|
|
|
|
|
Exhibit
No. 1
|
Director/PDMR
Shareholding dated 01 March 2018
|
|
Exhibit
No. 2
|
Director/PDMR
Shareholding dated 08 March 2018
|
|
Exhibit
No. 3
|
Morgan
Stanley European Financials Conference dated 20 March
2018
|
|
Exhibit
No. 4
|
Publication
of Suppl.Prospcts dated 23 March 2018
|
|
Exhibit
No. 5
|
Additional
Listing dated 26 March 2018
|
|
Exhibit
No. 6
|
Recommended
Cash Offer for Freeagent Holdings PLC dated 27 March
2018
|
|
Exhibit
No. 7
|
Director/PDMR
Shareholding dated 29 March 2018
|
|
Exhibit
No. 8
|
Total
Voting Rights dated 29 March 2018
|
|
Name of PDMR
|
Position of PDMR
|
Type of transaction
|
No. of Shares purchased / sold
|
Transaction price per share
|
Date of transaction
|
|
Yasmin
Jetha
|
Non-executive
director
|
Purchase
|
20,000
|
£2.690
|
26-02-2018
|
|
Chris
Marks
|
CEO, NatWest Markets
|
Sale
|
354,000
|
£2.692
|
26-02-2018
|
|
David
Stephen
|
Chief
Risk Officer
|
Sale
|
175,000
|
£2.692
|
26-02-2018
|
|
Lena
Wilson
|
Non-executive
director
|
Purchase
|
6,000
|
£2.689
|
26-02-2018
|
|
Name of PDMR
|
Position of PDMR
|
No. of Shares purchased
|
Purchase price
|
|
Chris
Marks
|
CEO,
NatWest Markets
|
56
|
£2.691
|
|
Name of PDMR
|
Position of PDMR
|
No. of Shares vested
|
No. of Shares withheld to satisfy associated tax
liability
|
No. of vested Shares retained
|
|
Mark
Bailie
|
Chief Operating Officer
|
118,314
|
55,608
|
62,706
|
|
Helen
Cook
|
Chief HR Officer
|
34,143
|
16,049
|
18,094
|
|
Chris
Marks
|
CEO, NatWest Markets
|
118,314
|
55,608
|
62,706
|
|
Name of PDMR
|
Position of PDMR
|
Maximum no. of
Shares eligible to vest
|
|
Mark
Bailie
|
Chief
Operating Officer
|
507,710
|
|
Helen
Cook
|
Chief HR Officer
|
225,649
|
|
Chris
Marks
|
CEO, NatWest Markets
|
564,122
|
|
Les
Matheson
|
CEO,
Personal & Business Banking
|
394,886
|
|
Ross
McEwan
|
Chief
Executive
|
592,328
|
|
Simon
McNamara
|
Chief
Administrative Officer
|
394,886
|
|
Alison
Rose
|
CEO,
Commercial & Private Banking
|
488,906
|
|
Ewen
Stevenson
|
Chief
Financial Officer
|
541,557
|
|
David
Wheldon
|
Chief
Marketing Officer
|
206,845
|
|
●
|
The boards of directors of The Royal Bank of Scotland Group plc
("RBS") and FreeAgent are pleased to announce that they have
reached agreement on the terms of a recommended cash offer pursuant
to which RBS BidCo, a wholly-owned indirect subsidiary of RBS, will
acquire the entire issued and to be issued ordinary share capital
of FreeAgent (the "Acquisition"). The Acquisition is to be effected
by means of a scheme of arrangement under Part 26 of the Companies
Act.
|
|
|
●
|
Under the terms of the Acquisition, Scheme Shareholders will be
entitled to receive 120 pence in cash (the "Offer Price") for each
FreeAgent Share held, valuing the entire issued and to be issued
share capital of FreeAgent at approximately £53
million.
|
|
|
●
|
As further described in paragraph 11 below, under the terms of the
Scheme the consideration payable to the Founders will be satisfied,
in part, by the issue of shares in RBS BidCo which, in aggregate,
amount to approximately five per cent. of the issued share capital
of RBS BidCo. The shares in RBS BidCo constitute approximately 23.5
per cent. by value of the aggregate consideration due to the
Founders under the Acquisition.
|
|
|
●
|
The Offer Price represents a premium of approximately:
|
|
|
|
●
|
86.0 per cent. to the Closing Price per FreeAgent Share of 64.5
pence on 26 March 2018 (being the last Business Day prior to the
date of this announcement);
|
|
|
●
|
42.9 per cent. to the IPO Price per FreeAgent Share of 84 pence;
and
|
|
|
●
|
67.3 per cent. to the six month average price per FreeAgent Share
of 71.7 pence (being the average Closing Price for the six month
period ended on 26 March 2018, being the last Business Day prior to
the date of this announcement).
|
|
●
|
The FreeAgent Directors, who have been so advised by N+1 Singer as
to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing its advice
to the FreeAgent Directors, N+1 Singer has taken into account the
commercial assessments of the FreeAgent Directors.
|
|
|
●
|
Accordingly, the FreeAgent Directors intend unanimously to
recommend that FreeAgent Shareholders vote in favour of the Scheme
at the Court Meeting and the Special Resolution to be proposed at
the General Meeting as they have irrevocably undertaken to do in
respect of their own beneficial holdings of 3,813,481 FreeAgent
Shares representing, in aggregate, approximately 9.36 per cent. of
the ordinary share capital of FreeAgent in issue on 26 March 2018
(being the Latest Practicable Date).
|
|
|
●
|
RBS BidCo has also received irrevocable undertakings from the
FreeAgent Shareholders set out in Part B of Appendix III to this
announcement to vote in favour of the Scheme at the Court Meeting
and the Special Resolution to be proposed at the General Meeting,
in respect of a total of 16,860,430 FreeAgent Shares, representing
approximately 41.4 per cent. of the ordinary share capital of
FreeAgent in issue on 26 March 2018 (being the Latest Practicable
Date).
|
|
|
●
|
In aggregate, therefore, irrevocable undertakings to vote in favour
of the Scheme at the Court Meeting and the Special Resolution to be
proposed at the General Meeting have been received in respect of a
total of 20,673,911 FreeAgent Shares, representing approximately
50.7 per cent. of the ordinary share capital of FreeAgent in issue
on 26 March 2018 (being the Latest Practicable Date). Further
details of these irrevocable undertakings are set out in Appendix
III to this announcement.
|
|
|
●
|
RBS is a UK-based banking and financial services company,
headquartered in Edinburgh. Through its operating subsidiaries, RBS
provides a wide range of products and services to personal,
commercial and large corporate and institutional customers through
a number of well-known brands.
|
|
|
●
|
RBS is one of the leading banks in the UK for business banking,
serving over 1 million small and medium enterprises ("SMEs"). RBS
is developing its customer facing channels, with an enhanced
digital offering supporting ongoing productivity improvements. RBS
believes that the acquisition of FreeAgent is consistent with this
strategy of developing innovative digital customer
solutions.
|
|
|
●
|
FreeAgent is a provider of cloud-based Software-as-a-Service
("SaaS") accounting software solutions and mobile applications
designed specifically for UK micro-businesses (defined as sole
traders and companies with fewer than 10 employees) and their
accountants. With its easy-to-use, intuitive software, FreeAgent's
offering streamlines financial management, bringing together a
range of functionality from invoice and expense management to VAT
and payroll.
|
|
|
●
|
RBS and FreeAgent have an existing commercial partnership, which,
following a successful pilot, has seen expanding customer numbers.
RBS offers FreeAgent's accounting software to its business banking
customers and, following a rollout in the fourth quarter of 2017,
more than 10,000 RBS customers are already signed up to use the
FreeAgent solution.
|
|
|
●
|
RBS intends to operate FreeAgent as an operationally independent
member of the RBS Group, retaining FreeAgent's existing management
team and maintaining its current Edinburgh location. RBS values the
entrepreneurial culture of FreeAgent and believes that by providing
access to the additional financial resources and infrastructure of
RBS and facilitating access to potential new FreeAgent customers,
there is an opportunity to accelerate the growth ambitions of
FreeAgent, including within FreeAgent's existing direct and
accountancy practice sales channels. It is expected that the
Acquisition will yield benefits through enhanced customer
engagement helping to support RBS's market-leading position in
business banking.
|
|
|
●
|
RBS intends to continue to use the FreeAgent brand in tandem with
its existing Royal Bank of Scotland and NatWest brands. FreeAgent's
capabilities will be offered to RBS's existing and new business
banking customers and, as is already the case, by FreeAgent to both
existing and new direct customers and accountancy
practices.
|
|
|
●
|
The Acquisition will be subject to the Conditions (including, if
required for the Acquisition, the FCA consenting to the acquisition
by RBS BidCo of control of FreeAgent) and further terms set out in
Appendix I to this announcement and to be set out in the Scheme
Document, which it is expected will be despatched to FreeAgent
Shareholders as soon as reasonably practicable and, in any event,
within 28 days of the date of this announcement (or such later date
as may be agreed with the Panel).
|
|
|
●
|
Commenting on the Acquisition, Andy Roberts, Chairman of FreeAgent,
said:
"The combination of FreeAgent and RBS makes sense for our talented
people, for our company's growth prospects, and for the
shareholders who have backed our journey so far. For those
shareholders, today's offer represents a 5x multiple on our current
revenues as well as a very substantial premium to our IPO
price. For the FreeAgent team, it opens up a huge opportunity
for them: a chance to target the entire RBS SME client base with a
product designed with their needs in mind. It is for these
reasons that I and my Board colleagues fully recommend the offer to
shareholders."
|
|
|
●
|
Commenting on the Acquisition, Ed Molyneux, Chief Executive of
FreeAgent said:
"Today's announcement represents the beginning of a new and
exciting chapter for FreeAgent. Our vision is 'making
businesses happier and more successful by putting them in control
of their finances' and this moves us closer to that vision. Having
developed a strong strategic partnership with
RBS and with
over 10,000 of their business banking customers having already
signed up to use FreeAgent's accounting solution, we look ahead to
the next chapter, where we will accelerate and further extend our
technology capabilities as part of a bigger group. Our working
together represents a really compelling opportunity and hence the
Board is intending to recommend the offer which we believe makes
both good strategic and financial sense."
|
|
|
●
|
Commenting on the Acquisition, Ross McEwan, Chief Executive Officer
of RBS said:
"RBS is pleased to have reached an agreement on a recommended
acquisition of FreeAgent. Since the beginning of our partnership,
we have been impressed by FreeAgent and its technology and are
excited by the enhanced offering we will be able to provide to our
customers. We believe that a technology-enabled solution for our
business banking customers will make it easier for our customers to
build their businesses safely and securely."
