Source - RNS
RNS Number : 9631Z
Serco Group PLC
23 May 2019
 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX, AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

23 May 2019

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 ("MAR").  Upon publication of this announcement, the inside information is now considered to be in the public domain for the purposes of MAR.

 

Serco Group plc

 

Placing of New Ordinary Shares
 

Serco Group plc ("Serco" or the "Company" or the "Group") today announces its intention to place up to 111,216,400 new ordinary shares in the Company (the "Placing Shares"), representing up to 10 per cent of Serco's existing issued ordinary share capital, with both existing and new institutional investors (the "Placing").

The Placing is being conducted through an accelerated bookbuild process which will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix. Merrill Lynch International ("BofA Merrill Lynch") and Barclays Bank PLC ("Barclays" and together with BofA Merrill Lynch, the "Joint Bookrunners") are acting as joint bookrunners in connection with the Placing. Rothschild & Co is acting as Financial Adviser to Serco.

Use of the proceeds of the Placing

As announced separately today, the Placing is expected to raise gross proceeds of around £130m (based on yesterday's closing share price) (the "Placing Proceeds") which will be used to part fund the acquisition of the Naval Systems Business Unit and a small number of related contracting entities (collectively, "NSBU"), from Alion Science & Technology Corporation ("Alion"), by the Company for $225m (the "Acquisition").  NSBU is a leading provider of naval design, systems engineering, as well as production and lifecycle support services to the US Navy, US Army and Royal Canadian Navy.

The Placing is not conditional upon completion of the Acquisition. In the event that the Acquisition does not complete, Serco will retain the Placing Proceeds to provide financial flexibility should another attractive acquisition opportunity arise.  If no such opportunities arise in the medium term, Serco would consider appropriate methods to return excess capital to shareholders.

Financial position

At 31 December 2018, the Company's leverage for debt covenant purposes was 1.1x EBITDA, which compares with the covenant requirement to be less than 3.5x; removing the benefit of the £23.6m of non-underlying items within covenant EBITDA, underlying leverage was 1.2x.

Net Debt for the end of 2019 was previously anticipated to be approximately £200m and leverage for covenant purposes around 1.3x; following the Acquisition, these will increase, respectively, to approximately £250m and, on a pro forma basis, to around 1.5x.

Details of the Placing

The Joint Bookrunners will today commence a bookbuilding process in respect of the Placing (the "Bookbuilding Process"). The price per ordinary share at which the Placing Shares are to be placed (the "Placing Price") will be decided at the close of the Bookbuilding Process. The book will open with immediate effect following this Announcement. The timing of the closing of the book, pricing and allocations are at the discretion of the Joint Bookrunners and Serco. Details of the Placing Price and the number of Placing Shares will be announced as soon as practicable after the close of the Bookbuilding Process.

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares of the Company. The number of Placing Shares shall not exceed 10 per cent of the current issued share capital of the Company.

Application will be made for the Placing Shares to be admitted to the premium listing segment of the Official List (the "Official List") of the Financial Conduct Authority (the "FCA") and to be admitted to trading on the main market for listed securities of the London Stock Exchange plc (the "London Stock Exchange") (together, "Admission"). Settlement of the Placing Shares is expected to take place on 28 May 2019, and Admission is expected to take place at 8.00 a.m. on 28 May 2019. The Placing is conditional, among other things, upon Admission becoming effective and the placing agreement between the Company and the Joint Bookrunners (the "Placing Agreement") not being terminated in accordance with its terms.

This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notice" section of this Announcement.

The Appendix to this announcement (which forms part of the announcement) (such announcement, the Important Notice section and the Appendix together being the "Announcement") sets out the terms and conditions of the Placing and expressions used in this Announcement shall have the meanings set out in the Definitions section of the Appendix. By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety (including the "Important Notice" section and the Appendix) and to be making such offer on the terms and subject to the terms and conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

For further information on the Announcement, please contact

Serco                                                                                                                        +44 (0)7738 894 788

Stuart Ford, Head of Investor Relations

BofA Merrill Lynch (Joint Corporate Broker and Joint Bookrunner)                 +44 (0) 20 7628 1000

Tim Waddell

Kieran Millar

Daniel Burton-Morgan

Barclays (Joint Bookrunner)                                                                                +44 (0) 20 7567 8000

Andrew Tusa

Lawrence Jamieson

Richard Probert

Rothschild & Co (Financial Adviser to the Company)                                       +44 (0) 20 7280 5000

John Deans

Shannon Nicholls

David Weinberg

Serco media enquiries:

Marcus De Ville, Head of Media Relations                                                            +44 (0)7738 898 550

Notes to Editors

About Serco

Serco is a leading provider of public services. Our customers are governments or others operating in the public sector.  We gain scale, expertise and diversification by operating internationally across five sectors and four geographies: Defence, Justice & Immigration, Transport, Health and Citizen Services, delivered in UK & Europe, North America, Asia Pacific and the Middle East.

More information can be found at www.serco.com 

 

 

IMPORTANT NOTICE

This information contained in this Announcement, including the Appendix, is restricted and is not for release, publication or distribution, directly or indirectly, in whole or in part, in, into or from the United States (including its territories and possessions, any state of the United States and the District of Columbia, collectively the "United States") Australia, Canada, Japan or South Africa or any jurisdiction in which the same would be unlawful. This Announcement is for information purposes only and does not constitute an offer to sell or issue or the solicitation of an offer to buy, acquire or subscribe for shares in the capital of the Company in the United States, Australia, Canada, Japan or South Africa or any other jurisdiction where such offer or solicitation may be restricted, unlawful or unauthorised. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Subject to certain exemptions, the securities referred to herein may not be offered or sold in Canada, Australia, Japan or South Africa or to, or for the account or benefit of any national resident or citizen of Canada, Australia, Japan or South Africa. The Placing Shares have not been and will not be registered under the United States Securities Act of 1933, as amended ("Securities Act") or the securities laws of any other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States absent registration under the Securities Act or an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any other jurisdiction of the United States. Any offering of the Placing Shares to be made in the United States will be made only to a limited number of "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act in a transaction not involving any public offering and outside the United States in offshore transactions within the meaning of, and in reliance on, Regulation S under the Securities Act. No public offering of the shares referred to in this Announcement is being made in the United States, United Kingdom or elsewhere.

