter's culture and people-focused values. Following the Effective Date, the existing
contractual and statutory employment rights of the Lighthouse employees will be
observed and pensions obligations complied with. Other than in respect of aligning
the terms and conditions of employment of members of Lighthouse's executive
management team, Intrinsic does not envisage making any material changes to the
conditions of employment of the Lighthouse Group employees or the existing agreed
pension contributions for existing members of the Lighthouse pension plans or the
inclusion of any new members into the existing Lighthouse defined contribution
pension plans in connection with the Acquisition.
Save as set out above, the Intrinsic Board does not expect any material change to the
balance of skills and functions of the employees and the management of the
Lighthouse Group or the Enlarged Group.
AIM Listing
On, or shortly after, the Effective Date, Intrinsic expects to cancel the trading of
Lighthouse's shares on the AIM market.
Research and development
Owing to the nature of its business, the Lighthouse Group does not conduct
significant research and development activities but, to the extent any such activities
are currently undertaken, Intrinsic does not expect to make material changes after the
Effective Date.
The statements above will be treated as post-offer intention statements by Intrinsic for
the purpose of Rule 19.6 of the Takeover Code.
7. Information relating to Intrinsic Group
Quilter is a leading wealth management business in the UK and operates
internationally, helping to create prosperity for the generations of today and
tomorrow. It has an adviser and customer offering spanning financial advice,
investment platforms, multi-asset investment solutions and discretionary fund
management. Quilter oversees £109.3 billion in customer investments (as at 31
December 2018). The business is comprised of two segments: Wealth Platforms and
Advice and Wealth Management.
Intrinsic is a wholly owned subsidiary of Quilter. It is a restricted and independent
financial adviser network providing mortgage and financial planning advice and
financial solutions for both individuals and businesses through its network of
intermediaries and Intrinsic's National Advice Business. Intrinsic operates across
markets, from wealth management and retirement planning advice through to dealing
with property wealth and personal and business protection needs. Intrinsic has over
3,500 advisers operating under its advice network, including independent financial
advisers, mortgage and protection advisers and over 1,600 restricted financial
planners, who deliver face-to-face financial advice tailored to meet the specific needs
of the customer.
8. Information relating to Lighthouse Group
Lighthouse is an AIM-quoted group of approximately 400 financial advisers
providing financial advice to retail and corporate customers across the UK through
three principal operating divisions: (i) its national affinity business, which is a market
leader for the provision of advice to members of affinity groups, with 23 contractual
relationships whose aggregate membership exceeds six million individuals; (ii) its
wealth advisory business, working with clients of approximately 40 accountancy and
professional connections and higher net worth customers across the South of England;
and (iii) appointed representatives servicing customers in their local communities.
9. Financing of the Acquisition
The Cash Consideration payable to Lighthouse Shareholders pursuant to the
Acquisition will be financed from Intrinsic's existing cash reserves.
J.P. Morgan Cazenove is satisfied that sufficient resources are available to Intrinsic to
satisfy in full the Cash Consideration payable pursuant to the terms of the Acquisition.
10. Acquisition-related arrangements
Confidentiality Agreement
Intrinsic and Lighthouse entered into the Confidentiality Agreement on 17 January
2019 pursuant to which each of Intrinsic and Lighthouse has undertaken to keep
certain information relating to the Acquisition and to the other party confidential and
not to disclose such information to third parties except to certain permitted disclosees
for the purposes of evaluating the Acquisition or as permitted in writing provided by
the other party in advance, and, unless or if required by applicable laws or regulations.
The confidentiality obligations of each party under the Confidentiality Agreement
shall terminate on 17 January 2021, with certain exceptions.
Letter Agreement
Intrinsic and Lighthouse have entered into a letter agreement pursuant to which
Intrinsic has agreed to: (a) prepare and submit a briefing paper to the CMA as soon as
reasonably practicable following the date of this Announcement; (b) provide
Lighthouse with a reasonable opportunity to comment on drafts of the briefing paper;
and (c) notify Lighthouse when the CMA provides any material response to the
briefing paper. In addition, Lighthouse has agreed to co-operate and provide
information to Intrinsic for this purpose.
11. Lighthouse share plans
The Acquisition will extend to any Lighthouse Shares unconditionally allotted, issued
or transferred prior to the Scheme Record Time to satisfy the vesting or exercise of
options and awards granted under the Lighthouse LTIP.
Appropriate proposals will be made in due course to participants in the Lighthouse
LTIP. Details of these proposals will be set out in the Scheme Document and in
separate letters to be sent to the participants in the Lighthouse LTIP.
12. Scheme process and publication of the Scheme Document
It is intended that the Acquisition will be implemented by way of a Court-sanctioned
scheme of arrangement between Lighthouse and Lighthouse Scheme Shareholders,
made under Part 26 of the 2006 Act (although Intrinsic reserves the right to
implement the Acquisition by way of a Takeover Offer, subject to the consent of the
Panel). The procedure involves, among other things, an application by Lighthouse to
the Court to sanction the Scheme, in consideration for which Lighthouse Scheme
Shareholders will receive the Cash Consideration. The purpose of the Scheme is to
provide for Intrinsic to become the owner of the entire issued and to be issued
ordinary share capital of Lighthouse.
To become Effective, the Scheme requires, among other things, the approval of a
majority in number representing not less than 75 per cent. in value of the Lighthouse
Shares held by relevant Lighthouse Scheme Shareholders present and voting in person
or by proxy at the Court Meeting, which is convened by order of the Court, and the
passing of the Resolutions necessary to implement the Acquisition at the General
Meeting. The Scheme must also be sanctioned by the Court.
The Conditions in paragraph 2 of Part 1 of Appendix 1 to this Announcement provide
that the Scheme will lapse if:
- the Court Meeting and the General Meeting are not held by the 22nd day after
the expected date of the Court Meeting to be set out in the Scheme Document
in due course (or such later date as may be agreed between Intrinsic
and Lighthouse and that the Court may allow); or
- the Court Hearing to approve the Scheme is not held by the 22nd day after the
expected date of the Court Hearing to be set out in the Scheme Document in
due course (or such later date as may be agreed between Intrinsic and
Lighthouse).
In addition to these approvals, the Scheme is subject to (among other things) the
receipt of FCA and certain antitrust approvals. The Scheme is also subject to the other
terms and Conditions set out in Appendix 1 to this Announcement, and to the full
terms and conditions to be set out in the Scheme Document.
Upon the Scheme becoming Effective it will be binding on all Lighthouse Scheme
Shareholders, irrespective of whether or not they attended or voted at the Court
Meeting or the General Meeting (and if they attended and voted, whether or not they
voted in favour) and the Cash Consideration will be dispatched by Intrinsic to
Lighthouse Scheme Shareholders no later than 14 days after the Effective Date.
The Scheme Document will include full details of the Scheme, together with notices
of the Court Meeting and the General Meeting. The Scheme Document will also
contain the expected timetable for the Acquisition, and will specify the necessary
actions to be taken by Lighthouse Shareholders. The Scheme Document will be
posted to Lighthouse Shareholders as soon as practicable and, in any event, within 28
days of this Announcement (unless Intrinsic and Lighthouse otherwise agree, and the
Panel consents, to a later date).
Once the necessary approvals from Lighthouse Shareholders have been obtained and
the other Conditions have been satisfied or (where applicable) waived and the Scheme
has been approved by the Court, the Scheme will become Effective upon delivery of
the Court Order to the Registrar of Companies. Subject to the satisfaction of the
Conditions, the Scheme is expected to become Effective during the second quarter of
2019.
If the Scheme is not Effective on or before the Long Stop Date, the Scheme will not
be implemented and the Acquisition will not proceed.
The Scheme will be governed by English law and will be subject to the jurisdiction of
the Courts of England and Wales. The Scheme will also be subject to the applicable
requirements of the Takeover Code, the Panel, AIM and the FCA.
13. Interests in Lighthouse Shares
As at the close of business on 2 April 2019 (being the last practicable date prior to the
date of this Announcement):
(a) Old Mutual Wealth Holdings Limited, which is presumed to be acting in
concert with Intrinsic under the Takeover Code, was the registered holder of
5,581,383 Lighthouse Shares, representing approximately 4.37 per cent. of
Lighthouse's issued share capital; and
(b) Quilter Cheviot Limited, which is presumed to be acting in concert with
Intrinsic under the Takeover Code in respect of shares held by it in client
accounts and which are managed at its discretion, was the registered holder of
150,000 Lighthouse Shares, representing approximately 0.12 per cent. of
Lighthouse's issued share capital.
As at close of business on 2 April 2019 (being the last practicable date prior to the
date of this Announcement), save for: (i) the disclosures in this paragraph 13 and (ii)
the irrevocable undertakings referred to in paragraph 4 above, neither Intrinsic, nor
any of the Intrinsic Directors, nor any member of the Intrinsic Group, nor, so far as
the Intrinsic Directors are aware, any person acting in concert with Intrinsic for the
purposes of the Acquisition, had:
(a) any interest in, or right to subscribe for, any relevant securities of Lighthouse;
(b) any short position in (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 of, any relevant securities of Lighthouse;
(c) procured an irrevocable commitment or letter of intent to accept the terms of
the Acquisition in respect of relevant securities of Lighthouse; or
(d) borrowed or lent, or entered into any financial collateral arrangements or
dealing arrangements in respect of, any relevant securities of Lighthouse.