|
|
|
Enquiries:
|
|
|
RBS
|
|
|
Matt Waymark - Investor Relations
|
+44 20 7672
1758
|
|
BofA Merrill Lynch (RBS's Financial Adviser and Corporate
Broker)
|
|
|
Arif Vohra
Peter Luck
Geoff Iles
Pete Nicholls
|
+44 20 7268
1000
|
|
FreeAgent
|
|
|
Ed Molyneux - Chief Executive Officer
|
via FTI Consulting
|
|
N+1 Singer (FreeAgent's Financial Adviser and Corporate
Broker)
|
|
|
Sandy Fraser
Jen Boorer
|
+44 207 496 3000
|
|
FTI Consulting (Public relations adviser to FreeAgent)
|
|
|
Matt Dixon
Emma Hall
|
+44 203 727
1000
|
|
1.
|
INTRODUCTION
The boards of directors of The Royal Bank of Scotland Group Plc
("RBS") and FreeAgent are pleased to announce that they have
reached agreement on the terms of a recommended cash offer pursuant
to which RBS BidCo, a wholly-owned indirect subsidiary of RBS, will
acquire the entire issued and to be issued ordinary share capital
of FreeAgent. The Acquisition is to be effected by means of a
scheme of arrangement under Part 26 of the Companies
Act.
|
|||||
|
2.
|
THE ACQUISITION
Under the terms of the Acquisition, which will be subject to the
Conditions and further terms set out in Appendix I to this
announcement and to be set out in the Scheme Document, Scheme
Shareholders will be entitled to receive:
|
|||||
|
|
for each FreeAgent Share 120 pence (the "Offer Price") in
cash
|
|||||
|
|
The Acquisition values the entire existing issued and to be issued
ordinary share capital of FreeAgent at approximately £53
million. The Offer Price represents a premium of
approximately:
|
|||||
|
|
●
86.0 per cent. to the Closing Price per FreeAgent Share of 64.5
pence on 26 March 2018 (being the last Business Day prior to the
date of this announcement);
|
|||||
|
|
●
42.9 per cent. to the IPO Price per FreeAgent Share of 84 pence;
and
|
|||||
|
|
●
67.3 per cent. to the six month average price per FreeAgent Share
of 71.7 pence (being the average Closing Price for the six month
period ended on 26 March 2018, being the last Business Day prior to
the date of this announcement).
|
|||||
|
|
As further described in paragraph 11 below, under the terms of the
Scheme the consideration payable to the Founders will be satisfied,
in part, by the issue of shares in RBS BidCo which, in aggregate,
amount to approximately five per cent. of the issued share capital
of RBS BidCo. The shares in RBS BidCo constitute approximately 23.5
per cent. by value of the aggregate consideration due to the
Founders under the Acquisition.
|
|||||
|
|
It is expected that the Scheme Document will be published as soon
as is reasonably practicable, and in any event within 28 days of
this announcement (or such later date as may be agreed with the
Panel) and that, subject to the necessary approvals having been
obtained at the Court Meeting and General Meeting and the approval
of the Court, the Scheme will become Effective in the second
quarter of 2018.
|
|||||
|
|
The Offer Price assumes that no dividends or other distributions
will be declared by FreeAgent following the date of this
announcement. If any dividend or other distribution is authorised,
declared, made or paid in respect of the FreeAgent Shares on or
after the date of this announcement and before the Effective Date,
RBS BidCo reserves the right to reduce the Offer Price by the
amount of all or part of any such other dividend or other
distribution.
|
|||||
|
3.
|
BACKGROUND TO AND REASONS FOR THE ACQUISITION
RBS believes that the Acquisition represents an opportunity to help
develop its business banking proposition for SMEs in the
UK.
RBS is developing its customer facing channels, with an enhanced
digital offering supporting ongoing productivity improvements. RBS
believes that the acquisition of FreeAgent is consistent with this
strategy of developing innovative, digital customer
solutions.
RBS and FreeAgent have an existing commercial partnership, which,
following a successful pilot, has seen expanding customer numbers.
RBS offers FreeAgent's accounting software to its business banking
customers and following a rollout in the fourth quarter of 2017,
more than 10,000 RBS customers are already signed up to use the
FreeAgent solution.
RBS believes that the Acquisition will deliver the following key
benefits:
A product that offers enhanced capability in the UK business
banking sector
|
|||||
|
|
●
RBS believes that with FreeAgent's accounting product, coupled with
RBS's business banking platform, RBS will have an enhanced
proposition in the UK banking market.
|
|||||
|
|
Technology with innovative capability that will
enhance RBS's
platform and speed to market
|
|||||
|
|
●
RBS operates in a competitive market, requiring continued
technological development. RBS believes that FreeAgent's
development capability will support RBS's ability to deploy
technology in a timely and efficient manner, supporting both its
own platform and the development of future customer facing
propositions to capture potential
opportunities from
trends such as Open Banking.
|
|||||
|
|
●
RBS sees an opportunity to utilise FreeAgent's expertise in SaaS in
other parts of RBS's business and operations.
|
|||||
|
|
Opportunity to deliver increased customer engagement
|
|||||
|
|
●
RBS's customers who use FreeAgent's products value them and, given
RBS's existing customer base, there is an opportunity to generate
additional customer engagement.
|
|||||
|
|
●
FreeAgent's platform provides analytical capability which will
further support RBS's underwriting capabilities and could help
support customers through value added products.
|
|||||
|
4.
|
RECOMMENDATION
The FreeAgent Directors, who have been so advised by N+1 Singer as
to the financial terms of the Acquisition, consider the terms of
the Acquisition to be fair and reasonable. In providing its advice
to the FreeAgent Directors, N+1 Singer has taken into account the
commercial assessments of the FreeAgent Directors.
Accordingly, the FreeAgent Directors intend to recommend
unanimously that FreeAgent Shareholders vote in favour of the
Scheme at the Court Meeting and the Special Resolution to be
proposed at the General Meeting, as the FreeAgent Directors have
irrevocably undertaken to do in respect of their own beneficial
holdings of 3,813,481 FreeAgent Shares representing, in aggregate,
approximately 9.36 per cent. of the ordinary share capital of
FreeAgent in issue on 26 March 2018 (being the Latest Practicable
Date).
|
|||||
|
5.
|
BACKGROUND TO AND REASONS FOR THE RECOMMENDATION
FreeAgent was admitted to trading on AIM in November 2016, with a
clear strategy to drive future growth through a focus on UK
micro-businesses and their accountants, offering a premium,
differentiated product experience and a continued focus on
innovation. Since that time, FreeAgent has continued its focus on
building its UK subscriber base in parallel with developing new
features for its business and accounting software
solutions.
At 30 September 2017, FreeAgent had approximately 60,000
subscribers and, within its interim results statement for the six
months ended on that date, FreeAgent reported buoyant growth in the
direct sales channel and continued positive returns on the
investments made in customer acquisition strategies.
Accountancy practice channel revenues continued to grow in the same
period, although this growth was tempered due to the effect of
changes in IR35 legislation on public sector contractors. This
impacted FreeAgent's accountancy practice customers who provide
personal accountancy and company accountancy support services for
contractors supplying public sector organisations.
October 2016 saw the soft launch of a new commercial collaboration
between FreeAgent and RBS under which SME customers of RBS, which
meet FreeAgent's core target market profile, were offered the
branded FreeAgent SaaS solution as an additional part of their
account on-boarding process. Since that time, FreeAgent and RBS
have together engaged in a number of initiatives to integrate
systems and create roll-out processes. Whilst still in the early
stages of a rollout, by 4 December 2017 there were 1,800 monthly
fee-paying subscribers through this channel from RBS's
approximately 700,000 strong micro-business customer base and by
the Latest Practicable Date this figure had grown to over 3,800
monthly fee-paying subscribers.
One of the primary drivers of interest in FreeAgent's solution in
both the accountancy practice channel and the wider banking channel
is the transition to a digital tax regime through HMRC's Making Tax
Digital agenda ("MTD"). HMRC continues to work with FreeAgent and
various other software vendors to support the necessary new
interfaces and processes. In April 2019 those customers filing VAT
returns will do so within the new MTD system, and from 2020 onwards
it is likely that other areas of business tax will follow
suit.
In summary, FreeAgent's SaaS accounting solutions address a market
with structural growth drivers and which is experiencing rapid
change as a result of the growth of the digital economy.
Nonetheless, FreeAgent faces external challenges to the successful
implementation of its growth strategy which are outside FreeAgent
management's control. These challenges include HMRC's timetable for
MTD, which has seen two-year delays to the original timetable for
implementation, and changes to IR35 legislation which have tempered
near-term growth prospects in the accountancy practice channel.
Furthermore, whilst the FreeAgent Directors believe that
FreeAgent's SaaS solutions include a comprehensive list of features
which are tailored to address the specific needs of the
micro-business community and therefore provide FreeAgent with a
competitive advantage, FreeAgent's principal competitors are, in
the main, much larger and better capitalised entities which can
compete for new customers both by spending heavily on customer
acquisition and by adopting aggressive pricing
strategies.
It is against this background that the FreeAgent Directors have
considered the merits of the Acquisition, assessing FreeAgent's
future prospects as an independent entity and acknowledging its
relative lack of scale and therefore vulnerability to further
unforeseen market developments, as against the opportunity to
realise a certain cash value at a significant premium both to the
recent weighted average share price and to the IPO Price. Their
assessment is that the Acquisition terms fairly reflect FreeAgent's
current market position and its future prospects, recognising that FreeAgent's future prospects as an
independent entity are becoming increasingly driven by its
commercial partnership with RBS.
The FreeAgent Directors also view access to the greater financial
resources of RBS together with RBS's intention to further develop
FreeAgent's technology platform, and its support for the continued
growth of FreeAgent's existing direct and accountancy practice
sales channels, as a positive development for both customers and
employees of FreeAgent alike.
|
|||||
|
6.
|
IRREVOCABLE UNDERTAKINGS
RBS BidCo has received irrevocable undertakings from each of the
FreeAgent Directors who hold FreeAgent Shares to vote in favour of
the Scheme at the Court Meeting and the Special Resolution to be
proposed at the General Meeting, in respect of a total of 3,813,481
FreeAgent Shares, representing approximately 9.36 per cent. of the
ordinary share capital of FreeAgent in issue on 26 March 2018
(being the Latest Practicable Date).
RBS BidCo has also received irrevocable undertakings from the
FreeAgent Shareholders set out in Part B of Appendix III to this
announcement to vote in favour of the Scheme at the Court Meeting
and the Special Resolution to be proposed at the General Meeting,
in respect of a total of 16,860,430 FreeAgent Shares, representing
approximately 41.4 per cent. of the ordinary share capital of
FreeAgent in issue on 26 March 2018 (being the Latest Practicable
Date).
