NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
28 September 2016 RECOMMENDED CASH OFFER for UK Mail Group plc (“UK Mail”) by Deutsche Post AG (“Deutsche Post DHL”) to be implemented pursuant to a scheme of arrangement
Summary of the recommended cash offer
The boards of Deutsche Post DHL and UK Mail are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Deutsche Post DHL will acquire the entire issued and to be issued ordinary share capital of UK Mail (the “Offer”). The Offer is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
Under the terms of the Offer, UK Mail Shareholders will be entitled to receive 440 pence in cash for each UK Mail Share held.
The Offer assumes that UK Mail Shareholders will be entitled to receive an interim dividend of 5.5 pence per UK Mail Share (the “Agreed Dividend”).
If any dividend or other distribution is authorised, declared, made or paid in respect of UK Mail Shares on or after the date of this Announcement and prior to the Effective Date other than the Agreed Dividend, or in excess of the Agreed Dividend, Deutsche Post DHL reserves the right to reduce the Offer Price by the amount of all or part of any such excess, in the case of a dividend or other distribution in excess of the Agreed Dividend, or otherwise by the amount of any such dividend or other distribution.
The Offer values the entire issued ordinary share capital of UK Mail at approximately £242.7 million.
The Offer Price represents:
(i)
a premium of approximately 43.1 per cent. to the Closing Price of 307.5 pence on 27 September 2016 (being the latest practicable date prior to this Announcement); and
(ii)
a premium of approximately 43.2 per cent. to the volume-weighted average price for the three-month period ending on 27 September 2016 (being the latest practicable date prior to this Announcement) of 307.2 pence.
The Offer is conditional on, amongst other things, the approval of UK Mail Shareholders, sanction of the Scheme by the Court and obtaining the merger control clearance from the European Commission. The Offer is further subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document.
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Deutsche Post DHL and UK Mail
Deutsche Post DHL is the world’s leading mail and logistics group. Deutsche Post DHL is focused on being the first choice for customers, employees and investors in its core business areas worldwide. It makes a positive contribution to the world by connecting people and enabling global trade while being committed to responsible business practices and corporate citizenship.
UK Mail is one of the largest integrated mail and parcel operators within the UK offering parcel and mail delivery solutions both locally and worldwide. With a national network of more than 50 sites and 2,400 vehicles, UK Mail is able to offer business customers a unique integrated service with a full range of time-sensitive and secure delivery options for parcels and letters.
Recommendation and support for the Offer
The UK Mail Directors, who have been so advised by Investec Bank plc, consider the terms of the Offer to be fair and reasonable. In providing advice to the UK Mail Directors, Investec Bank plc has taken into account the commercial assessments of the UK Mail Directors. In addition, the UK Mail Directors consider the terms of the Offer to be in the best interests of UK Mail Shareholders as a whole.
Accordingly, the UK Mail Directors intend to recommend unanimously that UK Mail Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the UK Mail General Meeting.
Deutsche Post DHL has received irrevocable undertakings from each of the UK Mail Directors who owns or controls UK Mail Shares to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the UK Mail General Meeting, in respect of a total of 163,612 UK Mail Shares, representing, in aggregate, approximately 0.3 per cent. of UK Mail’s ordinary share capital in issue on 27 September 2016 (being the latest practicable date prior to this Announcement). All of the UK Mail Directors support the Offer, as set out in paragraph 4 below. Deutsche Post DHL has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the UK Mail General Meeting from Mr John Kane, Mr Michael Kane, Ms Ghislaine Kane, Mr and Mrs Matthew Bailey, Marlborough Fund Managers Limited and Unicorn Asset Management in respect of a total of 32,939,537 UK Mail Shares representing, in aggregate, approximately 59.7 per cent. of UK Mail’s ordinary share capital in issue on 27 September 2016 (being the latest practicable date prior to this Announcement). The irrevocable undertakings received by the Kane family represent such irrevocable undertakings as the Kane family are able to provide in support of the Offer. Deutsche Post DHL has therefore received irrevocable undertakings in respect of a total of 33,103,149 UK Mail Shares representing, in aggregate, approximately 60.0 per cent. of UK Mail’s ordinary share capital in issue on 27 September 2016 (being the latest practicable date prior to this Announcement). Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.
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The acquisition process
The Offer will be put to UK Mail Shareholders at the Court Meeting and at the UK Mail General Meeting. In order to become effective, the Scheme must be approved by a majority in number of the UK Mail Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the UK Mail Shares voted. In addition, a special resolution implementing the Scheme must be passed by UK Mail Shareholders representing at least 75 per cent. of votes cast at the UK Mail General Meeting. The Scheme will also need to be sanctioned by the Court.
The Scheme Document, containing further information about the Offer and notices of the Court Meeting and the UK Mail General Meeting will be published as soon as practicable and, in any event, (save with the consent of the Panel) within 28 days of this Announcement and will be made available by Deutsche Post DHL and UK Mail on their websites at http://www.dpdhl-publications.com and http://www.ukmail.com/investors/reportsdownloads/dhl-offer respectively.
UK Mail and Deutsche Post DHL comment
Commenting on the Offer, Peter Kane, Chairman of UK Mail, said: “We have made good strategic progress in recent years, establishing leading positions in our key markets of parcels and mail, investing in additional capacity in our operations and in IT and product and service innovation. “However, the Board believes that UK Mail will benefit significantly from becoming part of Deutsche Post DHL, and will be better positioned to continue to develop our parcels and mail businesses with the benefit of Deutsche Post DHL’s greater financial and operational resources. Our customers will have direct access to Deutsche Post DHL’s integrated global parcel network and comprehensive logistics capabilities; we will have opportunities to win additional business from Deutsche Post DHL’s existing customer base; and there will be significant synergies including additional volumes flowing through our network from Deutsche Post DHL’s global operations. “Furthermore, the Offer provides UK Mail Shareholders with the opportunity to realise their investment for cash at a significant premium to the levels at which the share price has traded in recent months.”
Commenting on the Offer, Jürgen Gerdes, board member of Deutsche Post DHL, said: “The on-going expansion of our parcel network in Europe is driven by increasing demand within our e-commerce customer base for cross-border deliveries. Deutsche Post DHL, as the leader in the German parcel market, has already established a strong position in a number of European countries. UK Mail is a well-run business and an established provider of quality delivery services in the UK and offers a complementary fit with our integrated offering. With this acquisition, we will further extend our network and have a strong foothold in Europe’s three largest e-commerce markets, the United Kingdom, Germany and France, which account for over 60 per cent. of online retail in the continent.”
This summary should be read in conjunction with the full text of this Announcement. The Offer will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to the full terms and conditions which will be set out in the Scheme Document. Appendix II to this Announcement contains the sources of information and bases of calculations of certain information contained in this Announcement. Appendix III
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contains a summary of the irrevocable undertakings received in relation to this Offer. Appendix IV contains definitions of certain expressions used in this summary and in this Announcement.
Enquiries: Deutsche Post DHL
+49 (228) 182 9944
Jürgen Gerdes Achim Dünnwald Anita Gupta Robert Schneider Marco Jülich Daniel McGrath
Deutsche Bank AG (Financial Adviser to Deutsche Post DHL)
+44 (20) 7545 8000
Christof Muerb James Ibbotson Ammar Altaf Jimmy Bastock (Corporate Broking)
UK Mail
+44 (1753) 706070
Steven Glew
Investec Bank plc (Financial Adviser to UK Mail)
+44 (20) 7597 4000
Keith Anderson James Rudd Matt Lewis William Godfrey Rob Baker
MHP Communications (PR Adviser to UK Mail)
+44 (20) 3128 8100
John Olsen Giles Robinson Gina Bell
Important Notices Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank). It is subject to supervision by the European Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority. Deutsche Bank AG is acting as financial adviser to Deutsche Post DHL and no one else in connection with the Offer or the contents of this announcement and will not be responsible to anyone other than Deutsche Post DHL for providing the protections afforded to its clients or for providing advice in connection with the contents of this announcement or any matter referred to herein.
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Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec Bank plc is acting exclusively as financial adviser to UK Mail and no one else in connection with the Offer and will not be responsible to anyone other than UK Mail for providing the protections afforded to clients of Investec Bank plc nor for providing advice in connection with the Offer or any matter referred to herein. This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer will be made solely by means of the Scheme Document or any document by which the Offer is made which will contain the full terms and Conditions of the Offer, including details of how to vote in respect of the acquisition. This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. UK Mail will, with the assistance of Deutsche Post DHL, prepare the Scheme Document to be distributed to UK Mail Shareholders. UK Mail and Deutsche Post DHL urge UK Mail Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Offer. This Announcement does not constitute a prospectus or prospectus equivalent document.
Overseas Shareholders The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements. The Offer relates to the acquisition of shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. However, if Deutsche Post DHL were to elect to implement the Offer by means of a takeover offer, such takeover offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of the US Securities Exchange Act of 1934 (the “US Exchange Act”) and Regulation 14E thereunder. Such a takeover would be made in the United States by Deutsche Post DHL and no one else. In addition to any such takeover offer, Deutsche Post DHL, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in UK Mail outside such takeover offer during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act. Unless otherwise determined by Deutsche Post DHL or required by the Takeover Code, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction (a “Restricted Jurisdiction”) and no person may vote in favour of the offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this
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Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. The availability of the Offer to UK Mail Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. The Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.