This Announcement has been issued by, and is the sole responsibility, of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Merrill Lynch International ("BofA Merrill Lynch"),  Barclays Bank PLC ("Barclays", and together with BofA Merrill Lynch, the "Joint Bookrunners") or N.M. Rothschild & Sons Limited ("Rothschild & Co") or by any of their respective Affiliates or agents (or any of their respective directors, officers, employees or advisers) as to or in relation to, the accuracy or completeness of this Announcement or any other written, visual, electronic or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of either Joint Bookrunner, Rothschild & Co or any of their respective Affiliates in connection with the Company, the Placing Shares, the Placing or the Acquisition and any liability therefor is expressly disclaimed. No reliance may be placed by any person for any purpose on the information contained in this Announcement, which is subject to change, or its accuracy, fairness or completeness.

No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive) to be published. Persons needing advice should consult an independent financial adviser.

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by the Joint Bookrunners or Rothschild & Co.

Rothschild & Co, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting for the Company and no one else in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Rothschild & Co nor for providing advice in relation to the proposed transaction.

BofA Merrill Lynch and Barclays, which are authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority, are each acting exclusively as Joint Bookrunners for the Company in connection with the Placing and no one else in connection with the Placing and/or any other matter referred to in this Announcement; will not regard any other person as a client; and will not be responsible to anyone other than the Company for providing the protections afforded to clients of the Joint Bookrunners nor for providing advice in relation to the Placing and/or any other matter referred to in this Announcement. Apart from the responsibilities and liabilities, if any, which may be imposed on the Joint Bookrunners by the Financial Services and Markets Act 2000 or by the regulatory regime established under it, none of  BofA Merrill Lynch, Barclays or Rothschild & Co nor any of their respective Affiliates accepts any responsibility whatsoever for the contents of the information contained in this Announcement or for any other statement made or purported to be made by or on behalf of BofA Merrill Lynch, Barclays or Rothschild & Co or any of their respective Affiliates in connection with the Company, the Placing Shares, the Placing or the Acquisition. BofA Merrill Lynch, Barclays and Rothschild & Co and each of their respective Affiliates accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by BofA Merrill Lynch, Barclays or Rothschild & Co or any of their respective Affiliates as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or the Joint Bookrunners that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about, and to observe, such restrictions.

The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS (AS DEFINED IN ARTICLE 2(1)(E) OF EU DIRECTIVE 2003/71/EC (AND AMENDMENTS THERETO, INCLUDING THE 2010 PD AMENDING DIRECTIVE, TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE) (THE "PROSPECTUS DIRECTIVE")); AND/OR (B) PERSONS IN THE UNITED KINGDOM WHO ARE QUALIFIED INVESTORS AND PERSONS WHO ARE (I) INVESTMENT PROFESSIONALS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ('HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC') OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (A) AND (B) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.

Persons (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given ("Placees") will be deemed to have read and understood this Announcement, including the Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in the Appendix. In particular, each such Placee represents, warrants and acknowledges that it: (i) is outside the United States and is subscribing for the Placing Shares in an 'offshore transaction' (within the meaning of Regulation S under the United States Securities Act of 1933 (the "Securities Act")) or (ii) (a) is a 'qualified institutional buyer' (as defined in Rule 144A under the Securities Act), and (b) subscribing for the Placing Shares pursuant to an exemption from, or in a transaction not subject to, the registration requirements under the Securities Act and (c) acknowledges that the Placing Shares have not been, and will not be, registered under the Securities Act or with any State or other jurisdiction of the United States.

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction, or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan" "estimate", "expect" and words of similar meaning, reflect the directors' beliefs and expectations and involve a number of risks, uncertainties and assumptions that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice and, except as required by applicable law, the Company does not assume any responsibility or obligation to update publicly or review any of the forward-looking statements contained herein. Each of the Joint Bookrunners and their respective Affiliates expressly disclaim any obligation or undertaking to update, review or revise any forward-looking statement contained in this Announcement whether as a result of new information, future developments or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company. The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares.

The relevant clearances have not been, and nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Canada, Australia, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Canada, Australia, Japan or South Africa or any other jurisdiction outside the United Kingdom.

The Placing Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission (the "SEC"), any State securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is unlawful. Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this Announcement should seek appropriate advice before taking any action.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

In connection with the Placing, each of the Joint Bookrunners and any of their respective Affiliates, may take up a portion of the shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own accounts such shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, the Joint Bookrunners and any of their respective Affiliates acting in such capacity. In addition, the Joint Bookrunners and any of their respective Affiliates may enter into financing arrangements (including swaps) with investors in connection with which the Joint Bookrunners and any of their respective Affiliates may from time to time acquire, hold or dispose of shares. The Joint Bookrunners do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

Information to Distributors

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

This Announcement does not constitute a recommendation concerning the Placing.

 

APPENDIX: TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE PLACING

Defined terms used in this Appendix are set out at the end of this Appendix.

Details of the Placing

BofA Merrill Lynch and Barclays (the "Banks") have today entered into an agreement with the Company (the "Placing Agreement") under which, subject to the conditions set out in that agreement, each of the Banks, each as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees for the Placing Shares at a price determined following completion of the bookbuilding process in respect of the Placing (the "Bookbuild"), described in this Announcement and set out in the Placing Agreement and, subject to agreement with the Company as to the number and price of the Placing Shares to be placed with the Placees, to the extent that such Placees fail to pay for all the Placing Shares, to subscribe for those Placing Shares for which the Company has not received payment at the agreed price.