Further details of these irrevocable undertakings are set out in
Appendix III to this announcement.
|
|||||
|
7.
|
INFORMATION ON RBS AND RBS BIDCO
RBS is a UK-based banking and financial services company,
headquartered in Edinburgh. Through its operating subsidiaries, RBS
provides a wide range of products and services to personal,
commercial and large corporate and institutional customers through
a number of well-known brands. RBS is one of the leading banks in
the UK for business banking, serving approximately 1 million
SMEs.
RBS BidCo is a newly incorporated private limited company
registered in Scotland, which is indirectly wholly-owned by RBS.
RBS BidCo was formed for the purposes of implementing the
Acquisition. It has not traded prior to the date of this
announcement nor has it entered into any obligations other than in
connection with the Acquisition.
|
|||||
|
8.
|
INFORMATION ON, AND CURRENT TRADING OF, FREEAGENT
Headquartered in Edinburgh and with over 100 full-time employees,
FreeAgent is a provider of cloud-based SaaS accounting software
solutions and mobile applications designed specifically for UK
micro-businesses and their accountants. In 2017, micro-businesses
accounted for 96 per cent. of the UK's 5.7 million SMEs,
representing 33 per cent. of total private sector employment and 22
per cent. of total private sector turnover. With its easy to use,
intuitive software, FreeAgent's offering streamlines financial
management, bringing together a range of functionality from invoice
and expense management to VAT and payroll. FreeAgent even enables
users to generate and submit their self-assessment tax return
filings to HMRC automatically. Built and optimised over ten years,
FreeAgent has developed significant intellectual property and
know-how around its current platform which, in the Directors'
opinion, gives the Company a meaningful and sustainable competitive
advantage. During the financial year ended 31 March 2017, FreeAgent
recorded an adjusted EBITDA loss of £0.7 million on sales of
£8.0 million. Unaudited interim results for the six months
ended 30 September 2017 showed a 28 per cent. year-on-year increase
in revenues to £4.6 million and a reduced EBITDA loss for the
period of £0.3 million.
The commentary on outlook within the interim results statement
noted that: "Operating costs have grown in
line with management expectations as the Group continues to
consolidate and grow market share through a land, expand and retain
strategy. Our balance sheet is strong with net cash balances at the
period end of £3.4m and we anticipate monthly EBITDA breakeven
towards the end of calendar year 2018. We expect to report further
strategic progress and solid business growth during the second
half, building on the achievements of the first six months of the
year."
FreeAgent's trading performance since the interim results statement
on 5 December 2017 has been consistent with that
commentary.
|
|||||
|
9.
|
FINANCING
The cash consideration payable by RBS BidCo under the terms of the
Acquisition will be financed from RBS's existing cash
resources.
BofA Merrill Lynch, financial adviser to RBS and RBS BidCo, is
satisfied that sufficient resources are available to satisfy in
full the cash consideration payable under the terms of the
Acquisition.
|
|||||
|
10.
|
MANAGEMENT, EMPLOYEES, PENSION SCHEMES AND LOCATION OF
BUSINESS
Management
RBS's intention is that FreeAgent will continue to operate as an
operationally independent member of the RBS Group with its existing
executive management team under the leadership of FreeAgent's CEO,
Ed Molyneux. Day-to-day management responsibility for FreeAgent
will continue to be devolved to the FreeAgent executive team with
the Board of FreeAgent, comprised of key FreeAgent executives and
RBS executives, providing input on strategy and an appropriate
oversight, reporting and governance structure. FreeAgent will
operate in accordance with RBS's remuneration governance framework
and the FreeAgent executive management team will be eligible to
participate in RBS's discretionary bonus plan, under which they may
earn a discretionary annual bonus based upon a combination of RBS
Group, the FreeAgent business unit and personal performance
measures. Delivery and settlement of any bonus payments awarded
will be in line with RBS's group-wide bonus structure and subject
to the rules of the relevant RBS employee share plan in place at
the time of award.
Locations
Following completion of the Acquisition, RBS intends to retain
FreeAgent's corporate headquarters and headquarter functions in
Edinburgh. There is no expectation that the Acquisition will have
any immediate impact on the RBS Group's places of
business.
Employees, pension schemes and fixed assets
RBS believes that FreeAgent's employees will remain vital to
the business of the FreeAgent
Group and to delivering the strategic benefits that the Acquisition
is expected to deliver. RBS
does not envisage any material changes to employee compensation
packages including current levels of any contribution to defined
contribution pension arrangements (unless required to do so in
order to comply with applicable legislation). FreeAgent employees, including the
executive management team, will also be eligible to participate in
RBS's 'all employee' share
plans, specifically its Save As You Earn share option scheme and
Share Incentive Plan. RBS does
not intend to implement headcount reductions nor to centralise
existing finance, administration and support functions of
FreeAgent and accordingly there
will be no material change to the balance of the skills and
functions of FreeAgent's
employees and management as a result of the Acquisition. In addition, RBS does not intend that the
Acquisition will have any consequences in relation to the continued
employment of those of its employees who are not involved in the
FreeAgent business.
RBS confirms that it has no intention to redeploy any of the fixed
assets of FreeAgent following completion of the
Acquisition.
R&D
RBS believes that the Acquisition provides both RBS and FreeAgent
with enhanced R&D capability. RBS further believes that the
incremental financial resources it can provide to FreeAgent,
together with access to RBS's existing business and client
infrastructure, will enhance its abilities to develop new solutions
to better meet evolving and increasingly complex customer needs.
RBS's view is that over time there is an opportunity for FreeAgent
to become a key part of the bank's interface with the SME business
community.
RBS believes that FreeAgent offers additional capability to its own
R&D expertise and intends to leverage its technology and
intellectual property across the other parts of the RBS Group. As
such, within its current R&D budget, RBS intends to continue to
invest in FreeAgent's technology, which it believes is consistent
with RBS's stated strategy, and does not expect the Acquisition to
have any material impact on RBS's approach to R&D or its
technology strategy more broadly.
Brand strategy
It is RBS BidCo's intention that FreeAgent will operate as a
separate brand in its existing core markets, including FreeAgent's
existing accountancy practice sales channel and its direct
customers sales channel.
The above intention statements in relation to FreeAgent are
"post-offer intention statements" for the purposes of Rule 19.6 of
the Code and are not "post-offer undertakings" for the purposes of
Rule 19.5 of the Code.
|
|||||
|
11.
|
MANAGEMENT ARRANGEMENTS
RBS believes in the importance of the ongoing participation of the
Founders in the continued growth of FreeAgent due to their
knowledge of FreeAgent's business and their relationships with key
customers, suppliers, FreeAgent's employees and other stakeholders.
Accordingly, pursuant to the terms of the Shareholders' Agreement,
RBS has agreed the Management Arrangements with the Founders, the
principal features of which are summarised as follows:
|
|||||
|
|
●
In part consideration for the acquisition of their respective
FreeAgent Shares, the Founders will, under the terms of the Scheme,
receive between them, in aggregate, 2,192,543 fully paid B Ordinary
Shares in RBS BidCo. These fully paid B Ordinary Shares in RBS
BidCo constitute approximately 23.5 per cent. by value of the
aggregate
consideration due to the Founders under
the Acquisition.
|
|||||
|
|
●
The B Ordinary Shares will constitute approximately 5 per cent. of
the share capital of RBS BidCo with the balance of the share
capital (consisting of 41,658,332 A Ordinary Shares) held by
NatWest.
|
|||||
|
|
●
The B Ordinary Shares will carry no voting and dividend rights and
will only be transferable in very limited circumstances.
|
|||||
|
|
●
Each Founder's right to derive value from the B Ordinary Shares is
conditional on such Founder not being a Bad Leaver during the three
year period (the "Reference Period") starting on the first day of
the month following the Scheme becoming Effective or not breaching
certain non-competition covenants for a period thereafter.
|
|||||
|
|
●
The B Ordinary Shares will be subject to put and call option
arrangements.
|
|||||
|
|
●
The price for the B Ordinary Shares pursuant to such put and call
option arrangements (the "Reference Price") will be calculated by
reference to four metrics as follows:
|
|||||
|
|
o
the revenue generated from the services provided by the FreeAgent
Group over the Reference Period (35 per cent. weighting);
|
|||||
|
|
o
the number of active customers of the services provided by the
FreeAgent Group in the final month of the Reference Period (35 per
cent. weighting);
|
|||||
|
|
o
the EBITDA Margin of the FreeAgent Group for the final 12 months of
the Reference Period (15 per cent. weighting); and
|
|||||
|
|
o
the average net promoter scores from a selection of customers of
the services provided by the FreeAgent Group over the Reference
Period (15 per cent. weighting).
|
|||||
|
|
●
Performance by reference to each metric will be calculated in
accordance with agreed targets and there will be a maximum applied
to each.
|
|||||
|
|
●
The Founders will have the right to require NatWest to acquire
their B Ordinary Shares in a window following the agreement of the
Reference Price at the end of the Reference Period. If such right
is not exercised, NatWest will then have a window to exercise an
option to acquire all of the Founders' B Ordinary Shares for the
Reference Price.
|
|||||
|
|
●
In the event that any of the Founders ceases to be employed by the
FreeAgent Group during the Reference Period or certain events
relating to data breaches, adverse publicity or regulatory
censure/penalties take place, the Reference Price will be subject
to potential downwards adjustment dependent on the
circumstances.
|
|||||
|
|
●
In no circumstances will the Reference Price exceed a sum equal to
2 x the Offer Price. Subject to limited exceptions, the Reference
Price cannot be lower than 0.7 x the Offer Price.
|
|||||
|
|
●
In the event of a sale of RBS BidCo, the Founders will be required
to sell their shares at the same price as that offered to the other
shareholders subject always to the Founders not receiving more than
2 x the Offer Price.
|
|||||
|
|
The Management Arrangements will be described in more detail in the
Scheme Document.
Rule 16 of the Code provides that, except with the consent of the
Panel, an offeror or persons acting in concert with it may not make
any arrangements with shareholders, and may not deal or enter into
arrangements to deal in shares of an offeree company, or enter into
arrangements which involve acceptance of an offer, either during an
offer or when one is reasonably in contemplation, if there are
favourable conditions attached which are not being extended to all
shareholders.
In relation to the Management Arrangements, the Panel has agreed to
allow the Management Arrangements to be made on the terms set out
above and subject to the Conditions notwithstanding the fact that
the opportunity to participate in such arrangements is not being
extended to all FreeAgent Shareholders. For the purposes of Rule
16.2 of the Code, N+1 has confirmed to the FreeAgent Directors
that, in its opinion, the terms of the Management Arrangements are
fair and reasonable. In providing its opinion, N+1 has taken into
account the commercial assessments of the FreeAgent
Directors.
|
|||||
|
12.
|
FREEAGENT SHARE OPTION SCHEMES AND WARRANTS
Participants in the FreeAgent Share Option Schemes and holders of
FreeAgent Warrants will be contacted regarding the effect of the
Acquisition on their rights, and appropriate proposals will be made
to such parties in due course in accordance with the
Code.
|
|||||
|
13.
|
OPENING POSITION DISCLOSURES AND INTERESTS
RBS BidCo confirms that it will be making an Opening Position
Disclosure, setting out the details required to be disclosed by it
under Rule 8.1(a) of the City Code.
|
|||||
|
14.
|
OFFER-RELATED ARRANGEMENTS
Confidentiality Agreement
RBS and FreeAgent entered into a confidentiality agreement on 2
February 2018 (the "Confidentiality Agreement") pursuant to which
each of RBS and FreeAgent has undertaken to keep certain
information relating to the other party confidential and not to
disclose it to third parties (other than to permitted disclosees)
unless required by law or regulation.