Forward Looking Statements This Announcement contains statements about Deutsche Post DHL and UK Mail that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words “targets”, “plans”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “estimates”, “projects” or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Deutsche Post DHL’s or UK Mail’s operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Deutsche Post DHL’s or UK Mail’s business. Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Deutsche Post DHL disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.
No profit forecasts or estimates No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Deutsche Post DHL or UK Mail, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Deutsche Post DHL or UK Mail, as appropriate.
Disclosure requirements of the Takeover Code Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30pm (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30pm (London time) on the 10th business day following the
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announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel’s website at http://www.thetakeoverpanel.org.uk/, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129.
Electronic Communications Please be aware that addresses, electronic addresses and certain information provided by UK Mail Shareholders, persons with information rights and other relevant persons for the receipt of communications from UK Mail may be provided to Deutsche Post DHL during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.
Publication on Website and Availability of Hard Copies A copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Deutsche Post DHL’s and UK Mail’s websites at http://www.dpdhl-publications.com and http://www.ukmail.com/investors/reports-downloads/dhloffer respectively by no later than 12 noon (London time) on Thursday 29 September 2016. For the avoidance of doubt, the contents of these websites are not incorporated into and do not form part of this Announcement. You may request a hard copy of this Announcement by contacting Ammar Altaf on +44 (20) 7545 8000. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.
Rounding Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly
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and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
Rule 2.9 Disclosure In accordance with Rule 2.9 of the Takeover Code, UK Mail confirms that as at the date of this Announcement, it has in issue and admitted to trading on the main market of the London Stock Exchange 55,152,431 ordinary shares of 10 pence each (excluding ordinary shares held in treasury). The International Securities Identification Number (ISIN) of the ordinary shares is GB0001576163.
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
28 September 2016 RECOMMENDED CASH OFFER for UK Mail Group plc (“UK Mail”) by Deutsche Post AG (“Deutsche Post DHL”) to be implemented pursuant to a scheme of arrangement
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Introduction The boards of Deutsche Post DHL and UK Mail are pleased to announce that they have reached agreement on the terms of a recommended cash offer pursuant to which Deutsche Post DHL will acquire the entire issued and to be issued ordinary share capital of UK Mail (the “Offer”). The Offer is to be effected by means of a scheme of arrangement under Part 26 of the Companies Act.
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The Offer Under the terms of the Offer, which will be subject to the Conditions and further terms set out in Appendix I to this Announcement and to be set out in the Scheme Document, UK Mail Shareholders will be entitled to receive: for each UK Mail Share
440 pence in cash
The Offer values the entire issued ordinary share capital of UK Mail at approximately £242.7 million. The Offer assumes that UK Mail Shareholders will be entitled to receive an interim dividend of 5.5 pence per UK Mail Share (the “Agreed Dividend”). If any dividend or other distribution is authorised, declared, made or paid in respect of UK Mail Shares on or after the date of this Announcement and prior to the Effective Date other than the Agreed Dividend, or in excess of the Agreed Dividend, Deutsche Post DHL reserves the right to reduce the Offer Price in accordance with paragraph 17 below. The Offer Price represents: (i)
a premium of approximately 43.1 per cent. to the Closing Price of 307.5 pence on 27 September 2016 (being the latest practicable date prior to this Announcement); and
(ii)
a premium of approximately 43.2 per cent. to the volume-weighted average price for the three-month period ending on 27 September 2016 (being the latest practicable date prior to this Announcement) of 307.2 pence.
It is expected that the Scheme Document will be published as soon as practicable and, in any event, (save with the consent of the Panel) within 28 days of this Announcement.
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Background to and reasons for the Offer Deutsche Post DHL is the world’s leading mail and logistics group, active in more than 220 countries and territories, deploying approximately 500,000 personnel to deliver a full range of communications and logistics services to its customers, from standardised products through to innovative and tailored solutions. As a core part of its “Strategy 2020”, Deutsche Post DHL sets out its aims for continued expansion in growth markets and segments. Consistent with the strength of its experience in its German parcel business, Deutsche Post DHL believes that the acquisition of UK Mail will allow it to bring its expertise in e-commerce and parcel delivery together with UK Mail’s existing customer base and network, to drive substantial shareholder value. As a result, the board of Deutsche Post DHL believes that an acquisition of UK Mail presents an attractive opportunity for all stakeholders. Strengthens Deutsche Post DHL’s European market position Deutsche Post DHL will be able to increase its network coverage to include a direct commercial and operational presence, including pick-up and delivery capabilities, in the UK, Europe’s largest e-commerce market, and to benefit from the strong growth in parcel volumes to and from the UK. Enhances Deutsche Post DHL’s and UK Mail’s customer value proposition UK Mail’s customers will gain direct access to the global Deutsche Post DHL network, allowing them to benefit from Deutsche Post DHL’s comprehensive logistics capabilities across product categories, whilst also providing Deutsche Post DHL’s existing customer base with enhanced access to the UK market via UK Mail’s high quality UK network. Deutsche Post DHL otherwise intends to maintain the status of its existing customer relationships. Strengthens UK Mail’s UK market position UK Mail will have the opportunity to win additional customer business with Deutsche Post DHL’s existing customer base and gain know-how, and operational and financial support. Deutsche Post DHL will also maintain and develop UK Mail’s profitable domestic mail operations, sharing its considerable experience and expertise in this area. In addition, Deutsche Post DHL will support continued product and service innovation across UK Mail’s business and will continue operating and supporting the UK Mail brand. Delivers significant synergy benefits Additional volume will flow through UK Mail’s established network from Deutsche Post DHL’s global operation. There will also be enhanced access to global export markets for UK Mail’s customer volumes, shared know-how, IT solutions and innovation and other operational efficiencies.
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Recommendations The UK Mail Directors, who have been so advised by Investec Bank plc, consider the terms of the Offer to be fair and reasonable. In providing advice to UK Mail Directors, Investec Bank plc has taken into account the commercial assessments of the UK Mail Directors. In addition, the UK Mail Directors consider the terms of the Offer to be in the best interests of UK Mail Shareholders as a whole.
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Accordingly, the UK Mail Directors intend to recommend unanimously that UK Mail Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the UK Mail General Meeting as the UK Mail Directors who own or control UK Mail Shares have irrevocably undertaken to do in respect of their own beneficial holdings of 163,612 UK Mail Shares representing, in aggregate, approximately 0.3 per cent. of the ordinary share capital of UK Mail in issue on 27 September 2016 (being the latest practicable date prior to this Announcement).
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Background to and reasons for the recommendation UK Mail is one of the largest integrated mail and parcel operators within the UK. Its strategy is to grow revenue and profitability by establishing a market leading position in the UK in its key markets of parcels and mail, with a clear focus on high service levels and network efficiency together with product and service innovation. To achieve this and to facilitate the future growth of the business, UK Mail has created additional capacity both in operations, including the establishment of a new hub near Coventry, and in support areas, including significant investment in IT. However, the UK market for parcels and mail remains highly competitive. High service levels and a low cost efficient network are key to attracting and retaining customers while generating attractive returns. This requires continued investment in automation, product and service innovation and the extensive and innovative use of IT. In recent years, UK Mail has made good progress in all these areas. The Board believes that, by becoming part of the Wider Deutsche Post DHL Group, the UK Mail business will benefit from: (i)
the access to Deutsche Post DHL’s resources and expertise to further develop UK Mail’s network and customer value proposition;
(ii)
the ability to continue to develop its parcels and mail businesses within Deutsche Post DHL and with the benefit of Deutsche Post DHL’s greater financial and operational resources;
(iii)
the ability to provide both existing and new UK customers with international fulfilment via Deutsche Post DHL’s global distribution network; and
(iv)
the increased volumes of parcels coming into the UK through Deutsche Post DHL’s network which will result in better overhead recovery and economies of scale.
The Offer provides UK Mail Shareholders with the opportunity to realise their investment for cash at a significant premium to the levels where the share price has traded in recent months. Accordingly, taking into account the potential challenges associated with the execution of UK Mail’s stand alone strategy, the UK Mail Directors believe that the terms of the Offer are fair and reasonable.
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Irrevocable undertakings Deutsche Post DHL has received irrevocable undertakings from each of the UK Mail Directors who owns or controls UK Mail Shares to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the UK Mail General Meeting, in respect of a total of 163,612 UK Mail Shares, representing, in aggregate, approximately 0.3 per cent. of UK Mail’s ordinary share capital in issue on 27 September 2016 (being the latest practicable
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date prior to this Announcement). All of the UK Mail Directors support the Offer, as set out in paragraph 4 above. Deutsche Post DHL has also received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions to be proposed at the UK Mail General Meeting from Mr John Kane, Mr Michael Kane, Ms Ghislaine Kane, Mr and Mrs Matthew Bailey, Marlborough Fund Managers Limited and Unicorn Asset Management in respect of a total of 32,939,537 UK Mail Shares representing, in aggregate, approximately 59.7 per cent. of UK Mail’s ordinary share capital in issue on 27 September 2016 (being the latest practicable date prior to this Announcement). The irrevocable undertakings received by the Kane family represent such irrevocable undertakings as the Kane family are able to provide in support of the Offer. Deutsche Post DHL has therefore received irrevocable undertakings in respect of a total of 33,103,149 UK Mail Shares representing, in aggregate, approximately 60.0 per cent. of UK Mail’s ordinary share capital in issue on 27 September 2016 (being the latest practicable date prior to this Announcement). Further details of these irrevocable undertakings are set out in Appendix III to this Announcement.