The Company has appointed each of BofA Merrill Lynch and Barclays as underwriter for the purposes of underwriting the settlement of the Placing at such price, to the extent such a price is agreed and set out in an executed version of the terms of the Placing (the "Placing Terms") and each of BofA Merrill Lynch and Barclays has accepted such appointment in connection with the Placing relying on the representations and warranties and subject to the terms and conditions set out in the Placing Agreement.

The Placing Shares have been duly authorised and will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares with respect to the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

The Placing Shares will be issued free of any pre-emption rights, encumbrances, liens or other security interests.

As part of the Placing, the Company has agreed that it will not issue or sell any Ordinary Shares for a period of 90 days after Admission, without the prior consent of the Banks.  This agreement is subject to customary exceptions and waivers and does not prevent the Company from granting or satisfying exercises of options granted pursuant to the terms of existing employee share schemes of the Company as disclosed in publicly available information.

Application for listing and admission to trading

Application will be made to the FCA as the competent authority for listing for admission of the Placing Shares to the premium listing segment of the Official List of the FCA (the "Official List") in accordance with section 74(1) of FSMA for the purposes of Part VI of FSMA and to admission to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange"). It is expected that Admission will become effective on or around 28 May 2019 and that dealings in the Placing Shares will commence at that time. 

Bookbuild

The Banks will today commence the Bookbuild to determine demand for participation in the Placing by Placees.  This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing.

The Banks shall be entitled to effect the Placing by such alternative method to the Bookbuild as they may, in their absolute discretion, determine. 

Participation in, and principal terms of, the Placing

1          BofA Merrill Lynch and Barclays are acting as bookrunners and as agents of the Company. 

2          Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by the Banks.  The Banks and their respective Affiliates are each entitled to enter bids in the Bookbuild as principal. 

3          The Bookbuild will establish a single price payable to the Banks by all Placees whose bids are successful (the "Placing Price").  The Placing Price and the number of Placing Shares to be issued will be agreed between the Banks and the Company following completion of the Bookbuild.  Any discount to the market price of the Ordinary Shares will be determined in accordance with the FCA Listing Rules published pursuant to Part IV of FSMA.  The Placing Price and the number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild. 

4          To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales or equity capital markets contact at either of the Banks.  Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at either the Placing Price, which is ultimately established by the Company and the Banks, or at prices up to a price limit specified in its bid.  Bids may be scaled down by the Banks on the basis referred to in paragraph 9 below.  Each of the Banks reserves the right not to accept bids or to accept bids in part rather than in whole.  The acceptance of the bids shall be at the relevant Banks' absolute discretion.

5          The Bookbuild is expected to close no later than 4.30 p.m. (London time) on 23 May 2019 but may be closed earlier or later at the absolute discretion of the Banks.  The Banks may, in their absolute discretion, accept bids that are received after the Bookbuild has closed.  The Company reserves the right (upon the agreement of the Banks) to reduce the amount to be raised pursuant to the Placing, in its absolute discretion. 

6          Each prospective Placee's allocation will be agreed between the Banks and the Company and will be confirmed orally by one of the Banks as agent of the Company following the close of the Bookbuild.  That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of the Company and the Banks to subscribe for the number of Placing Shares allocated to it at the Placing Price on these Terms and Conditions and in accordance with the Company's memorandum and articles of association. 

7          Each prospective Placee's allocation and commitment will be evidenced by a contract note issued to such Placee by the relevant Bank.  These Terms and Conditions will be deemed incorporated in that contract note. 

8          Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to the relevant Bank (as an agent of the Company), to pay to the relevant Bank (or as it may direct) in cleared funds at the time set out in paragraph 12, an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to subscribe for and the Company has agreed to allot and issue to that Placee.  Each Placee's obligation will be owed to the Company and to the relevant Bank.  The Company shall allot such Placing Shares to each Placee following each Placee's payment to the relevant Bank of such amount.

9          Subject to paragraphs 4 and 5 above, the Banks may choose to accept bids, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale down any bids for this purpose on such basis as it may determine.  The Banks may also, notwithstanding paragraphs 4 and 5 above, subject to the prior consent of the Company (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.  The acceptance of offers shall be at the absolute discretion of the Banks. 

10        A bid in the Bookbuild will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and, except with the consent of the relevant Bank, will not be capable of variation or revocation after the time at which it is submitted. 

11        Except as required by law or regulation, no press release or other announcement will be made by the Banks or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

12        Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be subscribed for pursuant to the Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement". 

13        All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing Agreement". 

14        By participating in the Bookbuild, each Placee will agree that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee. 

15        To the fullest extent permissible by law, neither of the Banks nor any of their respective Affiliates nor any person acting on their behalf shall have any responsibility or liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise).  In particular, neither of the Banks nor any of their respective Affiliates nor any person acting on their behalf shall have any responsibility or liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of the Banks' conduct of the Bookbuild or of such alternative method of effecting the Placing as the Banks may determine. 