In the interests of secrecy prior to this Announcement, Intrinsic has not made any
enquiries in respect of the matters referred to in this paragraph of certain parties who
may be deemed by the Panel to be acting in concert with Intrinsic for the purposes of
the Acquisition. Enquiries of such parties will be made as soon as practicable
following the date of this Announcement, and Intrinsic confirms that further
disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover
Code will be made as soon as possible and by no later than 12 noon on 17 April 2019.
14. Cancellation of admission to trading
The last day of dealings in, and registration of transfers of, Lighthouse Shares is
expected to be the Business Day prior to the Effective Date. It is further intended that
an application will be made to the London Stock Exchange for the cancellation of the
admission to trading of Lighthouse Shares on AIM, with effect as of or shortly after
the Effective Date.
It is also intended that, following the Effective Date and after cancellation of
admission to trading of its shares, Lighthouse will be re-registered as a private limited
company.
15. Overseas Shareholders
The availability of the Acquisition and the distribution of this Announcement to
Lighthouse Shareholders who are not resident in the United Kingdom may be affected
by the laws of the relevant jurisdiction in which they are located. Such persons should
inform themselves of, and observe, any applicable legal or regulatory requirements of
their jurisdiction. Lighthouse Shareholders who are in any doubt regarding such
matters should consult an appropriate independent professional adviser in the relevant
jurisdiction without delay.
This Announcement does not constitute an offer for sale for any securities or an offer
or an invitation to purchase any securities. Lighthouse Shareholders are advised to
read carefully the Scheme Document and related forms of proxy once these have
been dispatched.
16. Documents available on websites
Copies of the following documents will be available promptly on Intrinsic's and
Lighthouse's websites, subject to certain restrictions relating to persons residing in
Restricted Jurisdictions, at www.quilter.com/Lighthousegroupoffer and
www.lighthousegroup.plc.uk/investor-relations/ respectively and in any event by no
later than noon on 4 April 2019:
(a) this Announcement;
(b) the irrevocable undertakings listed in Appendix 3;
(c) the Confidentiality Agreement;
(d) the Letter Agreement; and
(e) the consents to be named in this Announcement from financial advisers.
Neither the content of the websites referred to in this Announcement nor the content
of any website accessible from hyperlinks is incorporated into, or forms part of,
this Announcement.
17. Reserving the right to proceed by way of a Takeover Offer
Intrinsic reserves the right (with the consent of the Panel) to implement the
Acquisition by way of a Takeover Offer for the entire issued and to be issued share
capital of Lighthouse not already held by Intrinsic as an alternative to the Scheme. In
such an event a Takeover Offer will be implemented on substantially the same terms,
so far as applicable, as those which apply to the Scheme, subject to the Takeover
Code and to any modifications or amendments which may be required by the Panel or
which are necessary as a result of the election of Intrinsic to implement the
Acquisition by way of a Takeover Offer.
If the Acquisition is effected by way of a Takeover Offer and such Takeover Offer
becomes or is declared unconditional in all respects and sufficient acceptances are
received, Intrinsic intends to: (i) request that the London Stock Exchange cancel
trading in Lighthouse Shares on AIM; (ii) re-register Lighthouse as a private limited
company; and (iii) exercise its rights to apply the provisions of Chapter 3 of Part 28 of
the Companies Act to acquire compulsorily the remaining Lighthouse Shares in
respect of which the Takeover Offer has not been accepted.
18. General
Investors should be aware that Intrinsic may purchase Lighthouse Shares otherwise
than under the Scheme or any Takeover Offer, such as in the open market or privately
negotiated purchases.
The Acquisition will be on the terms and subject to the conditions set out herein and
in Appendix 1, and to be set out in the Scheme Document.
J.P. Morgan Cazenove has given and not withdrawn its consent to the publication of
this Announcement with the inclusion herein of the references to its name in the form
and context in which it appears. Investec has given and not withdrawn its consent to
the publication of this Announcement with the inclusion herein of the references to its
name in the form and context in which it appears.
The bases and sources for certain financial information contained in this
Announcement are set out in Appendix 2. Details of undertakings received by
Intrinsic and given by the Lighthouse Directors are set out in Appendix 3. Certain
definitions and terms used in this Announcement are set out in Appendix 4.
Enquiries:
Intrinsic / Quilter
Intrinsic / Quilter
Kathleen Gallagher - Corporate Communications Manager Tel: +44 (0) 79 9000 4932
John-Paul Crutchley - Head of Investor Relations Tel: +44 (0) 20 7002 7016
J.P. Morgan Cazenove (financial adviser to Intrinsic and
Quilter)
Ed Squire / Rajesh Iyer Tel: +44 (0) 20 7742 4000
Kirshlen Moodley / Henry Capper
Lighthouse
Lighthouse
Richard Last - Chairman Tel: +44 (0) 20 7065 5640
Malcolm Streatfield - Chief Executive Officer
Peter Smith - Finance Director
Investec Bank plc (financial adviser to Lighthouse)
Andrew Pinder Tel: +44 (0) 20 7597 5970
William Godfrey
David Bickerstaffe
Allen & Overy LLP is retained as legal adviser to Intrinsic. DLA Piper UK LLP is retained as
legal adviser to Lighthouse.
Further information
This Announcement is not intended to, and does not, constitute or form part of any offer or
invitation to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any
securities or the solicitation of any vote or approval in any jurisdiction pursuant to the
Acquisition or otherwise. The Acquisition will be made solely through the Scheme Document,
which will contain the full terms and conditions of the Acquisition, including details of how to
vote in respect of the Acquisition. Any vote or other response to the Acquisition should be
made only on the basis of the information in the Scheme Document.
This Announcement does not constitute a prospectus or prospectus equivalent document.
Intrinsic reserves the right to elect, with the consent of the Panel (where necessary), to
implement the Acquisition by way of a Takeover Offer. In such event, the Takeover Offer will
be implemented on substantially the same terms, so far as applicable, as those which would
apply to the Scheme, subject to the Takeover Code and to any appropriate amendments to
reflect the change in method of effecting the Acquisition.
Important notices relating to financial advisers
J.P. Morgan Securities plc, which conducts its U.K. investment banking business as J.P.
Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the
PRA and regulated by the PRA and the FCA. J.P. Morgan Cazenove is acting as financial
adviser exclusively for Intrinsic and Quilter and no one else in connection with the matters
set out in this Announcement and will not regard any other person as its client in relation to
the matters set out in this Announcement and will not be responsible to anyone other than
Intrinsic and Quilter for providing the protections afforded to clients of J.P. Morgan
Cazenove or its affiliates, or for providing advice in relation to any matter referred to herein.
Investec Bank plc ("Investec"), which is authorised by the PRA and regulated in the United
Kingdom by the FCA and the PRA, is acting exclusively for Lighthouse and no one else in
relation to the Acquisition and/or other matters set out in this Announcement and will not be
responsible to anyone other than Lighthouse for providing the protections afforded to clients
of Investec or for providing advice in relation to the Acquisition, the contents of this
Announcement or any other matter or arrangement referred to herein.
Overseas shareholders
This Announcement has been prepared in accordance with English law, the Takeover Code,
the Market Abuse Regulation, the AIM Rules and the Disclosure Guidance and Transparency
Rules and information disclosed may not be the same as that which would have been
prepared in accordance with the laws of jurisdictions outside England.
Copies of this Announcement and any formal documentation relating to the Acquisition are
not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and persons receiving such documents
(including custodians, nominees and trustees) must not mail or otherwise forward, distribute
or send it in or into or from any Restricted Jurisdiction. If the Acquisition is implemented by
way of a Takeover Offer (unless otherwise determined by Intrinsic and permitted by
applicable law and regulation), the Takeover Offer may not be communicated, directly or
indirectly, in or into or by the use of the mails of, or by any other means or instrumentality
(including, without limitation, by mail, telephonically or electronically by way of internet or
otherwise) of interstate or foreign commerce of, or any facilities of a national, state or
securities exchange of, any Restricted Jurisdiction and the Takeover Offer may not be
capable of acceptance by any such use, means, instrumentality or otherwise.
The Acquisition will be subject to the applicable requirements of the Takeover Code, the
Panel, AIM and the FCA.
Further details in relation to Lighthouse Shareholders in overseas jurisdictions will be
contained in the Scheme Document.
Additional information for US investors
US holders of Lighthouse Shares should note that the Acquisition relates to the securities of a
UK company admitted to trading on AIM and is proposed to be implemented pursuant to 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 Acquisition will be subject to
UK procedural and disclosure requirements and practices applicable to a scheme of
arrangement involving a target company in England admitted to trading on AIM, which are
different from the disclosure requirements of the US tender offer and proxy solicitation rules.
The financial information included in this Announcement and other documentation related to
the Acquisition has been or will have been prepared in accordance with International
Financial Reporting Standards and thus 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 US. If Intrinsic exercises its right, in the
circumstances provided for in this Announcement, to implement the Acquisition by way of a
Takeover Offer, such Takeover Offer will only be made in the United States if an exemption
from the registration requirements of the US Securities Act is available.