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Information on Deutsche Post DHL Deutsche Post DHL is an Aktiengesellschaft (corporation limited by share ownership) registered in Germany, with shares listed on the Frankfurt Stock Exchange. It is the world’s leading mail and logistics group. Deutsche Post DHL is focused on being the first choice for customers, employees and investors in its core business areas worldwide. It makes a positive contribution to the world by connecting people and enabling global trade while being committed to responsible business practices and corporate citizenship. Deutsche Post DHL operates under two brands: Deutsche Post, which is Europe’s leading postal service provider; and DHL, which is uniquely positioned in the world’s growth markets, with a comprehensive range of international express, freight transportation, ecommerce and supply chain management services. Deutsche Post DHL is the leading parcel delivery company in Germany, Europe’s largest parcel market by volume, and has expanded its cross-border network since 2014 to cover 18 European countries. Deutsche Post DHL has pioneered a number of innovative solutions, from same-day and time-specific delivery to automated packstations and parcel shops that maximize delivery convenience. Deutsche Post DHL employs approximately 500,000 employees in over 220 countries and territories worldwide. In 2015, Deutsche Post DHL generated revenues of more than €59 billion.
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Information on UK Mail UK Mail is a public limited company registered in England and Wales. The UK Mail Shares are listed on the Official List of the London Stock Exchange. Founded in 1971 by the current Chairman, Peter Kane, UK Mail is one of the largest integrated mail and parcel operators within the UK, offering parcel and mail delivery solutions both locally and worldwide. With a national network of more than 50 sites (including an automated national hub in Ryton which can process up to 20,000 parcels per hour), 2,800 employees and 2,400 vehicles, UK Mail
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is able to offer business customers a unique integrated service with a full range of timesensitive and secure delivery options for parcels and letters. For the year ended 31 March 2016, UK Mail reported a profit before tax and exceptional items of £10.7 million (2015: £21.0 million) on revenue of £481.0 million (2015: £485.1 million).
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Management, employees and locations Deutsche Post DHL attaches great importance to the skills, knowledge and experience of UK Mail’s management team and employees and believes that they will benefit from greater career and business opportunities as part of Deutsche Post DHL. Following completion of the Offer, Deutsche Post DHL intends to work with UK Mail’s management team to review potential areas for integration of the UK Mail business with Deutsche Post DHL’s existing international operations. No decisions have been made by Deutsche Post DHL in relation to that integration and no detailed discussions have been held between Deutsche Post DHL and UK Mail in this regard.
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Arrangements between Deutsche Post DHL and Peter Kane On completion of the Offer, Deutsche Post DHL intends to enter into a one-year consultancy arrangement, on terms to be agreed between the parties, with Peter Kane pursuant to which Peter Kane will continue to act as interim Chief Executive Officer of the UK Mail business whilst assisting with the identification of a new Chief Executive Officer and supporting the successful continuation of the UK Mail business as part of the Wider Deutsche Post DHL Group.
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UK Mail Employee Share Plans UK Mail and Deutsche Post DHL value the UK Mail Group employees and are discussing how best to secure their continued involvement in the business after completion of the Offer. UK Mail and Deutsche Post DHL are discussing allowing the current Business Post Group plc Long Term Incentive Plan 2009 (operated by UK Mail) to lapse and offering participants a new incentive plan which is aligned to Deutsche Post DHL’s future strategy and business plan. UK Mail and Deutsche Post DHL are further considering how options granted under the Business Post Group plc Sharesave Option Scheme (operated by UK Mail) will be treated. No firm decisions have yet been made by UK Mail or Deutsche Post DHL. Once appropriate proposals have been finalised, participants in the UK Mail Employee Share Plans will be contacted regarding the effect of the Offer on their rights under the UK Mail Employee Share Plans. Further details of the terms of such proposals will be included in the Scheme Document.
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Financing Deutsche Post DHL is providing the cash consideration payable under the Offer using its existing cash resources. Deutsche Bank AG, financial adviser to Deutsche Post DHL, is satisfied that sufficient resources are available to satisfy in full the cash consideration payable to UK Mail Shareholders under the terms of the Offer.
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Offer-related Arrangements Confidentiality Agreement Deutsche Post DHL and UK Mail entered into a confidentiality agreement on 22 December 2015, which was amended on 1 March 2016 (the “Confidentiality Agreement”). Pursuant to the Confidentiality Agreement, each of Deutsche Post DHL and UK Mail has undertaken to keep confidential information relating to the other party and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation. These confidentiality obligations will remain in force for a period of 60 months from the date of the Confidentiality Agreement unless otherwise terminated on completion of the Offer.
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Structure of the Offer Scheme It is intended that the Offer will be effected by means of a Court-approved scheme of arrangement between UK Mail and UK Mail Shareholders under Part 26 of the Companies Act. The purpose of the Scheme is to provide for Deutsche Post DHL to become the holder of the entire issued and to be issued ordinary share capital of UK Mail. This is to be achieved by the transfer of the UK Mail Shares to Deutsche Post DHL, in consideration for which the UK Mail Shareholders will receive cash consideration on the basis set out in paragraph 2 of this Announcement. Approval by Court Meeting and General Meeting To become effective, the Scheme must be approved by a majority in number of the UK Mail Shareholders voting at the Court Meeting, either in person or by proxy, representing at least 75 per cent. in value of the UK Mail Shares voted. The Scheme also requires the passing at the UK Mail General Meeting of a special resolution necessary to implement the Scheme. Application to Court to sanction the Scheme Once the necessary approvals from UK Mail Shareholders have been obtained and the other Conditions have been satisfied or (where applicable) waived, the Scheme must be sanctioned by the Court. The Scheme will then become effective upon delivery of the Court Order to the Registrar of Companies. Upon the Scheme becoming effective, it will be binding on all UK Mail Shareholders, irrespective of whether or not they attended or voted at the Court Meeting or the UK Mail General Meeting. Lapsing of the Offer The Offer will lapse if:
the Court Meeting and the UK Mail General Meeting are not held by the 22nd day after the expected date of such meetings as set out in the Scheme Document (or such later date as may be agreed between Deutsche Post DHL and UK Mail);
the Court hearing to approve the Scheme is not held by the 22nd day after the expected date of such hearing as set out in the Scheme Document (or such later date as may be agreed between Deutsche Post DHL and UK Mail); or
the Scheme does not become effective by the Long Stop Date,
14
provided however that the deadlines for the timing of the Court Meeting, the UK Mail General Meeting and the Court hearing to approve the Scheme as set out above may be waived by Deutsche Post DHL, and the deadline for the Scheme to become effective may be extended by agreement between UK Mail and Deutsche Post DHL. Full details of the Scheme to be set out in the Scheme Document Further details of the Scheme, including an indicative timetable for its implementation, will be set out in the Scheme Document, which, together with the Forms of Proxy, is expected to be despatched to UK Mail Shareholders as soon as practicable and, in any event, (save with the consent of the Panel) within 28 days of this Announcement. The Scheme Document and Forms of Proxy will be made available to all UK Mail Shareholders at no charge to them. Right to switch to an Offer Deutsche Post DHL reserves the right to elect (subject to the consent of the Panel) to implement the acquisition of the UK Mail 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 offer relates or such lesser percentage, being more than 50 per cent., as Deutsche Post DHL may decide).
15
Conditions to the Offer The Offer 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, which include obtaining the necessary merger control clearance should the Offer fall within the scope of Council Regulation (EC) 139/2004. The Offer is conditional upon the Scheme becoming unconditional and effective, subject to the Takeover Code. The Scheme will be subject to the following conditions:
16
(i)
its approval by a majority in number of the UK Mail Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. in value of the UK Mail Shares voted by those UK Mail Shareholders;
(ii)
the resolutions required to implement the Scheme being duly passed by UK Mail Shareholders representing 75 per cent. or more of votes cast at the UK Mail General Meeting; and
(iii)
the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to UK Mail and Deutsche Post DHL) and the delivery of a copy of the Court Order to the Registrar of Companies.
De-listing and re-registration Prior to the Scheme becoming effective, UK Mail will make an application for the cancellation of the listing of UK Mail Shares on the Official List and for the cancellation of trading of the UK Mail Shares on the London Stock Exchange’s market for listed securities in each case to take effect from or shortly after the Effective Date. The last day of dealings in UK Mail Shares on the main market of the London Stock Exchange is expected to be the
15
Business Day immediately prior to the Effective Date and no transfers will be registered after 6.00pm on that date. On the Effective Date, share certificates in respect of UK Mail Shares will cease to be valid and entitlements to UK Mail Shares held within the CREST system will be cancelled. It is also proposed that, following the Effective Date and after its shares are delisted, UK Mail will be re-registered as a private limited company under the relevant provisions of the Companies Act.