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.  The obligations of each of the Banks under the Placing Agreement are conditional on, amongst other things:

1          the execution of the asset purchase agreement relating to the acquisition from Alion Science & Technology Corporation ("Alion") of their Naval Systems Business Unit, together with a small number of related contracting entities (collectively, "NSBU"), by the Company (the "Acquisition Agreement") and the Acquisition Agreement not having lapsed or been terminated or rescinded, no condition thereto having become incapable of satisfaction and which has not otherwise been waived, in each case prior to Admission;

2          there having been no alteration, revision or amendment of any of the terms or conditions of the Acquisition Agreement (or any document entered into pursuant to or in connection with the Acquisition Agreement) or waiver, variation, compromise or release of any obligation under the Acquisition Agreement nor the grant of any time for performance or other indulgence to any party under the Acquisition Agreement, in each case prior to Admission which in the good faith opinion of the Banks (acting jointly) is material in the context of the Placing or Admission

3          the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;

4          agreement being reached between the Company and each of the Banks on the Placing Price and the number of Placing Shares, and the publication by the Company of a pricing announcement; 

5          the representations and warranties contained in the Placing Agreement being true and accurate on the date of the Placing Agreement, on the date of release of the pricing announcement and on Admission;

6          the Company complying with all of the agreements and undertakings and satisfied or performed all of the conditions and obligations on its part under the Placing Agreement to the extent the same fall to be performed or satisfied prior to Admission;

7          the Banks receiving customary legal opinions and certifications from the Company; and

8          Admission taking place at 8.00 a.m. (London time) on 28 May 2019 (or such later date as the Company and the Banks may otherwise agree).

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or, where permitted, waived by each of the Banks, by the respective time or date where specified (or such later time and/or date as the Company and each of the Banks may agree), or (ii) the Placing Agreement is terminated in the circumstances specified below, the Placing will not proceed and each Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof. 

The Banks may, at their discretion and upon such terms as they think fit, extend the time for the satisfaction of any condition or waive compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement, save that the condition in the Placing Agreement relating to Admission taking place may not be waived.  Any such extension or waiver will not affect Placees' commitments as set out in this Announcement. 

None of the Banks, the Company or any other person shall have any responsibility or liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision made as to whether or not to waive or to extend the time and / or the date for the satisfaction of any condition to the Placing nor for any decision made as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Banks. 

By participating in the Bookbuild, each Placee agrees that its rights and obligations hereunder terminate only in the circumstances described above and under "Termination of the Placing Agreement" below, and will not be capable of rescission or termination by the Placee.

Termination of the Placing Agreement

Each of the Banks is entitled, acting in good faith and after prior consultation with the Company to the extent reasonably practicable in the circumstances, at any time before Admission, to terminate the Placing Agreement in relation to its obligations in respect of the Placing Shares by giving notice to the Company if, amongst other things:

1          any of the conditions not being satisfied or (to the extent capable of being waived) waived in accordance with the Placing Agreement, or having become incapable of satisfaction; or

2          there has been a breach of any of the warranties and representations contained in the Placing Agreement or any failure to perform any of the undertakings or agreements in the Placing Agreement; or 

3          it shall come to the notice of either Bank that any statement contained in this Announcement, or any other document or announcement issued or published by or on behalf of the Company in connection with the Placing (together the "Placing Documents"), or any of them, is or has become untrue, incorrect or misleading in any material respect, or any matter has arisen, which would, if the Placing were made at that time, constitute a material omission from the Placing Documents, or any of them, and which either Bank considers (acting in good faith) to be material in the context of the Placing or the underwriting of the Placing Shares, Admission or any of the transactions contemplated by the Placing Agreement;

4          the Company has notified the Banks on becoming aware of any event or development making untrue or inaccurate any change affecting the representations and warranties, agreements or indemnities in the Placing Agreement when made or if repeated at any time prior to payment being made in respect of the Placing Shares on 28 May 2019 (or such later date as the Company and the Banks may otherwise agree); or 

5          a material adverse change in, or any development involving a prospective material adverse change in or affecting, the condition, financial, operational or otherwise, or in the earnings, management, result of operations, business affairs, business prospects or financial prospects of (i) the Company or the Group or (ii) the Company or the Group as enlarged by the assets and businesses being acquired pursuant to the Acquisition, in each case whether or not arising in the ordinary course of business or Target Material Adverse Effect has occurred or been made public since the execution of this Agreement; or

6          there has occurred (i) any change in the financial markets in the United States, the United Kingdom, member states of the European Union or in the international financial markets, (ii) any outbreak or escalation of hostilities, act of terrorism or other calamity or crisis or (iii) any change or development involving a prospective change in national or international political, financial or economic conditions, or currency exchange rates; or

7          if admission to listing or trading of the Ordinary Shares on the Exchange has been withdrawn, or the listing or trading in any Ordinary Shares has been suspended or limited by the FCA or the Exchange, or the New York Stock Exchange has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the regulatory authorities of the United States, the United Kingdom or any other governmental or self-regulatory authority, or a material disruption has occurred in commercial banking or shares settlement or clearance services in the United Kingdom, the United States or in Europe; or

8          if any public announcement is made by the Company that would make it, in the judgement of either of the Banks (acting in good faith) impracticable or inadvisable to sell, market or underwrite the Placing Shares or to enforce contracts for the sale of the Placing Shares; or

9          if a banking moratorium has been declared by the authorities of any of the United Kingdom, the United States, South Africa or the State of New York or any other member state of the EEA.,

in the case of 6, 8 and 9, in each case the effect of which is such as to make it, in the judgement of either Bank (acting in good faith) impracticable or inadvisable to sell, market or underwrite the Placing Shares or to enforce contracts for the sale of the Placing Shares.

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions. 

By participating in the Placing, Placees agree that the exercise by either Bank of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of the relevant Bank and that it need not make any reference to Placees in this regard and that, to the fullest extent permitted by law, the Banks shall have no responsibility or liability to Placees whatsoever in connection with any such exercise or failure so to exercise. 

No prospectus

No offering document, prospectus or admission document has been or will be prepared in relation to the Placing, and Placees' commitments will be made solely on the basis of publicly available information taken together with the information contained in this Announcement (including this Appendix) released by the Company today, and any Exchange Information (as defined below) previously published by the Company and subject to the further terms set forth in the contract note to be provided to individual prospective Placees. 