None of the securities referred to in this Announcement have been approved or disapproved
by the SEC, any state securities commission in the United States or any other US regulatory
authority, nor have such authorities passed upon or determined the adequacy or accuracy of
the information contained in this document. Any representation to the contrary is a criminal
offence in the United States.
It may be difficult for US holders of Lighthouse Shares to enforce their rights and claims
arising out of the US federal securities laws, since Intrinsic and Lighthouse are located in
countries other than the United States, and some or all of their officers and directors may be
residents of countries other than the United States. US holders of Lighthouse Shares may not
be able to sue a non-US company or its officers or directors in a non-US court for violations
of US securities laws. Further, it may be difficult to compel a non-US company and its
affiliates to subject themselves to a US court's judgement.
Forward-looking statements
This Announcement (including information incorporated by reference in this Announcement),
oral statements made regarding the Acquisition, and other information published by Intrinsic
and Lighthouse contain statements which are, or may be deemed to be, "forward-looking
statements". All statements, other than statements of historical fact are, or may be deemed to
be, forward-looking statements. Forward-looking statements are prospective in nature and
are not based on historical facts, but rather on assumptions, expectations, valuations, targets,
estimates, forecasts and projections of Intrinsic and Lighthouse about future events, and are
therefore subject to risks and uncertainties which could cause actual results, performance or
events to differ materially from those expressed or implied by the forward-looking statements.
The forward-looking statements contained in this Announcement include statements relating
to the expected effects of the Acquisition on the Intrinsic Group, the Lighthouse Group and
the Enlarged Group, the expected timing and scope of the Acquisition and other statements
other than historical facts. Often, but not always, forward-looking statements can be
identified by the use of forward-looking words such as "plans", "expects", "budget",
"targets", "aims", "scheduled", "estimates", "forecast", "intends", "anticipates", "seeks",
"prospects", "potential", "possible", "assume" or "believes", or variations of such words and
phrases or statements that certain actions, events or results "may", "could", "should",
"would", "might" or "will" be taken, occur or be achieved. Although Intrinsic and Lighthouse
believe that the expectations reflected in such forward-looking statements are reasonable,
Intrinsic and Lighthouse can give no assurance that such expectations will prove to be
correct. By their nature, forward-looking statements involve risks (known and unknown) and
uncertainties (and other factors that are in many cases beyond the control of Intrinsic and/or
Lighthouse) because they relate to events and depend on circumstances that may or may not
occur in the future.
There are a number of factors that could affect the future operations of the Intrinsic Group,
the Lighthouse Group and/or the Enlarged Group and that could cause actual results and
developments to differ materially from those expressed or implied by such forward-looking
statements. These factors include the satisfaction (or, where permitted, waiver) of the
Conditions, as well as additional factors, such as: domestic and global business and
economic conditions; asset prices; market related risks such as fluctuations in interest rates
and exchange rates, industry trends, competition, changes in government and regulation,
changes in the policies and actions of governments and/or regulatory authorities (including
changes related to capital and tax), changes in political and economic stability (including
exposures to terrorist activities, the repercussions of the UK's referendum vote to leave the
European Union (EU), the UK's exit from the EU (including any changes to the UK
currency), Eurozone instability, any referendum on Scottish independence), disruption in
business operations due to reorganisation activities, interest rate, inflation, deflation and
currency fluctuations, the timing impact and other uncertainties of future or planned
acquisitions or disposals or offers, the inability of the Enlarged Group to realise successfully
any anticipated synergy benefits when the Acquisition is implemented (including changes to
the board and/or employee composition of the Enlarged Group), the inability of the Intrinsic
Group to integrate successfully the Lighthouse Group's operations and programmes when the
Acquisition is implemented, the Enlarged Group incurring and/or experiencing unanticipated
costs and/or delays (including IT system failures, cyber-crime, fraud and pension scheme
liabilities), or difficulties relating to the Acquisition when the Acquisition is implemented.
Other unknown or unpredictable factors could affect future operations and/or cause actual
results to differ materially from those in the forward-looking statements. Such forward-
looking statements should therefore be construed in the light of such factors.
Each forward-looking statement speaks only as of the date of this Announcement. Neither
Intrinsic Group nor Lighthouse Group, nor any of their respective associates or directors,
officers or advisers, provides any representation, warranty, assurance or guarantee that the
occurrence of the events expressed or implied in any forward-looking statements in this
Announcement will actually occur. Forward-looking statements involve inherent risks and
uncertainties. All forward-looking statements contained in this Announcement are expressly
qualified in their entirety by the cautionary statements contained or referred to in this
section. Readers are cautioned not to place undue reliance on these forward-looking
statements. Other than in accordance with their legal or regulatory obligations (including
under the Takeover Code, the Market Abuse Regulation, the AIM Rules and the Disclosure
Guidance and Transparency Rules), neither the Intrinsic Group nor the Lighthouse Group is
under or undertakes any obligation, and each of the foregoing expressly disclaims any
intention or obligation, to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
No profit forecasts or estimates
Nothing in this Announcement is intended, or is to be construed, as a profit forecast or to be
interpreted to mean that earnings per Lighthouse Share for the current or future financial
years, will necessarily match or exceed the historical published earnings per Lighthouse
Share.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Takeover Code, any person who is interested in one per cent. or
more of any class of relevant securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure
following the 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 on the 10th business day following the commencement of the
offer period and, if appropriate, by no later than 3.30 pm 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 Takeover Code, any person who is, or becomes, interested in one
per cent. or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals in any
relevant securities of the offeree company or of any securities exchange offeror. A Dealing
Disclosure must contain details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s), 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 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 www.thetakeoverpanel.org.uk, including details of the
number of relevant securities in issue, when the offer period commenced and when any
offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44
(0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
Publication on a website
This Announcement and the documents required to be published pursuant to Rule 26 of the
Takeover Code will be available, subject to certain restrictions relating to persons resident in
Restricted Jurisdictions, on Quilter's website at www.quilter.com/Lighthousegroupoffer and
on Lighthouse's website at www.lighthousegroup.plc.uk/investor-relations/ promptly and in
any event by no later than 12 noon on 4 April 2019.
Neither the content of the websites referred to in this Announcement nor the content of any
website accessible from hyperlinks is incorporated into, or forms part of, this Announcement.
Request for hard copies
Lighthouse Shareholders may, subject to applicable securities laws, request a hard copy of
this Announcement (and any information incorporated into it by reference to another source)
by contacting Lighthouse's registrars, Link Asset Services during business hours on 0371 664
0300 within the United Kingdom or on +44 (0) 371 664 0300 from overseas or by submitting
a request in writing to shareholderenquiries@linkgroup.co.uk or 34 Beckenham Rd,
Beckenham BR3 4TU, United Kingdom, with an address to which the hard copy may be sent.
Calls are charged at the standard geographic rate and will vary by provider. Calls from
outside of the United Kingdom will be charged at the applicable international rate. Unless
you make such a request, a hard copy of this Announcement (and any information
incorporated by reference to another source) will not be sent to you. Lighthouse
Shareholders may, subject to applicable securities laws, also request that all future
documents, Announcements and information to be sent in relation to the Acquisition should
be in hard copy form.
Information relating to Lighthouse Shareholders
Please be aware that addresses, electronic addresses and certain information provided by
Lighthouse Shareholders, persons with information rights and other relevant persons for the
receipt of communications from Lighthouse may be provided to Intrinsic during the Offer
Period as required under section 4 of Appendix 4 to the Takeover Code.
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 2.9 of the Code
For the purposes of Rule 2.9 of the Takeover Code, Lighthouse confirms that, as at
2 April 2019, it had in issue 127,700,298 ordinary shares of 1 pence each in issue admitted to
trading on AIM. The International Securities Identification Number for Lighthouse Shares is
GB0009779116.
General
If you are in any doubt about the contents of this Announcement or the action you should
take, you are recommended to seek your own independent financial advice immediately from
your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly
authorised under the Financial Services and Markets Act 2000 (as amended) if you are
resident in the United Kingdom or, if not, from another appropriately authorised independent
financial adviser
Time
All times shown in this Announcement are London times, unless otherwise stated.
APPENDIX 1
CONDITIONS AND CERTAIN FURTHER TERMS OF THE ACQUISITION
The Acquisition will be subject to the terms and conditions set out in this Appendix and in
the Scheme Document.
Part 1: Conditions to the Scheme and Acquisition
1. The Acquisition will be conditional upon the Scheme becoming unconditional and
Effective, subject to the Takeover Code, before 11.59 pm on the Long Stop Date.
Scheme approval
2. The Scheme will be conditional upon:
(a)
(i) the approval of the Scheme by a majority in number representing not
less than 75 per cent. in value of the Lighthouse Shares held by
Lighthouse Shareholders (or the relevant class or classes thereof, if
applicable) present, entitled to vote and voting, whether in person or by
proxy, at the Court Meeting and at any separate class meeting which
may be required by the Court (or any adjournment thereof); and
(ii) such Court Meeting and any separate class meeting which may be
required by the Court or any adjournment of any such meeting being
held on or before the 22nd day after the expected date of the Court
Meeting to be set out in the Scheme Document in due course (or such
later date, if any, as may be agreed between Intrinsic and Lighthouse
and which the Court may allow); and
(b)
(i) all resolutions necessary to approve and implement the Scheme being
duly passed by the requisite majority or majorities at the General
Meeting (or any adjournment thereof); and
(ii) the General Meeting or any adjournment of such meeting being held
on or before the 22nd day after the expected date of the General
Meeting to be set out in the Scheme Document in due course (or such
later date, if any, as may be agreed between Intrinsic and Lighthouse
and which the Court may allow); and
(c)
(i) the sanction of the Scheme with or without modification (but subject to
any such modification being acceptable to Intrinsic and Lighthouse) by
the Court; and
(ii) the Court Hearing being held on or before the 22nd day after the
expected date of the Court Hearing to be set out in the Scheme
30
Document in due course (or such later date, if any, as may be agreed
between Intrinsic and Lighthouse and which the Court may allow); and
(d) the delivery of a copy of the Court Order to the Registrar of
Companies.