The Confidentiality Agreement also contains undertakings from RBS
that, for a period of six months from the date of the
Confidentiality Agreement, RBS shall not, without the prior written
consent of FreeAgent, acquire or offer to acquire any interest in
securities of FreeAgent (which undertaking ceased to apply
following this announcement) and that, for a period of 12 months
from the date of the Confidentiality Agreement, RBS shall not
solicit certain employees of FreeAgent or certain consultants or
independent contractors engaged by FreeAgent, subject to customary
carve-outs.
The Confidentiality Agreement terminates upon the earlier of the
completion of the Acquisition or the date falling 24 months from
the date of the Confidentiality Agreement.
Co-operation Agreement
RBS and FreeAgent have entered into the co-operation agreement (the
"Co-operation Agreement") pursuant to which RBS and FreeAgent have
undertaken to co-operate with one another and to provide such
details as are required to facilitate the implementation of
arrangements in respect of: (a) the FreeAgent Share Option Schemes,
including: (i) agreeing to prepare proposals to be put to holders
of awards under the FreeAgent Share Option Schemes in connection
with the Acquisition; and (ii) to agree that FreeAgent will propose
an amendment to its articles of association at the General Meeting
to include provisions to enable FreeAgent Shares issued under the
FreeAgent Share Option Schemes after the Scheme Record Time to be
acquired by RBS BidCo for the Offer Price; and (b) the satisfaction
of the FCA Condition, whereby RBS has agreed to use reasonable
endeavours to procure the satisfaction of the FCA Condition, as
soon as reasonably practicable and, without prejudice thereto, to
use reasonable endeavours to secure the clearances and
authorisations to satisfy the FCA Condition and RBS and FreeAgent
have agreed to co-operate and provide each other with reasonable
information, assistance and access in relation to the filing,
submission and notification of such regulatory clearances and
authorisations.
The Co-operation Agreement will terminate if the parties agree so
in writing; if the Scheme is not approved at the General Meeting or
if the Scheme is not sanctioned by the Court; if the Acquisition
has not completed by the Long-stop Date; or on the Effective
Date.
Shareholders' Agreement
RBS BidCo, NatWest and the Founders have entered into the
Shareholders' Agreement pursuant to which they have agreed the
terms upon which the Management Arrangements will be implemented.
The material terms of that agreement are summarised at paragraph 11
above.
|
|||||
|
15.
|
STRUCTURE OF THE ACQUISITION
It is intended that the Acquisition will be effected by means of a
scheme of arrangement between FreeAgent and Scheme Shareholders
under Part 26 of the Companies Act.
The purpose of the Scheme is to provide for RBS BidCo to become the
holder of the FreeAgent Shares in consideration for the payment by
RBS BidCo of the cash consideration on the basis set out in
paragraph 2 above and the satisfaction of the obligations envisaged
by the Management Arrangements.
To become Effective, the Scheme must be approved by a majority in
number of the Scheme Shareholders voting at the Court Meeting,
either in person or by proxy, and representing at least 75 per
cent. in value of the Scheme Shares which are voted at the Court
Meeting, together with the approval of the Court and the passing at
the General Meeting of the Special Resolution necessary to
implement the Scheme.
The Scheme will also be subject to the Conditions (including the
FCA Condition) and further terms set out in Appendix I to this
announcement and to be set out in the Scheme Document.
Once the necessary approvals from Scheme Shareholders have been
obtained and the other Conditions have been satisfied or (where
applicable) waived, the Scheme must be approved by the Court. The
Scheme will become Effective in accordance with its terms upon a
copy of the Court Order being delivered to the Registrar of
Companies for registration. Subject to satisfaction of the
Conditions and the above process, the Scheme is expected to become
Effective in the second quarter of 2018.
The Acquisition will lapse if the Scheme does not become Effective
by the Long-stop Date.
Upon the Scheme becoming Effective, it will be binding on all
FreeAgent 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).
Further details of the Scheme, including an indicative timetable
for its implementation, will be set out in the Scheme Document,
which is expected to be despatched as soon as reasonably
practicable. The timing of events which relate to the
implementation of the Acquisition is, however, subject, amongst
other things, to the approval of the Court and is therefore subject
to change.
|
|||||
|
16.
|
CONDITIONS TO THE ACQUISITION
The Acquisition will be subject to the Conditions and further terms
set out in Appendix I to this announcement and to be set out in the
Scheme Document.
|
|||||
|
17.
|
DE-LISTING AND RE-REGISTRATION
Prior to the Scheme becoming Effective, FreeAgent will make an
application to the London Stock Exchange to cancel the trading of
the FreeAgent Shares on AIM, to take effect shortly after the
Effective Date. The last day of dealings in FreeAgent Shares on AIM
is expected to be the Business Day immediately prior to the Court
Hearing and no transfers will be registered after 6.00p.m. on that
date.
On the Effective Date, FreeAgent will become a subsidiary of RBS
BidCo and share certificates in respect of FreeAgent Shares will
cease to be valid and should be destroyed. In addition,
entitlements to FreeAgent Shares held within the CREST system will
be cancelled on the Effective Date. It is also proposed that,
following the Effective Date and after the FreeAgent Shares are
delisted, FreeAgent will be re-registered as a private limited
company.
|
|||||
|
18.
|
GENERAL
RBS BidCo reserves the right, with the consent of the Panel, to
elect to implement the acquisition of the FreeAgent Shares by way
of a Takeover Offer as an alternative to the Scheme. In such event,
the Acquisition will be implemented on substantially the same terms
as those which would apply to the Scheme (subject to appropriate
amendments, including an acceptance condition set at 90 per cent.
of the shares to which such Takeover Offer relates or such lesser
percentage, being more than 50 per cent., as RBS BidCo may decide).
However, if RBS BidCo were to elect to implement the Acquisition by
way of a Takeover Offer, that Takeover Offer will be made in
compliance with all applicable laws and regulations, including the
City Code.
If the Acquisition were to be effected by way of a Takeover Offer
and that offer becomes or is declared unconditional in all respects
and sufficient acceptances are received in respect of that offer,
RBS would intend to: (i) make an application to the London Stock
Exchange to cancel trading of FreeAgent Shares on AIM; and (ii)
exercise its rights (to the extent such rights are available) to
apply the provisions of Chapter 3 of Part 28 of the Companies Act
to acquire compulsorily the remaining FreeAgent Shares in respect
of which such Takeover Offer has not been accepted.
The Acquisition will be made subject to the Conditions and further
terms set out in Appendix I to this announcement and to be set out
in the Scheme Document. The bases and sources of certain financial
information contained in this announcement are set out in Appendix
II to this announcement. A summary of the irrevocable undertakings
received by RBS BidCo is contained in Appendix III to this
announcement. Certain terms used in this announcement are defined
in Appendix IV to this announcement.
The Acquisition will be subject to the applicable requirements of
the AIM Rules, the City Code, the Panel, the London Stock Exchange
and the FCA.
|
|||||
|
19.
|
DOCUMENTS ON DISPLAY
Copies of the following documents will be made available on RBS's
and FreeAgent's websites at https://investors.rbs.com and
www.https://www.freeagent.com/investors, respectively until the end
of the Offer Period:
|
|||||
|
|
●
this announcement;
|
|||||
|
|
●
the irrevocable undertakings referred to in paragraph 6 above and
summarised in Appendix III to this announcement;
|
|||||
|
|
●
the Confidentiality Agreement;
|
|||||
|
|
●
the Co-operation Agreement; and
|
|||||
|
|
●
the Shareholders' Agreement.
|
|||||
|
Enquiries:
|
|
|
RBS
|
|
|
Matt Waymark - Investor Relations
|
+44 20 7672
1758
|
|
BofA Merrill Lynch (RBS's Financial Adviser and Corporate
Broker)
|
|
|
Arif Vohra
Peter Luck
Geoff Iles
Pete Nicholls
|
+44 20 7628
1000
|
|
FreeAgent
|
|
|
Ed Molyneux - Chief Executive Officer
|
via FTI Consulting
|
|
N+1 Singer (FreeAgent's Financial Adviser and Corporate
Broker)
|
|
|
Sandy Fraser
Jen Boorer
|
+44 207 496 3000
|
|
FTI Consulting (Public relations adviser to FreeAgent)
|
|
|
Matt Dixon
Emma Hall
|
+44 203 727
1000
|
|
1.
|
The Acquisition will be conditional upon the Scheme becoming
otherwise unconditional and becoming Effective, subject to the
provisions of the City Code, by not later than 11.59 p.m. on 31
December 2018 or such later date (if any) as RBS BidCo and
FreeAgent may, with the consent of the Panel, agree and (if
required) the Court may allow (the "Long-stop Date").
|
|
|
2.
|
The Scheme is subject to:
|
|
|
|
(a)
|
the approval of the Scheme by a majority in number representing 75
per cent. or more in value of the Scheme Shareholders entitled to
vote and present and voting, either in person or by proxy, at the
Court Meeting (and at any separate class meeting which may be
required by the Court or at any adjournment of any such meeting)
which is held on or before the 22nd
day after the expected date of the
Court Meeting to be set out in the Scheme Document (or such later
date (if any) as may be agreed by RBS BidCo and FreeAgent and the
Court may allow);
|
|
|
(b)
|
all resolutions necessary to approve and implement the Scheme, as
set out in the notice of the General Meeting (including, without
limitation, the Special Resolution), being duly passed by Scheme
Shareholders at the General Meeting or at any adjournment of that
meeting which is held on or before the 22nd
day after the expected date of the
General Meeting to be set out in the Scheme Document (or such later
date (if any) as may be agreed by RBS BidCo and FreeAgent and the
Court may allow); and
|
|
|
(c)
|
the sanction of the Scheme (without modification, or with such
modifications as are agreed by RBS BidCo and FreeAgent) by the
Court on or before the 22nd
day after the expected date of the
Court Hearing to be set out in the Scheme Document (or such later
date (if any) as may be agreed by RBS BidCo and FreeAgent and the
Court may allow) and a copy of the Court Order being delivered for
registration to the Registrar of Companies.
|
|
3.
