MWB BUSINESS EXCHANGE PLC 
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Not for release, publication or distribution (in whole or in part) in, into or from any Restricted Jurisdiction. 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. Any failure to comply with such restrictions may constitute a violation of the securities laws of such jurisdictions. To the fullest extent permitted by law, the Company disclaims any responsibility or liability for the violation of such restrictions by any person.
15 February 2013, London
MWB Business Exchange Plc
(the "Company" or "Business Exchange")
Statement in response to cash offer for MWB Business Exchange Plc by Gallant Victor Holdings Limited (a wholly owned subsidiary of Pyrrho Investments Limited)
The Board notes today's statement by Pyrrho Investments Limited announcing the terms of a cash offer by Gallant Victor Holdings Limited, a wholly owned subsidiary of Pyrrho, for the entire issued and to be issued share capital of Business Exchange not already owned by Pyrrho or its associates. Pyrrho holds 16.7 per cent. of the Business Exchange Shares. Under the terms of the Pyrrho Offer, Business Exchange shareholders would receive 100 pence per ordinary share of 0.1 pence each in the capital of Business Exchange. The Pyrrho Offer Price values the entire existing issued share capital of Business Exchange at approximately £65.0 million.
The Board welcomes this development as it will mean that Business Exchange Shareholders will receive significantly greater value for their Business Exchange Shares than under the Unsolicited Regus Offer.
As noted in GVHL's announcement, pursuant to the irrevocable undertaking given previously to MAL in connection with the Unsolicited Regus Offer (the "Regus Irrevocable Undertaking"), MWBPL has irrevocably undertaken to MAL that if: (i) there is a Higher Offer for MWBPL's shareholding in Business Exchange during the Marketing Period; and (ii) Regus does not make a Revised Offer prior to 00.01 (London-time) on the fourth Business Day following the expiry of the Marketing Period, which is at least £500,000 more than the amount payable to MWBPL pursuant to the highest offer made during the Marketing Period, MWBPL will accept that highest offer in respect of its entire legal and beneficial holding in Business Exchange, totalling 48,863,129 Business Exchange Shares and representing approximately 75.22 per cent. of Business Exchange's issued share capital.
The Board has received confirmation that the Pyrrho Offer qualifies as a Relevant Higher Offer under the terms of the Regus Irrevocable Undertaking and, as a result, MAL has the right, but not the obligation, to make a Revised Offer prior to 00.01 (London-time) on 20 February 2013.
In the meantime, the Directors unanimously recommend that Business Exchange Shareholders should await further developments and not accept the Unsolicited Regus Offer at this time. Accordingly, Business Exchange Shareholders should take no action in respect of their shareholdings, as the Directors intend to do in respect of their and their connected persons' entire beneficial holdings in Business Exchange, amounting to, in aggregate, 304,166 Business Exchange Shares, representing approximately 0.47 per cent. of the issued ordinary share capital of Business Exchange.
The Board also notes that the announcement made by Pyrrho earlier today makes reference to the legal proceedings brought by Pyrrho against MWBPL and the Company.
As set out in the Company's circular to Business Exchange Shareholders published on 31 January 2013, on 29 January 2013, the Company received a letter from solicitors acting for Pyrrho. In the letter, Pyrrho threatened to issue a petition under section 994 of the Companies Act 2006 alleging unfair prejudice. Pyrrho issued a petition on 11 February 2013, and served that petition on the Company on 13 February 2013. The parties to the proceedings have been instructed by the Court to attend a directions hearing on 13 May 2013.
The allegations made by Pyrrho relate to loans made by the Company to various subsidiaries of MWB between 2009 and 2012 (of which approximately £8.3 million remains outstanding from those subsidiaries to the Company at the date of this document) and the arrangements between the Company and MWB described in paragraph 4.5(a) of part 3 of the Company's circular to Business Exchange Shareholders published on 31 January 2013. Pyrrho asserts that these loans and arrangements were not made in the interests of the Company, and infers that they were made with a view to preferring the interests of MWBPL and/or MWB to those of the Company. Pyrrho alleges that the current and/or former directors of the Company who caused or allowed these loans and arrangements to be entered into breached their duties as directors of the Company and that its interest was unfairly prejudiced as a result of these loans and arrangements.
A number of possible orders may be sought in section 994 proceedings and the court is empowered to make such an order as it thinks fit for giving relief in respect of the matters complained of, as set out in section 996 of the Companies Act 2006. Section 996 sets out the following examples of the orders that may be given:
(a) an order to regulate the conduct of the Company's affairs in the future;
(b) an order to require the Company:
(i) to refrain from doing or continuing an act complained of; or
(ii) to do an act that the petitioner has complained it had omitted to do;
(c) an order to authorise civil proceedings to be brought in the name and on behalf of the Company by such person or persons and on such terms as the court may direct;
(d) an order to require the Company not to make any, or any specified, alterations in its articles of association without the leave of the court; and/or
(e) an order to provide for the purchase of the shares of any member of the Company by other members or by the Company itself and, in the case of a purchase by the Company itself, the reduction of the Company's capital accordingly.