In addition, Intrinsic and Lighthouse have agreed that the Acquisition will be conditional
upon the following Conditions and, accordingly, the necessary actions to make the Scheme
effective will not be taken unless the following Conditions (as amended if appropriate) have
been satisfied or, where relevant, waived:
CMA competition clearance
3. (a) Either:
(i) as at the date on which all other Conditions are satisfied or waived, the
CMA having neither requested submission of a Merger Notice nor
opened a CMA Merger Investigation; or
(ii) the CMA having indicated, in terms reasonably satisfactory to
Intrinsic, that the CMA or, as the case may be, the Secretary of State
for Business, Energy and Industrial Strategy does not intend to make a
CMA Phase 2 Reference; or
(iii) in the event that any Member State of the EU requests a referral to the
EC pursuant to Article 22(1) of the EUMR to review all of the
Acquisition and such a request being accepted either: (i) the EC having
declared the Acquisition to be compatible with the common market
pursuant to Article 6(1)(b) of the EUMR; or (ii) the Acquisition having
been deemed compatible with the common market pursuant to Article
10(6) of the EUMR; and
(b) in the event that any Member State of the EU requests a referral to the EC
pursuant to Article 22(1) of the EUMR to review part of the Acquisition and
such a request being accepted either: (i) the EC having declared the
Acquisition to be compatible with the common market pursuant to Article
6(1)(b) of the EUMR in respect of all parts of the Acquisition which were the
subject of such a request; or (ii) all parts of the Acquisition which were the
subject of the request having been deemed compatible with the common
market pursuant to Article 10(6) of the EUMR.
FCA approvals
4. In respect of each notice under section 178 of FSMA which Intrinsic or any other
person who has decided to acquire or increase control over any member of the Wider
Lighthouse Group which is a UK authorised person (as such term is defined in section
191G of FSMA) is under a duty to give in connection with the proposed
implementation of the Acquisition:
(a) the FCA having given notice in writing pursuant to section 189(4)(a) of FSMA
that it has determined unconditionally to approve each such acquisition or
increase in control pursuant to section 185 of FSMA;
31
(b) in relation to such acquisition or increase in control, the FCA having given
notice in writing pursuant to section 189(7) of FSMA subject to condition(s)
specified in the decision notice and such condition(s) being satisfactory to
Intrinsic, acting reasonably; or
(c) the FCA being treated, under section 189(6) of FSMA, as having approved
each such acquisition or increase in control.
Other Third Party clearances
5. Other than in respect of Conditions 3 and 4 above, no relevant government or
governmental, quasi-governmental, supranational, statutory, regulatory,
environmental or investigative body, court, trade agency, association, institution, any
entity owned or controlled by any relevant government or state, or any other similar
body or person whatsoever in any jurisdiction (each a Third Party) having 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 any statute,
regulation, decision, order or change to published practice, or having taken any other
steps (in each case, not having withdrawn the same) (in each case which would be
material in the context of the Wider Intrinsic Group or Wider Lighthouse Group, as
the case may be, taken as a whole) and there not continuing to be outstanding any
statute, regulation, decision or order which would or might reasonably be expected to:
(a) make the Acquisition, its implementation or the acquisition or proposed
acquisition of any shares or other securities in, or control or management of,
any member of the Wider Lighthouse Group by any member of the Wider
Intrinsic Group void, illegal and/or unenforceable under the laws of any
jurisdiction, or otherwise directly or indirectly prevent, prohibit, or restrain,
restrict, impede, materially challenge, delay or otherwise interfere with the
implementation of, or impose additional material conditions or material
obligations with respect thereto or otherwise challenge or interfere therewith;
(b) impose any material limitation on, or result in a material delay in, the ability of
any member of the Wider Intrinsic Group directly or indirectly to acquire or
hold or to exercise effectively, directly or indirectly, all or any rights of
ownership in respect of shares or loans or other securities convertible into
shares or any other securities (or the equivalent) in Lighthouse (or any
member of the Wider Lighthouse Group) or to exercise management control
over, any member of the Wider Lighthouse Group;
(c) require, prevent or delay the divestiture or alter the terms envisaged for any
proposed divestiture by any member of the Wider Intrinsic Group or by any
member of the Wider Lighthouse Group of all or any part of their respective
businesses, assets or property or impose any limitation on the ability of all or
any of them to conduct their respective businesses (or any part thereof) or to
own, control or manage any of their respective assets or properties or any part
thereof which, in any such case, is material in the context of the Wider
Intrinsic Group or the Wider Lighthouse Group, in either case taken as a
whole;
32
(d) other than pursuant to sections 974 to 991 of the 2006 Act and the
implementation of the Scheme, require any member of the Wider Intrinsic
Group or the Wider Lighthouse Group to acquire or offer to acquire any
shares, other securities (or the equivalent) or interest in any member of the
Wider Lighthouse Group owned by any third party;
(e) require, prevent or materially delay a divestiture by any member of the Wider
Intrinsic Group of any shares, securities or other interests in any member of
the Wider Lighthouse Group (in each case to an extent which is material in the
context of the Wider Intrinsic Group or the Wider Lighthouse Group, in each
case, taken as a whole);
(f) result in any member of the Wider Lighthouse Group or the Wider Intrinsic
Group ceasing to be able to carry on business under any name under which it
presently does so (in each case to an extent which is material in the context of
the Wider Intrinsic Group or the Wider Lighthouse Group, in each case, taken
as a whole);
(g) impose any limitation on, or result in any delay of, the ability of any member
of the Wider Intrinsic Group or any member of the Wider Lighthouse Group
to integrate or co-ordinate all or any part of their respective businesses with all
or any part of the business of any other member of the Wider Intrinsic Group
and/or the Wider Lighthouse Group in a manner which is material in the
context of the Wider Intrinsic Group and/or the Wider Lighthouse Group, in
either case, taken as a whole; or
(h) otherwise adversely affect the business, assets, value, profits, prospects or
operational performance of any member of the Wider Lighthouse Group or
any member of the Wider Intrinsic Group to an extent which is material in the
context of the Wider Intrinsic Group or the Wider Lighthouse Group, in either
case taken as a whole.
If there are any waiting or other time periods (including any extensions thereof)
during which a Third Party could take, institute, implement or threaten any such
action, proceeding, suit, investigation, enquiry or reference or take any other step
under the laws of any jurisdiction in respect of the Acquisition or proposed
acquisition of any Lighthouse Shares or otherwise intervene, this waiting or other
time period must have expired, lapsed or been terminated.
6. Other than in relation to the FCA and competition law approvals referred to in
Conditions 3 and 4 above, all notifications, filings or applications which are necessary
or reasonably considered appropriate by Intrinsic or any member of the Wider
Intrinsic Group having been made in connection with the Acquisition and all
necessary waiting and other time periods (including any extensions thereof) under any
applicable legislation or regulation of any jurisdiction having expired, lapsed or been
terminated (as appropriate) and all statutory and regulatory obligations in any
jurisdiction having been complied with in respect of the Acquisition and all
Authorisations which are necessary or reasonably considered appropriate by Intrinsic
or any member of the Wider Intrinsic Group in any jurisdiction for or in respect of the
Acquisition or the proposed acquisition of any shares or other securities in, or control
of, Lighthouse by any member of the Wider Intrinsic Group having been obtained in
33
terms and in a form reasonably satisfactory to Intrinsic from all appropriate Third
Parties or (without prejudice to the generality of the foregoing) from any person or
bodies with whom any member of the Wider Lighthouse Group has entered into
contractual arrangements and all such Authorisations which are necessary or
reasonably considered appropriate by Intrinsic or any member of the Wider Intrinsic
Group to carry on the business of any member of the Wider Lighthouse Group in any
jurisdiction having been obtained in each case where the consequence of a failure to
make such notification or filing or to wait for the expiry, lapse or termination of any
such waiting or other time period or to comply with such obligation or obtain such
Authorisation would be unlawful in any relevant jurisdiction or have a material
adverse effect on the Wider Lighthouse Group, any member of the Intrinsic Group or
the ability of Intrinsic to implement the Scheme and all such Authorisations remaining
in full force and effect at the time at which the Scheme becomes otherwise
unconditional and there being no notice or intimation of an intention to revoke,
suspend, restrict, modify or not to renew such Authorisations.