|
In addition, subject as stated in Part B of this Appendix I and to
the requirements of the Panel, the Acquisition will be conditional
upon the following Conditions and, accordingly, 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:
|
|
|
|
(a)
|
no 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 or order, or taken any
other step that would or might reasonably be expected
to:
|
|
|
|
(i)
|
make
the Acquisition, its implementation or the acquisition or the
proposed acquisition by RBS BidCo or any member of the Wider RBS
Group of any shares or other securities in, or control or
management of, FreeAgent or any member of the Wider FreeAgent Group
void, illegal or unenforceable in any jurisdiction, or otherwise
directly or indirectly restrain, prevent, prohibit, restrict, delay
or otherwise adversely interfere with the same or impose additional
conditions or obligations with respect to the Acquisition (or its
implementation) or such acquisition, or otherwise impede, challenge
or interfere with the Acquisition (or its implementation) or such
acquisition, or require adverse amendment to the terms of the
Acquisition or the acquisition or proposed acquisition of any
FreeAgent Shares or the acquisition of control or management of
FreeAgent or any member of the Wider FreeAgent Group by RBS BidCo
or any member of the Wider RBS Group;
|
|
|
|
(ii)
|
limit
or materially delay the ability of any member of the Wider RBS
Group or any member of the Wider FreeAgent Group to acquire or to
hold or to exercise effectively, directly or indirectly, all or any
rights of ownership in respect of shares or other securities (or
the equivalent) in, or to exercise voting or management control
over, any member of the Wider FreeAgent Group or any member of the
Wider RBS Group, as the case may be, taken as a whole;
|
|
|
|
(iii)
|
require,
prevent or materially delay any divestiture or alter the terms
envisaged for any proposed divestiture by any member of the Wider
RBS Group of any shares or other securities in any member of the
Wider FreeAgent Group (in any case to an extent which is material
in the context of the Wider RBS Group or the Wider FreeAgent Group,
as the case may be, taken as a whole);
|
|
|
|
(iv)
|
require,
prevent or materially delay any divestiture or alter the terms
envisaged for any proposed divestiture by any member of the Wider
RBS Group or by any member of the Wider FreeAgent Group of all or
any part of their respective businesses, assets or properties or
limit the ability of any of them to conduct all or any part of
their respective businesses or to own or control any of their
respective assets or properties or any part thereof (in any case to
an extent which is or is reasonably likely to be material in the
context of the Wider RBS Group or the Wider FreeAgent Group, as the
case may be, taken as a whole);
|
|
|
|
(v)
|
other
than in connection with the implementation of the Acquisition,
including, without limitation pursuant to sections 974 to 991 of
the Companies Act, require any member of the Wider RBS Group or of
the Wider FreeAgent Group to subscribe for or acquire, or to offer
to subscribe for or acquire, any shares or other securities (or the
equivalent) or interest in any member of the Wider FreeAgent
Group;
|
|
|
|
(vi)
|
limit
the ability of any member of the Wider RBS Group or of the Wider
FreeAgent Group to integrate or co-ordinate its business, or any
part of it, with the businesses or any part of the businesses of
any other member of the Wider RBS Group or of the Wider FreeAgent
Group in each case in a manner which is material in the context of
the Wider RBS Group taken as a whole or the Wider FreeAgent Group
taken as a whole, as the case may be;
|
|
|
|
(vii)
|
result
in any member of the Wider RBS Group or the Wider FreeAgent Group
ceasing to be able to carry on business under any name under which
it presently does so (in any case to an extent which is material in
the context of the Wider RBS Group taken as a whole or the Wider
FreeAgent Group taken as a whole, as the case may be);
or
|
|
|
|
(viii)
|
otherwise
materially adversely affect the business, assets, profits,
financial or trading position or prospects of the Wider RBS Group
taken as a whole or the Wider FreeAgent Group taken as a
whole;
|
|
|
(b)
|
all material notifications, filings and/or applications with Third
Parties which are necessary under applicable law or regulations
having been made, all appropriate waiting and other time periods
(including any extensions of such waiting and other time periods)
under any applicable legislation or regulation of any relevant
jurisdiction having expired, lapsed or been terminated (as
appropriate) and all statutory or regulatory obligations in any
relevant jurisdiction having been complied with, in each case in
connection with the Acquisition or the acquisition or proposed
acquisition of any shares or other securities in, or control of,
FreeAgent or any other member of the Wider FreeAgent Group by any
member of the Wider RBS Group or the carrying on by any member of
the Wider FreeAgent Group of its business;
|
||
|
|
(c)
|
if such approval is required, the Financial Conduct Authority
approving either:
|
||
|
|
|
(i)
|
unconditionally, pursuant to section 189(4)(a) or section 189(6) of
the Financial Services and Markets Act 2000, as amended ("FSMA")
(which applies to FreeAgent pursuant to Paragraph 5 of Part 1 of
Schedule 6 to the Payment Services Regulations 2017);
or
|
|
|
|
|
(ii)
|
subject to one or more conditions, pursuant to section 189(7) of
FSMA, that are satisfactory to RBS BidCo acting
reasonably,
the changes in control over FreeAgent, arising out of the
Acquisition or its implementation, by RBS BidCo, each controller of
RBS BidCo and any other person that would become a controller. In
each case, for the purposes of this paragraph 3(c) only,
"controller" shall have the meaning set out in section 422 of FSMA
and "control" shall be interpreted in accordance with Part XII of
FSMA;
|
|
|
|
(d)
|
all Authorisations which are necessary in any relevant jurisdiction
for or in respect of the Acquisition (or its implementation) or the
acquisition or proposed acquisition of any shares or other
securities in, or control or management of, FreeAgent or any other
member of the Wider FreeAgent Group by RBS BidCo or any member of
the Wider RBS Group or the carrying on by any member of the Wider
FreeAgent Group of its business having been obtained, in terms and
in a form reasonably satisfactory to RBS BidCo from all appropriate
Third Parties or from any persons or bodies with whom any member of
the Wider FreeAgent Group has entered into contractual arrangements
and such Authorisations together with all authorisations necessary
for any member of the Wider FreeAgent Group to carry on its
business remaining in full force and effect, and there being no
notice or other intimation of any intention to revoke, suspend,
restrict, modify or not to renew any of the same having been made
in connection with the Acquisition, where the absence of such
Authorisation would have a material adverse effect on the Wider
FreeAgent Group taken as a whole;
|
||
|
|
(e)
|
save as Disclosed, there being no provision of any arrangement,
agreement, lease, licence, permit, franchise or other instrument to
which any member of the Wider FreeAgent Group is a party, or by or
to which any such member or any of its assets is or may be bound,
entitled or subject, or any circumstance, which, in each case as a
consequence of the Acquisition (or its implementation) or the
acquisition or proposed acquisition by RBS BidCo or any member of
the Wider RBS Group or otherwise of any shares or other securities
(or the equivalent) in, or control or management of, FreeAgent or
any other member of the Wider FreeAgent Group, could reasonably be
expected to result in (in any case to an extent which is or would
be material in the context of the Wider FreeAgent Group taken as
whole):
|
||
|
|
|
(i)
|
any monies borrowed by or any other indebtedness or liabilities
(actual or contingent) of, or any grant available to, any member of
the Wider FreeAgent Group being or becoming repayable or being
capable of being declared repayable immediately or prior to their
or its stated maturity or the ability of any member of the Wider
FreeAgent Group to borrow monies or incur any indebtedness being
withdrawn or inhibited or becoming capable of being withdrawn or
inhibited;
|
|
|
|
|
(ii)
|
the creation, save in the ordinary course of business, of any
mortgage, charge or other security interest over the whole or any
part of the business, property, assets or interests of any member
of the Wider FreeAgent Group or any such mortgage, charge or other
security interest (wherever and whenever created, arising or having
arisen) becoming enforceable;
|
|
|
|
|
(iii)
|
any such arrangement, agreement, lease, licence, permit, franchise
or instrument, or the rights, liabilities, obligations or interests
of any member of the Wider FreeAgent Group thereunder, being
terminated or adversely modified or affected or any adverse action
being taken;
|
|
|
|
|
(iv)
|
any asset or interest of any member of the Wider FreeAgent Group or
any asset the use of which is enjoyed by any member of the Wider
FreeAgent Group being or falling to be disposed of or charged or
ceasing to be available to any member of the Wider FreeAgent Group
or any right arising under which any such asset or interest could
be required to be disposed of or charged or could cease to be
available to any member of the Wider FreeAgent Group otherwise than
in the ordinary course of business;
|
|
|
|
|
(v)
|
any member of the Wider FreeAgent Group ceasing to be able to carry
on business under any name under which it presently does
so;
|
|
|
|
|
(vi)
|
the creation or assumption of any liabilities (actual or
contingent) by any member of the Wider FreeAgent Group other than
in the ordinary course of business;
|
|
|
|
|
(vii)
|
the rights, liabilities, obligations or interests of any member of
the Wider FreeAgent Group under any such arrangement, agreement,
lease, licence, permit, franchise or other instrument or the
interests or business of any such member in or with any other
person, firm, company or body (or any agreements or arrangements
relating to any such interests or business) being terminated,
adversely modified or affected; or
|
|
|
|
|
(viii)
|
the financial or trading position or the prospects or the value of
the Wider FreeAgent Group (taken as a whole) being prejudiced or
adversely affected,
which in each of the foregoing cases is material and adverse in the
context of the Wider FreeAgent Group (taken as a whole) and no
event having occurred which, under any provision of any such
arrangement, agreement, lease, license, permit, franchise or other
instrument to which any member of the Wider FreeAgent Group is a
party, or by or to which any such member or any of its assets may
be found entitled or subject, could result in any of the events or
circumstances which are referred to in sub-paragraphs (i) to
(viii) of this Condition 3(e) of this Appendix I in any case
to an extent which is or would be material in the context of the
Wider FreeAgent Group;
|
|
|
|
(f)
|
no circumstance or event having arisen or occurred, respectively,
in relation to any intellectual property owned or used by any
member of the Wider FreeAgent Group which would have a material
adverse effect on the Wider FreeAgent Group (taken as a whole),
including:
|
||
|
|
|
(i)
|
any member of the Wider FreeAgent Group losing its title to any
intellectual property material to its business, or any intellectual
property owned by the Wider FreeAgent Group, which is material to
the Wider FreeAgent Group (taken as a whole) being revoked,
cancelled or declared invalid;
|
|
|
|
|
(ii)
|
any claim being asserted in writing or threatened in writing by any
person challenging the ownership of any member of the Wider
FreeAgent Group to, or the validity or effectiveness of, any of its
intellectual property, which is material to the Wider FreeAgent
Group (taken as a whole); or
|
|
|
|
|
(iii)
|
any agreement regarding the use of any intellectual property