The petition issued on 11 February 2013 seeks:
(a) an order that MWBPL purchase Pyrrho's Shares at a fair value to be determined; alternatively
(b) an order requiring a payment to be made by MWBPL to compensate Pyrrho (on two alternative bases of calculation) for the alleged diminution in the value of Pyrrho's Shares; further or alternatively
(c) an order that Pyrrho be authorised to bring proceedings on behalf of the Company against the former and/or current directors of the Company responsible for the conduct complained of; and
(d) unspecified further or other relief.
Due to the inherent uncertainty of this matter and the dispute resolution process, there can be no assurance as to the outcome of the proceedings being brought by Pyrrho. However, on the basis of the information currently available, having taken appropriate advice and recognising that this is a recent development, the Directors do not currently believe that these proceedings, as they are currently framed, will have a material adverse effect on the Company's financial condition.
Contacts
MWB Business Exchange Plc
John Spencer, Chief Executive 020 7868 7268
Andrew Blurton, Corporate Finance Director 020 7868 7321
Nplus1 Singer Advisory LLP
Sandy Fraser020 7496 3000
Baron Philips Associates
Baron Philips020 7920 3161
Definitions
Terms used but not defined in this announcement shall have the following meanings:
"Board" | the board of directors of Business Exchange | |
"Business Day" | a day, (other than a Saturday, Sunday, public or bank holiday) on which banks are generally open for business in London (other than solely for trading and settlement in euro) | |
"Business Exchange" or the "Company" | MWB Business Exchange Plc, a company incorporated in England and Wales with registered number 5628635 | |
"Business Exchange Group" | Business Exchange and its subsidiaries and subsidiary undertakings within the meaning of sections 1159 and 1162 of the Companies Act 2006 | |
"Business Exchange Shareholders" | the holders of Business Exchange Shares | |
"Business Exchange Shares" | ordinary shares of 0.1 pence each in the capital of Business Exchange | |
"Directors" | the directors of Business Exchange at today's date | |
"FSA" | the UK Financial Services Authority | |
"GVHL" | Gallant Victor Holdings Limited | |
"Higher Offer" | any offer or combination of connected or unconnected offers for any Business Exchange Shares which is/are communicated to MWBPL (or to MWBPL's representatives or the Joint Administrators) prior to the end of the Marketing Period and which: (a) offer(s) consideration payable wholly in cash; (b) offer(s) (either alone or, in the case of an offer for less than all of the Business Exchange Shares, when combined with other offers selected, subject to the remainder of this definition, at MWBPL's sole discretion) aggregate consideration of an amount sufficient to ensure that the amount of such consideration payable to MWBPL will be at least £500,000 more than the amount payable to MWBPL pursuant to the Unsolicited Regus Offer or a Scheme; (c) in the case of any offer which is to be implemented by a transaction which is regulated by the Takeover Code: (i) is announced pursuant to Rule 2.7 of the Takeover Code prior to the end of the Marketing Period; and (ii) is open for acceptance by MWBPL for a period which expires no earlier than 14 days after expiry of the Marketing Period; (d) in the case of any offer which is to be implemented by a transaction which is not regulated by the Takeover Code MWBPL consider, together with the Joint Administrators, in each case acting reasonably, that the relevant offeror(s) have access to sufficient cash resources to settle the offer consideration in full within five Business Days of the completion of that offer; and (e) is unconditional, save for: (i) in the case of an offer which is to be implemented by a transaction which is regulated by the Takeover Code, an acceptance condition which can be satisfied by the acceptance of the offer by MWBPL alone; and/or (ii) in the case of any offer, any other condition where either: (1) MWBPL considers, together with the Joint Administrators, in each case acting reasonably, is reasonably certain to be satisfied; or (2) MWBPL has been provided with contractual commitments, the fulfilment of which would satisfy any such condition, and, for the avoidance of doubt, and without prejudice to the generality of the foregoing, such offer or offers may be made or structured by way of contractual offer, takeover offer, Scheme, undertaking to purchase pursuant to a bookbuild placing or other legally binding or market recognised commitment or undertaking to acquire shares | |
"Joint Administrators" | Neville Kahn and Philip Bowers, both of Deloitte LLP, whose registered office is at Hill House, 1 Little New Street, London EC4A 3TR (registered in England and Wales No. 06487877), appointed as administrators to MWB Group Holdings PLC (in administration) on 16 November 2012 and MWB Serviced Office Holdings Limited (in administration) on 10 December 2012 and acting as joint agents and without personal liability | |
"MAL" | Marley Acquisitions Limited | |
"Marketing Period" | the period of eight weeks ended at 23.59 (London-time) on 14 February 2013 | |
"MWB" | MWB Group Holdings Plc (in administration), incorporated in England and Wales with registered number 6487877; | |
"MWBPL" | MWB Property Limited, incorporated in England and Wales with registered number 3125437 | |
"Panel" | the Panel on Takeovers and Mergers | |
"Pyrrho" | Pyrrho Investments Limited, a company incorporated in the British Virgin Islands with registered number 1501014 whose registered office is at P.O. Box 957, Offshore Incorporation Centre, Road Town, Tortola, British Virgin Islands | |
"Pyrrho Offer" | the cash offer to be made by GVHL to acquire all of the issued and to be issued ordinary share capital of Business Exchange not already owned by Pyrrho or its associates on the terms and subject to the condition to be set out in the Offer Document and at Appendix 1 to this announcement and, in the case of Business Exchange Shareholders holding Business Exchange Shares in certificated form, in the Form of Acceptance, including where the context permits or requires, any subsequent revision, variation extension or renewal thereof | |
"Pyrrho Offer Price" | the consideration payable per BX Share in connection with the Offer | |
