Recommended Cash Offer by MMS UK Holdings Limited, a Publicis Group Company, for Chemistry Communications Group plc
By Publicis Groupe And Chemistry Communications Group Plc, PRNETuesday, January 25, 2011
LONDON, January 26, 2011 - NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART DIRECTLY
OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
Recommended Cash Offer
by
MMS UK Holdings Limited,
a Publicis Group Company,
for
Chemistry Communications Group plc
Summary
The Boards of Publicis Groupe S.A. ("Publicis") and Chemistry
Communications Group plc ("Chemistry") are pleased to announce that they have
agreed the terms of a recommended cash offer, to be made by MMS UK Holdings
Limited ("MMS"), a wholly owned subsidiary of Publicis, for the entire issued
and to be issued ordinary share capital of Chemistry.
The Offer will comprise 37 pence in cash for each Chemistry Share (the
"Offer Price"), valuing the entire issued and to be issued ordinary share
capital of Chemistry at approximately GBP14.45 million.
The Offer Price represents a premium of approximately:
- 134.9 per cent. to the Closing Price of 15.75 pence per Chemistry Share
on 25 January 2011, being the last Business Day prior to the date of
this announcement;
- 179.9 per cent. to the average Closing Price of 13.22 pence per
Chemistry Share for the six months prior to and including 25 January
2011, being the last Business Day prior to the date of this
announcement;
- 196.7 per cent. to the average Closing Price of 12.47 pence per
Chemistry Share for the 12 months prior to and including 25 January
2011, being the last Business Day prior to the date of this
announcement; and
- 252.4 per cent. to the lowest price of 10.50 pence per Chemistry Share
for the 12 months prior to and including 25 January 2011, being the
last Business Day prior to the date of this announcement.
The Offer Price has been determined on the basis that no dividend in
respect of the ordinary share capital of Chemistry will be paid by Chemistry
in respect of the financial year ended 30 November, 2010.
The Chemistry Directors, who have been so advised by Acorn Corporate
Finance, consider the terms of the Offer to be fair and reasonable.
Accordingly, the Chemistry Directors intend unanimously to recommend that
Chemistry Shareholders accept the Offer, as the Chemistry Directors have
irrevocably undertaken to do, in respect of the entire beneficial holdings of
themselves and their related parties amounting, in aggregate, to 7,555,978
Chemistry Shares, representing approximately 21.74 per cent. of the existing
issued ordinary share capital of Chemistry. In providing its advice, Acorn
Corporate Finance has taken into account the commercial assessments of the
Chemistry Directors.
MMS has also received irrevocable undertakings from certain other
Chemistry Shareholders (as detailed in Appendix III to this announcement) in
respect of a total of 11,731,985 Chemistry Shares, representing approximately
33.75 per cent. of the existing issued ordinary share capital of Chemistry.
In aggregate therefore, including the shareholdings of the Chemistry
Directors, MMS has received irrevocable undertakings to accept or procure the
acceptance of the Offer amounting, in aggregate, to 19,287,963 Chemistry
Shares, representing approximately 55.49 per cent. of the existing issued
ordinary share capital of Chemistry.
The irrevocable undertakings of the Chemistry Directors will continue
to be binding even in the event of a higher competing offer for Chemistry
being announced, unless the Offer lapses or is withdrawn.
The acquisition of Chemistry, an independent communications agency in
the UK, represents an attractive opportunity for Publicis to enhance its
expertise and proposition in that market, particularly in the fields of
digital customer relationship management and data analytics. The acquisition
of Chemistry by Publicis will also provide Chemistry with the opportunity to
leverage Publicis's international network to service its existing
international clients and expand its offering into end markets in which it is
not currently present. The resulting enlarged group in the UK will provide a
powerful platform to continue to attract and retain leading talent from
across the industry.
This summary should be read in conjunction with, and is subject to the
full text of the following announcement (including the Appendices).
The Offer will be subject to the conditions and further terms set out in
Appendix I to this announcement and to the terms and conditions to be set out
in the Offer Document when issued. Appendix II contains the bases and sources
of certain information used in this summary and the following announcement.
Appendix III contains details of the irrevocable undertakings referred to in
this announcement. Appendix IV contains definitions of certain terms used in
this summary and the following announcement.
Please carefully read the Offer Documentation in its entirety before
making a decision with respect to the Offer.
———————————————————————-
This announcement is for information purposes only and is not intended to
and does not constitute or form part of any offer or invitation to sell or
the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Offer or otherwise. MMS will
prepare the Offer Documentation to be distributed to Chemistry Shareholders
and, for information only, to persons with information rights. The Offer will
be made solely by the Offer Documentation which will contain the full terms
and conditions of the Offer, including details of how the Offer may be
accepted. Please carefully read the Offer Documentation in its entirety
before making a decision with respect to the Offer.
Rothschild, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for MMS and Publicis
as financial adviser in relation to the Offer and for no one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than MMS and Publicis for providing the
protections afforded to clients of Rothschild or for providing advice in
relation to the Offer, the content of this announcement or any matter
referred to herein or in the Offer Documentation. Neither Rothschild nor any
of its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether
in contract, in tort, under statute or otherwise) to any person who is not a
client of Rothschild in connection with this document, any statement
contained herein or otherwise.
Acorn Corporate Finance, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for
Chemistry as financial adviser in relation to the Offer and is not acting for
or advising any other person and accordingly will not be responsible to any
person other than Chemistry for providing the protections afforded to the
customers of Acorn Corporate Finance or for providing advice in relation to
the contents of this announcement or any offer or arrangements referred to
herein or in the Offer Documentation. Neither Acorn Corporate Finance nor any
of its affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a customer of Acorn Corporate
Finance in connection with this document, any statement contained herein or
otherwise.
IMPORTANT NOTICE
The availability of the Offer or the distribution of this announcement to
Chemistry Shareholders who are not resident in the United Kingdom may be
affected by the laws and regulations of the relevant jurisdiction in which
they are located or of which they are citizens. Any persons who are subject
to the laws and regulations of any jurisdiction other than the United Kingdom
should inform themselves of, and observe, any and all applicable legal or
regulatory requirements of their jurisdiction. Any failure to comply with the
requirements of such jurisdictions may constitute a violation of the
securities laws of such jurisdictions.
The release, publication or distribution of this announcement in
jurisdictions other than in the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom should inform themselves about, and observe, any
applicable requirements. Any failure to comply with the applicable
restrictions may constitute a violation of the securities laws of any such
jurisdiction. To the fullest extent permitted by applicable law, the
companies involved in the Offer disclaim any responsibility or liability for
the violation of such restrictions by any person.
This announcement has been prepared for the purposes of complying with
English law, the City Code, the PLUS Rules and the Disclosure and
Transparency Rules and the information disclosed may not be the same as that
which would have been disclosed if this document had been prepared in
accordance with the laws of any jurisdiction outside the United Kingdom.
The Offer will not be made, directly or indirectly, in, into or from any
jurisdiction where to do so would violate the laws in that jurisdiction.
Accordingly, copies of this announcement and the Offer Documentation will not
be and must not be, mailed or otherwise forwarded, distributed or sent in,
into or from any jurisdiction where to do so would violate the laws of that
jurisdiction.
NOTICE TO US HOLDERS OF CHEMISTRY SHARES
Neither the United States Securities and Exchange Commission nor any
state securities commission has reviewed, approved or disapproved this
document or any of the proposals described in this announcement.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This announcement may contain "forward looking statements" concerning
MMS, Publicis and Chemistry. Generally, the words "will", "may", "should",
"continue", "believes", "expects", "intends", "anticipates" or similar
expressions identify forward looking statements. These statements are based
on assumptions and assessments made by the MMS Directors, the Publicis
Directors and the Chemistry Directors, in the light of their experience and
their perception of historical trends, current conditions, expected future
developments and other factors they believe appropriate. By their nature the
forward looking statements involve risks and uncertainties that could cause
actual results to differ materially from those suggested by them. Many of
these risks and uncertainties relate to factors that are beyond the ability
of MMS, Publicis and Chemistry to control or estimate precisely, such as
future market conditions and the behaviours of other market participants, and
therefore undue reliance should not be placed on such statements which speak
only as at the date of this document.