licensed to or by any member of the Wider FreeAgent Group, which is
material to the Wider FreeAgent Group (taken as a whole), being
terminated or varied;
|
|
|
|
(g)
|
save as Disclosed, no member of the Wider FreeAgent Group having
since 31 March 2017:
|
||
|
|
|
(i)
|
issued or agreed to issue, or authorised or proposed or announced
its intention to authorise or propose the issue of, additional
shares or securities of any class, or securities convertible into
or exchangeable for, or rights, warrants or options to subscribe
for or acquire, any such shares or convertible securities (save as
between FreeAgent and wholly-owned subsidiaries of FreeAgent and
save for the issue of FreeAgent Shares pursuant to or in connection
with the exercise or vesting of options or awards granted under, or
the grant of options or awards under, the FreeAgent Share Option
Schemes);
|
|
|
|
|
(ii)
|
purchased or redeemed or repaid or proposed the purchase,
redemption or repayment of any of its own shares or other
securities (or the equivalent) or reduced or, save in respect of
the matters mentioned in sub-paragraph (i) above made or authorised
any other change to any part of its share capital other than
pursuant to the implementation of the Acquisition;
|
|
|
|
|
(iii)
|
recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other
distribution, whether payable in cash or otherwise save for any
dividend declared before the Effective Date by any wholly-owned
subsidiary of FreeAgent to FreeAgent or any of its wholly-owned
subsidiaries;
|
|
|
|
|
(iv)
|
save for transactions between FreeAgent and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries, made,
authorised, proposed or announced an intention to make, propose or
authorise any change in its loan capital;
|
|
|
|
|
(v)
|
(save for transactions between FreeAgent and its wholly-owned
subsidiaries or between such wholly-owned subsidiaries) merged
with, demerged or acquired any body corporate, partnership or
business or acquired or disposed of or transferred, mortgaged or
charged or created any security interest over any material assets
or any right, title or interest in any material assets (including
shares in any undertaking and trade investments) or authorised or
announced the same, in any such case to the extent that is material
in the context of the Wider FreeAgent Group (taken as a
whole);
|
|
|
|
|
(vi)
|
issued, authorised or proposed or announced an intention to
authorise or propose the issue of, or made any change in or to, any
debentures or, other than trade credit incurred in the ordinary
course of business, incurred or increased any indebtedness or
liability (actual or contingent) except as between FreeAgent and
any of its wholly owned subsidiaries or between such subsidiaries,
which in any case is material in the context of the Wider FreeAgent
Group taken as a whole;
|
|
|
|
|
(vii)
|
other than in the ordinary course of business, entered into,
varied, authorised, proposed or announced an intention to enter
into or vary any contract, agreement, transaction, arrangement or
commitment (whether in respect of capital expenditure or otherwise)
which:
|
|
|
|
|
|
(aa)
|
is of a long term, onerous or unusual nature or magnitude or which
involves or is or is reasonably likely to involve an obligation of
such a nature or magnitude; or
|
|
|
|
|
(bb)
|
restricts or could reasonably be expected to restrict the business
of any member of the Wider FreeAgent Group,
and which is, in any such case, material and adverse in the context
of the Wider FreeAgent Group;
|
|
|
|
(viii)
|
entered into, implemented, effected or authorised any merger,
demerger, reconstruction, amalgamation, scheme, commitment or other
transaction or arrangement in respect of itself or another member
of the Wider FreeAgent Group;
|
|
|
|
|
(ix)
|
entered into or varied or made an offer (which remains open for
acceptance) to vary the terms of any contract, agreement,
commitment or arrangement with any of the directors or senior
executives of any member of the Wider FreeAgent Group or changed or
entered into any commitment to change the terms of any of the
FreeAgent Share Option Schemes save for salary increases and
bonuses not resulting in total annual remuneration of any
individual exceeding the immediately preceding year's remuneration
by more than three per cent. or other bonuses or variations of
terms in the ordinary course of business which are not material in
the context of the Acquisition or the Wider FreeAgent
Group;
|
|
|
|
|
(x)
|
taken any corporate action or had any legal proceedings started, or
threatened against it for its winding-up (voluntarily or
otherwise), dissolution or reorganisation or for the appointment of
a receiver, administrator, administrative receiver, trustee or
similar officer of all or any material part of its assets and
revenues or any analogous proceedings in any jurisdiction which in
any case is material in the context of the Wider FreeAgent Group
taken as a whole;
|
|
|
|
|
(xi)
|
been unable, or admitted in writing that it is unable, to pay its
debts or having stopped or suspended (or threatened to stop or
suspend) payment of its debts generally or having entered into or
taken steps to enter into a moratorium, composition, compromise or
arrangement with its creditors in respect of its debts or ceased or
threatened to cease carrying on all or a substantial part of its
business;
|
|
|
|
|
(xii)
|
waived, settled or compromised any claim (other than in the
ordinary and usual course of business) to an extent which is
material in the context of the Wider FreeAgent Group taken as a
whole;
|
|
|
|
|
(xiii)
|
terminated or varied the terms of any agreement or arrangement
between any member of the Wider FreeAgent Group and any other
person in a manner which would or might reasonably be expected to
have a material adverse effect on the financial position or
prospects of the Wider FreeAgent Group taken as a
whole;
|
|
|
|
|
(xiv)
|
made any alteration to its articles of association other than as
required to implement the Acquisition;
|
|
|
|
|
(xv)
|
put in place any pension schemes for its directors, employees or
their dependants or made or agreed or consented to any change
to:
|
|
|
|
|
|
(aa)
|
the terms of the trust deeds constituting the pension schemes (if
any) established for its directors, employees or their dependants;
or
|
|
|
|
|
(bb)
|
the benefits which accrue, or to the pensions which are payable,
thereunder; or
|
|
|
|
|
(cc)
|
the basis on which qualification for, or accrual or entitlement to,
such benefits or pensions are calculated or determined;
or
|
|
|
|
|
(dd)
|
the basis upon which the liabilities (including pensions) of such
pension schemes are funded or made,
|
|
|
|
|
or agreed or consented to any change to the trustees involving the
appointment of a trust corporation; or
|
|
|
|
|
(xvi)
|
proposed, agreed to provide or modified the terms of any share
option scheme, incentive scheme or other benefit relating to the
employment or termination of employment of any person employed by
the Wider FreeAgent Group in a manner which is material in the
context of the Wider FreeAgent Group;
|
|
|
|
(h)
|
since 31 March 2017, save as Disclosed:
|
||
|
|
|
(i)
|
no adverse change or deterioration having occurred in the business,
assets, financial or trading position or profits or prospects of
any member of the Wider FreeAgent Group which in any case is
material in the context of the Wider FreeAgent Group taken as a
whole and no circumstances have arisen which would or might
reasonably be expected to result in any such adverse
change;
|
|
|
|
|
(ii)
|
no litigation, arbitration proceedings, prosecution or other legal
proceedings to which any member of the Wider FreeAgent Group is or
may become a party (whether as plaintiff, defendant or otherwise)
having been threatened, announced, implemented or instituted by or
against or remaining outstanding against or in respect of any
member of the Wider FreeAgent Group which in any case is material
in the context of the Wider FreeAgent Group taken as a
whole;
|
|
|
|
|
(iii)
|
other than as a result of the Acquisition, no enquiry or
investigation by, or complaint or reference to, any Third Party
having been threatened, announced, implemented, instituted by or
against or remaining outstanding against or in respect of any
member of the Wider FreeAgent Group which in any such case might
reasonably be excepted to be material in the context of the Wider
FreeAgent Group taken as a whole;
|
|
|
|
|
(iv)
|
no contingent or other liability having arisen or become apparent
to any member of the Wider RBS Group or increased which might
reasonably be expected to adversely affect any member of the Wider
FreeAgent Group which is material in the context of the Wider
FreeAgent Group taken as a whole;
|
|
|
|
|
(v)
|
no claim being made and no circumstance having arisen which might
reasonably be expected to lead to a claim being made under the
insurance of any member of the Wider FreeAgent Group where such
claim would not be covered by such insurance and where such claim
is material in the context of the Wider FreeAgent Group taken as a
whole; and
|
|
|
|
|
(vi)
|
no steps having been taken which are reasonably likely to result in
the withdrawal, cancellation or termination or modification of any
licence, permit or consent held by any member of the Wider
FreeAgent Group which is necessary for the proper carrying on by
such member of its business and which is material in the context of
the Wider FreeAgent Group taken as a whole;
|
|
|
|
(i)
|
save as Disclosed, RBS BidCo not having discovered:
|
||
|
|
|
(i)
|
that any financial or business or other information concerning the
Wider FreeAgent Group disclosed at any time prior to the date of
this announcement by or on behalf of any member of the Wider
FreeAgent Group, whether publicly, to any member of the Wider RBS
Group or otherwise, is materially misleading or contains any
material misrepresentation of fact or omits to state a fact
necessary to make any information contained therein not materially
misleading which is material in the context of the Wider FreeAgent
Group taken as a whole;
|
|
|
|
|
(ii)
|
circumstances exist whereby a person or class of persons would be
likely to have a claim against a member of the Wider FreeAgent
Group in respect of any product or service used therein now or
previously sold or carried out by any past or present member of the
Wider FreeAgent Group which is or would be material in the context
of the Wider FreeAgent Group taken as a whole;
|
|
|
|
|
(iii)
|
that any past or present member, director, officer or employee of,
or person that performs or has performed services for or on behalf
of, the Wider FreeAgent Group is or has at any time engaged in any
activity, practice or conduct which would constitute an offence
under the Bribery Act 2010, the US Foreign Corrupt Practices Act of
1977 or any other applicable anti-corruption
legislation;
|
|
|
|
|
(iv)
|
that any material asset of any member of the Wider FreeAgent Group
constitutes criminal property as defined by section 340(3) of the
Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that
definition);
|
|
|
|
|
(v)
|
that any past or present member, director, officer or employee of
the Wider FreeAgent Group has engaged in any business with, made
any investments in, made any funds or assets available to or
received any funds or assets from: (a) any government, entity or
individual in respect of which US or European Union persons, or
persons operating in those 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 United States Office of Foreign Assets Control
or HM Treasury; or (b) 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 FreeAgent Group; or
|
|
|
|
|
(vi)
|
that no member of the Wider FreeAgent Group being engaged in any
transaction which would cause RBS BidCo or any member of the Wider
RBS Group to be in breach of any law or regulation as a result of
the completion of the Acquisition, including the economic sanctions
of the United States Office of Foreign Assets Control or HM
Treasury, 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.
|
|
|
1.