17
Dividends UK Mail Shareholders will be entitled to receive the Agreed Dividend, which is intended to be paid prior to the Effective Date. If any dividend or other distribution is authorised, declared, made or paid in respect of UK Mail Shares on or after the date of this Announcement and prior to the Effective Date other than the Agreed Dividend, or in excess of the Agreed Dividend, Deutsche Post DHL reserves the right to reduce the Offer Price by the amount of all or part of any such excess, in the case of a dividend or other distribution in excess of the Agreed Dividend, or otherwise by the amount of any such dividend or other distribution.
18
Disclosure of Interests in UK Mail As at the close of business on 27 September 2016 (being the last practicable date prior to the date of this Announcement) neither Deutsche Post DHL, nor any of its directors, nor, so far as Deutsche Post DHL is aware, any person acting in concert (within the meaning of the Takeover Code) with it has: (i) any interest in or right to subscribe for any relevant securities of UK Mail; nor (ii) any short positions in respect of relevant UK Mail Shares (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to purchase or take delivery; nor (iii) borrowed or lent any relevant UK Mail Shares (including, for these purposes, any financial collateral arrangements of the kind referred to in Note 4 on Rule 4.6 of the Takeover Code), save for any borrowed shares which had been either on-lent or sold. 'Interests in securities' for these purposes arise, in summary, when a person has long economic exposure, whether absolute or conditional, to changes in the price of securities (and a person who only has a short position in securities is not treated as interested in those securities). In particular, a person will be treated as having an 'interest' by virtue of the ownership, voting rights or control of securities, or by virtue of any agreement to purchase, option in respect of, or derivative referenced to, securities. It has not been practicable for Deutsche Post DHL to make enquiries of all of its concert parties in advance of the release of this Announcement. Therefore, all relevant details in respect of Deutsche Post DHL’s concert parties will be included in the Opening Position Disclosure in accordance with Rule 8.1(a) and Note 2(a)(i) on Rule 8 of the Takeover Code.
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General The Offer 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
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this Announcement. A summary of the irrevocable undertakings given in relation to the Offer is contained in Appendix III to this Announcement. Certain terms used in this Announcement are defined in Appendix IV to this Announcement. Deutsche Bank AG and Investec Bank plc have each given and not withdrawn their consent to the publication of this Announcement with the inclusion herein of the references to their names in the form and context in which they appear.
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Documents available on website Copies of the following documents will be made available on Deutsche Post DHL’s and UK Mail’s websites at http://www.dpdhl-publications.com and http://www.ukmail.com/investors/reports-downloads/dhl-offer respectively until the end of the Offer:
a copy of this Announcement;
the irrevocable undertakings referred to in paragraph 6 above and summarised in Appendix III to this Announcement; and
the Confidentiality Agreement referred to in paragraph 13 above.
Enquiries: Deutsche Post DHL
+49 (228) 182 9944
Jürgen Gerdes Achim Dünnwald Anita Gupta Robert Schneider Marco Jülich Daniel McGrath
Deutsche Bank AG (Financial Adviser to Deutsche Post DHL)
+44 (20) 7545 8000
Christof Muerb James Ibbotson Ammar Altaf Jimmy Bastock (Corporate Broking)
UK Mail
+44 (1753) 706070
Steven Glew
Investec Bank plc (Financial Adviser to UK Mail) Keith Anderson James Rudd Matt Lewis
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+44 (20) 75974000
William Godfrey Rob Baker
MHP Communications (PR Adviser to UK Mail)
+44 (20) 3128 8100
John Olsen Giles Robinson Gina Bell
Important Notices Deutsche Bank AG is authorised under German Banking Law (competent authority: European Central Bank). It is subject to supervision by the European Central Bank and by BaFin, Germany’s Federal Financial Supervisory Authority. Deutsche Bank AG is acting as financial adviser to Deutsche Post DHL and no one else in connection with the Offer or the contents of this announcement and will not be responsible to anyone other than Deutsche Post DHL for providing the protections afforded to its clients or for providing advice in connection with the contents of this announcement or any matter referred to herein. Investec Bank plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the UK. Investec Bank plc is acting exclusively as financial adviser to UK Mail and no one else in connection with the Offer and will not be responsible to anyone other than UK Mail for providing the protections afforded to clients of Investec Bank plc nor for providing advice in connection with the Offer or any matter referred to herein. This Announcement is for information purposes only and does not constitute an offer to sell or an invitation to purchase any securities or the solicitation of an offer to buy any securities, pursuant to the Offer or otherwise. The Offer will be made solely by means of the Scheme Document or any document by which the Offer is made which will contain the full terms and Conditions of the Offer, including details of how to vote in respect of the acquisition. This Announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom. UK Mail will, with the assistance of Deutsche Post DHL, prepare the Scheme Document to be distributed to UK Mail Shareholders. UK Mail and Deutsche Post DHL urge UK Mail Shareholders to read the Scheme Document when it becomes available because it will contain important information relating to the Offer. This Announcement does not constitute a prospectus or prospectus equivalent document. Overseas Shareholders The release, publication or distribution of this Announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements. The Offer relates to the acquisition of shares of a UK company and is proposed to be effected by means of a scheme of arrangement under the laws of England and Wales. However, if Deutsche Post DHL were to elect to implement the Offer by means of a takeover offer, such takeover offer will be made in compliance with all applicable laws and regulations, including Section 14(e) of the
18
US Securities Exchange Act of 1934 (the “US Exchange Act”) and Regulation 14E thereunder. Such a takeover would be made in the United States by Deutsche Post DHL and no one else. In addition to any such takeover offer, Deutsche Post DHL, certain affiliated companies and the nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in UK Mail outside such takeover offer during the period in which such takeover offer would remain open for acceptance. If such purchases or arrangements to purchase were to be made they would be made outside the United States and would comply with applicable law, including the US Exchange Act. Unless otherwise determined by Deutsche Post DHL or required by the Takeover Code, and permitted by applicable law and regulation, the Offer will not be made available, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction (a “Restricted Jurisdiction”) and no person may vote in favour of the Offer by any such use, means, instrumentality or form within a Restricted Jurisdiction or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this Announcement and all documents relating to the Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this Announcement and all documents relating to the Offer (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction. The availability of the Offer to UK Mail Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are resident. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements. The Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA. Forward looking statements This Announcement contains statements about Deutsche Post DHL and UK Mail that are or may be forward looking statements. All statements other than statements of historical facts included in this Announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words “targets”, “plans”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “estimates”, “projects” or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Deutsche Post DHL’s or UK Mail’s operations and potential synergies resulting from the Offer; and (iii) the effects of government regulation on Deutsche Post DHL’s or UK Mail’s business. Such forward looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. Deutsche Post DHL disclaims any obligation to update any forward looking or other statements contained herein, except as required by applicable law.
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No profit forecasts or estimates No statement in this Announcement is intended as a profit forecast or estimate for any period and no statement in this Announcement should be interpreted to mean that earnings or earnings per share for Deutsche Post DHL or UK Mail, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings or earnings per share for Deutsche Post DHL or UK Mail, as appropriate.
Disclosure requirements of the Takeover Code Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the Offer Period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30pm (London time) on the 10th business day following the commencement of the Offer Period and, if appropriate, by no later than 3.30pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure. Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of: (i) the offeree company; and (ii) any securities exchange offeror, save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30pm (London time) on the business day following the date of the relevant dealing. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3. Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel’s website at http://www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129.
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Electronic Communications Please be aware that addresses, electronic addresses and certain information provided by UK Mail Shareholders, persons with information rights and other relevant persons for the receipt of communications from UK Mail may be provided to Deutsche Post DHL during the Offer Period as requested under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code. Publication on Website and Availability of Hard Copies A copy of this Announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on Deutsche Post DHL’s and UK Mail’s websites at http://www.dpdhl-publications.com and http://www.ukmail.com/investors/reports-downloads/dhloffer respectively by no later than 12 noon (London time) on Thursday 29 September 2016. For the avoidance of doubt, the contents of these websites are not incorporated into and do not form part of this Announcement. You may request a hard copy of this Announcement by contacting Ammar Altaf on +44 (20) 7545 8000. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form. Rounding Certain figures included in this Announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.
Rule 2.9 Disclosure In accordance with Rule 2.9 of the Takeover Code, UK Mail confirms that as at the date of this Announcement, it has in issue and admitted to trading on the main market of the London Stock Exchange 55,152,431 ordinary shares of 10 pence each (excluding ordinary shares held in treasury). The International Securities Identification Number (ISIN) of the ordinary shares is GB0001576163.
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APPENDIX I CONDITIONS AND FURTHER TERMS OF THE OFFER Part A: Conditions of the Scheme The Offer is conditional upon the Scheme becoming unconditional and effective, subject to the Takeover Code, by not later than the Long Stop Date or such later date (if any) as Deutsche Post DHL and UK Mail may agree and (if required) the Panel and the Court may allow.