Neither MMS, Publicis nor Chemistry undertakes any obligation to update
or revise publicly any of the forward-looking statements set out herein,
whether as a result of new information, future events or otherwise, except to
the extent legally required.
Nothing contained herein shall be deemed to be a forecast, projection or
estimate of the future financial performance of any member of the Publicis
Group, the Chemistry Group or the Enlarged Group following completion of the
Offer unless otherwise stated.
OPENING POSITION AND DEALING DISCLOSURE REQUIREMENTS OF THE CITY CODE
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more
of any class of relevant securities of an offeree company or of any paper
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 paper 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 paper
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company
or of a paper offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested
in 1% or more of any class of relevant securities of the offeree company or
of any paper offeror must make a Dealing Disclosure if the person deals in
any relevant securities of the offeree company or of any paper 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 paper
offeror, save to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business day
following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an interest
in relevant securities of an offeree company or a paper offeror, they will be
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and
by any offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on the Panel's
website at www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any
offeror was first identified. 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.
Publication on websites
A copy of this announcement is and will be available free of charge,
subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on Publicis's website at www.publicisgroupe.com
and on the Chemistry website at www.chemistrygroup.co.uk during the course of
the Offer.
For the avoidance of doubt, the content of the websites referred to above
is not incorporated into and does not form part of this announcement.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, Chemistry confirms that on 25
January 2011, being the latest practicable Business Day prior to the date of
this announcement, it had 34,757,427 ordinary shares in issue all with equal
voting rights. The total number of voting rights in Chemistry is therefore
34,757,427. The International Securities Identification Number for the
Chemistry Shares is GB0005543706.
Please be aware that addresses, electronic addresses and certain other
information provided by Chemistry Shareholders, persons with information
rights and other relevant persons for the receipt of communications from
Chemistry may be provided to MMS during the offer period as required under
Section 4 of Appendix 4 of the City Code.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART DIRECTLY
OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
Recommended Cash Offer
by
MMS UK Holdings Limited,
a Publicis Group company,
for
Chemistry Communications Group plc
1. Introduction
The boards of Publicis and Chemistry are pleased to announce that they
have agreed the terms of a recommended cash offer to be made by MMS, a wholly
owned subsidiary of Publicis, to acquire the entire issued and to be issued
ordinary share capital of Chemistry.
2. The Offer
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 Offer
Documentation which is expected to be posted to Chemistry Shareholders later
today, will be made on the following basis:
for each Chemistry Share 37 pence in cash
The Offer values the entire issued and to be issued ordinary share
capital of Chemistry at approximately GBP14.45 million.
The Offer Price represents a premium of approximately:
- 134.9 per cent. over the Closing Price of 15.75 pence per Chemistry
Share on 25 January 2011, being the last Business Day prior to the
date of this announcement;
- 179.9 per cent. to the average Closing Price of 13.22 pence per
Chemistry Share over the six months prior to and including 25 January
2011, being the last Business Day prior to the date of this
announcement;
- 196.7 per cent. to the average Closing Price of 12.47 pence per
Chemistry Share over the 12 months prior to and including 25 January
2011, being the last Business Day prior to the date of this
announcement; and
- 252.4 per cent. to the lowest Closing Price of 10.50 pence per
Chemistry Share over the 12 months prior to and including 25 January
2011, being the last Business Day prior to the date of this
announcement.
The Offer Price has been determined on the basis that no dividend in
respect of the ordinary share capital of Chemistry will be paid in respect of
the financial year ended 30 November 2010.
The Offer will extend to all Chemistry Shares unconditionally allotted or
issued and fully paid on the date of the Offer and any Chemistry Shares which
are unconditionally allotted or issued and fully paid (including pursuant to
the exercise of options under the Chemistry Share Schemes) while the Offer
remains open for acceptance or such earlier date as MMS may, subject to the
City Code, decide, being in any event no earlier than the date on which the
Offer becomes or is declared unconditional as to acceptances.
The Chemistry Shares will be acquired by MMS fully paid and free from all
liens, equitable interests, charges, encumbrances, rights of pre-emption and
any other third party rights or interests whatsoever and together with all
rights existing as at the date of this announcement or thereafter attaching
thereto, including, without limitation, the right to receive and retain, in
full, all dividends and other distributions (if any) declared, made or paid
or any other return of capital (whether by way of reduction of share capital
or share premium account or otherwise) made on or after the date of this
announcement in respect of the Chemistry Shares. If any dividend or other
distribution in respect of the Chemistry Shares is declared, paid or made on
or after the date of this announcement, MMS reserves the right to reduce the
consideration payable for each Chemistry Share under the terms of the Offer
by the amount per Chemistry Share of such dividend or distribution.
The conditions to the Offer are set out in Appendix I to this
announcement.
3. Recommendation
The Chemistry Directors, who have been so advised by Acorn Capital
Partners, consider the terms of the Offer to be fair and reasonable and
intend to unanimously recommend that all Chemistry Shareholders accept the
Offer, as the Chemistry Directors have irrevocably undertaken to do (or
procure to be done) in respect of their entire beneficial shareholdings of
Chemistry Shares and those of their related parties, comprising, in
aggregate, 7,555,978 Chemistry Shares, representing approximately 21.74 per
cent. of Chemistry's existing issued ordinary share capital.
4. Irrevocable undertakings
MMS has received irrevocable undertakings to accept, or to procure
acceptance, of the Offer from the Chemistry Directors and their related
parties, in respect of beneficial holdings amounting, in aggregate, to
7,555,978 Chemistry Shares, representing approximately 21.74 per cent. of
Chemistry's existing issued ordinary share capital.
These undertakings will remain binding in the event of a competing offer
being made for Chemistry and will cease to be binding only if the Offer
lapses or is withdrawn.
MMS has also received irrevocable undertakings to accept, or procure the
acceptance of the Offer in respect of a further 11,731,985 Chemistry Shares,
representing approximately 33.75 per cent. of Chemistry's existing issued
ordinary share capital. These undertakings have been received from the
Chemistry Shareholders detailed in Appendix III of this announcement, and
will only cease to be binding in the event that a competing offer is made for
Chemistry where the value of such offer is not less than 5 per cent. higher
than the Offer Price, or if the Offer lapses or is withdrawn.
In aggregate therefore, MMS has received irrevocable undertakings to
accept, or procure the acceptance of, the Offer in respect of 19,287,963
Chemistry Shares, representing approximately 55.49 per cent, of Chemistry's
existing issued ordinary share capital.
Further details in relation to these irrevocable undertakings, including
the circumstances in which they lapse, are set out in Appendix III of this
announcement.
5. Background to and reasons for the Offer
Publicis has been committed to developing and strengthening its leading
family of agencies worldwide. The acquisition of Chemistry, an independent
communications agency in the UK, represents an attractive opportunity for
Publicis to enhance its expertise and proposition in that market,
particularly in the fields of digital customer relationship management and
data analytics. The acquisition of Chemistry by Publicis will also provide
Chemistry with the opportunity to leverage Publicis's international network
to service its existing international clients and expand its offering into
end markets in which it is not currently present. The resulting enlarged
group in the UK will provide a powerful platform to continue to attract and
retain leading talent from across the industry.
6. Information relating to MMS and Publicis
MMS is a wholly-owned subsidiary of Publicis. Publicis is one of the
world's largest communications groups. With activities spanning 104 countries
on five continents, Publicis offers local and international clients a
comprehensive range of creative advertising services through three global
advertising networks (Leo Burnett, Publicis and Saatchi & Saatchi) and
several smaller agencies including, inter alia, Fallon, Bartle Bogle Hegarty
and Kaplan Thaler Group. Under its VivaKi umbrella organisation, Publicis
provides media agency services mainly through the Starcom MediaVest Group and
ZenithOptimedia worldwide media networks, and interactive and digital
marketing services through the Digitas and Razorfish networks. Publicis is
also active in specialised healthcare communications through Publicis
Healthcare Communications Group. Publicis's MSL GROUP is one of the world's
leading public relations and events networks.