|
Subject to the requirements of the Panel or subject to any
requirement of the Court, RBS BidCo reserves the right to waive all
or any of the Conditions in Part A above (save for the Conditions contained in
paragraph 2 which cannot be waived), in whole or in part. The
Scheme will not become Effective unless the Conditions (other than
the Condition in paragraph 2(c) of Part A to this Appendix I)
have been fulfilled or (if capable of waiver) waived, by no later
than 11:59 p.m. on the date immediately preceding the date of the
Court Hearing, failing which the Scheme will lapse. RBS BidCo
undertakes that it will no later than 11:59 p.m. on the date
immediately preceding the date of the Court Hearing provide a
notice in writing to FreeAgent that either (i) the Conditions
(other than the Condition in paragraph 2(c) of Part A of this
Appendix I) have been satisfied or that RBS BidCo has waived or
treated as satisfied all such Conditions; or (ii) it intends to
invoke or treat as incapable of satisfaction each or any Condition,
which will always be subject to the Panel's
consent.
|
|
2.
|
Subject to the requirements of the Panel, RBS BidCo shall be under
no obligation to waive (if capable of waiver) any of the Conditions
in Part A of this Appendix I by a date earlier than the
latest date of the fulfilment or waiver of that Condition
notwithstanding that the other Conditions to the Acquisition may at
such earlier date have been waived or fulfilled and that there are
at such earlier date no circumstances indicating that any such
Conditions may not be capable of fulfilment.
|
|
3.
|
Under Rule 13.5 of the City Code, RBS BidCo 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 RBS BidCo in the context of the Acquisition. The
Conditions contained in paragraph 2 of Part A of this
Appendix I, are not subject to this provision of the City
Code.
|
|
4.
|
RBS BidCo 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 offer will be implemented on the same terms and
Conditions (subject to appropriate amendments, including (without
limitation) an acceptance Condition set at 90 per cent. (or such
lesser percentage, being more than 50 per cent., as RBS BidCo may
decide (subject to the Panel's consent)), so far as applicable, as
those which would apply to the Scheme.
|
|
5.
|
If the Panel requires RBS BidCo to make an offer or offers for any
FreeAgent Shares under the provisions of Rule 9 of the City Code,
RBS BidCo may make such alterations to the above Conditions as are
necessary to comply with the provisions of that Rule.
|
|
6.
|
The Acquisition will lapse and the Scheme will not proceed (unless
the Panel otherwise consents) if the Competition and Markets
Authority makes a Phase 2 CMA reference in respect of any matter
arising from or relating to the Acquisition before the date of the
Court Meeting and the General Meeting.
|
|
7.
|
The Acquisition and the Scheme are and will be governed by Scots
law and will be subject to the exclusive jurisdiction of the Court.
The Acquisition will comply with, and be subject to, the applicable
rules and regulations of the FCA, the London Stock Exchange, the
AIM Rules and the City Code.
|
|
8.
|
The availability of the Acquisition to persons not resident in the
United Kingdom may be affected by the laws of the relevant
jurisdictions. Persons who are not resident in the United Kingdom
should inform themselves about and observe any applicable
requirements. Further Details in relation to Overseas Shareholders
will be contained in the Scheme Document.
|
|
9.
|
The Acquisition is not being made, directly or indirectly, in, into
or from, or by use of the mails of, or by any means of
instrumentality (including, but not limited to, facsimile, e-mail
or other electronic transmission, telex or telephone) of interstate
or foreign commerce of, or of any facility of a national, state or
other securities exchange of, any jurisdiction where to do so would
violate the laws of that jurisdiction.
|
|
10.
|
If any dividend or other distribution or return of capital is
proposed, declared, made, paid or becomes payable by FreeAgent in
respect of a FreeAgent Share on or after the date of this
announcement and prior to the Acquisition becoming Effective, RBS
BidCo reserves the right to reduce the value of the consideration
payable for each FreeAgent Share under the Acquisition by up to the
amount per FreeAgent Share of such dividend, distribution or return
of capital, except where the FreeAgent Share is or will be acquired
pursuant to the Acquisition on a basis which entitles RBS BidCo to
receive the dividend and/or distribution and/or return of capital
and to retain it. RBS BidCo also reserves the right, with Panel
consent, to reduce the value of the consideration payable for each
FreeAgent Share under the Acquisition.
|
|
11.
|
Each of the Conditions shall be regarded as a separate Condition
and shall not be limited by reference to any other
Condition.
|
|
(i)
|
The Closing Price of a FreeAgent Share is based on the middle
market quotation of a FreeAgent share derived from the Daily
Official List for the relevant dates.
|
|
(ii)
|
The value of the entire issued and to be issued share capital of
approximately £53 million, as set out in this announcement, is
based on the fully diluted share capital of FreeAgent (being
43,850,875 FreeAgent Shares). That has been calculated on the basis
of: (a) 40,739,775 FreeAgent Shares currently in issue on 26 March
2018; (b) up to 2,590,620 further FreeAgent Shares which may be
issued on or after the date of this announcement, but before the
Scheme Record Time, following the exercise of options under the
FreeAgent Share Option Schemes (other than the FreeAgent SAYE
Option Plan 2017); (c) up to 250,480 further FreeAgent Shares which
may be issued on or after the date of this announcement, and before
the date falling six months after the Court Order, following the
exercise of options under the FreeAgent SAYE Option Plan 2017; and
(d) up to 270,000 further FreeAgent Shares which may be issued on
or after the date of this announcement, but before the Scheme
Record Time, following the exercise of the FreeAgent
Warrants.
|
|
(iii)
|
All share prices expressed in pence have been rounded to the
nearest pence and all percentages have been rounded to one decimal
place (other than the percentages in Appendix III which have been
rounded to the nearest two decimal places).
|
|
(iv)
|
Unless otherwise stated, the financial information relating to
FreeAgent is extracted from the audited consolidated financial
statements of FreeAgent for the financial year ended 31 March 2017,
prepared in accordance with IFRS.
|
|
Name
|
Number of FreeAgent Shares
|
per cent. of FreeAgent Shares in issue
|
|
Ed Molyneux
|
3,622,530
|
8.89
|
|
Katherine Tenner
|
60,000
|
0.15
|
|
Nigel Halkes
|
11,904
|
0.03
|
|
Andy Roberts
|
119,047
|
0.29
|
|
TOTAL
|
3,813,481
|
9.36
|
|
Name
|
Number of FreeAgent Shares
|
per cent. of FreeAgent Shares in issue
|
|
Opus Incertum
Limited
|
6,207,140
|
15.24%
|
|
Local Globe IV
Limited
|
2,821,060
|
6.92%
|
|
RJ Beteiligungsgesellschaft
mbh
|
1,588,630
|
3.90%
|
|
STM Fidexs Trust
Company
|
544,400
|
1.34%
|
|
Olly Headey
|
3,059,200
|
7.51%
|
|
Roan Lavery
|
2,640,000
|
6.48%
|
|
TOTAL
|
16,860,430
|
41.39%
|
|
"A Ordinary Shares"
|
the 'A' ordinary shares of £0.01 pence each in the capital of
RBS BidCo;
|
|
"Acquisition"
|
the acquisition of the entire issued and to be issued share capital
of FreeAgent by RBS BidCo (other than FreeAgent Shares already held
by RBS BidCo, if any) to be implemented by way of the Scheme or
(should RBS BidCo so elect, subject to the consent of the Panel) by
way of a Takeover Offer, including, where the context so requires,
any subsequent variation, revision, extension or renewal
thereof;
|
|
"AIM"
|
the market of that name operated by the London Stock
Exchange;
|
|
"AIM Rules"
|
Rules and Guidance notes for AIM Companies and their nominated
advisers issued by the London Stock Exchange from time to time
relating to AIM traded securities and the operation of
AIM;
|
|
"Authorisations"
|
regulatory authorisations, orders, recognitions, grants, consents,
clearances, confirmations, certificates, licences, permissions or
approvals;
|
|
"Bad Leaver"
|
a Founder whose employment is terminated as a result of a
conviction for fraud or for serious misconduct justifying summary
dismissal or who breaches certain restrictive
covenants;
|
|
"B Ordinary Shares"
|
the 'B' ordinary shares of £0.01 pence each in the capital of
RBS BidCo;
|
|
"BofA Merrill Lynch"
|
Merrill Lynch International;
|
|
"Board of FreeAgent"
|
the board of directors of FreeAgent;
|
|
"Business Day"
|
a day (other than Saturdays, Sundays and public holidays in the UK)
on which banks are open for business in London and in
Edinburgh;
|
|
"City Code" or "Code"
|
the City Code on Takeovers and Mergers;
|
|
"Closing Price"
|
the closing middle market price of a FreeAgent Share on a
particular trading day as derived from the AIM appendix to the
London Stock Exchange Daily Official List;
|
|
"Companies Act"
|
the Companies Act 2006, as amended from time to time;
|
|
"Computershare"
|
Computershare of Leven House, 10 Lochside Place, Edinburgh Park,
Edinburgh, EH12 9DF, the registrars to the Company;
|
|
"Conditions"
|
the conditions to the implementation of the Acquisition (including
the Scheme), as set out in Appendix I to this announcement and to
be set out in the Scheme Document;
|
|
"Confidentiality Agreement"
|
has the meaning given to it in paragraph 14 of this
announcement;
|
|
"Co-operation Agreement"
|
has the meaning given to it in paragraph 14 of this
announcement;
|
|
"Court"
|
the Court of Session at Edinburgh;
|
|
"Court Hearing"
|
the hearing by the Court of the petition to sanction the Scheme
under section 899 of the Companies Act;
|
|
"Court Meeting"
|
the meeting of Scheme Shareholders to be convened pursuant to an
order of the Court under section 896 of the Companies Act for the
purpose of considering and, if thought fit, approving the Scheme,
including any adjournment thereof;
|
|
"Court Order"
|
the order of the Court sanctioning the Scheme under section 899 of
the Companies Act;
|
|
"CMA"
|
the UK
Competition and Markets Authority;
|
|
"CREST"
|
the system for the paperless settlement of trades in securities and
the holding of uncertificated securities operated by
Euroclear;
|
|
"Daily Official List"
|
the Daily Official List of the London Stock Exchange;
|
|
"Dealing Disclosure"
|
has the same meaning as in Rule 8 of the Code;
|
|
"Disclosed"
|
means information which has been fairly disclosed by or on behalf
of FreeAgent: (i) in its Report and Financial Statements for the
financial year ending 31 March 2017; (ii) in this announcement;
(iii) in any other public announcement made by FreeAgent in
accordance with the Market Abuse Regulation, the AIM Rules or the