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement (including this Appendix) and the publicly available information released by or on behalf of the Company or Alion is exclusively the responsibility of the Company or Alion, respectively, and confirms that it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or Alion (other than publicly available information) or either of the Banks or their respective Affiliates (other than the amount of the relevant Placing participation in the oral confirmation given to Placees and the contract note referred to below) or any other person and none of the Banks, their respective Affiliates, any persons acting on their behalf or the Company or Alion nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received (regardless of whether or not such information, representation, warranty or statement was given or made by or on behalf of any such persons).  Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company and the assets and businesses being acquired pursuant to the Acquisition in accepting a participation in the Placing.  Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation. 

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN GB0007973794) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST"), using the delivery versus payment mechanism, subject to certain exceptions.  The Company reserves the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form if, in the Banks' opinion, delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction. 

Following the close of the Bookbuild for the Placing, each Placee allocated Placing Shares in the Placing will be sent a contract note stating the number of Placing Shares to be allocated to it at the Placing Price, the aggregate amount owed by such Placee to the relevant Bank and settlement instructions.  Placees should settle against CREST ID: 686 for BofA Merrill Lynch (if a Placee holds an account with Merrill Lynch International, otherwise CREST ID: 8FUAG if a Placee holds an account with BofA Securities Europe Société Anonyme) and CREST ID: 598 for Barclays.  It is expected that such contract note will be despatched on 23 May 2019 and that this will also be the trade date. 

Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the relevant Bank. 

The Company will deliver the Placing Shares to a CREST account operated by BofA Merrill Lynch as agent for the Company and BofA Merrill Lynch will enter its delivery (DEL) instruction into the CREST system.  BofA Merrill Lynch will hold any Placing Shares delivered to this account as nominee for the Placees.  The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment. 

It is expected that settlement will be on 28 May 2019 on a T+2 basis in accordance with the instructions given to the relevant Bank. 

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the relevant Bank. 

Each Placee agrees that, if it does not comply with these obligations, the relevant Bank may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due.  The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and shall be required to bear any stamp duty, stamp duty reserve tax or other stamp, securities, transfer, registration, execution, documentary or other similar impost, duty or tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. 

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the contract note is copied and delivered immediately to the relevant person within that organisation.  Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject to as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.  If there are any circumstances in which any other stamp duty or stamp duty reserve tax (together with interest and penalties) is payable in respect of the issue of the Placing Shares, neither the Banks nor the Company shall be responsible for the payment thereof. 

Representations and warranties

By participating in the Placing each Placee (and any person acting on such Placee's behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) with the Banks (in their capacity as underwriters of the Placing Shares and bookrunners and placing agents of the Company in respect of the Placing) and the Company, in each case as a fundamental term of their application for Placing Shares as set out below.  Each Placee (and any person acting on such Placee's behalf):

1          represents and warrants that it has read and understood this Announcement, including the Appendix, in its entirety and that its subscription for the Placing Shares is subject to and based upon all the terms, conditions, warranties, acknowledgements, agreements and undertakings and other information contained herein; 

2          acknowledges and agrees that no offering document or prospectus or admission document has been or will be prepared in connection with the Placing and represents and warrants that it has not received a prospectus, admission document or other offering document in connection with the Bookbuild, the Placing or the Placing Shares;

3          acknowledges that the Ordinary Shares are listed on the premium listing segment of the Official List of the FCA, and that the Company is therefore required to publish certain business and financial information in accordance with the rules and practices of the FCA (collectively, the "Exchange Information"), which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account, and similar statements for preceding financial years and that it has reviewed such Exchange Information and is able to obtain or access such Exchange Information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty; 

4          acknowledges that none of the Banks or the Company nor any of their respective Affiliates nor any person acting on behalf of any of them has provided, and will not provide, it with any material or information regarding the Placing Shares, the Placing or the Company or any other person other than this Announcement; nor has it requested any of the Banks, the Company, any of their respective Affiliates or any person acting on behalf of any of them to provide it with any such material or information;

5          acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, South Africa or, Japan and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, in or into such jurisdictions; 

6          confirms that, subject to certain exceptions under applicable securities laws, (i) it is not within the United States, Australia, Canada, South Africa or Japan or any other jurisdiction in which it would be unlawful to make or accept an offer to acquire the Placing Shares; and (ii) it is not acquiring the Placing Shares with a view to the offer, sale, resale, transfer, delivery or distribution, directly or indirectly, of any such Placing Shares into the United States, Australia, Canada, South Africa or Japan or any other jurisdiction, subject to certain exceptions under applicable securities laws,  in which it would be unlawful;

7          confirms that, if resident in Australia, it is a person who is able to demonstrate that it (i) falls within one or more of the categories of investors under Section 708 of the Australian Corporations Act to whom an offer may be made without disclosure under Part 6d.2 of the Corporations Act and (ii) are "wholesale clients" for the purpose of section 761G of the Corporations Act;

8          acknowledges that the relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada.  The offering of the Placing Shares is being made on a private placement basis only and is exempt from the requirement that the Company prepare and file a prospectus with the relevant securities regulatory authorities in Canada.  No offer of securities is made pursuant to this Announcement in Canada except to a person who has represented to the Company and the Banks that such person (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or redistribution; (ii) is an "accredited investor" as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a "permitted client" as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.  Any resale of the Placing Shares acquired by a Canadian investor in this offering must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority.  These resale restrictions may under certain circumstances apply to resales of the Placing Shares outside of Canada;

9          acknowledges that the content of this Announcement is exclusively the responsibility of the Company and that neither of the Banks, their respective Affiliates nor any person acting on their behalf has or shall have any responsibility or liability for any information, representation or statement contained in this Announcement or any information previously published by or on behalf of the Company or Alion and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement, the announcement relating to the Acquisition, any information published by or on behalf of the Company or Alion or otherwise.  Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to subscribe for the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or investigations, representations, warranties or statements made by the Banks or the Company or Alion and neither the Banks nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement.  Each Placee further acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company and the assets and businesses being acquired pursuant to the Acquisition in deciding to participate in the Placing; 