Publicis is listed on the Euronext Paris Exchange (FR0000130577-PUB) and
a member of the CAC40. For the financial year ended 31 December 2008,
Publicis reported turnover of EUR4.7 billion and operating profit before
exceptionals of EUR785m. For the financial year ended 31 December 2009,
Publicis reported turnover of EUR4.5 billion and operating profit before
exceptionals of EUR680m.
7. Information relating to Chemistry
Chemistry is a marketing communications group that specialises in
integrated marketing services with a strong emphasis on digital
communications. Chemistry's services include:
- Advertising - on-line advertising, press, radio and outdoor
- Digital services - website design and build, digital strategy, social
media strategy and delivery and mobile marketing
- Direct marketing - relationship and customer relationship marketing
programmes, direct mail and on-line communications
- Promotional marketing - integrated campaigns, experimental activity
and events, in-store point-of-sale marketing and door-drop sampling.
Chemistry was recently named direct marketing agency of the year at the
Grocer magazine's 2010 Gramia Awards (Grocer Advertising and Marketing
Industry Awards) at which it also won the creative DM award with its Dove RM
programme for Unilever. Chemistry also won awards in 2010 at the ISP Awards
(Institute of Sales Promotion), Globes (Global Promotional Awards) and EIM
(European Integrated Marketing Awards) for its work on the Triple Velvet and
Bounty brands for SCA Hygiene.
Chemistry's other major clients include Diageo, Emirates, Experian, Kraft
Foods, McNeil Nutritionals, Orange and Tesco.
Currently, approximately 178 people are employed by the Chemistry Group
at its offices in London and Nottingham.
Chemistry was established in August 2000 and its shares were admitted to
trading on the PLUS Market in January 2001.
In the financial year to 30 November 2009, turnover was approximately
GBP19.10 million (30 November 2008: GBP13.44 million,) profit before taxation
GBP1.41 million (30 November 2008: GBP0.56 million) and profit after taxation
GBP0.95 million (30 November 2008: GBP0.34 million). Shareholders' funds at
30 November 2009 were approximately GBP4.75 million (30 November 2008:
GBP3.80 million).
8. Financing the Offer
The cash consideration payable by MMS under the terms of the Offer will
be funded from funds made available to MMS from the existing cash resources
of the Publicis Group.
Rothschild is satisfied that sufficient resources are available to MMS to
satisfy, in full, the cash consideration payable to Chemistry Shareholders
under the terms of the Offer.
9. Chemistry Directors, management and employees and location of business
Upon the Offer being declared wholly unconditional, all of the Chemistry
Directors (other than Joseph Garton) will resign as directors of Chemistry.
Joseph Garton and Diane Charlton, as the Executive Management Team, will both
remain in place to operate the business once the Offer becomes or is declared
wholly unconditional. Peter Meaklim will also resign as an employee upon the
Offer becoming or being declared wholly unconditional. Details of his
proposed severance package will be set out in the Offer Document.
Publicis has agreed that Joe Garton and Diane Charlton will join the
senior management of the Enlarged Group in the UK following completion of the
Offer. Publicis also intends to make a proposal to Peter Meaklim to retain
his services to assist in an orderly transition in the period following
completion of the Offer although no such proposal has been finalised at the
date of this announcement.
Publicis has given assurances that, if the Offer becomes or is declared
unconditional in all respects, the existing employment rights, including
accrued pension rights, of the Chemistry Group's employees will be fully
safeguarded.
In assessing the terms of the Offer, Publicis has made certain
assumptions in relation to cost savings. The precise scope for realising any
such cost savings in the context of the Enlarged Group, as well as the timing
and manner of implementation, will be determined by Publicis following
completion of the Offer, when it is intended that the Enlarged Group will
conduct an integration review process which will include seeking ways to
achieve cost savings through the elimination of duplicated functions. These
are likely to include the rationalisation of the Enlarged Group's property
portfolio. In particular, it is envisaged that the Chemistry Group's
employees will be relocated from the Fulham offices to Publicis UK's Baker
Street offices.
It is expected that this integration review process will result in some
headcount reduction within the Enlarged Group. However, the Publicis Board
believes that for the majority of the Enlarged Group's employees, the
combination of the Publicis Group and the Chemistry Group will be to their
advantage, offering the opportunity of continued employment in a larger
group, with the anticipated benefits the Publicis's Board expects the
combination to bring (as described above in paragraph 5).
10. Arrangements between Publicis and the Executive Management Team
The Executive Management Team will remain in place to operate the
business once the Offer becomes or is declared wholly unconditional. Their
employment will be governed by the New Service Contracts (details of which
will be set out in the Offer Document).
Following completion of the Offer, Chemistry's current annual bonus plan
will be replaced by the LTIP (further details of which will be set out in the
Offer Document) which will only make payments in years three and five,
subject to more challenging targets being met.
The LTIP will be made available to Joseph Garton and Diane Charlton, in
addition to certain existing senior employees of Publicis, including senior
employees who work in the Incorporated Businesses. The performance criteria
for the LTIP, which will reflect the performance expected of the Enlarged
Chemistry Group, will be based on: (a) revenue growth; and (b) growth in
operating income.
Payments under the LTIP will be made on a sliding scale. If
the performance targets are met in full, the LTIP will pay a total of
GBP3,250,000 to its participants. In addition, the LTIP provides for the
payment of a super bonus of up to GBP813,000 to participants in the event of
performance in excess of the maximum performance target.
Acorn Corporate Finance considers the terms of the Management
Arrangements to be fair and reasonable as far as the Independent Shareholders
are concerned.
11. Chemistry Share Schemes
As soon as practicable following the publication of the Offer Document,
explanatory letters will be sent to the participants in the Chemistry Share
Schemes explaining the effect of the Offer on them and, where applicable,
their right to exercise share options.
The Offer will extend to any Chemistry Shares which are unconditionally
allotted or issued, fully paid (or credited as fully paid) whilst the Offer
remains open for acceptance (or by such earlier time and date as MMS may,
subject to the City Code, decide), as a result of the exercise of options
granted under the Chemistry Share Schemes or otherwise.
12. Inducement fee and other arrangements
Chemistry and Publicis have entered into the Inducement Fee Agreement,
pursuant to which Chemistry has agreed to pay Publicis an inducement fee on
the occurrence of certain events, both prior to, and following, the
publication of this announcement. As the provisions relating to payment of
the inducement fee prior to the publication of this announcement have now
ceased to have effect, the following paragraphs summarise the remaining
provisions of the inducement fee agreement.
Chemistry has agreed to pay Publicis an amount equal to one per cent. of
the value of Chemistry calculated by reference to the Offer Price and the
fully diluted ordinary share capital of Chemistry in accordance with Rule
21.2 of the Code (inclusive, in certain circumstances, of VAT if applicable)
in the event that:
- Chemistry acts in breach of the non-solicitation covenants referred to
below; or
- an offer by a third party for the equity share capital of Chemistry is
publicly announced and such offer becomes or is declared unconditional
in all respects or otherwise completes and the Offer lapses; or
- the board of Chemistry recommends any offer other than the Offer and
such offer becomes or is declared unconditional in all respects or
otherwise completes and the Offer lapses.
Nothing in the Inducement Fee Agreement obliges Chemistry to pay any
amount which the Panel determines would not be permitted by Rule 21.2 of the
Code.
Non-solicitation and Alternative Offers
Pursuant to the terms of the Inducement Fee Agreement, Chemistry has
undertaken to Publicis, inter alia, that it shall not, nor shall it permit
any member of the Chemistry Group, nor any director, officer or employee of,
or any investment banker, corporate finance adviser, lawyer or other adviser
or representative of any member of the Chemistry Group, to:
- solicit the submission of any Alternative Offer (as defined in the
Inducement Fee Agreement); or
- participate in any discussions or negotiations regarding, or furnish to
any person any information with respect to, or take any other action to
facilitate any enquiries or the making of any proposal that
constitutes, or may be expected to lead to, any Alternative Offer.
In addition, Chemistry has agreed not to disclose information to any
third party in connection with a possible Alternative Offer except in certain
limited circumstances.
Chemistry has also agreed to notify Publicis promptly of any Alternative
Offer or any enquiry which it believes could reasonably lead to an
Alternative Offer.