Confirmation of absence of adverse circumstances
7. Except as Disclosed, there being no provision of any arrangement, agreement, licence,
permit, franchise, lease or other instrument to which any member of the Wider
Lighthouse Group is a party or by or to which any such member or any of its assets is
or may be bound, entitled or be subject or any event or circumstance which, in each
case as a consequence of the Acquisition or the proposed acquisition by any member
of the Wider Intrinsic Group of any shares or other securities in Lighthouse or
because of a change in the control or management of any member of the Wider
Lighthouse Group or otherwise, would or might reasonably be expected to result in
(in each case to an extent which is or would be material in the context of the Wider
Lighthouse Group as a whole):
(a) any monies borrowed by, or any other indebtedness or liabilities (including,
without limitation, guarantees, letters of credit and hedging contracts), actual
or contingent of, or any grant available to, any member of the Wider
Lighthouse Group being or becoming repayable, or capable of being declared
repayable immediately or prior to its or their stated maturity date or repayment
date, or the ability of any such member to borrow monies or incur any
indebtedness being withdrawn or inhibited or being capable of becoming or
being withdrawn or inhibited;
(b) any such arrangement, agreement, licence, permit, lease or instrument, or the
rights, liabilities, obligations or interests of any member of the Wider
Lighthouse Group thereunder being or becoming capable of being terminated
or adversely modified or affected or any onerous obligation or liability arising
or any adverse action being taken or arising thereunder;
(c) any member of the Wider Lighthouse Group ceasing to be able to carry on
business under any name under which it presently does so;
(d) any assets or interests of, or any asset the use of which is enjoyed by, any
member of the Wider Lighthouse Group being or falling to be disposed of or
charged or ceasing to be available to any member of the Wider Lighthouse
Group or any right arising under which any such asset or interest could be
34
required to be disposed of or charged or could cease to be available to any
member of the Wider Lighthouse Group otherwise than in the ordinary course
of business;
(e) the creation or enforcement of any mortgage, charge or other security interest
over the whole or any part of the business, property or assets of any member
of the Wider Lighthouse Group or any such mortgage, charge or other security
interest (whenever created, arising or having arisen), becoming enforceable;
(f) the business, assets, value, financial or trading position, profits, prospects or
operational performance of any member of the Wider Lighthouse Group being
materially prejudiced or adversely affected;
(g) the creation or acceleration of any material liability (actual or contingent) by
any member of the Wider Lighthouse Group, other than trade creditors or
other liabilities incurred in the ordinary course of business; or
(h) any liability of any member of the Wider Lighthouse Group to make any
severance, termination, bonus or other payment to any of its directors or other
officers,
and no event having occurred which, under any provision of any agreement,
arrangement, licence, permit or other instrument to which any member of the Wider
Lighthouse Group is a party or by or to which any such member or any of its assets
may be bound, entitled or subject, could result in any of the events or circumstances
as are referred to in sub-paragraphs (a) to (h) of this Condition, in each case, to an
extent which is material in the context of the Wider Lighthouse Group taken as a
whole.
No material transactions, claims or changes in the conduct of the business of the
Lighthouse Group
8. Except as Disclosed, no member of the Wider Lighthouse Group having since
31 December 2018:
(a) save as between Lighthouse and wholly-owned subsidiaries of Lighthouse or
for Lighthouse Shares issued pursuant to the exercise of options or vesting of
awards granted in the ordinary course under the Lighthouse LTIP, issued or
agreed to be issued or authorised or proposed or announced its intention to
authorise or propose the issue of additional shares of any class, or securities or
securities convertible into, or exchangeable for, or rights, warrants or options
to subscribe for or acquire, any such shares or convertible securities;
(b) other than to another member of the Lighthouse Group, 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) save for the Pre-Close Dividend;
(c) save for Intra-Lighthouse Group Transactions, merged or demerged with any
body corporate or acquired or disposed of any body corporate, partnership or
business or acquired or disposed of, or transferred, mortgaged or charged or
35
created any security interest over, any assets or any right, title or interest in
any asset (including shares and trade investments) or authorised, proposed or
announced any intention to do so, in each case, other than in the ordinary
course of business;
(d) save for Intra-Lighthouse Group Transactions, made, authorised, proposed or
announced an intention to propose any change in its loan capital in each case,
to the extent which is material in the context of the Wider Lighthouse Group
taken as a whole;
(e) issued, authorised or proposed or announced an intention to authorise or
propose the issue of, or made any change in or to the terms of, any debentures
or (save for Intra-Lighthouse Group Transactions), save in the ordinary course
of business, incurred or increased any indebtedness or become subject to any
contingent liability which in any case is material in the context of the Wider
Lighthouse Group taken as a whole;
(f) entered into, varied, authorised or proposed entry into or variation of, or
announced its intention to enter into or vary, any contract, transaction,
arrangement or commitment (whether in respect of capital expenditure or
otherwise) which is of a long term, unusual or onerous nature, or which
involves or could reasonably be expected to involve an obligation of a nature
or magnitude or which is other than in the ordinary course of business and
which, in any such case, is material in the context of the Wider Lighthouse
Group or in the context of the Acquisition, or which is or is reasonably likely
to be restrictive on the business of any member of the Wider Lighthouse
Group or Wider Intrinsic Group;
(g) entered into any licence or other disposal of intellectual property rights of any
member of the Wider Lighthouse Group which is material in the context of the
Wider Lighthouse Group or which is other than in the ordinary course of
business;
(h) entered into, varied, authorised or proposed entry into or variation of, or
announced its intention to enter into or vary the terms of or made any offer
(which remains open for acceptance) to enter into or vary the terms of, any
contract, commitment, arrangement or any service agreement with any
director or senior executive of the Wider Lighthouse Group;
(i) proposed, agreed to provide or modified to a material extent the terms of the
Lighthouse LTIP or any share option scheme, incentive scheme, or other
benefit relating to the employment or termination of employment, of any
employee of the Wider Lighthouse Group;
(j) procured the trustees of any pension scheme or other retirement or death
benefit arrangement established for the directors, former directors, employees
or former employees of any entity in the Wider Lighthouse Group or their
dependants (a "Relevant Pension Plan"), or any such trustees having taken
any action since 31 December 2018, to:
36
(I) make or agree to any material change to: (a) the terms of the trust
deeds, rules, policy or other governing documents constituting any
Relevant Pension Plan; (b) the basis on which benefits accrue,
pensions which are payable or the persons entitled to accrue or be paid
benefits, under any Relevant Pension Plan; (c) the basis on which the
liabilities of any Relevant Pension Plan are funded or valued; or (d) the
basis or rate of employer contribution to a Relevant Pension Plan, in
each case other than as required by applicable law;
(II) carry out any act: (a) which would or could reasonably be expected to
lead to the commencement of the winding up of any Relevant Pension
Plan; (b) which would or is reasonably likely to create a material debt
owed by an employer to any Relevant Pension Plan; (c) which would
or might accelerate any obligation on any employer to fund or pay
additional contributions to any Relevant Pension Plan, in each case
other than as required by applicable law;
(k) entered into, implemented or effected, or authorised, proposed or announced
its intention to implement or effect, any joint venture, asset or profit sharing
arrangement, partnership, composition, assignment, reconstruction,
amalgamation, commitment, scheme or other transaction or arrangement other
than the Scheme;
(l) purchased, redeemed or repaid or announced any proposal 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 (a) above, made any other change
to any part of its share capital;
(m) waived, compromised or settled any claim (whether actual or threatened)
otherwise than in the ordinary course of business and which is material in the
context of the Wider Lighthouse Group taken as a whole;
(n) save as is envisaged by the Acquisition, made any alteration to its articles of
association or other constitutional documents;
(o) (other than in respect of a member of the Wider Lighthouse Group which is
dormant and was solvent at the relevant time) taken or proposed any steps,
corporate action or had any legal proceedings instituted or threatened against it
in relation to the suspension of payments, a moratorium of any indebtedness,
its winding-up (voluntary or otherwise), dissolution, reorganisation or for the
appointment of any administrator, receiver, manager, administrative receiver,
trustee or similar officer of all or any of its assets or revenues or any
analogous proceedings in any jurisdiction or appointed any analogous person
in any jurisdiction or had any such person appointed;
(p) been unable, or admitted in writing that it is unable, to pay its debts or
commenced negotiations with one or more of its creditors with a view to
rescheduling or restructuring any of its indebtedness, or having stopped or
suspended (or threatened to stop or suspend) payment of its debts generally or
ceased or threatened to cease carrying on all or a substantial part of its
business;
37
(q) entered into any contract, commitment, agreement or arrangement otherwise
than in the ordinary course of business or passed any resolution or made any
offer (which remains open for acceptance) with respect to or announced an
intention to, or to propose to, effect any of the transactions, matters or events
referred to in this Condition and which is material in the context of the Wider
Lighthouse Group taken as a whole or in the context of the Acquisition;
(r) terminated or varied the terms of any agreement or arrangement between any
member of the Wider Lighthouse Group and any other person in a manner
which would or would reasonably likely to be expected to have a material
adverse effect on the financial position of the Wider Lighthouse Group taken
as a whole; or
(s) other than with the consent of Intrinsic, having taken (or agreed or proposed to
take) any action which requires, or would require, the consent of the Panel or
the approval of Lighthouse Shareholders in general meeting in accordance
with, or as contemplated by, Rule 21.1 of the Takeover Code.