1
The Scheme will be subject to the following conditions:
1.1 (i)
its approval by a majority in number of the UK Mail Shareholders who are present and vote, whether in person or by proxy, at the Court Meeting and who represent 75 per cent. or more in value of the UK Mail Shares voted by those UK Mail Shareholders who are on the register of members of UK Mail at the Scheme Voting Record Time; and
(ii)
such Court Meeting being held on or before the 22nd day after the expected date of the Court Meeting as set out in the Scheme Document (or such later date as may be agreed by Deutsche Post DHL and UK Mail and the Court may allow);
1.2 (i)
the resolutions required to approve and implement the Scheme being duly passed by UK Mail Shareholders who are present and vote, whether in person or by proxy, representing 75 per cent. or more of votes cast at the UK Mail General Meeting who are on the register of members of UK Mail at the Scheme Voting Record Time; and
(ii)
such UK Mail General Meeting being held on or before the 22nd day after the expected date of the UK Mail General Meeting as set out in the Scheme Document (or such later date as may be agreed by Deutsche Post DHL and UK Mail and the Court may allow);
1.3
2
(i)
the sanction of the Scheme by the Court (with or without modification but subject to any modification being on terms acceptable to UK Mail and Deutsche Post DHL) and the delivery of a copy of the Court Order to the Registrar of Companies; and
(ii)
the Court hearing to sanction the Scheme being held on or before the 22nd day after the expected date of the Court sanction hearing as set out in the Scheme Document (or such later date as may be agreed by Deutsche Post DHL and UK Mail and the Court may allow);
In addition, subject as stated in Part B below and to the requirements of the Takeover Code, the Offer will be conditional upon the following Conditions and, accordingly, the Court Order will not be delivered to the Registrar of Companies unless such Conditions (as amended if appropriate) have been satisfied or, where relevant, waived:
Merger control clearance (a)
insofar as the Offer falls within the scope of Council Regulation (EC) 139/2004 (as amended) (the “Regulation”):
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(i)
the European Commission taking a decision (or being deemed to have taken a decision) under Article 6(1)(b) of the Regulation, on terms satisfactory to Deutsche Post DHL, acting reasonably, declaring the Offer to be compatible with the common market such that it will not initiate proceedings under Article 6(1)(c) of the Regulation in relation to the Offer or any matter arising from or relating to the Offer; or
(ii)
in so far as the Offer creates a relevant merger situation within the meaning of section 23 of the Enterprise Act 2002 (as amended), the European Commission taking a decision (or being deemed to have taken a decision) to refer the whole or part of the Offer to the CMA under Article 9(3) of the Regulation; and A.
the CMA indicating (or being deemed to have indicated) on terms satisfactory to Deutsche Post DHL, acting reasonably, that it does not intend to make a CMA Phase 2 Reference of the Offer or of any matter arising from or relating to the Offer; and
B.
the European Commission taking any of the decisions referred to in (i) with respect to any part of the Offer retained by it.
Notifications, waiting periods and Authorisations (b)
all material notifications, filings or applications which are necessary or considered appropriate or desirable by Deutsche Post DHL (acting reasonably) having been made in connection with the Offer and all necessary waiting periods (including any extensions thereof) under any applicable legislation or regulation of any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory and regulatory obligations in any jurisdiction having been complied with in each case in respect of the Offer and its implementation and all Authorisations necessary or appropriate for or in respect of the Offer and, except pursuant to Chapter 3 of Part 28 of the Companies Act, the acquisition or the proposed acquisition of any shares or other securities in, or control or management of, UK Mail or any other member of the Wider UK Mail Group by any member of the Wider Deutsche Post DHL Group having been obtained in terms and in a form reasonably satisfactory to Deutsche Post DHL from all appropriate Third Parties or (without prejudice to the generality of the foregoing) from any person or bodies with whom any member of the Wider UK Mail Group or the Wider Deutsche Post DHL Group has entered into contractual arrangements and all such Authorisations necessary, appropriate or desirable to carry on the business of any member of the Wider UK Mail Group in any jurisdiction having been obtained and all such Authorisations remaining in full force and effect at the time at which the Offer becomes otherwise wholly unconditional and there being no notice or intimation of an intention to revoke, suspend, restrict, modify or not to renew such Authorisations;
General antitrust and regulatory (c)
no NCA or Third Party having given notice of a decision to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference (and in each case, not having withdrawn the same), or having required any action to be taken or otherwise having done anything, or having enacted, made or proposed any statute, regulation, decision, order or change to published practice (and in each case, not having withdrawn the same) and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to:
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(i)
require, prevent or materially delay the divestiture or materially alter the terms envisaged for such divestiture by any member of the Wider Deutsche Post DHL Group or by any member of the Wider UK Mail Group of all or any material part of its businesses, assets or property or impose any limitation on the ability of all or any of them to conduct their businesses (or any part thereof) or to own, control or manage any of their assets or properties (or any part thereof);
(ii)
except pursuant to Chapter 3 of Part 28 of the Companies Act, require any member of the Wider Deutsche Post DHL Group or the Wider UK Mail Group to acquire or offer to acquire any shares, other securities (or the equivalent) or interest in any member of the Wider UK Mail Group or any asset owned by any Third Party (other than in the implementation of the Offer);
(iii)
impose any material limitation on, or result in a delay in, the ability of any member of the Wider Deutsche Post DHL Group directly or indirectly to acquire, hold or to exercise effectively all or any rights of ownership in respect of shares or other securities in UK Mail or on the ability of any member of the Wider UK Mail Group or any member of the Wider Deutsche Post DHL Group directly or indirectly to hold or exercise effectively all or any rights of ownership in respect of shares or other securities (or the equivalent) in, or to exercise voting or management control over, any member of the Wider UK Mail Group to an extent which is material in the context of the Wider UK Mail Group taken as a whole or the Wider Deutsche Post DHL Group taken as a whole or material in the context of the Offer (as the case may be);
(iv)
otherwise materially adversely affect any or all of the business, assets, profits or prospects of any member of the Wider UK Mail Group or any member of the Wider Deutsche Post DHL Group;
(v)
result in any member of the Wider UK Mail Group or any member of the Wider Deutsche Post DHL Group ceasing to be able to carry on business under any name under which it presently carries on business to an extent which is material in the context of the Wider UK Mail Group taken as a whole or the Wider Deutsche Post DHL Group taken as a whole or material in the context of the Offer (as the case may be);
(vi)
make the Offer, its implementation or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, UK Mail by any member of the Wider Deutsche Post DHL Group void, unenforceable and/or illegal under the laws of any relevant jurisdiction, or otherwise, directly or indirectly prevent or prohibit, restrict, restrain, or delay or otherwise materially interfere with the implementation of, or impose additional materially adverse conditions or obligations with respect to, or otherwise challenge, impede, interfere or require material amendment of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control or management of, UK Mail by any member of the Wider Deutsche Post DHL Group;
(vii)
require, prevent or materially delay a divestiture by any member of the Wider Deutsche Post DHL Group of any shares or other securities (or the equivalent) in any member of the Wider UK Mail Group or any member of the Wider Deutsche Post DHL Group; or
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(viii)
impose any limitation on the ability of any member of the Wider Deutsche Post DHL Group or any member of the Wider UK Mail Group to conduct, integrate or co-ordinate all or any part of its business with all or any part of the business of any other member of the Wider Deutsche Post DHL Group and/or the Wider UK Mail Group in a manner which is materially adverse to the Wider Deutsche Post DHL Group taken as a whole or the Wider UK Mail Group taken as a whole or material in the context of the Offer (as the case may be),
and all applicable waiting and other time periods (including any extensions thereof) during which any such NCA or Third Party could decide to take, institute, implement or threaten any such action, proceeding, suit, investigation, enquiry or reference or take any other step under the laws of any jurisdiction in respect of the Offer or the acquisition or proposed acquisition of any UK Mail Shares or otherwise intervene having expired, lapsed or been terminated;
Certain matters arising as a result of any arrangement, agreement, etc. (d)
except as Disclosed, there being no provision of any arrangement, agreement, lease, licence, franchise, permit or other instrument to which any member of the Wider UK Mail 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 to or any event or circumstance which, as a consequence of the Offer or the acquisition or the proposed acquisition by any member of the Wider Deutsche Post DHL Group of any shares or other securities (or the equivalent) in UK Mail or because of a change in the control or management of any member of the Wider UK Mail Group or otherwise, would or might reasonably be expect to result in: (i)
any monies borrowed by, or any other indebtedness, actual or contingent, of, or any grant available to, any member of the Wider UK Mail Group being or becoming repayable, or capable of being declared repayable, immediately or prior to its or their stated maturity date or repayment date, or the ability of any such member to borrow monies or incur any indebtedness being withdrawn or inhibited or being capable of becoming or being withdrawn or inhibited;
(ii)
the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider UK Mail Group or any such mortgage, charge or other security interest (whenever created, arising or having arisen) being enforced or becoming enforceable;
(iii)
any such arrangement, agreement, lease, licence, franchise, permit or other instrument being terminated or becoming capable of being terminated or adversely modified or the rights, liabilities, obligations or interests of any member of the Wider UK Mail Group being adversely modified or adversely affected or any obligation or liability arising or any adverse action being taken or arising thereunder;
(iv)
any liability of any member of the Wider UK Mail Group to make any severance, termination, bonus or other payment to any of its directors, or other officers;
(v)
the rights, liabilities, obligations, interests or business of any member of the Wider UK Mail Group or any member of the Wider Deutsche Post DHL Group under any such arrangement, agreement, licence, permit, lease or instrument or the interests or business of any member of the Wider UK Mail Group or any member of the Wider Deutsche Post DHL Group in or with any other person or
25
body or firm or company (or any arrangement or arrangement relating to any such interests or business) being or becoming capable of being terminated, or adversely modified or affected or any onerous obligation or liability arising or any adverse action being taken thereunder; (vi)
any member of the Wider UK Mail Group ceasing to be able to carry on business under any name under which it presently carries on business;
(vii)
the value of, or the financial or trading position or prospects of, any member of the Wider UK Mail Group being prejudiced or adversely affected; or
(viii)
the creation or acceleration of any liability (actual or contingent) by any member of the Wider UK Mail Group,