13. Disclosure of interests in Chemistry securities
Neither MMS nor any person acting in concert with MMS has any interest in
or right to subscribe for, any relevant securities of Chemistry, or any short
positions (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. Save as set out in paragraph 4 above and in
Appendix III of this announcement, neither MMS nor any of its associates has
procured any irrevocable commitment or letter of intent in respect of any
relevant securities of Chemistry. Neither MMS nor any person acting in
concert with MMS has borrowed or lent any relevant securities of Chemistry
(save for any borrowed shares which have been either on-lent or sold). There
are no arrangements of the kind referred to in Note 6(b) to Rule 8 of the
Code which exist between MMS or any associate of MMS and any other person in
relation to any relevant securities of Chemistry.
MMS confirms that it will, if necessary, on the date of this
announcement, make an Opening Position Disclosure pursuant to Rule 8.1(a) of
the Code.
14. Conditionality of the Offer
The conditions to the Offer are set out in full in Appendix I to this
announcement.
The Offer will be conditional, inter alia, upon Publicis receiving valid
acceptances of the Offer in respect of not less than 90 per cent. of the
Chemistry Shares to which the Offer relates (or such lower percentage as
Publicis may decide provided that such condition will not be satisfied unless
Publicis and/or any other members of the Publicis Group have acquired or
agreed to acquire, whether pursuant to the Offer or otherwise, Chemistry
Shares carrying in aggregate more than 50 per cent. of the voting rights then
normally exercisable at general meetings of Chemistry.
15. Overseas Shareholders
The distribution of this announcement to and the availability of the
Offer to, persons who are not resident in the United Kingdom may be affected
by the laws of their relevant jurisdiction. Such persons should inform
themselves of and observe any applicable legal or regulatory requirements of
their jurisdiction. Chemistry Shareholders who are in doubt regarding such
matters should consult an appropriate independent professional adviser in the
relevant jurisdiction without delay.
This announcement does not constitute an offer for sale of any securities
or an offer or an invitation to purchase any securities. Chemistry
Shareholders are advised to read carefully the Offer Documentation once it
has been dispatched.
16. Delisting, compulsory acquisition and re-registration
If MMS receives acceptances of the Offer in respect of, or otherwise
acquires, 90 per cent. or more of the Chemistry Shares to which the Offer
relates, and assuming all other conditions to the Offer have been satisfied
or waived (if they are capable of being waived), MMS intends to exercise its
rights pursuant to the provisions of Chapter 3 of Part 28 of the Act to
acquire compulsorily the remaining Chemistry Shares to which the Offer
relates on the same terms as the Offer.
If the Offer becomes or is declared unconditional in all respects and MMS
receives acceptances of the Offer which result in MMS and/or any other
members of the Publicis Group holding Chemistry Shares carrying in aggregate
75 per cent. or more of the voting rights then normally exercisable at
general meetings of Chemistry, MMS intends to procure the making of an
application by Chemistry as soon as it is appropriate to withdraw the
Chemistry Shares from the PLUS Market. It is anticipated that, subject to any
applicable requirements of the PLUS Rules, such withdrawal will take effect
no earlier than 10 Business Days after the date on which MMS announces that
it has, by virtue of its shareholdings and acceptances of the Offer, acquired
or agreed to acquire Chemistry Shares carrying 75 per cent. of the voting
rights attaching to the issued ordinary share capital of Chemistry or that
the Offer has become or is declared unconditional in all respects. Such
withdrawal will significantly reduce the liquidity and marketability of any
Chemistry Shares not assented to the Offer and may adversely affect their
value.
Following such withdrawal, MMS intends to procure that Chemistry
re-registers as a private limited company under the Act.
17. General
There are no agreements or arrangements to which MMS is a party which
relate to the circumstances in which it may or may not invoke a condition to
the Offer.
This announcement does not constitute an offer to purchase or an
invitation to sell any Chemistry Shares and any response to the Offer should
be made only on the basis of the information contained in the Offer
Documentation.
The Offer Documentation is expected to be posted (other than to
Restricted Overseas Persons) later today, and in any event will be posted
within 28 days of, the date of this announcement (unless agreed otherwise
with the Panel).
The Offer will be governed by English law and will be subject to the
jurisdiction of the English courts. The Offer will be subject to the
applicable requirements of the Code.
A copy of this announcement is and will be available free of charge,
subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on Publicis's website at www.publicisgroupe.com
and Chemistry's website at www.chemistrygroup.co.uk during the course of the
Offer.
For the avoidance of doubt, the content of the websites referred to above
is not incorporated into and does not form part of this announcement.
Details of the bases and sources of certain information set out in this
announcement are included in Appendix II. Appendix III contains details of
the irrevocable undertakings referred to in this announcement. Appendix IV
contains definitions of certain terms used in this announcement.
————————————————————————
This announcement is for information purposes only and is not intended to
and does not constitute or form part of any offer or invitation to sell or
the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the Offer or otherwise. MMS will
prepare the Offer Documentation to be distributed to Chemistry Shareholders
and, for information only, to persons with information rights. The Offer will
be made solely by the Offer Documentation which will contain the full terms
and conditions of the Offer, including details of how the Offer may be
accepted. Please carefully read the Offer Documentation in its entirety
before making a decision with respect to the Offer.
Rothschild, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for MMS and Publicis
as financial adviser in relation to the Offer and for no one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than MMS and Publicis for providing the
protections afforded to clients of Rothschild or for providing advice in
relation to the Offer, the content of this announcement or any matter
referred to herein or in the Offer Documentation. Neither Rothschild nor any
of its subsidiaries, branches or affiliates owes or accepts any duty,
liability or responsibility whatsoever (whether direct or indirect, whether
in contract, in tort, under statute or otherwise) to any person who is not a
client of Rothschild in connection with this document, any statement
contained herein or otherwise.
Acorn Corporate Finance, which is authorised and regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for
Chemistry as financial adviser in relation to the Offer and is not acting for
or advising any other person and accordingly will not be responsible to any
person other than Chemistry for providing the protections afforded to the
customers of Acorn Corporate Finance or for providing advice in relation to
the contents of this announcement or any offer or arrangements referred to
herein or in the Offer Documentation. Neither Acorn Corporate Finance nor any
of its affiliates owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, whether in contract, in tort, under
statute or otherwise) to any person who is not a customer of Acorn Corporate
Finance in connection with this document, any statement contained herein or
otherwise.
IMPORTANT NOTICE
The availability of the Offer or the distribution of this announcement to
Chemistry Shareholders who are not resident in the United Kingdom may be
affected by the laws and regulations of the relevant jurisdiction in which
they are located or of which they are citizens. Any persons who are subject
to the laws and regulations of any jurisdiction other than the United Kingdom
should inform themselves of, and observe, any and all applicable legal or
regulatory requirements of their jurisdiction. Any failure to comply with the
requirements of such jurisdictions may constitute a violation of the
securities laws of such jurisdictions.
The release, publication or distribution of this announcement in
jurisdictions other than in the United Kingdom may be restricted by law and
therefore any persons who are subject to the laws of any jurisdiction other
than the United Kingdom should inform themselves about, and observe, any
applicable requirements. Any failure to comply with the applicable
restrictions may constitute a violation of the securities laws of any such
jurisdiction. To the fullest extent permitted by applicable law, the
companies involved in the Offer disclaim any responsibility or liability for
the violation of such restrictions by any person.
This announcement has been prepared for the purposes of complying with
English law, the City Code, the PLUS Rules and the Disclosure and
Transparency Rules and the information disclosed may not be the same as that
which would have been disclosed if this document had been prepared in
accordance with the laws of any jurisdiction outside the United Kingdom.
The Offer will not be made, directly or indirectly, in, into or from any
jurisdiction where to do so would violate the laws in that jurisdiction.
Accordingly, copies of this announcement and the Offer Documentation will not
be and must not be, mailed or otherwise forwarded, distributed or sent in,
into or from any jurisdiction where to do so would violate the laws of that
jurisdiction.