No material adverse change
9. Except as Disclosed, since 31 December 2018:
(a) there having been no adverse change or deterioration in the business, assets,
value, financial or trading position, profits, prospects or operational
performance of any member of the Wider Lighthouse Group which, in any
such case, is material in the context of the Wider Lighthouse Group taken a
whole or in the context of the Acquisition and no circumstances have arisen
which would or might reasonably be expected to result in any such adverse
change;
(b) no material litigation, arbitration proceedings, prosecution or other material
legal proceedings including, without limitation, with regard to intellectual
property rights used by the Wider Lighthouse Group to which any member of
the Wider Lighthouse Group is or may become a party (whether as claimant or
defendant or otherwise) and no enquiry, review, investigation or enforcement
proceedings by, or complaint or reference to, any Third Party against or in
respect of any member of the Wider Lighthouse Group having been
threatened, announced or instituted by or against, or remaining outstanding in
respect of, any member of the Wider Lighthouse Group in each case which is
material in the context of the Wider Lighthouse Group taken as a whole;
(c) no contingent or other liability having arisen, increased or become apparent
which would reasonably be likely adversely to affect the business, assets,
financial or trading position, profits, prospects or operational performance of
any member of the Wider Lighthouse Group to an extent which is material to
the Wider Lighthouse Group taken as a whole or in the context of the
Acquisition; and
(d) no steps having been taken and no omissions having been made which are
reasonably likely to result in the withdrawal, cancellation, termination or
modification of any licence held by any member of the Wider Lighthouse
38
Group, which is necessary for the proper carrying on of its business and the
withdrawal, cancellation, termination or modification of which is material and
reasonably likely to have an adverse effect on the Wider Lighthouse Group
taken as a whole or in the context of the Acquisition.
No discovery of certain matters
10. Except as Disclosed, since 31 December 2018 Intrinsic not having discovered:
(a) that any financial, business or other information concerning the Wider
Lighthouse Group publicly announced or disclosed to any member of the
Wider Intrinsic Group at any time by or on behalf of any member of the Wider
Lighthouse Group or to any of their advisers is materially misleading, contains
a material misrepresentation of fact or omits to state a fact necessary to make
that information not materially misleading; or
(b) that any member of the Wider Lighthouse Group is subject to any material
liability, contingent or otherwise, which is not disclosed in the Annual Report
and Financial Statements of Lighthouse; or
(c) any information which affects the import of any information disclosed at any
time by or on behalf of any member of the Wider Lighthouse Group and
which is material in the context of the Wider Lighthouse Group taken as a
whole or in the context of the Acquisition.
Intellectual Property
11. Save as Disclosed, no circumstance having arisen or ceasing to exist, or no event
having occurred, in each case, in relation to any intellectual property owned or used
by any member of the Wider Lighthouse Group which is reasonably anticipated to
have a material adverse effect on the Wider Lighthouse Group taken as a whole or is
otherwise material in the context of the Acquisition.
Anti-corruption and sanctions
12. Save as Disclosed, Intrinsic not having discovered that:
(a) any past or present member, director, officer or employee of the Wider
Lighthouse Group or any person that performs or has performed services for
or on behalf of any such company is or has at any time engaged in any
activity, practice or conduct (or omitted to take any action) in connection with
the performance of such services which would constitute an offence under the
UK Bribery Act 2010, the US Foreign Corrupt Practices Act of 1977, Part 3 of
the Criminal Finances Act 2017 (each as amended) or any other applicable
anti-corruption or anti-tax-evasion legislation; or
(b) any past or present member, director, officer or employee of the Wider
Lighthouse Group or any person who has performed services for and on behalf
of any such company has engaged in any activity or business with, or made
any investments in, or made any funds or assets available to or received any
funds or assets from: (i) any government, entity or individual in respect of
which US or European Union persons, or persons operating in those
39
territories, are prohibited from engaging in activities or doing business, or
from receiving or making available funds or economic resources, by US or
European Union laws or regulations, including the economic sanctions
administered by the HM Treasury & Customs, the United Nations or the
European Union (or any of their respective member states) or 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 Nations,
the United States, the European Union or any of its member states, in each
case to an extent which is material in the context of the Wider Lighthouse
Group taken as a whole; or
(c) any member of the Lighthouse Group has been engaged in any transaction
which would cause Intrinsic to be in breach of any applicable law or
regulation upon its acquisition of Lighthouse, including the economic
sanctions of the United States Office of Foreign Assets Control, or HM
Treasury & Customs, or any government, entity or individual targeted by any
of the economic sanctions of the United Nations, the United States, the
European Union or any of its member states.
No criminal property
13. Save as Disclosed, Intrinsic not having discovered that any material asset of any
member of the Wider Lighthouse Group constitutes criminal property as defined by
section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of
that definition).
Part 2: Waiver and invocation of the Conditions
1. Subject to the requirements of the Panel in accordance with the Takeover Code,
Intrinsic reserves the right in its sole discretion to waive:
(a) those parts of all or any of the Conditions set out in paragraph 2 of Part 1 of
this Appendix 1 relating to the deadlines for the Court Meeting, General
Meeting and/or the Court Hearing. If any such deadline is not met, Intrinsic
shall make an announcement by 8.00 a.m. on the Business Day following such
deadline confirming whether it has invoked the relevant Condition, waived the
relevant deadline or agreed with Lighthouse to extend the relevant deadline;
and
(b) in whole or in part, all or any of the Conditions 3 and 5 to 13.
2. Under Rule 13.5(a) of the Takeover Code, Intrinsic may not invoke a Condition to the
Acquisition so as to cause the Acquisition not to proceed, to lapse or to be withdrawn
unless the circumstances which give rise to the right to invoke the Condition are of
material significance to Intrinsic in the context of the Acquisition. Conditions 2(a)(i),
2(b)(i), 2(c)(i) and 2(d), 3 (CMA Competition Clearance) and, if applicable, any
acceptance condition if the Acquisition is implemented by means of a Takeover Offer,
are not subject to this provision of the Takeover Code.
3. Intrinsic 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 by a date earlier than
40
the latest date specified above for the fulfilment or waiver thereof, notwithstanding
that any other Conditions may at any earlier date have been waived or fulfilled and
that there are, at such earlier date, no circumstances indicating that any of such
Conditions may not be capable of fulfilment.
Part 3: Implementation by way of Takeover Offer
Intrinsic reserves the right to elect to implement the Acquisition by way of a Takeover
Offer, subject to the Panel's consent. In such event, such Takeover Offer will be
implemented on the same terms and conditions as those which would apply to the
Scheme subject to appropriate amendments, including (without limitation) an
acceptance condition set at 90 per cent. (or such other percentage (being more than 50
per cent.) as Intrinsic may, subject to the rules of the Takeover Code and with the
consent of the Panel, decide) in nominal value of the shares to which such Takeover
Offer relates and of the voting rights to those shares.
Part 4: Certain further terms of the Acquisition
1. The availability of the Acquisition to persons not resident in the UK may be affected
by the laws of the relevant jurisdictions. Persons who are not resident in the UK
should inform themselves about, and observe, any applicable requirements. Further
information in relation to Overseas Shareholders will be contained in the Scheme
Document.
2. If Intrinsic is required by the Panel to make an offer for Lighthouse Shares under the
provisions of Rule 9 of the Takeover Code, Intrinsic may make such alterations to any
of the above Conditions as are necessary to comply with the provisions of that Rule.
3. The Lighthouse Shares will be acquired by Intrinsic fully paid and free from all liens,
charges, equities, encumbrances, options, rights of pre-emption and any other third
party rights and interests of any nature whatsoever and together with all rights
attaching to them as at the date of this Announcement or subsequently attaching or
accruing to them, including without limitation voting rights and the right to receive
and retain, in full, all dividends and other distributions (if any), declared, made or
paid, or any other return of capital (whether by way of reduction of share capital or
share premium account or otherwise) made on or after the date of this Announcement
and before the Effective Date, other than the Pre-Close Dividend.
4. Intrinsic reserves the right to reduce the consideration payable in respect of each
Lighthouse Share under the terms of the Acquisition to the extent that the Pre-Close
Dividend exceeds 0.5 pence per Lighthouse Share. If any dividend or other
distribution is announced, declared, made, payable or paid in respect of the
Lighthouse Shares on or after the date of this Announcement and prior to the
Effective Date, other than the Pre-Close Dividend, Intrinsic reserves the right to
reduce the consideration payable in respect of each Lighthouse Share by the amount
of all or part of any such dividend or other distribution. If Intrinsic exercises this right
or makes such reduction in respect of a dividend or other distribution that has not
been paid, Lighthouse Shareholders will be entitled to receive and retain that dividend
or other distribution.
41
5. The Acquisition will lapse and the Scheme will not become Effective if the
Acquisition or any matter arising from or relating to it becomes subject to a CMA
Phase 2 Reference before 11.59 p.m. (London time) on the date immediately
preceding the date of the Court Meeting.
6. The Acquisition will lapse and the Scheme will note become Effective if the
European Commission either initiates proceedings under Article 6(1)(c) of Council
Regulation (EC) 139/2004 or makes a referral to a competent authority of the United
Kingdom under Article 9(3)(b) of that Regulation and there is a subsequent CMA
Phase 2 Reference, in either case before the Lighthouse Meetings.
7. The Scheme will be governed by the laws of England and Wales and be subject to the
jurisdiction of the Courts and to the Conditions and further terms set out in this
Announcement and in the Scheme Document. The Acquisition will comply with the
AIM Rules and the Takeover Code.