"Regus" | Marley Acquisitions Limited and Regus plc | |
"Relevant Higher Offer" | the highest Higher Offer | |
"Restricted Jurisdiction" | the United States, Canada, Japan, Australia or 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 Business Exchange Shareholders in that jurisdiction | |
"Revised Offer" | is a revised offer announced by Regus pursuant to the Code after the expiry of the Marketing Period but prior to the Revision Closing Time on the same terms and condition as the Regus Offer, save that the cash consideration is increased such that the amount of consideration payable to MWBPL in respect of its shares in Business Exchange shall be at least £500,000 more than the amount payable to MWBPL pursuant to the Higher Offer with the highest aggregate consideration | |
"Revision Closing Time" | 00.01 (London-time) on the fourth Business Day following the expiry of the Marketing Period | |
"Scheme" | a court sanctioned scheme of arrangement in accordance with Part 26 of the Companies Act 2006, as amended | |
"Takeover Code" | the City Code on Takeovers and Mergers | |
"UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland | |
"Unsolicited Regus Offer" | the unsolicited cash offer made by MAL on 17 January 2013 to acquire all of the issued and to be issued ordinary share capital of Business Exchange | |
"US" or "United States" | the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia |
Notes
Nothing in this announcement shall constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction.
The Directors each accept responsibility for the information contained in this announcement, except that the only responsibility accepted by them in respect of the information contained in this announcement relating to Regus, GVHL and Pyrrho, which has been compiled from published sources, is to ensure that such information has been correctly and fairly reproduced and presented. Subject as aforesaid, to the best of the knowledge and belief of each of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this announcement for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.
Nplus1 Singer Advisory LLP ("N+1 Singer"), which is authorised and regulated by the FSA, is acting exclusively for Business Exchange and no one else in connection with the Regus Offer and the Pyrrho Offer and will not be responsible to anyone other than Business Exchange for providing the protections afforded to clients of N+1 Singer or for providing advice in relation to the Regus Offer, the Pyrrho Offer or this announcement or any other matters referred to in this announcement.
Forward looking statements
This announcement contains statements 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 words such as "target", "plan", "believe", "expect", "aim", "intend", "will", "should", "could", "would", "may", "consider", "anticipate", "estimate", "synergy", "cost saving", "project", "goal" or "strategy" or words or terms of similar substance or the negative of such words are forward-looking statements. Forward-looking statements include statements relating to the following: future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, losses, profits and future prospects of the Company and/or the Business Exchange Group.
These forward-looking statements are not guarantees of future financial performance. Except as expressly provided in this announcement, they have not been reviewed by the auditors of Business Exchange. Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Business Exchange assumes no obligation to update or correct the information contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required. 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 of this announcement.
All subsequent oral or written forward-looking statements attributable to Business Exchange or any of its members, directors, officers or employees or any persons acting on their behalf, are expressly qualified in their entirety by the cautionary statement above. Business Exchange and the directors disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law. All forward-looking statements included in this announcement are based on information available to Business Exchange on the date of this announcement and are made only as of the date of this announcement.
Dealing disclosure requirements
Under the provisions of Rule 8.3 of the Takeover Code (the "Code"), if any person is, or becomes, "interested" (directly or indirectly) in 1% or more of any class of "relevant securities" of Business Exchange, all "dealings" in any "relevant securities" of that company (including by means of an option in respect of, or a derivative referenced to, any such "relevant securities") must be publicly disclosed by no later than 3.30 p.m. (London time) on the London business day following the date of the relevant transaction. This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is otherwise withdrawn or on which the "offer period" otherwise ends. If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire an "interest" in "relevant securities" of Business Exchange, they will be deemed to be a single person for the purpose of Rule 8.3.
Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevant securities" of Business Exchange by Regus or by MWBPL, or by any of their respective "associates", must be disclosed by no later than 12.00 noon (London time) on the London business day following the date of the relevant transaction.
A disclosure table, giving details of the companies in whose "relevant securities" "dealings" should be disclosed, and the number of such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk.
"Interests in securities" arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in the price of securities. In particular, a person will be treated as having an "interest" by virtue of the ownership or control of securities, or by virtue of any option in respect of, or derivative referenced to, securities.
Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether or not you are required to disclose a "dealing" under Rule 8, you should consult the Panel.
Documents on display
A copy of this announcement will be available at the website of the Company at www.mwbex.com/more/investor-relations
This information is provided by RNS
RNS news service provided by Hemscott Group Limited.
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