Disclosure Guidance and Transparency Rules, prior to the date of
this announcement; or (iv) as disclosed in writing prior to the
date of this announcement by or on behalf of FreeAgent to RBS BidCo
(or its respective officers, employees, agents or advisers in their
capacity as such);
|
|
"Disclosure Guidance and Transparency Rules"
|
the disclosure rules and transparency rules made by the FCA
pursuant to section 73A of the Financial Services and Markets Act
2000 (as amended from time to time);
|
|
"EBITDA Margin"
|
the consolidated profit margin of the FreeAgent Group;
|
|
"Effective"
|
the Scheme having become effective in accordance with its
terms;
|
|
"Effective Date"
|
the date on which the Scheme becomes Effective;
|
|
"Enlarged Group"
|
RBS and its subsidiaries, including the FreeAgent Group, following
the Acquisition becoming Effective;
|
|
"Euroclear"
|
Euroclear UK & Ireland Limited;
|
|
"Exchange Act"
|
the US Securities Exchange Act of 1934 (as amended);
|
|
"FCA" or "Financial Conduct Authority"
|
the United Kingdom's Financial Conduct Authority;
|
|
"FCA Condition"
|
the condition set out in paragraph 3(c) in Part A of Appendix I to
this announcement;
|
|
"Forms of Proxy"
|
the forms of proxy for use at the Court Meeting and the General
Meeting, which will accompany the Scheme Document;
|
|
"Founders"
|
Ed Molyneux, Roan Lavery and Olly Headey;
|
|
"FreeAgent" or the "Company"
|
FreeAgent Holdings plc, a company incorporated in Scotland with
company number SC541036 whose registered office is at One Edinburgh
Quay, 133 Fountainbridge, Edinburgh, Scotland, EH3
9QG;
|
|
"FreeAgent Directors"
|
the directors of FreeAgent;
|
|
"FreeAgent Group"
|
FreeAgent and its subsidiary undertakings and, where the context
permits, each of them;
|
|
"FreeAgent Share Option Schemes"
|
the FreeAgent Legacy EMI Plan, the FreeAgent EMI Long Term
Incentive Plan 2016, the FreeAgent Unapproved Share Option Plan
2016 and the FreeAgent SAYE Option Plan 2017;
|
|
"FreeAgent Shareholders"
|
the registered holders of FreeAgent Shares;
|
|
"FreeAgent Shares"
|
the existing unconditionally allotted or issued and fully paid
ordinary shares of one penny each in the capital of FreeAgent and
any further such ordinary shares which are unconditionally allotted
or issued before the Scheme becomes Effective;
|
|
"FreeAgent Warrants"
|
the one warrant issued to Saas Capital Partners II, LP pursuant to
a warrant deed between the parties dated October 2016;
|
|
"General Meeting"
|
the general meeting of FreeAgent Shareholders (including any
adjournment thereof) to be convened in connection with the
Acquisition for the purposes of the Scheme;
|
|
"HMRC"
|
HM Revenue & Customs or its successors from time to
time;
|
|
"IFRS"
|
International Financial Reporting Standards;
|
|
"IPO Price"
|
means 84 pence per FreeAgent Share, being the price per FreeAgent
Share at the time of FreeAgent's admission to trading on AIM in
November 2016;
|
|
"IR35 legislation"
|
the provisions in the Social Security Contributions
(Intermediaries) Regulations 2000 (SI 2000/727) (Regulations) and
in Chapter 8 of Part 2 of the Income Tax (Earnings and Pensions)
Act 2003 (ITEPA 2003), as amended from time to time;
|
|
"Latest Practicable Date"
|
close of business on 26 March 2018, being the latest practicable
date prior to the date of this announcement;
|
|
"London Stock Exchange"
|
London Stock Exchange plc;
|
|
"Long-stop Date"
|
has the meaning given to it in paragraph 1 of Appendix I to this
announcement;
|
|
"Management Arrangements"
|
the arrangements with the Founders described in paragraph 11 of
this announcement, further details of which will be included in the
Scheme Document;
|
|
"Market Abuse Regulation"
|
the Market Abuse Regulation (2014/596/EU);
|
|
"Meetings"
|
the Court Meeting and the General Meeting, and "Meeting" shall be
construed accordingly;
|
|
"MTD"
|
has the meaning given to it in paragraph 5 of this
announcement;
|
|
"N+1 Singer"
|
Nplus1 Singer Advisory LLP;
|
|
"NatWest"
|
National Westminster Bank plc, a company incorporated under the
laws of England and Wales with company number 00929027 and whose
registered office is at 135 Bishopsgate, London, EC2M
3UR;
|
|
"Offer Period"
|
the offer period (as defined in the Code) relating to FreeAgent,
which commenced on 27 March 2018 (being the date of this
announcement);
|
|
"Offer Price"
|
120 pence per Scheme Share;
|
|
"Official List"
|
the Official List maintained by the FCA;
|
|
"Open Banking"
|
a series of reforms implemented in connection with the second
Payment Services Directive (Directive (EU) 2015/2366) aimed at
enabling personal and business customers to share their data
securely with banks and third parties, allowing them to, amongst
other things, initiate payments and request account
information;
|
|
"Opening Position Disclosure"
|
has the same meaning as in Rule 8 of the Code;
|
|
"Overseas Shareholders"
|
FreeAgent Shareholders (or nominees of, or custodians or trustees
for, FreeAgent Shareholders) not resident in, or nationals or
citizens of the United Kingdom;
|
|
"Panel" or "Takeover Panel"
|
the Panel on Takeovers and Mergers;
|
|
"PRA"
|
the Prudential Regulatory Authority or its successor form time to
time;
|
|
"R&D"
|
research and development;
|
|
"RBS"
|
The Royal Bank of Scotland Group plc, a company registered in
Scotland with number SC045551, whose registered office is 36 St
Andrew Square, Edinburgh, EH2 2YB;
|
|
"RBS BidCo"
|
Silvermere Holdings Limited, a company incorporated in Scotland
with company number SC592039 whose registered office is at 24/25 St
Andrew Square, Edinburgh, United Kingdom, EH2 1AF;
|
|
"RBS Group"
|
RBS and its subsidiary undertakings and, where context permits,
each of them;
|
|
"RBS Share"
|
the existing unconditionally allotted or issued and fully paid
ordinary shares of £1.00 each in the capital of
RBS;
|
|
"Reference Period"
|
has the meaning given to it paragraph 11 of this
announcement;
|
|
"Reference Price"
|
has the meaning given to it paragraph 11 of this
announcement;
|
|
"Registrar of Companies"
|
the Registrar of Companies in Scotland;
|
|
"Regulations"
|
the Uncertificated Securities Regulations 2001 (SI 2001 number
3755) as amended;
|
|
"Regulatory Information Service"
|
a regulatory information service that is approved by the FCA and is
on the list of Regulatory Information Services maintained by the
FCA;
|
|
"Restricted Jurisdiction"
|
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
FreeAgent Shareholders in that jurisdiction;
|
|
"SaaS"
|
Software-as-a-Service;
|
|
"Scheme"
|
the proposed scheme of arrangement under Part 26 of the Companies
Act between FreeAgent and the Scheme Shareholders to implement the
Acquisition, with or subject to any modification, addition or
condition approved or imposed by the Court and agreed by FreeAgent
and RBS BidCo;
|
|
"Scheme Document"
|
the document to be sent to FreeAgent Shareholders containing,
amongst other things, the Scheme and the notices convening the
Court Meeting and the General Meeting;
|
|
"Scheme Record Time"
|
the time and date specified as such in the Scheme Document (or such
later time as FreeAgent and RBS may agree);
|
|
"Scheme Shareholders"
|
holders of Scheme Shares;
|
|
"Scheme Shares"
|
(a)
the FreeAgent Shares in issue at the date of the Scheme
Document;
(b)
any FreeAgent Shares issued after the date of the Scheme Document
and prior to the Voting Record Time; and
(c)
any FreeAgent Shares issued at or after the Voting Record Time and
prior to the Scheme Record Time in respect of which the original or
any subsequent holder thereof is bound by the Scheme, or shall by
such time have agreed in writing to be bound by the
Scheme;
|
|
"SEC"
|
US Securities and Exchange Commission;
|
|
"Shareholders' Agreement"
|
the shareholders' agreement dated the date of this announcement and
made between (1) Silvermere Holdings Limited, (2) NatWest and (3)
the Founders;
|
|
"Significant Interest"
|
in relation to an undertaking, a direct or indirect interest of 20
per cent. or more of the total voting rights conferred by the
equity share capital (as defined in section 548 of the Companies
Act) of such undertaking;
|
|
"SMEs"
|
small and medium sized enterprises;
|
|
"Special Resolution"
|
the special resolution to be proposed at the General Meeting in
connection with the Scheme;
|
|
"subsidiary", "subsidiary undertaking", "associated undertaking",
"holding company undertaking"
|
have the meanings ascribed to them under the Companies
Act;
|
|
"Takeover Offer"
|
has the meaning given to it in Part 28 of the Companies
Act;
|
|
"Third Party"
|
any government, government department, governmental or
quasi-governmental, supranational, statutory, regulatory,
environmental or investigative body or association, institution or
agency (including, without limitation, any trade agency) or
authority (including, without limitation, any anti-trust or merger
control authority), any court or professional or environmental body
or any other person or body whatsoever in any relevant
jurisdiction;
|
|
"uncertificated" or "in uncertificated form"
|
a share or other security recorded on the relevant register as
being held in uncertificated form in CREST and title to which, by
virtue of the Regulations, may be transferred by means of
CREST;
|
|
"United Kingdom" or "UK"
|
the United Kingdom of Great Britain and Northern
Ireland;
|
|
"United States" or "US"
|
the United States of America, its territories and possessions, any
state of the United States of America, the District of Columbia and
all other areas subject to its jurisdiction and any political
sub-division thereof;
|
|
"Voting
Record Time"
|
6.00 p.m. on the day two Business Days before the date of the Court
Meeting or any adjournment of it (as the case may be);
|
|
"Wider RBS Group"
|
RBS and associated undertakings and any other body corporate,
partnership, joint venture or person in which RBS and all such
undertakings (aggregating their interests) have a Significant
Interest; and
|
|
"Wider FreeAgent Group"
|
FreeAgent and associated undertakings and any other body corporate,
partnership, joint venture or person in which FreeAgent and such
undertakings (aggregating their interests) have a Significant
Interest.
|
|
PDMR
|
Position of PDMR
|
No. of Shares purchased
|
Purchase price
|
|
Chris
Marks
|
Chief
Executive, NatWest Markets
|
59
|
£2.555260
|
|
Share Class and nominal value
|
Number of Shares issued
|
Voting rights per share
|
Total Voting rights -
|
|
29 March 2018
|
|||
|
Ordinary
shares of £1
|
11,992,953,552
|
4
|
47,971,814,208
|
|
11%
Cumulative Preference Shares of £1
|
500,000
|
4
|
2,000,000
|
|
5.5%
Cumulative Preference Shares of £1
|
400,000
|
4
|
1,600,000
|
|
Total:
|
11,993,853,552
|
|
47,975,414,208
|
|
|
THE
ROYAL BANK OF SCOTLAND GROUP plc (Registrant)
|
|
|
|
|
|
By: /s/
Jan Cargill
|
|
|
|
|
|
Name:
Jan Cargill
|
|
|
Title:
Deputy Secretary
|