8. Each of the Conditions shall be regarded as a separate Condition and shall not be
limited by reference to any other Condition.
42
APPENDIX 2
SOURCES AND BASES OF INFORMATION
Unless otherwise stated in this Announcement:
1. As at close of business on 2 April 2019 (being the last Business Day prior to the date
of this Announcement):
(a) Lighthouse had in issue 127,700,298 ordinary shares;
(b) Old Mutual Wealth Holdings Limited, which is presumed to be acting in
concert with Intrinsic under the Takeover Code, was the registered holder of
5,581,383 Lighthouse Shares; and
(c) Quilter Cheviot Limited, which is presumed to be acting in concert with
Intrinsic under the Takeover Code in respect of shares held by it in client
accounts and which are managed at its discretion, was the registered holder of
150,000 Lighthouse Shares,
giving a total number of outstanding shares excluding those owned by Intrinsic or a
person acting in concert with Intrinsic of 121,968,915.
2. Lighthouse does not hold any shares in treasury.
3. Any reference to the entire issued and to be issued ordinary share capital of
Lighthouse is based on:
(a) 127,700,298 Lighthouse Shares referred to in paragraph 1 above; and
(b) 12,163,972 Lighthouse Shares which may be issued on or after the date of this
Announcement on the exercise of options or vesting of awards under the
Lighthouse LTIP.
4. The excess cash of Lighthouse of approximately £4m is based on Quilter's and
Intrinsic's expectation of the surplus cash of Lighthouse over and above the capital
required for regulatory purposes.
5. The volume-weighted average prices of a Lighthouse Share are derived from data
provided by Bloomberg.
6. Unless otherwise stated, all prices for Lighthouse Shares have been derived from data
provided by Bloomberg and represent Closing Prices on the relevant date(s).
7. Unless otherwise stated, the balance sheet and income statement financial information
relating to Lighthouse is extracted from the Annual Report and Financial Statements
of Lighthouse for the period ending 31 December 2018.
8. Certain figures included in this Announcement have been subject to rounding
adjustments.
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APPENDIX 3
DETAILS OF IRREVOCABLE UNDERTAKINGS
1. Lighthouse Directors
The following Lighthouse Directors have given irrevocable undertakings in respect of
their own beneficial holdings (or those Lighthouse Shares over which they have
control) of Lighthouse Shares to vote (or procure a vote) in favour of the resolutions
relating to the Acquisition at the Lighthouse Meetings or, in the event that the
Transaction is implemented by way of a Takeover Offer, to accept (or procure the
acceptance of) such Takeover Offer:
Name Total Number of Percentage of existing
Lighthouse Shares issued share capital
Richard Last 912,500 0.71%
Malcolm Streatfield 2,791,563 2.19%
Peter Smith 430,000 0.34%
Kenneth Paterson 100,000 0.08%
Alexander Scott-Barrett 305,000 0.24%
The obligations of the Lighthouse Directors under the irrevocable undertakings given
by them shall lapse and cease to have effect on and from the earlier of the following
occurrences:
(a) Intrinsic publicly announces, with the consent of the Panel, that it does not
intend to proceed with the Acquisition;
(b) immediately if the Scheme Document is not published within 28 days of the
date of publication of this Announcement (or within such longer period as
Lighthouse and Intrinsic may agree, with the consent of the Panel);
(c) the Acquisition lapses, is withdrawn or otherwise terminates in accordance
with its terms; or
(d) the Scheme has not become Effective before 11.59 p.m. on the Long Stop
Date.
These irrevocable undertakings remain binding in the event a competing offer is made
for Lighthouse. Malcolm Streatfield, Peter Smith and Kenneth Paterson also hold
options over 9,900,778 Lighthouse Shares pursuant to the Lighthouse LTIP. If any of
these options are exercised prior to the date of the Lighthouse Meetings, the
irrevocable undertakings provide for the directors to vote in favour of the Scheme in
respect of the Lighthouse Shares issued as a consequence of any exercise of these
options.
44
2. Lighthouse Shareholders
The following persons have given irrevocable undertakings to vote (or procure a vote)
in favour of the resolutions relating to the Acquisition at the Lighthouse Meetings in
respect of its holdings of Lighthouse Shares or, in the event that the Transaction is
implemented by way of a Takeover Offer, to accept (or procure the acceptance of)
such Takeover Offer:
Name Total Number of Percentage of existing
Lighthouse Shares issued share capital
Helium Rising Stars 21,756,979 17.04%
Fund
Allan Rosengren 20,699,396 16.21%
MI Discretionary Unit 8,510,588 6.66%
Fund
The obligations of Allan Rosengren under his irrevocable undertaking shall lapse and
cease to have effect on and from the earlier of the following occurrences:
(a) Intrinsic publicly announces, with the consent of the Panel, that it does not
intend to proceed with the Acquisition;
(b) immediately if the Scheme Document is not published within 28 days of the
date of publication of this Announcement (or within such longer period as
Lighthouse and Intrinsic may agree, with the consent of the Panel);
(c) the Acquisition lapses, is withdrawn or otherwise terminates in accordance
with its terms;
(d) the Scheme has not become Effective before 11.59 p.m. on the Long Stop
Date; or
(e) any competing offer for the issued and to be issued ordinary share capital of
Lighthouse is announced which exceeds Intrinsic's offer price by 10 per cent.
or more, and Intrinsic has not issued a revised offer where the value of
consideration represents an amount not less than the value of consideration
under that competing offer before 11.59 p.m. on the fourteenth day following
the date of that announcement.
The obligations of each of Helium Rising Stars Fund and MI Discretionary Unit Fund
under the irrevocable undertakings given by them shall lapse and cease to have effect
on and from the earlier of the following occurrences:
(a) Intrinsic publicly announces, with the consent of the Panel, that it does not
intend to proceed with the Acquisition;
45
(b) immediately if the Scheme Document is not published within 28 days of the
date of publication of the Press Announcement (or within such longer period
as Lighthouse and Intrinsic may agree, with the consent of the Panel);
(c) the Acquisition lapses, is withdrawn or otherwise terminates in accordance
with its terms;
(d) the Scheme has not become Effective before 11.59 p.m. on the Long Stop
Date; or
(e) any competing offer for the issued and to be issued ordinary share capital of
Lighthouse is announced which exceeds Intrinsic's offer price by 5 per cent. or
more, and Intrinsic has not issued a revised offer where the value of
consideration represents an amount not less than the value of consideration
under that competing offer before 11.59 p.m. on the fourteenth day following
the date of that announcement.