which in each case is or would be material in the context of the Wider UK Mail Group taken as a whole or material in the context of the Offer, and no event having occurred which, under any provision of any arrangement, agreement, licence, permit, franchise, lease or other instrument to which any member of the Wider UK Mail Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would or might result in any of the events or circumstances as are referred to in Conditions (d)(i) to (viii);
UK Mail Shareholder resolution (e)
except as Disclosed, no resolution of UK Mail Shareholders in relation to any acquisition or disposal of assets or shares (or the equivalent thereof) in any undertaking or undertakings (or in relation to any merger, demerger, reconstruction, amalgamation or scheme) being passed at a meeting of UK Mail Shareholders;
Certain events occurring since 31 March 2016 (f)
except as Disclosed, no member of the Wider UK Mail Group having since 31 March 2016: (i)
issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue, of additional shares of any class, or securities or securities convertible into, or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares, securities or convertible securities or transferred or sold or agreed to transfer or sell or authorised or proposed the transfer or sale of UK Mail Shares out of treasury (except, where relevant, as between UK Mail and wholly-owned subsidiaries of UK Mail or between the wholly-owned subsidiaries of UK Mail and except for the issue or transfer out of treasury of UK Mail Shares on the exercise of employee share options or vesting of employee share awards in the ordinary course under the UK Mail Employee Share Plans);
(ii)
except for the Agreed Dividend, recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution (whether payable in cash or otherwise) other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of UK Mail to UK Mail or any of its wholly-owned subsidiaries;
(iii)
other than pursuant to the Offer (and except for transactions between UK Mail and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of
26
UK Mail and transactions in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof); (iv)
except for transactions between UK Mail and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of UK Mail and except for transactions in the ordinary course of business disposed of, or transferred, mortgaged or created any security interest over any material asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so;
(v)
(except for transactions between UK Mail and its wholly-owned subsidiaries or between the wholly-owned subsidiaries of UK Mail) issued, authorised or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness, which is material in the context of the Wider UK Mail Group taken as a whole or is material in the context of the Offer;
(vi)
entered into or varied or authorised, proposed or announced its intention to enter into or vary any contract, arrangement, agreement, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, unusual or onerous nature or magnitude or which is or which involves or could involve an obligation of a nature or magnitude which is reasonably likely to be restrictive on the business of any member of the Wider UK Mail Group;
(vii)
entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of any contract, service agreement, commitment or arrangement with any director or, except for salary increases, bonuses or variations of terms in the ordinary course, senior executive of any member of the Wider UK Mail Group;
(viii)
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 employee of the Wider UK Mail Group;
(ix)
purchased, redeemed or repaid or announced any proposal to purchase, redeem or repay any of its own shares or other securities or reduced or, except in respect of the matters mentioned in sub-paragraph (i) above, made any other change to any part of its share capital;
(x)
except in the ordinary course of business, waived, compromised or settled any claim;
(xi)
terminated or varied the terms of any agreement or arrangement between any member of the Wider UK Mail 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 of the Wider UK Mail Group taken as a whole;
(xii)
made any alteration to its memorandum or articles of association or other incorporation documents;
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(xiii)
except in relation to changes made or agreed as a result of, or arising from, changes to legislation, made or agreed or consented to any change to: A.
the terms of the trust deeds and rules constituting the pension scheme(s) established by any member of the Wider UK Mail Group for its directors, employees or their dependants;
B.
the contributions payable to any such scheme(s) or to the benefits which accrue, or to the pensions which are payable, thereunder;
C.
the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined; or
D.
the basis upon which the liabilities (including pensions) of such pension schemes are funded, valued, made, agreed or consented to;
(xiv) been unable, or admitted in writing that it is unable, to pay its debts or commenced negotiations with one or more of its creditors with a view to rescheduling or restructuring any of its indebtedness, or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; (xv)
taken or proposed any steps, corporate action or had any legal proceedings instituted or threatened against it in relation to the suspension of payments, a moratorium of any indebtedness, its winding-up (voluntary or otherwise), dissolution, reorganisation or for the appointment of a receiver, administrator, manager, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous or equivalent steps or proceedings in any jurisdiction or appointed any analogous person in any jurisdiction or had any such person appointed;
(xvi) (except for transactions between UK Mail and its wholly-owned subsidiaries or between the wholly-owned subsidiaries), made, authorised, proposed or announced an intention to propose any change in its loan capital; (xvii) entered into, implemented or authorised the entry into, any joint venture, asset or profit sharing arrangement, partnership or merger of business or corporate entities; or (xviii) entered into any agreement, arrangement, commitment or contract or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced an intention to, or to propose to, effect any of the transactions, matters or events referred to in this Condition (f);
No adverse change, litigation, regulatory enquiry or similar (g)
except as Disclosed, since 31 March 2016 there having been: (i)
no adverse change and no circumstance having arisen which would or might be expected to result in any adverse change in, the business, assets, financial or trading position or profits or prospects or operational performance of any member of the Wider UK Mail Group which is material in the context of the Wider UK Mail Group taken as a whole or is material in the context of the Offer;
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(ii)
no litigation, arbitration proceedings, prosecution or other legal proceedings having been threatened, announced or instituted by or against or remaining outstanding against or in respect of, any member of the Wider UK Mail Group or to which any member of the Wider UK Mail Group is or may become a party (whether as claimant, defendant or otherwise) having been threatened, announced, instituted or remaining outstanding by, against or in respect of, any member of the Wider UK Mail Group, in each case which is or might reasonably be expected to be material in the context of the Wider UK Mail Group taken as a whole or is material in the context of the Offer;
(iii)
no enquiry, review or investigation by, or complaint or reference to, any Third Party against or in respect of any member of the Wider UK Mail Group having been threatened, announced or instituted or remaining outstanding by, against or in respect of any member of the Wider UK Mail Group, in each case which might reasonably be expected to have a material adverse effect on the Wider UK Mail Group taken as a whole or is material in the context of the Offer;
(iv)
no contingent or other liability having arisen or become apparent to Deutsche Post DHL or increased which is reasonably likely to affect adversely the business, assets, financial or trading position or profits or prospects of any member of the Wider UK Mail Group to an extent which is material in the context of the Wider UK Mail Group taken as a whole or is material in the context of the Offer; and
(v)
no steps having been taken and no omissions having been made which are reasonably likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider UK Mail Group which is necessary for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which might reasonably be expected to have a material adverse effect on the Wider UK Mail Group taken as a whole or is material in the context of the Offer;
No discovery of certain matters regarding information, liabilities and environmental issues (h)
except as Disclosed, Deutsche Post DHL not having discovered: (i)
that any financial, business or other information concerning the Wider UK Mail Group publicly announced prior to the date of this Announcement or disclosed at any time to any member of the Wider Deutsche Post DHL Group by or on behalf of any member of the Wider UK Mail Group prior to the date of this Announcement is misleading, contains a material misrepresentation of any fact, or omits to state a fact necessary to make that information not misleading;
(ii)
that any member of the Wider UK Mail Group or any partnership, company or other entity in which any member of the Wider UK Mail Group has a significant economic interest and which is not a subsidiary undertaking of UK Mail is subject to any liability, contingent or otherwise which is material in the context of the Wider UK Mail Group taken as a whole or material in the context of the Offer;
(iii)
that any past or present member of the Wider UK Mail Group has not complied with all applicable legislation, regulations or other requirements of any jurisdiction or any Authorisations relating to the use, treatment, storage, carriage, disposal, discharge, spillage, release, leak or emission of any waste or hazardous
29
substance or any substance likely to impair the environment (including property) or harm human or animal health or otherwise relating to environmental matters or the health and safety of humans, which non-compliance would be likely to give rise to any material liability including any penalty for non-compliance (whether actual or contingent) on the part of any member of the Wider UK Mail Group, in each case to an extent which is material in the context of the Wider UK Mail Group taken as a whole or material in the context of the Offer; (iv)
that there has been a disposal, discharge, spillage, accumulation, release, leak, emission or the migration, production, supply, treatment, storage, transport or use of any waste or hazardous substance or any substance likely to impair the environment (including any property) or harm human or animal health which (whether or not giving rise to non-compliance with any law or regulation), would be likely to give rise to any material liability (whether actual or contingent) on the part of any member of the Wider UK Mail Group, in each case to an extent which is material in the context of the Wider UK Mail Group taken as a whole or material in the context of the Offer;
(v)
that there is or is reasonably likely to be any obligation or liability (whether actual or contingent) or requirement to make good, remediate, repair, reinstate or clean up any property, asset or any controlled waters currently or previously owned, occupied, operated or made use of or controlled by any past or present member of the Wider UK Mail Group (or on its behalf), or in which any such member may have or previously have had or be deemed to have had an interest, under any environmental legislation, common law, regulation, notice, circular, Authorisation or order of any Third Party in any jurisdiction or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto; or
(vi)
that circumstances exist (whether as a result of making the Offer or otherwise) which would be reasonably likely to lead to any Third Party instituting (or whereby any member of the Wider UK Mail Group would be likely to be required to institute), an environmental audit or take any steps which would in any such case be reasonably likely to result in any actual or contingent liability to improve or install new plant or equipment or to make good, repair, reinstate or clean up any property of any description or any asset now or previously owned, occupied or made use of by any past or present member of the Wider UK Mail Group (or on its behalf) or by any person for which a member of the Wider UK Mail Group is or has been responsible, or in which any such member may have or previously have had or be deemed to have had an interest, which is material in the context of the Wider UK Mail Group taken as a whole or material in the context of the Offer.