NOTICE TO US HOLDERS OF CHEMISTRY SHARES
Neither the United States Securities and Exchange Commission nor any
state securities commission has reviewed, approved or disapproved this
document or any of the proposals described in this announcement.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This announcement may contain "forward looking statements" concerning
MMS, Publicis and Chemistry. Generally, the words "will", "may", "should",
"continue", "believes", "expects", "intends", "anticipates" or similar
expressions identify forward looking statements. These statements are based
on assumptions and assessments made by the MMS Directors, the Publicis
Directors and the Chemistry Directors in the light of their experience and
their perception of historical trends, current conditions, expected future
developments and other factors they believe appropriate. By their nature the
forward looking statements involve risks and uncertainties that could cause
actual results to differ materially from those suggested by them. Many of
these risks and uncertainties relate to factors that are beyond the ability
of MMS, Publicis and Chemistry to control or estimate precisely, such as
future market conditions and the behaviours of other market participants, and
therefore undue reliance should not be placed on such statements which speak
only as at the date of this document.
Neither MMS, Publicis nor Chemistry undertakes any obligation to update
or revise publicly any of the forward-looking statements set out herein,
whether as a result of new information, future events or otherwise, except to
the extent legally required.
Nothing contained herein shall be deemed to be a forecast, projection or
estimate of the future financial performance of any member of the Publicis
Group, the Chemistry Group or the Enlarged Group following completion of the
Offer unless otherwise stated.
OPENING POSITION AND DEALING DISCLOSURE REQUIREMENTS OF THE CITY CODE
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more
of any class of relevant securities of an offeree company or of any paper
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 paper 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 paper
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any paper offeror is first identified.
Relevant persons who deal in the relevant securities of the offeree company
or of a paper offeror prior to the deadline for making an Opening Position
Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested
in 1% or more of any class of relevant securities of the offeree company or
of any paper offeror must make a Dealing Disclosure if the person deals in
any relevant securities of the offeree company or of any paper 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 paper
offeror, save to the extent that these details have previously been disclosed
under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business day
following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an interest
in relevant securities of an offeree company or a paper offeror, they will be
deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and
by any offeror and Dealing Disclosures must also be made by the offeree
company, by any offeror and by any persons acting in concert with any of them
(see Rules 8.1, 8.2 and 8.4). Details of the offeree and offeror companies in
respect of whose relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on the Panel's
website at www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and when any
offeror was first identified. 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.
Publication on websites
A copy of this announcement is and will be available free of charge,
subject to certain restrictions relating to persons resident in Restricted
Jurisdictions, for inspection on Publicis's website at www.publicisgroupe.com
and on the Chemistry website at www.chemistrygroup.co.uk during the course of
the Offer.
For the avoidance of doubt, the content of the websites referred to above
is not incorporated into and does not form part of this announcement.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, Chemistry confirms that on 25
January 2011, being the latest practicable Business Day prior to the date of
this announcement, it had 34,,757,427 ordinary shares in issue all with equal
voting rights. The total number of voting rights in Chemistry is therefore
34,757,427. The International Securities Identification Number for the
Chemistry ordinary shares is GB0005543706.
Please be aware that addresses, electronic addresses and certain other
information provided by Chemistry Shareholders, persons with information
rights and other relevant persons for the receipt of communications from
Chemistry may be provided to MMS during the offer period as required under
Section 4 of Appendix IV of the City Code.
Appendix I
Conditions and further terms of the Offer
Part A
Conditions of the Offer
1 The Offer will be subject to the following conditions:
(a) valid acceptances being received (and not, where permitted,
withdrawn) by not later than 1.00 p.m. (London time) on 16 February 2011 (or
such later time(s) and/or date(s) as Publicis may, subject to the rules of
the City Code, decide) in respect of not less than 90 per cent. (or such
lower percentage as MMS may decide) in nominal value of the Chemistry Shares
to which the Offer relates representing not less than 90 per cent. (or such
lower percentage as MMS may decide) of the voting rights carried by the
Chemistry Shares to which the Offer relates, provided that this condition
will not be satisfied unless MMS and/or (with the consent of the Panel) any
member of the Publicis Group shall have acquired or agreed to acquire
(whether pursuant to the Offer or otherwise) Chemistry Shares carrying in
aggregate more than 50 per cent. of the voting rights then normally
exercisable at a general meeting of Chemistry. For the purpose of this
condition:
(i) Chemistry Shares which have been unconditionally allotted but not
issued before the Offer becomes or is declared unconditional as to
acceptances, whether pursuant to the exercise of any outstanding subscription
or conversion rights or otherwise, shall be deemed to carry the voting rights
which they will carry upon issue;
(ii) valid acceptances shall be deemed to have been received in respect
of Chemistry Shares which are treated for the purposes of sections 979(8) and
979(9) of the Act as having been acquired or contracted to be acquired by MMS
by virtue of acceptances of the Offer;
(iii) the expression "Chemistry Shares to which the Offer relates" means
Chemistry Shares except any Chemistry Shares which are treated at the date of
the Offer as already held by MMS for the purposes of Chapter 3 of Part 28 of
the Act;
(b) no central bank, government or governmental, quasi governmental,
supranational, statutory, administrative or regulatory or investigative body,
authority (including any anti-trust or merger control authority), court,
trade agency, association, institution, professional or environmental body or
any other person or body whatsoever in any jurisdiction (each a "Relevant
Authority") having decided to take, institute, implement or threaten any
action, proceedings, suit, investigation, enquiry or reference, or made,
proposed or enacted any statute, regulation, order or decision or taken any
other steps, and there not continuing to be outstanding any statute,
regulation, order or decision, which would:
(i) make the Offer, its implementation or the acquisition of any
Chemistry Shares, or control of Chemistry by MMS or any member of the
Publicis Group, void, illegal or unenforceable or otherwise materially
restrict, restrain, prohibit, delay or interfere with the implementation
thereof, or impose material additional conditions or obligations with respect
thereto, or require material amendment thereof or otherwise materially
impede, challenge or interfere therewith;
(ii) require, prevent or materially delay the divestiture or materially
alter the terms envisaged for any proposed divestiture by any member of the
wider Chemistry Group or by any member of the wider Publicis Group of all or
any portion of their respective businesses, assets or property or impose any
limitation on the ability of any of them to conduct their respective
businesses or own or control any of their respective assets or property or
any part thereof which in any case is material in the context of the wider
Chemistry Group or the wider Publicis Group, in either case taken as a whole;
(iii) impose any material limitation on or result in a material delay in
the ability of any member of the wider Chemistry Group to acquire or to hold
or to exercise effectively, directly or indirectly, all or any rights of
ownership of shares or loans, or securities convertible into shares or other
securities, in any member of the wider Chemistry Group held or owned by it or
to exercise management control over any member of the wider Chemistry Group
to an extent which is material in the context of the Chemistry Group taken as
a whole;
(iv) except pursuant to Chapter 3 of Part 28 of the Act, require any
member of the wider Publicis Group or the wider Chemistry Group to acquire or
offer to acquire any shares or other securities in any member of the wider
Chemistry Group which are owned by a third party where such acquisition would
be material in the context of the Chemistry Group taken as a whole;
(v) limit the ability of any member of the wider Chemistry Group or of
the wider Publicis Group to conduct or integrate or coordinate its business,
or any part of it, with the businesses or any part of the businesses of any
other member of the wider Chemistry Group or of the wider Publicis Group
which in any case is material in the context of the wider Chemistry Group or
the wider Publicis Group, in either case taken as a whole;
(vi) result in any member of the wider Chemistry Group ceasing to be able
to carry on business under any name under which it presently does so which in
any case is material in the context of the wider Chemistry Group taken as a
whole; or
(vii) otherwise adversely affect all or any of the assets, business,
profits or prospects of any member of the wider Publicis Group or of any
member of the wider Chemistry Group to an extent which would be material in
the context of the Chemistry Group taken as a whole,
and all applicable waiting and other time periods during which any such
Relevant Authority could decide to take, institute, implement or threaten any
such action, proceeding, suit, investigation, enquiry or reference having
expired, lapsed or been terminated;
(c) all necessary notifications and filings having been made, all
applicable waiting periods (including any extensions thereof) under any
applicable legislation or regulations of any jurisdiction having expired,
lapsed or been terminated, in each case in connection with the Offer and the
proposed acquisition of any Chemistry Shares, or of control or management of
Chemistry and/or of the Chemistry Group taken as a whole, by MMS, and all
authorisations, orders, recognitions, determinations, certificates, grants,
consents, licences, confirmations, clearances, permissions and approvals
("Authorisations") required by law in any jurisdiction for, or in respect of,
the Offer and the proposed acquisition of any Chemistry Shares, or of control
or management of Chemistry and/or of the Chemistry Group taken as a whole, by