46
APPENDIX 4
DEFINITIONS
The following definitions apply throughout this Announcement unless the context
otherwise requires:
"2006 Act" the Companies Act 2006, as amended from time
to time
"Acquisition" the proposed acquisition by Intrinsic of the
entire issued and to be issued share capital of
Lighthouse by means of the Scheme, or should
Intrinsic so elect, by means of a Takeover Offer
"AIM" the AIM market operated by the London Stock
Exchange
"AIM Rules" the rules of AIM as set out in the publication
entitled 'AIM Rules for Companies' published
by the London Stock Exchange from time to
time
"Announcement" this announcement
"Annual Report and Financial the annual report and financial statements of
Statements of Lighthouse" Lighthouse for the year ended 31 December
2018
"associated undertaking" shall be construed in accordance with
paragraph 19 of Schedule 6 to The Large and
Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008
(SI 2008/410) but for this purpose ignoring
paragraph 19(1)(b) of Schedule 6 to those
regulations
"Authorisations" authorisations, orders, grants, recognitions,
confirmations, consents, licences, clearances,
certificates, permissions or approvals
"Business Day" a day, not being a public holiday, Saturday or
Sunday, on which banks in London are open for
normal business
"Cash Consideration" means the cash amount of 33 pence payable by
Intrinsic under the Acquisition in respect of each
Lighthouse Share, as may be adjusted in
accordance with the terms of the Acquisition as
set out in this Announcement
"Closing Price(s)" the closing price of a Lighthouse Share as
derived from Bloomberg on any particular date
"CMA" the Competition and Markets Authority of the
UK
"CMA Merger Investigation" the investigation by the CMA to enable it to0
47
determine whether to make a reference under
section 33 of the Enterprise Act 2002
"CMA Phase 2 Reference" a reference pursuant to sections 22, 33, 45 or 62
of the Enterprise Act 2002 (as amended) of the
Acquisition to the chair of the CMA for the
constitution of a group under Schedule 4 to the
Enterprise and Regulatory Reform Act 2013
"Condition(s)" the conditions of the Acquisition, as set out in
Part 1 of Appendix 1 to this Announcement and
to be set out in the Scheme Document
"Confidentiality Agreement" the confidentiality agreement dated 17 January
2019 between Intrinsic and Lighthouse, as
described in paragraph 10 of this Announcement
"Court" the High Court of Justice of England and Wales
"Court Hearing" the Court hearing at which Lighthouse will seek
an order sanctioning the Scheme pursuant to
Part 26 of the 2006 Act
"Court Meeting" the meeting or meetings of Lighthouse
Shareholders to be convened by an order of the
Court pursuant to section 896 of the 2006 Act,
notice of which will be set out in the Scheme
Document, for the purposes of considering, and
if thought fit, approving the Scheme (with or
without amendment) and any adjournment,
postponement or reconvention thereof
"Court Order" the order of the Court sanctioning the Scheme
under section 899 of the 2006 Act
"CREST" the relevant system (as defined in the
Uncertificated Securities Regulations 2001
(SI 2001/3755)) (the "Regulations") in respect
of which Euroclear UK & Ireland Ltd is the
Operator (as defined in the Regulations) in
accordance with which securities may be held
and transferred in uncertificated form
"Dealing Disclosure" an announcement pursuant to Rule 8 of the
Takeover Code containing details of dealings in
relevant securities of a party to an Acquisition
"Disclosed" the information which has been fairly disclosed
by or on behalf of Lighthouse: (i) in writing
prior to the date of this Announcement to
Intrinsic or Intrinsic's professional advisers (in
their capacity as such in relation to the
Acquisition); (ii) in the Annual Report and
Financial Statements of Lighthouse; (iii) in this
Announcement; or (iv) in any other public
announcement made by Lighthouse after
48
31 December 2018 and prior to the date of this
Announcement in accordance with the Market
Abuse Regulation, the AIM Rules or the
Disclosure Guidance and Transparency Rules
"Disclosure Guidance and the Disclosure Guidance and Transparency
Transparency Rules" Rules of the FCA under FSMA and contained in
the FCA's publication of the same name (as
amended from time to time)
"EC" the European Commission of the European
Union
"Effective" in the context of the Acquisition: (i) if the
Acquisition is implemented by way of the
Scheme, the Scheme having become effective
pursuant to its terms; or (ii) if the Acquisition is
implemented by way of the Takeover Offer, the
Takeover Offer having been declared or having
become unconditional in all respects in
accordance with the requirements of the
Takeover Code
"Effective Date" the date on which the Acquisition becomes
Effective
"Enlarged Group" the enlarged group following the Acquisition
comprising the Intrinsic Group and the
Lighthouse Group
"EU" the European Union
"EUMR" the EU Merger Regulation (No. 139/2004), as
amended
"Eurozone" the Member States of the European Union that
have adopted the euro as their common currency
and sole legal tender
"Excluded Shares" any Lighthouse Shares:
(i) beneficially owned by Intrinsic or any
other member of the Intrinsic Group; and
(ii) held by Lighthouse in treasury
"FCA" Financial Conduct Authority or its successor
from time to time
"FCA Handbook" the FCA's Handbook of rules and guidance as
amended from time to time
"FSMA" the Financial Services and Markets Act 2000 (as
amended from time to time)
"General Meeting" the general meeting of Lighthouse Shareholders
(including any adjournment, postponement or
reconvention thereof) to be convened for the
purpose of considering and, if thought fit
49
approving, the Resolutions in relation to the
Acquisition, notice of which shall be contained
in the Scheme Document
"Intra-Lighthouse Group Transactions" transactions between Lighthouse and its wholly
owned subsidiaries or between such wholly
owned subsidiaries within the Lighthouse Group
"Intrinsic" Intrinsic Financial Services Limited, a company
incorporated in England and Wales with
registered number 05372217
"Intrinsic Directors" or "Intrinsic the directors of Intrinsic as at the date of this
Board" Announcement or, where the context so
requires, the directors of Intrinsic from time to
time
"Intrinsic Group" Intrinsic and its subsidiary undertakings from
time to time
"Letter Agreement" the letter agreement dated 3 April 2019 between
Intrinsic and Lighthouse, as described in
paragraph 10 of this Announcement
"Lighthouse" Lighthouse Group plc, a company incorporated
in England and Wales with registered number
04042743
"Lighthouse Directors" or "Lighthouse the directors of Lighthouse as at the date of this
Board" Announcement or, where the context so
requires, the directors of Lighthouse from time
to time
"Lighthouse Group" Lighthouse and its subsidiary undertakings from
time to time
"Lighthouse LTIP" the Lighthouse long term incentive plan
"Lighthouse Meetings" the Court Meeting and the General Meeting
"Lighthouse Scheme Shareholders" holders of Lighthouse Scheme Shares
"Lighthouse Scheme Shares" Lighthouse Shares:
(i) in issue as at the date of the Scheme
Document;
(ii) (if any) issued after the date of the
Scheme Document and prior to the
Voting Record Time; and
(iii)(if any) issued on or after the Voting
Record Time and before the Scheme
Record Time, either on terms that the
original or any subsequent holders
thereof shall be bound by the Scheme or
in respect of which the holders thereof
shall have agreed in writing to be bound
50
by the Scheme,
but in each case other than the Excluded Shares
"Lighthouse Share(s)" the ordinary shares of one pence each in the
capital of Lighthouse
"Lighthouse Shareholder(s)" holders of Lighthouse Shares
"London Stock Exchange" the London Stock Exchange plc or its successor
"Long Stop Date" 30 September 2019 or such later date (if any) as
Intrinsic and Lighthouse may agree, with the
consent of the Panel, and the Court may allow
"Market Abuse Regulation" Regulation (EU) No. 597/2014 of the European
Parliament and the Council of 16 April 2014 on
market abuse
"Merger Notice" a notice to the CMA in the prescribed form as
contemplated by section 96 of the Enterprise Act
2002
"Offer Period" the offer period (as defined by the Takeover
Code) relating to Lighthouse, which commenced
on the date of this Announcement
"Opening Position Disclosure" an announcement pursuant to Rule 8 of the
Takeover Code containing details on interests or
short positions in, or rights to subscribe for, any
relevant securities of a party to an Acquisition
"Overseas Shareholders" shareholders who are resident in, ordinarily
resident in, or citizens of, jurisdictions outside
the United Kingdom
"Panel" the Panel on Takeovers and Mergers
"PRA" the Prudential Regulation Authority or its
successor from time to time
"Pre-Close Dividend" has the meaning given in the Summary section
of this Announcement
"Quilter" Quilter plc, a company incorporated in England
and Wales with registered number 06404270
"Registrar of Companies" the Registrar of Companies in England and
Wales
"Regulatory Information Service" a regulatory information service as defined in
the FCA Handbook
"relevant securities" shall be construed in accordance with the
Takeover Code
"Resolutions" the resolutions proposed to be passed at the
General Meeting in connection with, inter alia,
implementation of the Scheme and such other
matters as may be necessary to implement the
51
Scheme
"Restricted Jurisdiction(s)" any jurisdiction where local laws or regulations
may result in a significant risk of civil,
regulatory or criminal exposure if information
concerning the Acquisition is sent or made
available to Lighthouse Shareholders in that
jurisdiction
"Scheme" the proposed scheme of arrangement under Part
26 of the 2006 Act between Lighthouse and the
holders of the Lighthouse Scheme Shares, with
or subject to any modification, addition or
condition approved or imposed by the Court and
agreed by Lighthouse and Intrinsic
"Scheme Document" the document to be sent to Lighthouse
Shareholders and persons with information
rights containing, amongst other things, the
Scheme, the full terms and conditions of the
Scheme and notices of the Lighthouse Meetings
and proxy forms in respect of the Lighthouse
Meetings
"Scheme Record Time" the time and date to be specified in the Scheme
Document, expected to be 6.00 p.m. on the
Business Day immediately after the Court
Hearing
"Significant Interest" in relation to an undertaking, a direct or indirect
interest of 20 per cent. or more of: (i) the total
voting rights conferred by the equity share
capital (as defined in section 548 of the 2006
Act) of such undertaking; or (ii) the relevant
partnership interest
"subsidiary", "subsidiary undertaking" shall be construed in accordance with the 2006
and "undertaking" Act
"Takeover Code" the Takeover Code issued by the Panel on
Takeovers and Mergers, as amended from time
to time
"Takeover Offer" if (with the consent of the Panel), Intrinsic elects
to effect the Acquisition by way of a takeover
offer (as defined in Chapter 3 of Part 29 of the
2006 Act), the offer to be made by or on behalf
of Intrinsic to acquire the entire issued and to be
issued ordinary share capital of Lighthouse on
the terms and subject to the conditions to be set
out in the related offer document and, where the
context permits, any subsequent revision,
variation, extension or renewal of such takeover
offer
52
"UK" or "United Kingdom" 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 and
the District of Columbia
"US Exchange Act" the US Securities Exchange Act of 1934, as
amended, and the rules and regulations
promulgated thereunder;
"US Securities Act" the US Securities Act of 1933, as amended and
the rules and regulations promulgated
thereunder
"Voting Record Time" the time and date to be specified in the Scheme
Document by reference to which entitlement to
vote on the Scheme will be determined
"Wider Intrinsic Group" Intrinsic Group and associated undertakings and
any other body corporate, partnership, joint
venture or person in which Intrinsic and all such
undertakings (aggregating their interests) have a
Significant Interest
"Wider Lighthouse Group" Lighthouse Group and associated undertakings
and any other body corporate, partnership, joint
venture or person in which Lighthouse and all
such undertakings (aggregating their interests)
have a Significant Interest
"£" or "pence" the lawful currency of the United Kingdom from
time to time
For the purposes of this Announcement, "subsidiary", "subsidiary undertaking",
"undertaking" and "associated undertaking" have the meanings given by the 2006 Act.
References to an enactment include references to that enactment as amended, replaced,
consolidated or re-enacted
JSE Sponsor: J.P. Morgan Equities South Africa (Pty) Ltd.
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