TALENT2 INTERNATIONAL LIMITED 
By
» Proposed acquisition of all of the outstanding shares in
Talent2 (which MBI and its associates do not currently have a
relevant interest in) for a cash consideration of $0.78 per
share (the Scheme Consideration)
» Cash consideration represents a premium of 98.5% to
Talent2's volume weighted average share price of $0.393 in
the one month up to and including 25 May 2012 (being the last
day of trading before the Scheme was announced)
» Transaction will be implemented by way of a scheme of
arrangement
» Unanimous recommendation by the IBC subject to no Superior
Proposal emerging and subject also to an independent expert
concluding that the Scheme is in the best interests of
shareholders
Talent2 International Limited (Talent2) (ASX:TWO) today
announced it has entered into a Scheme Implementation Deed
(SID) with Morgan & Banks Investments Pty Limited (MBI),
Allegis Group, Inc. (Allegis) and Perbec Pty Limited
(Perbec),1 under which it is proposed that
Perbec will acquire all of the outstanding Talent2 shares not
currently held by MBI or its associates,2 for a
cash consideration of $0.78 per share (the Scheme). The
Scheme implies an equity value for Talent2 of approximately
$115 million, on an undiluted basis.3
MBI is a company owned by Andrew Banks and Geoff Morgan, each
of whom is a director of Talent2. Allegis is a staffing and
workforce management company based in Maryland, USA and is a
current strategic operating partner of Talent2. MBI and
Allegis have each entered into a standstill deed with
Talent2.4
The board of Talent2 established an independent committee of
directors (the IBC) to evaluate, and negotiate the terms of,
the Scheme on behalf of Talent2.5
The IBC unanimously recommends that shareholders vote in
favour of the Scheme, in the absence of a Superior Proposal
and subject to the independent expert concluding that the
Scheme is in the best interests of shareholders.
1 As at the date of this announcement, Perbec is a wholly owned subsidiary of MBI. If the Scheme becomes effective, it will be
50% directly or indirectly owned by MBI and 50% directly or indirectly owned by Allegis.
2 Geoff Morgan, Andrew Banks and entities controlled by Mr Banks collectively own approximately 21.8% of the Talent2 shares. Allegis does not currently own any Talent2 shares.
3 As at the date of this announcement, Talent2 had 147,403,701 ordinary shares on issue.
4 An overview of the key terms of the standstill arrangements are attached to this announcement in Annexure A.
5 The IBC consists of Ken Borda, Pam Laidlaw and Hans Neilson.
ASX Release | 28 May 2012
Talent2 has appointed Lonergan Edwards & Associates to
prepare an independent expert's report on whether the Scheme
is in the best interests of shareholders.
The Scheme is intended to be effected by way of a scheme of
arrangement under Part 5.1 of the Corporations Act 2001 (Cth)
and is conditional on, among other things, shareholder and
court approval. A copy of the SID is attached to this
announcement in Annexure B. A full list of the conditions to
the Scheme is contained in clause 3.1 of the SID.
The Scheme Consideration of $0.78 per share represents:
» a premium of 64.2% to the ASX closing share price of $0.475
on 25 May 2012, being the last trading day before the Scheme
was announced;
» a premium of 98.5% to the volume weighted average ASX share
price (VWAP) of $0.393 in the one month up to and including
25 May 2012; and
» a premium of 77.7% to the VWAP of $0.439 in the three
months up to and including 25 May 2012.
Chairman of the IBC, Ken Borda, said: "The members of the IBC
intend to vote in favour of the Scheme in respect of any
shares owned or controlled by them, in the absence of a
Superior Proposal and subject to the independent expert
concluding that the Scheme is in the best interests of
shareholders.
The total consideration per share provides a premium to the
one month and three month VWAP of
98.5% and 77.7% respectively.
Upon completion of the proposed scheme, MBI and Allegis have
indicated their intention that the existing management team,
led by John Rawlinson, will remain in place to continue to
drive the performance and growth of the business."
The SID permits the Scheme Consideration to be structured to
include a fully franked special dividend (Special Dividend).
To the extent a Special Dividend is paid, shareholders may be
entitled to receive the benefit of any franking credits
attached to the Special Dividend. The payment of any Special
Dividend will be conditional on the Scheme becoming effective
and the receipt of a favourable Australian Tax Office ruling.
Funding for any Special Dividend is expected to be provided
by a loan facility from Perbec. Talent2 will update the
market after a final decision is made as to whether a Special
Dividend is likely to be paid.
If a Special Dividend is paid, the consideration payable
under the Scheme would be reduced by the cash amount of the
Special Dividend. However, Talent2 shareholders would still
be entitled to receive an aggregate amount of $0.78 per
Talent2 share (which would consist of the consideration
payable under the scheme and the Special Dividend).
Page 2
ASX Release | 28 May 2012
Next Steps
Talent2 shareholders are expected to be sent a scheme booklet
in July 2012 containing full details of the Scheme. The
scheme booklet will include, among other things, the reasons
for the IBC's unanimous recommendation and a copy of the
independent expert's report. The Scheme is expected to be
implemented in September 2012.
Further details on an anticipated transaction timetable will
be provided in due course.
Talent2 shareholders should consult their stockbroker,
accountant, tax, financial or other professional adviser
about the impact of the Scheme on their particular investment
objectives. Talent2 will inform the market of any material
developments at the appropriate time, including whether a
Special Dividend is likely to be declared and paid.
The IBC has engaged KPMG Corporate Finance as financial
adviser and Freehills as legal adviser in relation to the
Scheme.
For further information please contact: Investor
Talent2 International Limited
David Patteson, Company Secretary | t +61 2 9087 6333 | e david.patteson@talent2.com
Page 3
KPMG Corporate Finance
Rob Bazzani | t +61 3 9288 5594 | e rbazzani@kpmg.com.au
Jon Adgemis | t +61 2 9335 7222| e jadgemis@kpmg.com.au
Text100
Simon Fitzgerald | t +61 2 9956 5733 | e simon.fitzgerald@text100.com.au
Pip Giles | t +61 2 9956 5733 | e pip.giles@text100.com.au
ASX Release | 28 May 2012
About Talent2
Talent2 was founded in 2003, is listed on the Australian
Stock Exchange (ASX:TWO) and operates in over
40 offices providing services in 31 countries across the Asia
Pacific region, Middle East, UK and USA. It is the leading HR
BPO organisation in the Asia Pacific region, working with
clients across diverse organisation types and industries to
deliver end