MMS and to carry on the business of any member of the wider Publicis Group or
of the wider Chemistry Group having been obtained, in terms and in a form
reasonably satisfactory to MMS, from all appropriate Relevant Authorities and
from any persons or bodies with whom any member of the wider Publicis Group
or the wider Chemistry Group has entered into material contractual
arrangements (in each case where the direct consequence of a failure to make
such notification or filing or to wait for the expiry, lapse or termination
of any such waiting period or to comply with such obligation or obtain such
Authorisation would be unlawful in any relevant jurisdiction or have a
material adverse effect on the wider Chemistry Group or the ability of MMS to
implement the Offer) and all such Authorisations remaining in full force and
effect and MMS having no knowledge of an intention or proposal to revoke,
suspend or modify or not to renew any of the same and all necessary statutory
or regulatory obligations in any jurisdiction having been complied with;
(d) since 31 May 2010 and except as Disclosed, there being no provision
of any arrangement, agreement, licence, permit, franchise or other instrument
to which any member of the wider Chemistry Group is a party or by or to which
any such member or any of their assets is or may be bound, entitled or be
subject or any circumstance which, as a consequence of the Offer or the
acquisition or proposed acquisition of any Chemistry Shares, or control or
management of Chemistry and/or of the Chemistry Group taken as a whole, by
MMS or otherwise, would or might reasonably be expected, to an extent which
is material in the context of the Chemistry Group taken as a whole, to result
in:
(i) any monies borrowed by, or other indebtedness or liabilities (actual
or contingent) of, or any grant available to, any such member of the wider
Chemistry Group being or becoming repayable or being capable of being
declared repayable immediately or prior to its or their stated maturity or
the ability of any such member to borrow monies or incur any indebtedness
being withdrawn or inhibited or becoming capable of being withdrawn;
(ii) the creation of any mortgage, charge or other security interest over
the whole or any part of the business, property or assets of any such member
or any such security (whenever created, arising or having arisen) being
enforced or becoming enforceable;
(iii) any such arrangement, agreement, licence, permit, franchise or
other instrument or the rights, liabilities, obligations or interests of any
member of the wider Chemistry Group thereunder, being terminated or adversely
modified or affected or any action being taken of an adverse nature or any
obligation or liability arising thereunder;
(iv) any assets or interests of any such member being disposed of or
charged, or any right arising under which any such asset or interest could be
required to be disposed of or charged, other than in the ordinary course of
business;
(v) any member of the wider Chemistry Group ceasing to be able to carry
on business under any name under which it presently does so;
(vi) the creation of liabilities (actual or contingent) by any such
member other than in the ordinary course of business; or
(vii) the financial or trading position or the value of any such member
being prejudiced or adversely affected,
and no event having occurred which, under any provision of any such
arrangement, agreement, licence, permit, franchise or other instrument to
which any member of the wider Chemistry Group is a party, or to which any
such member or any of its assets may be bound, entitled or subject, could be
reasonably likely to result in any of the events or circumstances as are
referred to in paragraphs (i) to (vii) of this condition (d);
(e) since 31 May 2010 and except as Disclosed, no member of the wider
Chemistry Group having:
(i) issued, agreed to issue or proposed or authorised the issue of
additional shares or securities of any class, or securities convertible into,
or exchangeable for or rights, warrants or options to subscribe for or
acquire, any such shares, securities or convertible securities (save as
between Chemistry and wholly owned subsidiaries of Chemistry and save for
options and/or awards granted, and for any Chemistry Shares allotted upon
exercise of options and/or awards granted, under the Chemistry Share Schemes,
in each case before the date hereof), or redeemed, purchased, reduced or
repaid or made any other change to any part of its share capital or other
securities;
(ii) recommended, declared, paid or made or proposed to recommend,
declare, pay or make any bonus issue, dividend or other distribution, whether
payable in cash or otherwise, other than to Chemistry or a wholly-owned
subsidiary of Chemistry;
(iii) agreed, authorised, proposed or announced its intention to propose
any merger or demerger with or acquisition or disposal of any body corporate,
partnership or business or of assets or shares which are material in the
context of the Chemistry Group taken as a whole (other than in the ordinary
course of trading) or to any material change in its share or loan capital;
(iv) issued, authorised or proposed the issue of, or made any change in
or to, any debentures or incurred any indebtedness or actual or contingent
liability (other than in the ordinary course of business) which is material
in the context of the Chemistry Group taken as a whole;
(v) acquired or disposed of or transferred, mortgaged, charged, or
encumbered any asset or any right, title or interest in any asset, including
shares in any undertaking and trade investments (other than in the ordinary
course of trading), or authorised the same, in a manner which is material in
the context of the Chemistry Group taken as a whole, other than to or from
Chemistry or a wholly owned subsidiary of Chemistry;
(vi) entered into, authorised or varied, or announced its intention to
enter into, authorise or vary any contract, arrangement or commitment
(whether in respect of capital expenditure or otherwise) other than in the
ordinary course of business which is of a long term, onerous or unusual
nature, could restrict the business of any member of the wider Chemistry
Group or is other than in the ordinary course of business, and in any case
which is material in the context of the Chemistry Group taken as a whole or
involves or could involve an obligation of a nature or magnitude which is
material in the context of the Chemistry Group taken as a whole;
(vii) entered into, proposed or authorised, or announced its intention to
enter into or authorise, any reconstruction, amalgamation, transaction or
arrangement, in respect of itself or another member of the wider Chemistry
Group (and in any case otherwise than in the ordinary course of business or
as between Chemistry and wholly owned subsidiaries of Chemistry), which is
material in the context of the Chemistry Group taken as a whole;
(viii) taken any action nor having had any steps taken or legal
proceedings started or threatened against it or petition presented or order
made for its winding up (voluntary or otherwise), reorganisation or
dissolution or for it to enter into any arrangement or composition for the
benefit of its creditors, or for the appointment of a receiver,
administrator, administrative receiver, trustee or similar officer of it or
any of its assets (or any analogous proceedings or appointment in any
overseas jurisdiction);
(ix) been unable, or admitted in writing that it is unable, to pay its
debts or having stopped or suspended (or threatened to stop or suspend)
payment of its debts generally or ceased or threatened to cease carrying on
all or a substantial part of its business;
(x) entered into or varied, or made any offer to enter into or vary, to
any material extent, the terms of any service agreement or other agreement or
arrangement with any of the directors or senior executives of any member of
the Chemistry Group;
(xi) waived, compromised or settled any claim, other than in the ordinary
course of business, which is material in the context of the Chemistry Group
taken as a whole;
(xii) made any alteration to its memorandum or articles of association
which is material in the context of the Offer;
(xiii) made or agreed or consented to:
(A) any material change to:
(I) the terms of the trust deeds constituting the pension scheme(s)
established for its directors, employees or their dependants; or
(II) the benefits which accrue or to the pensions which are payable
thereunder; or
(III) the basis on which qualification for, or accrual or entitlement to
such benefits or pensions are calculated or determined; or
(IV) the basis upon which the liabilities (including pensions) or such
pension schemes are funded or made; or
(B) any change to the trustees including the appointment of a trust
corporation, which in any case above has an effect that is material in the
context of the Chemistry Group taken as a whole; or
(xiv) entered into or made an offer (which remains open for acceptance)
to enter into any agreement, arrangement or commitment or passed any
resolution with respect to any of the transactions or events referred to in
this condition (e);
(f) since 31 May 2010 and except as Disclosed:
(i) there having been no material adverse change or deterioration in the
business, assets, financial or trading position or profits or prospects of
any member of the wider Chemistry Group which in any such case is material in
the context of the Chemistry Group taken as a whole;
(ii) no litigation, arbitration proceedings, prosecution or other legal
proceedings having been instituted, announced or threatened by or against or
remaining outstanding against any member of the wider Chemistry Group and no
enquiry or investigation by or complaint or reference to any Relevant
Authority against or in respect of any member of the wider Chemistry Group
having been threatened, announced or instituted or remaining outstanding
which in any such case could have a material affect on that member of the
Chemistry Group and to an extent which would be material in the context of
the Chemistry Group taken as a whole; and
(iii) no contingent or other liability having arisen which might
reasonably be expected to adversely affect any member of the Chemistry Group
in a manner which is material in the context of the wider Chemistry Group;
(g) except as Disclosed, MMS not having discovered that:
(i) the financial, business or other information concerning the wider
Chemistry Group which has been disclosed at any time by or on behalf of any
member of the wider Chemistry Group whether publicly (by the delivery of an
announcement to a Regulatory Information Service) or to MMS or its
professional advisers, is misleading or either contains a misrepresentation
of fact or omits to state a fact necessary to make the information contained
therein not misleading and which was not subsequently corrected before 25
January 2011 by disclosure either publicly or otherwise to MMS or its
professional advisers, in any case with a consequence which is materially
adverse in the context of the wider Chemistry Group taken as a whole; and
(ii) any member of the wider Chemistry Group is subject to any liability,
contingent or otherwise, which is not disclosed in the annual report and
accounts of Chemistry for the financial year ended 30 November 2009 and which
is material in the context of the wider Chemistry Group taken as a whole.