10        acknowledges that it has not relied on any information relating to the Company contained in any research reports prepared by either of the Banks, any of their respective Affiliates or any person acting on the Banks' or any of their respective Affiliates' behalf and understands that (i) neither of the Banks, any of their respective Affiliates nor any person acting on their behalf has or shall have any liability for public information or any representation; (ii) neither of the Banks, any of their respective Affiliates nor any person acting on their behalf has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of publication, the date of this document or otherwise; and that (iii) neither of the Banks, any of their respective Affiliates nor any person acting on their behalf makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of publication, the date of this Announcement or otherwise;

11        acknowledges that neither of the Banks nor any person acting on behalf of it nor any of their respective Affiliates has or shall have any responsibility or liability for any Exchange Information, any publicly available or filed information or any representation relating to the Company or Alion, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person; 

12        represents and warrants that neither it, nor the person specified by it for registration as a holder of Placing Shares is, or is acting as nominee or agent for, and that the Placing Shares will not be allotted to, a person whose business either is or includes issuing depositary receipts or the provision of clearance services and therefore that the issue to the Placee, or the person specified by the Placee for registration as holder, of the Placing Shares will not give rise to a liability under any of sections 67, 70, 93 and 96 of the Finance Act 1986 (depositary and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance system; 

13        acknowledges that no action has been or will be taken by the Company, the Banks or any person acting on behalf of the Company or the Banks that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

14        represents and warrants that it has complied with its obligations in connection with money laundering and terrorist financing under the Criminal Justice Act 1993, the Market Abuse Regulation (and the delegated acts, implementing acts, technical standards and guidelines under it), the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2017 (the "Regulations") and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations; 

15        represents and warrants that it is acting as principal only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so, (ii) it is and will remain liable to the Company and/or the Banks for the performance of all its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person), (iii) it is both an "authorised person" for the purposes of FSMA and a "qualified investor" ("Qualified Investor") as defined in the Prospectus Directive acting as agent for such person, and (iv) such person is either (1) a "qualified investor" as referred to at section 86(7) of FSMA or (2) a "client" (as defined in section 86(2) of FSMA) of its that has engaged it to act as such client's agent on terms which enable it to make decisions concerning the Placing or any other offers of transferable securities on such client's behalf without reference to such client;

16        represents and warrants that it will subscribe for any Placing Shares for which it subscribes for its account or for one or more accounts as to each of which it exercises sole investment discretion and it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

17        if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive (including any relevant implementing measure in any member state), represents and warrants that the Placing Shares subscribed for by it in the Placing will not be subscribed for on a non-discretionary basis on behalf of, nor will they be subscribed for with a view to their offer or resale to, persons in a member state of the European Economic Area which has implemented the Prospectus Directive other than to Qualified Investors, or in circumstances in which the prior consent of the Banks has been given to the proposed offer or resale; 

18        represents and warrants that it has not offered or sold and, prior to the expiry of a period of six months from Admission, will not offer or sell any Placing Shares to persons in the United Kingdom, except to Qualified Investors or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA; 

19        acknowledges that any offer of Placing Shares may only be directed at persons in member states of the European Economic Area who are Qualified Investors and represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to Qualified Investors or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state); 

20        represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and agrees that this Announcement has not been approved by the Banks in their capacity as an authorised person under section 21 of FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person; 

21        represents and warrants that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom; 

22        represents and warrants that it is a person falling within Article 19(1), Article 19(5) and/or Article 49(2)(a) to (d) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or is a person to whom this Announcement may otherwise be lawfully communicated;

23        represents and warrants that (i) it and any person acting on its behalf has capacity and authority and is otherwise entitled to subscribe for and purchase the Placing Shares under the laws of all relevant jurisdictions which apply to it; (ii) it has paid any issue, transfer or other taxes due in connection with its participation in any territory; (iii) it has not taken any action which will or may result in the Company, the Banks, any of their respective Affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing and (iv) that the subscription for and purchase of the Placing Shares by it or any person acting on its behalf will be in compliance with applicable laws and regulations in the jurisdiction of its residence, the residence of the Company, or otherwise;

24        undertakes that it and any person acting on its behalf will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as the Banks may in their absolute discretion determine and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this document) which may arise upon the sale of such Placee's Placing Shares on its behalf

25        acknowledges that its allocation (if any) of Placing Shares will represent a maximum number of Placing Shares which it will be entitled, and required, to subscribe for, and that the Company may call upon it to subscribe for a lower number of Placing Shares (if any), but in no event in aggregate more than the aforementioned maximum; 

26        acknowledges that neither of the Banks or any of their respective Affiliates, nor any person acting on their behalf, is making any recommendations to it or advising it regarding the suitability or merits of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be a client of either Bank and that the Banks have no duties or responsibilities to any Placee for providing the protections afforded to their clients or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of the Banks' rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right; 

27        undertakes that (i) the person whom it specifies for registration as holder of the Placing Shares will be (a) itself or (b) its nominee, as the case may be; (ii) neither the Banks nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax (together with interest and penalties) resulting from a failure to observe this requirement and (iii) each Placee and any person acting on behalf of such Placee agrees to participate in the Placing on the basis that the Placing Shares will be allotted to the CREST stock account of BofA Merrill Lynch who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions with payment for the Placing Shares being made simultaneously upon receipt of the Placing Shares in the Placee's stock account on a delivery versus payment basis

28        acknowledges that these Terms and Conditions and any agreements entered into by it pursuant to these Terms and Conditions and any non-contractual obligations arising out of or in connection with such agreements shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or either Bank in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