Anti-corruption (vii)
any member of the Wider UK Mail Group or any person that performs or has performed services for or on behalf of any such company is or has engaged in any activity, practice or conduct which would constitute an offence under the Bribery Act 2010 and/or the US Foreign Corrupt Practices Act of 1977, as amended or any other applicable anti-corruption legislation;
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(viii)
any member of the Wider UK Mail Group is ineligible to be awarded any contract or business under section 23 of the Public Contracts Regulations 2006 or section 26 of the Utilities Contracts Regulations (2006) (each as amended); or
(ix)
any past or present member of the Wider UK Mail Group has engaged in any activity or business with, or made any investments in, or made any payments to any government, entity or individual covered by any of the economic sanctions administered by the United Nations or the European Union (or any of their respective member states) or the United States Office of Foreign Assets Control or any other governments or supranational body or authority in any jurisdiction;
No criminal property (x)
any asset of any member of the Wider UK Mail Group constitutes criminal property as defined by section 340(3) of the Proceeds of Crime Act 2002 (but disregarding paragraph (b) of that definition).
Part B: Certain further terms of the Offer 1
Subject to the requirements of the Panel, Deutsche Post DHL reserves the right to waive: (i)
any of the Conditions set out in the above Condition 1 for the timing of the Court Meeting, UK Mail General Meeting, the Court hearing to sanction the Scheme and the effectiveness of the Scheme. If any such deadline is not met, Deutsche Post DHL will make an announcement by 8.00am on the Business Day following such deadline confirming whether it has invoked or waived the relevant Condition or agreed with UK Mail to extend the deadline in relation to the relevant Condition; and
(ii)
in whole or in part, all or any of the above Conditions 2(a) to (h) (inclusive).
2
If Deutsche Post DHL is required by the Panel to make an offer for UK Mail Shares under the provisions of Rule 9 of the Takeover Code, Deutsche Post DHL may make such alterations to any of the above Conditions and terms of the Offer as are necessary to comply with the provisions of that Rule.
3
The Offer will lapse if in so far as the Offer or any matter arising from or relating to the Scheme or Offer constitutes a concentration with a Community dimension within the scope of the Regulation, the European Commission either initiates proceedings under Article 6(1)(c) of the Regulation or makes a referral to a competent authority in the United Kingdom under Article 9(1) of the Regulation and there is then a CMA Phase 2 Reference, in each case, before the date of the Court Meeting.
4
Deutsche Post DHL will be under no obligation to waive (if capable of waiver), to determine, to be or remain satisfied or to treat as fulfilled any of Conditions 2(a) to (h) (inclusive), by a date earlier than the latest date for the fulfilment of that Condition notwithstanding that the other Conditions of the Offer may at such earlier date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such Conditions may not be capable of fulfilment.
5
The UK Mail Shares acquired under the Offer will be acquired fully paid and free from all liens, equities, charges, encumbrances, options, rights of pre-emption and any other third party rights and interests of any nature and together with all rights now or hereafter
31
attaching or accruing to them, including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the date of this Announcement, save for the Agreed Dividend.
6
If, after the date of this Announcement but prior to the Effective Date, save for the Agreed Dividend, any dividend or other distribution is declared, paid or made or becomes payable by UK Mail, or the Agreed Dividend exceeds 5.5 pence per UK Mail Share, Deutsche Post DHL reserves the right (without prejudice to any right of Deutsche Post DHL, with the consent of the Panel, to invoke Condition 2(f)(ii) above) to reduce the consideration payable under the Offer by the aggregate amount of such dividend or distribution or excess, and accordingly reduce the Offer Price (excluding associated tax credit) as long as the UK Mail Shareholders remain entitled to retain that dividend or other distribution. Furthermore, Deutsche Post DHL reserves the right to reduce the consideration payable under the Offer in respect of a UK Mail Share in such circumstances as are, and by such amount as is, permitted by the Panel. If any such dividend or distribution occurs (other than the Agreed Dividend), any reference in this Announcement to the consideration payable or the Offer Price will be deemed to be a reference to the consideration or Offer Price as so reduced. If such reduction occurs, notwithstanding the terms on which the UK Mail Shares are expressed to be acquired by Deutsche Post DHL pursuant to the Offer in Appendix I, the UK Mail Shares will be acquired by or on behalf of Deutsche Post DHL pursuant to the Offer together with all rights now and hereafter attaching to such shares including, without limitation, voting rights and the right to receive and retain in full all dividends and other distributions (if any) declared, made or paid, or any other return of capital (whether by reduction of share capital or share premium account or otherwise) made, on or after the date of this Announcement save for the Agreed Dividend, if applicable. To the extent that such a dividend or distribution has been declared, paid, made or is payable is or will be: (i) transferred pursuant to the Offer on a basis which entitles Deutsche Post DHL to receive the dividend or distribution and to retain it; or (ii) cancelled, the consideration payable and the Offer Price will not be subject to change in accordance with this paragraph. Any exercise by Deutsche Post DHL of its rights referred to in this paragraph will be the subject of an announcement and, for the avoidance of doubt, will not be regarded as constituting any revision or variation of the Offer.
7
Deutsche Post DHL reserves the right to elect (with the consent of the Panel) to implement the Offer by way of a takeover offer as it may determine in its absolute discretion. In such event, the acquisition will be implemented on substantially the same terms subject to appropriate amendments, including (without limitation) an acceptance condition set at 90 per cent. (or such less percentage, being more than 50 per cent., as Deutsche Post DHL may decide) of the shares to which such offer relates, so far as applicable, as those which would apply to the Scheme.
8
The availability of the Offer 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.
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9
The Offer 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
The Offer is governed by the law of England and Wales and is subject to the jurisdiction of the English courts and to the Conditions and further terms set out in this Appendix I and to be set out in the Scheme Document. The Offer will be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the UKLA.
11
Each of the Conditions will be regarded as a separate Condition and will not be limited by reference to any other Condition.
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APPENDIX II SOURCES OF INFORMATION AND BASES OF CALCULATION (i)
The value placed by the Offer on the existing issued share capital of UK Mail is based on 55,152,431 UK Mail Shares in issue on 27 September 2016, being the last dealing day prior to the date of this Announcement.
(ii)
The Closing Prices on 27 September 2016 are taken from the Daily Official List.
(iii)
Volume-weighted average prices have been derived from Bloomberg and have been rounded to the nearest single decimal place.
(iv)
Unless otherwise stated, the financial information relating to UK Mail is extracted from the audited consolidated financial statements of UK Mail for the financial year to 31 March 2016, prepared in accordance with IFRS.
(v)
The financial information relating to Deutsche Post DHL is extracted from the audited consolidated financial statements of Deutsche Post DHL for the year ended 31 December 2015, prepared in accordance with IFRS.