2 MMS reserves the right (but shall be under no obligation) to waive, in
whole or in part, all or any of the conditions contained in paragraph 1 of
this Appendix I (except for condition 1(a)).
3 Conditions 1(b) to 1(g) (inclusive) must be fulfilled, be determined by
MMS to be or remain satisfied or (if capable of waiver) be waived by midnight
on the 21st day after the later of 16 February 2011 and the date on which
condition (a) is fulfilled (or in each case such later date as MMS may, with
the consent of the Panel, decide), failing which the Offer will lapse. MMS
shall 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 1(b) to
1(g) (inclusive) by a date earlier than the latest date specified above 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
condition may not be capable of fulfilment.
4 If the Panel requires MMS to make an offer for Chemistry Shares under
the provisions of Rule 9 of the City Code, MMS may make such alterations to
the conditions of the Offer, including to condition 1(a), as are necessary to
comply with the provisions of that Rule.
5 Accordingly, insofar as a dividend and/or distribution and/or a return
of capital is proposed, declared, made, paid or becomes payable by Chemistry
in respect of a Chemistry Share after the date of this announcement and prior
to the date on which the Offer becomes or is declared unconditional in all
respects or prior to the Offer lapsing or becoming withdrawn, MMS reserves
the right (at its sole discretion) to reduce the amount of consideration
payable under the Offer commensurate with such dividend and/or distribution
and/or return of capital, except insofar as the relevant Chemistry Share is
or will be acquired under the Offer on a basis which enables MMS alone to
receive the dividend and/or distribution and/or return of capital and to
retain it. To the extent that a reduction in the consideration payable
pursuant to the Offer in respect of a Chemistry Share is to apply in respect
of a dividend and/or distribution and/or return of capital but that reduction
of consideration has not been effected, the person to whom the consideration
payable under the Offer is paid in respect of that Chemistry Share will be
obliged to account to MMS for the amount of such dividend and/or distribution
and/or return of capital.
6 The Offer will lapse if the Offer is referred to the Competition
Commission or if the European Commission initiates proceedings under Article
6(1)(c) of the Merger Regulation, or following a referral under Article 9(1)
of the Merger Regulation, there is a subsequent reference to the Competition
Commission before 1.00 p.m. on the first closing date of the Offer or the
time and date on which the Offer becomes or is declared unconditional as to
acceptances, whichever is the later.
7 If the Offer lapses it will cease to be capable of further acceptance.
Chemistry Shareholders who have accepted the Offer and MMS shall then cease
to be bound by acceptances delivered on or before the date on which the Offer
lapses.
8 Under Rule 13.4(a) of the City Code, MMS may only invoke a
condition so as to cause the Offer not to proceed, to lapse or to be
withdrawn where the circumstances give rise to the right to invoke the
condition are of material significance to MMS in the context of the Offer.
Condition 1(a) is not subject to Rule 13.4(a) of the City Code. APPENDIX II
SOURCES AND BASES OF INFORMATION
In this announcement, unless otherwise stated or the context otherwise
requires, the following bases and sources have been used:
1. General
Unless otherwise stated, the financial information on the Chemistry Group
has been extracted or derived (without material adjustment) from Chemistry's
audited consolidated statutory annual report and accounts for the year ended
30 November 2009.
2. Existing issued share capital
References to the existing issued share capital of Chemistry are
references to Chemistry Shares in issue on 25 January 2011 (being the last
practicable Business Day prior to the release of this announcement), being
34,757,427 Chemistry Shares.
3. Value of the Offer
The value attributed to the Offer is based upon the 34,757,427 Chemistry
Shares in issue on 25 January 2011 (being the last practicable Business Day
prior to the release of this announcement) and on a further 4,306,634
Chemistry Shares being issued pursuant to the exercise of outstanding options
under the Chemistry Share Schemes.
4. Share prices
The market prices of Chemistry Shares on a particular date or over a
particular time period are derived from the closing middle market quotation
of a Chemistry Share, as derived from the PLUS Market for the particular date
or time period concerned.
5. Time
All the times referred to in this announcement are London times.
APPENDIX III
DETAILS OF IRREVOCABLE COMMITMENTS
Name of Director/Chemistry Shareholder giving Total Percentage %
irrevocable undertaking to accept or procure number of
acceptance of the Offer Chemistry
Shares in
respect of
which
undertaking
given
Joseph Garton 3,143,791 9.04
Diane Charlton 3,417,118 9.83
Peter Meaklim 949,091 2.73
Graham Norfolk 45,978 0.13
Keith Johnston 2,403,216 6.91
Nicholas Payne 2,291,667 6.59
John Sunter 2,291,667 6.59
Malcolm Cotton 2,280,435 6.56
Cheviot Capital (Nominees) Ltd 1,800,000 5.18
J.M. Finn Nominees Limited 665,000 1.91
Total 19,287,963 55.49
The undertakings given by the Chemistry Directors will remain
binding in the event of a competing offer being made for Chemistry and will
cease to be binding only if the Offer lapses or is withdrawn.
These undertakings also cover options over Chemistry Shares
granted under the Chemistry Share Schemes. Each Chemistry Director who holds
such options has agreed, if they exercise their subscription rights prior to
the lapse or withdrawal of the Offer, to accept the Offer in respect of the
Chemistry Shares received as a result of such exercise. In addition, such
Chemistry Directors have agreed that, if they do not exercise their options
prior to the lapse or withdrawal of the Offer but MMS makes any proposals in
respect of such options, they shall either accept such proposals or allow
such options to lapse. The number of Chemistry Shares stated as being
irrevocably committed excludes any Chemistry Shares arising from the exercise
of such options.
The irrevocable undertakings received from the Chemistry
Shareholders other than the Chemistry Directors will only cease to be binding
in the event that a competing offer is made for Chemistry where the value of
such offer is not less than 5 per cent. higher than the Offer Price, or if
the Offer lapses or is withdrawn.
APPENDIX IV
The following definitions apply throughout this announcement unless the
context requires otherwise.