29        acknowledges that each of the Banks and the Company and their respective Affiliates will rely upon the truth and accuracy of the representations, warranties, agreements, undertakings and acknowledgements set forth herein and which are irrevocable and it irrevocably authorises each of the Banks to produce this Announcement, pursuant to, in connection with, or as may be required by any applicable law or regulation, administrative or legal proceeding or official inquiry with respect to the matters set forth herein;

30        agrees to indemnify on an after-tax basis and hold the Company, each of the Banks, any of their respective Affiliates and any person acting on its or their behalf harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing; 

31        acknowledges that it irrevocably appoints any director of the Banks as its agent for the purposes of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares agreed to be taken up by it under the Placing;

32        acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing; 

33        in making any decision to subscribe for the Placing Shares, confirms that (i) it has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of acquiring the Placing Shares; (ii) it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with, the Placing; (iii) it has relied on its own examination, due diligence and analysis of the Company and its Affiliates taken as a whole, and the terms of the Placing, including the markets in which the Group and the businesses and assets being acquired in the Acquisition operate, and the terms of the Placing, including the merits and risks involved; (iv) it has had sufficient time to consider and conduct its own investigation with respect to the offer and purchase of the Placing Shares, including the legal, regulatory, tax, business, currency  and other economic and financial considerations relevant to such investment and (v) will not look to the Company, the Banks, any of their respective Affiliates or any person acting on its or their behalf for all or part of any such loss or losses it or they may suffer;

34        acknowledges and agrees that each Bank does not owe any fiduciary or other duties to it or any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement;

35        understands and agrees that it may not rely on any investigation that either Bank or any person acting on its behalf may or may not have conducted with respect to the Company, and its Affiliates, the businesses and assets being acquired in the Acquisition, or the Placing and each of the Banks has not made any representation or warranty to it, express or implied, with respect to the merits of the Placing, the subscription for or purchase of the Placing Shares, or as to the condition, financial or otherwise, of the Company, its Affiliates and the businesses and assets being acquired in the Acquisition, or as to any other matter relating thereto, and nothing herein shall be construed as a recommendation to it to subscribe for the Placing Shares.  It acknowledges and agrees that no information has been prepared by, or is the responsibility of, the Banks for the purposes of this Placing;

36        acknowledges and agrees that it will not hold either Bank or any of their respective Affiliates or any person acting on their behalf responsible or liable for any misstatements in or omission from any publicly available information relating to the Group or Alion or information made available (whether in written or oral form) relating to the Group or the businesses and assets being acquired in the Acquisition (the "Information") and that neither of the Banks nor any person acting on behalf of either Bank, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such Information or accepts any responsibility for any of such Information;

37        acknowledges that in connection with the Placing, the Banks and any of their respective Affiliates may take up shares in the Company as a principal position and in that capacity may retain, purchase or sell for its own account such shares in the Company and any securities of the Company or related investments and may offer or sell such securities or other investments otherwise than in connection with the Placing.  Accordingly, references in this Announcement to shares being issued, offered or placed should be read as including any issue, offering or placement of such shares in the Company to either Bank and any of their respective Affiliates acting in such capacity. In addition each of the Banks may enter into financing arrangements and swaps with investors in connection with which the Banks may from time to time acquire, hold or dispose of such securities of the Company, including the Placing Shares. Neither the Banks nor any of their respective Affiliates intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so;

38        acknowledges that communications that a transaction is or that books are "covered" (i.e. aggregate gross demand indications equal or exceed the amount of the securities being offered) are not in any way an indication or assurance that the transaction and securities will be fully distributed by the Banks. The Banks reserve the right to take up a portion of the securities being offered at any stage at their sole discretion for orderly market purposes;

39        represents and warrants that if resident in South Africa, either (i) it is a category of person contemplated in section 96(1)(a) of the Companies Act, 2008 of South Africa (the "SA Companies Act") to whom an offer of Placing Shares may be made without such offer being classified as an "offer to the public" (as defined in the SA Companies Act); or (ii) if (i) does not apply, it is acting as a principal and the total acquisition cost to it of the Placing Shares which it will acquire pursuant to the Placing will be equal to or greater than ZAR 1,000,000;

40        acknowledges that (i) the Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority; (ii) the Placing Shares are being offered and sold pursuant to Regulation S under the Securities Act or in a transaction otherwise exempt from or not subject to the registration requirements under the Securities Act and (iii) the Placing Shares may not be reoffered, resold, pledged or otherwise transferred except in transactions not requiring registration under the Securities Act;

41        represents and warrants that unless it is a "US Person" (within the meaning of Regulation S) that is a QIB in the United States to which the Placing Shares will be offered on a private placement basis, it (a) is, or at the time the Placing Shares are acquired, will be outside the United States and is not acquiring the Placing Shares for the account or benefit of any person located in the United States, unless the instruction to acquire was received from a person outside the United States and the person giving such instruction has confirmed that it has the authority to give such instruction, and that it has investment discretion over such account; (b) is acquiring the Placing Shares in an "offshore transaction" (as defined in Regulation S) and (c) will not offer or sell, directly or indirectly, any of the Placing Shares except in an "offshore transaction" in accordance with Regulation S or in the United States pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; and

42        represents and warrants that it is not taking and will not take up any Placing Shares as a result of any "directed selling efforts" as that term is defined in Regulation S under the Securities Act.