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APPENDIX III IRREVOCABLE UNDERTAKINGS UK Mail Directors’ Irrevocable Undertakings
Name of UK Mail Director
Number of UK Mail Shares in respect of which undertaking is given
Percentage of UK Mail issued share capital
Mr Steven Glew
155,812
0.28
Mr William Spencer
4,800
0.0087
Ms Jessica Burley
1,500
0.0027
Mr Michael Findlay
1,500
0.0027
As at the date of this Announcement, Mr Peter Kane, Mr Peter Fuller and Mr Chris Mangham do not hold any UK Mail Shares. These irrevocable undertakings will continue to be binding in the event that a higher competing offer is made for UK Mail. These irrevocable undertakings cease to be binding if: (i) Deutsche Post DHL announces, with the consent of the Panel, and before the Scheme Document is published, that it does not intend to proceed with the Offer and no new, revised or replacement scheme or offer is announced by the Deutsche Post DHL in accordance with Rule 2.7 of the Takeover Code; (ii) the Scheme does not become effective, is withdrawn or lapses in accordance with its terms, save for where the Scheme is withdrawn or lapses solely as a result of Deutsche Post DHL exercising its right to implement the Offer by way of takeover offer rather than the Scheme; or (iii) the Scheme is withdrawn or lapses, save for where the Scheme is withdrawn or lapses solely as a result of Deutsche Post DHL exercising its right to implement the Offer by way of takeover offer rather than the Scheme or any competing offer is made which is declared wholly unconditional or otherwise becomes effective. Other UK Mail Shareholders Name of UK Mail Shareholder giving undertaking
Number of UK Mail Shares in respect of which undertaking is given
Percentage of UK Mail issued share capital
Mr John Kane
13,626,167
24.71
Mr Michael Kane
5,300,000
9.61
Ms Ghislaine Kane
3,339,633
6.06
Mr and Mrs Matthew Bailey
3,033,333
5.50
Marlborough Fund Managers Limited
4,350,000
7.89
Unicorn Asset Management
3,290,404
5.97
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The irrevocable undertakings entered into by Mr John Kane, Mr Michael Kane, Ms Ghislaine Kane and Mr and Mrs Matthew Bailey will continue to be binding in the event that a higher competing offer is made for UK Mail. In the event that a higher competing offer is made for UK Mail, the irrevocable undertakings entered into by Marlborough Fund Managers Limited and Unicorn Asset Management shall be suspended until such time as Deutsche Post DHL makes a revised offer that is higher than such competing offer provided that such revised offer is made no later than midnight on the fourteenth day after the date such competing offer was made. These irrevocable undertakings cease to be binding if: (i) Deutsche Post DHL announces, with the consent of the Panel, and before the Scheme Document is published, that it does not intend to proceed with the Offer and no new, revised or replacement scheme or offer is announced by the Deutsche Post DHL in accordance with Rule 2.7 of the Takeover Code; (ii) the Scheme does not become effective, is withdrawn or lapses in accordance with its terms, save for where the Scheme is withdrawn or lapses solely as a result of Deutsche Post DHL exercising its right to implement the Offer by way of takeover offer rather than the Scheme; or (iii) the Scheme is withdrawn or lapses, save for where the Scheme is withdrawn or lapses solely as a result of Deutsche Post DHL exercising its right to implement the Offer by way of takeover offer rather than the Scheme or any competing offer is made which is declared wholly unconditional or otherwise becomes effective. The irrevocable undertakings given by UK Mail Shareholders prevent such UK Mail Shareholders from disposing of, charging, pledging or otherwise encumbering or granting any option or other right over or otherwise dealing in all or any part of their UK Mail Shares except pursuant to the Scheme.
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APPENDIX IV DEFINITIONS The following definitions apply throughout this Announcement unless the context requires otherwise: “Agreed Dividend”
the interim dividend of 5.5 pence per UK Mail Share;
“Announcement”
this announcement;
“Authorisations”
regulatory authorisations, orders, recognitions, grants, consents, clearances, confirmations, certificates, licences, permissions or approvals;
“Business Day”
a day (other than Saturdays, Sundays and public holidays in the UK) on which banks are open for business in the City of London and Frankfurt;
“Closing Price”
the closing middle market price of a UK Mail Share on a particular trading day as derived from the Daily Official List;
“CMA Phase 2 Reference”
a decision by the Competition and Markets Authority to refer the Offer or any part of it under section 33 of the Enterprise Act 2002 (as amended);
“Companies Act”
the Companies Act 2006, as amended;
“Competition and Markets Authority” or “CMA”
a UK statutory body established under the Enterprise and Regulatory Reform Act 2013;
“Conditions”
the conditions to the implementation of the Offer, as set out in Appendix I to this Announcement and to be set out in the Scheme Document;
“Court”
the High Court of Justice in England and Wales;
“Court Meeting”
the meeting of UK Mail Shareholders to be convened pursuant to an order of the Court under 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;
“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 published by the London Stock Exchange;
“Dealing Disclosure”
has the same meaning as in Rule 8 of the Takeover Code;
“Deutsche Post DHL”
Deutsche Post AG;
“Disclosed”
the information fairly disclosed by, or on behalf of UK Mail: (i) in the annual report and accounts of the UK Mail Group for the financial year ended 31 March 2016; (ii) in this
37
Announcement; (iii) in any other announcement to a Regulatory Information Service by, or on behalf of UK Mail prior to the publication of this Announcement; or (iv) as otherwise fairly disclosed to Deutsche Post DHL (or its respective officers, employees, agents or advisers) prior to the date of this Announcement; “Effective Date”
the date on which the Scheme becomes effective;
“Euroclear”
Euroclear UK and Ireland Limited;
“European Commission”
the Commission of the European Union;
“FCA” or “Financial Conduct Authority”
the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the UK Financial Services and Markets Act 2000;
“Forms of Proxy”
the forms of proxy in connection with each of the Court Meeting and the UK Mail General Meeting which will accompany the Scheme Document;
“IFRS”
International Financial Reporting Standards;
“Listing Rules”
the rules and regulations made by the Financial Conduct Authority in its capacity as the UKLA under the Financial Services and Markets Act 2000, and contained in the UKLA’s publication of the same name;
“London Stock Exchange”
London Stock Exchange plc;
“Long Stop Date”
28 September 2017, or such later date as may be agreed by UK Mail and Deutsche Post DHL (with the Panel’s consent);
“NCA”
national competition authority of a Member State;
“Offer”
the recommended cash offer to be made by Deutsche Post DHL to acquire the entire issued and to be issued ordinary share capital of UK Mail to be effected by means of the Scheme and, where the context requires, any subsequent revision, variation, extension or renewal thereof;
“Offer Period”
the offer period (as defined by the Takeover Code) relating to UK Mail, which commenced on 28 September 2016;
“Offer Price”
440 pence per UK Mail Share;
“Official List”
the Official List maintained by the UKLA;
“Opening Position Disclosure”
has the same meaning as in Rule 8 of the Takeover Code;
“Overseas Shareholders”
UK Mail Shareholders (or nominees of, or custodians or trustees for UK Mail Shareholders) not resident in, or nationals or citizens of the United Kingdom;
“Panel”
the Panel on Takeovers and Mergers;
“Registrar of Companies”
the Registrar of Companies in England and Wales;
38
“Regulation”
has the meaning given to it in paragraph 2(a) of Appendix I to this Announcement;
“Regulatory Information Service”
any of the services set out in Appendix I to the Listing Rules;
“Restricted Jurisdiction”
any jurisdiction into which, or from which, making the Offer or this Announcement available would violate the laws of that jurisdiction;
“Scheme”
the proposed scheme of arrangement under Part 26 of the Companies Act between UK Mail and the UK Mail Shareholders in connection with the Offer, with or subject to any modification, addition or condition approved or imposed by the Court and agreed by UK Mail and Deutsche Post DHL;
“Scheme Document”
the document to be sent to UK Mail Shareholders containing, amongst other things, the Scheme and the notices convening the Court Meeting and the UK Mail General Meeting;
“Scheme Voting Record Time”
the date and time specified in the Scheme Document by reference to which entitlement to vote at the Court Meeting will be determined, expected to be 6.00pm on the day which is two days before the Court Meeting or, if the Court Meeting is adjourned, 6.00pm on the day which is two days before the date of such adjourned Court Meeting;
“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;
“Takeover Code”
the City Code on Takeovers and Mergers;
“Third Party”
each of a central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental, administrative, fiscal or investigative body, court, trade agency, association, institution, environmental body, employee representative body or any other body or person whatsoever in any jurisdiction;
“UKLA”
the UK Listing Authority, being the Financial Conduct Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000;
“UK Mail”
UK Mail Group plc;
“UK Mail Directors”
the directors of UK Mail;
“UK Mail Employee Share Plans”
the Business Post Group plc Long Term Incentive Plan 2009 (as operated by UK Mail), Business Post Group plc Share Matching Plan (as operated by UK Mail) and Business Post Group plc Sharesave Option Scheme (as
39
operated by UK Mail); “UK Mail General Meeting”
the general meeting of UK Mail Shareholders (including any adjournment thereof) to be convened in connection with the Scheme;
“UK Mail Group”
UK Mail and its subsidiary undertakings and, where the context permits, each of them;
“UK Mail Shareholders”
the holders of UK Mail Shares;
“UK Mail Shares”
the existing unconditionally allotted or issued and fully paid ordinary shares of 10 pence each in the capital of UK Mail and any further such ordinary shares which are unconditionally allotted or issued before the Scheme becomes effective;
“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;
“Wider Deutsche Post DHL Group”
Deutsche Post AG and associated undertakings and any other body corporate, partnership, joint venture or person in which Deutsche Post AG and all such undertakings (aggregating their interests) have a Significant Interest; and
“Wider UK Mail Group”
UK Mail Group plc and associated undertakings and any other body corporate, partnership, joint venture or person in which UK Mail Group plc and such undertakings (aggregating their interests) have a Significant Interest.
For the purposes of this Announcement, “subsidiary”, “subsidiary undertaking”, “undertaking” and “associated undertaking” have the respective meanings given thereto by the Companies Act. All references to “pounds”, “pounds Sterling”, “Sterling”, “£”, “pence”, “penny” and “p” are to the lawful currency of the United Kingdom. All references to “Euros”, “EUR” and “€” are to the lawful currency of the member states of the European Union that adopt a single currency in accordance with the Treaty establishing the European Community as amended by the Treaty on the European Union. All the times referred to in this Announcement are London times unless otherwise stated. References to the singular include the plural and vice versa.
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