Acorn Corporate Finance means Acorn Corporate Finance
Limited, financial adviser to
Chemistry;
Act the Companies Act 2006;
Alternative Offer means any proposal for (i) a
merger, acquisition or other
business combination, scheme of
arrangement, exchange offer,
liquidation or takeover offer
involving Chemistry or any other
member of the Chemistry Group, or
(ii) any proposal to acquire in
any manner, directly or
indirectly, an equity interest in
any voting securities of Chemistry
or a substantial portion of the
assets of any member of the
Chemistry Group or (iii) any other
similar transaction(s), the
consummation of which could
reasonably be expected to prevent,
or materially impose, interfere
with or delay, the implementation
of the Offer;
Board as the context requires, the board
of directors of Chemistry, the
board of directors of Publicis or
the board of directors of MMS, and
the terms "Chemistry Board",
"Publicis Board" and "MMS Board"
shall be construed accordingly;
Business Day any day (other than a UK public
holiday, Saturday or a Sunday)
when clearing banks in the City of
London are open for the
transaction of general commercial
business;
Chemistry Chemistry Communications Group
plc, a company registered in
England and Wales with company
number 04051458, whose registered
office is at Melbray Mews, 158
Hurlingham Road, London, SW6 3NG;
Chemistry Directors the board of directors of
Chemistry at the date of this
announcement;
Chemistry Group Chemistry and its subsidiaries and
subsidiary undertakings;
Chemistry Shareholders holders of Chemistry Shares;
Chemistry Shares means the existing issued or
unconditionally allotted and fully
paid (or credited as fully paid)
ordinary shares of 1 pence each in
the capital of Chemistry and any
further such shares which are
unconditionally allotted or issued
fully paid (or credited as fully
paid) on or prior to the date on
which the Offer closes or, subject
to the provisions of the Code or
with the consent of the Panel, by
such earlier date or dates as
Publicis may determine, including
any such shares issued or
unconditionally allotted upon the
exercise of options granted under
the Chemistry Share Schemes;
Chemistry Share Schemes the Chemistry Enterprise
Management Incentive Scheme and
the Chemistry unapproved share
option scheme;
City Code the City Code on Takeovers and
Mergers;
Closing Price the closing middle-market
quotation of a Chemistry Share at
the close of business on a
particular trading day as derived
from PLUS;
Dealing Disclosure has the meaning given in Rule 8 of
the City Code;
Directors of Chemistry the directors of Chemistry at the
or Chemistry Directors date of this announcement, being
Joseph Garton, Diane Charlton,
Peter Meaklim and Graham Norfolk;
Directors of MMS or MMS the directors of MMS at the date
Directors of this announcement, being Michel
Karam, Jean-Michel Etienne and
Richard Pinder;
Disclosed disclosed in the annual report and
accounts of Chemistry for the year
ended 30 November 2009 or
otherwise publicly announced by
Chemistry prior to the date of
this announcement (by the delivery
of an announcement to a Regulatory
Information Service), or as
otherwise fairly disclosed to MMS;
Disclosure and the Disclosure and Transparency
Transparency Rules Rules published by the Financial
Services Authority from time to
time;
EBT the Chemistry Communications
Employee Benefit Trust;
the Chemistry Group combined with
Enlarged Chemistry Group the Incorporated Businesses;
Enlarged Group means the combined Publicis Group
and Chemistry Group from the date
on which the Offer becomes or is
declared unconditional in all
respects;
Executive Management means the executive management
Team team of Chemistry, being Joseph
Garton and Diane Charlton;
Financial Services the UK Financial Services
Authority Authority;
Form of Acceptance the form of acceptance and
authority relating to the Offer
and (where appropriate)
accompanying the Offer Document,
to be completed by holders of
Chemistry Shares in certificated
form;
Incorporated Businesses the Publicis businesses to be
incorporated into and assessed
with the Chemistry Group following
completion of the Offer;
means the Chemistry Shareholders,
Independent Shareholders excluding:
(a) all Publicis Group companies
which hold shares in Chemistry;
(b) the Executive Management Team
and their respective connected
persons and related trusts;
Inducement Fee Agreement means an agreement entered into by
Chemistry and Publicis on 25
January 2011, as more particularly
described in paragraph 12 of this
announcement;
London Stock Exchange London Stock Exchange plc;
LTIP the long term incentive plan
proposed by Publicis, details of
which are set out in paragraph 10
of this announcement;
the New Service Contracts and the
Management Arrangements LTIP;
Merger Regulation Council Regulation 139/2004/EC;
MMS MMS UK Holdings Limited, a company
registered in England and Wales
with company number 04982095,
whose registered office is at
Pembroke Building, Kensington
Village, Avonmore Road, London W14
8DG;
the new service contracts to be
entered into by each of the
New Service Contracts members of the Executive
Management Team, further details
of which will be set out in the
Offer Document;
Offer the cash offer to be made by MMS
to acquire all of the issued and
to be issued Chemistry Shares on
the terms and subject to the
conditions set out in the Offer
Documentation, including, where
the context so requires, any
subsequent revision, variation,
extension, or renewal of such
Offer;
Offer Document the document to be sent to
Chemistry Shareholders on or
following the date of this
announcement containing, inter
alia, the terms and conditions of
the Offer and certain information
about MMS, Chemistry, Publicis and
the Publicis Group;
Offer Documentation the Offer Document and (where
appropriate) the accompanying Form
of Acceptance to be sent to
Chemistry Shareholders and others
on or following the date of this
announcement;
Offer Price 37 pence per Chemistry Share;
Opening Position has the meaning given in Rule 8 of
Disclosure the City Code;
Overseas Shareholders Chemistry Shareholders (or
nominees of, or custodians or
trustees for Chemistry
Shareholders) not resident in or
citizens of the United Kingdom;
Panel the Panel on Takeovers and
Mergers;
Publicis Publicis Groupe S.A., a company
registered in France with company
number 542080601 (Paris), whose
registered office is at 133 avenue
des Champs Elysees, 75008 Paris,
France;
the directors of Publicis as at
Publicis Directors the date of this announcement;
Publicis Group Publicis and its subsidiaries and
subsidiary undertakings;
PLUS means PLUS Markets plc, a
recognised investment exchange
under section 290 of FSMA;
PLUS Market means the PLUS-quoted market,
being the PLUS primary market
segment operated by PLUS for
dealings in unlisted securities
admitted to trading in accordance
with the PLUS Rules;
PLUS Rules the PLUS Rules for Issuers
published by PLUS from time to
time;
Regulatory Information any of the services set out in
Service schedule 12 to the Listing Rules;
Restricted Jurisdiction the United States, Canada,
Australia, South Africa or Japan
and any jurisdiction where local
laws or regulations may result in
a significant risk of civil,
regulatory or criminal exposure if
information concerning the Offer
is sent or made available to
Chemistry Shareholders in that
jurisdiction;
Rothschild means N M Rothschild & Sons
Limited, financial adviser to MMS
and Publicis;
UK or United Kingdom the United Kingdom of Great
Britain and Northern Ireland;
United States of America the United States of America, its
or United States or USA territories and possessions, all
areas subject to its jurisdiction
or any submission thereof any
state of the United States and the
District of Columbia;
wider Chemistry Group means Chemistry or associated
undertakings (including any
company of which 20 per cent. or
more of the voting capital is held
by Chemistry, or any of its
subsidiary undertakings, or any
partnership, joint venture, firm
or company in which any of them
may be interested); and
wider Publicis Group means Publicis or associated
undertakings (including any
company of which 20 per cent. or
more of the voting capital is held
by Publicis, or any of its
subsidiary undertakings, or any
partnership, joint venture, firm
or company in which any of them
may be interested).
All references to legislation in this announcement are to English
legislation unless the contrary is indicated. Any reference to any provision
of any legislation shall include any amendment, modification, re-enactment or
extension thereof.
All references to time in this announcement are to London time.
Words importing the singular shall include the plural and vice versa, and
words importing the masculine gender shall include the feminine or neutral
gender.
For the purposes of this announcement, subsidiary, subsidiary undertaking
and parent undertaking have the respective meanings given to them by the Act
and substantial interest means the direct or indirect interest of twenty (20)
per cent. or more the equity share capital (as defined in the Act) of any
undertaking.
Publicis Groupe S.A., Martine Hue - Investor Relations, Tel: +33-(0)1-44-43-65-00;
Peggy Nahmany - Corporate, Tel: +33-(0)1-44-43-72-83; Chemistry Communications Group plc, Joseph Garton, Tel: +44-(0)20-7736-5355; Rothschild (Financial adviser to MMS and Publicis), Alexandre Mathe, Tel: +44-(0)20-7280-5000; Acorn Corporate Finance (Financial adviser to Chemistry), Harry Dutson, Tel: + 44-(0)870-122-5432
Tags: France, January 26, London, Publicis Groupe And Chemistry Communications Group Plc, United Kingdom