Additional representations and warranties from US Persons

In addition to the foregoing, by participating in the Placing, each Placee (and any person acting on such Placee's behalf) who is a US Person subscribing for Placing Shares being offered under a relevant exemption from the registration requirements of the Securities Act:

43        represents and warrants that (a) it is a QIB within the meaning of Rule 144A of the Securities Act; and (b) it is subscribing for the Placing Shares for its own account, or for the account managed on behalf of another QIB, and not with a view to any distribution within the meaning of the Securities Act or applicable state law except as set forth below;

44        represents and warrants that it understands and acknowledges that the Placing Shares are being offered and sold to it in accordance with the exemption from registration under the Securities Act for transactions by an issuer not involving a public offering of securities in the United States and that the Placing Shares have not been, and will not be, registered under the Securities Act or with any state or other jurisdiction of the United States;

45        represents and warrants that the Placing Shares will not be reoffered, resold, pledged or otherwise transferred by it except (a) outside the United States in an offshore transaction pursuant to Rule 903 or Rule 904 of Regulation S; (b) in the United States to a person whom the seller reasonably believes is a QIB and to whom notice is given that the offer, sale or transfer is being made in reliance on Rule 144A under the Securities Act; (c) pursuant to Rule 144 under the Securities Act (if available); (d) to the Company; (e) pursuant to an effective registration statement under the Securities Act; or (f) pursuant to another available exemption, if any, from registration under the Securities Act, in each case in compliance with all applicable laws;

46        it understands and agrees that (a) the Placing Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act; and (b) understands and agrees that the Placing Shares (to the extent they are in certificated form), unless otherwise determined by the Company in accordance with applicable law, will bear a legend to that effect in addition to such other legends as the Company deems necessary or as are required under applicable law;

47        represents and warrants that for so long as the Placing Shares are "restricted securities" (within the meaning of Rule 144(a)(3) under the Securities Act), it will segregate such Placing Shares from any other shares that they hold that are not restricted securities, shall not deposit such shares in any depositary facility established or maintained by a depositary bank and will only transfer such Placing Shares in accordance with the foregoing restrictions;

48        represents and warrants that it will notify any transferee to whom it subsequently reoffers, resells, pledges or otherwise transfers the Placing Shares of the foregoing restrictions on transfer;

49        represents and warrants that if it is acquiring the Placing Shares as a fiduciary or agent for one or more investor accounts, each such account is a QIB, it has sole investment discretion with respect to each such account and they have full power and authority to make the acknowledgements, representations, warranties and agreements herein on behalf of each such account;

50        represents and warrants that it is acquiring such Placing Shares for its own account (or the account of a QIB as to which it has sole investment discretion) for investment purposes and (subject to the disposition of its property being at all times within its control) not with a view to any distribution of the Placing Shares; and

51        represents and warrants that no representation has been made as to the availability of the exemption provided by Rule 144 or any other exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with either of the Banks, any money held in an account with any of the Banks on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA.  The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from the Banks' money in accordance with the client money rules and will be used by each of the Banks in the course of its own business; and the Placee will rank only as a general creditor of the relevant Bank.

All times and dates in this Announcement may be subject to amendment.  The relevant shall notify the Placees and any person acting on behalf of the Placees of any changes. 

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser. 

The rights and remedies of the Banks and the Company under these Terms and Conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others.

Each Placee may be asked to disclose in writing or orally to the Banks:

(a)        if he or she is an individual, his or her nationality; or

 

(b)        if he or she is a discretionary fund manager, the jurisdiction in which the funds are managed or owned.

 

DEFINITIONS

In this Announcement:

"Admission" means the admission of the Placing Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities;

"Affiliate" has the meaning given in Rule 501(b) of Regulation D promulgated under the Securities Act or Rule 405 under the Securities Act, as applicable;

"Announcement" means this Announcement (including the Appendix to this Announcement);

"AUD" means the lawful currency of Australia;

"Australia" means the Commonwealth of Australia;

"Barclays" means Barclays Bank PLC;

"BofA Merrill Lynch" means Merrill Lynch International;

"Bookbuild" means the bookbuilding process to be commenced by the Banks to use reasonable endeavours to procure placees for the Placing Shares, as described in this Announcement and subject to the terms and conditions set out in this Announcement and the Placing Agreement;

"Company" means Serco Group plc;

"CREST" means the relevant system, as defined in the Uncertificated Securities Regulations 2001 (SI 2001/3755) (in respect of which Euroclear UK & Ireland Limited is the operator);

"FCA" means the Financial Conduct Authority;

"FSMA" means the Financial Services and Markets Act 2000, including any supplements or amendments thereto and regulations made pursuant thereto;

"Group" means the Company and its subsidiary undertakings;

"London Stock Exchange" means the London Stock Exchange plc;

"Ordinary Share" means an ordinary share of two pence each in the capital of the Company, and "Ordinary Shares" shall be construed accordingly;

"Placee" means any person (including individuals, funds or otherwise) by whom or on whose behalf a commitment to subscribe for Placing Shares has been given;

"Placing" means the placing of the Placing Shares by the Banks, on behalf of the Company, with institutional investors;

"Placing Agreement" means the placing agreement dated 23 May 2019 between the Company and the Banks in respect of the Placing;

"Placing Price" means the price per Ordinary Share at which the Placing Shares are placed;

"Placing Shares" means up to 111,216,400 Ordinary Shares to be issued pursuant to the Placing, the number of which is to be determined at the close of the Bookbuild;

"Prospectus Directive" means the Directive of the European Parliament and of the Council of the European Union 2003/71/EC, as amended (which includes any relevant implementing measure in each member state of the European Economic Area and amendments thereto, including the Directive of the European Parliament and of the Council of the European Union 2010/73/EU to the extent implemented in each member state of the European Economic Area);

"Regulation S" means Regulation S promulgated under the Securities Act;

"Regulatory Information Service" means an information service that is approved by the FCA and on the FCA's list of Registered Information Services;

"Rothschild & Co" means N.M. Rothschild & Sons Limited

"Securities Act" means the US Securities Act of 1933, as amended;

"Terms and Conditions" means the terms and conditions of the Placing set out in the Appendix to this Announcement;

"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland;

"United States" or "US" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

"£" means the lawful currency of the United Kingdom; and

"$" means the lawful currency of the United States.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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