NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

20 JULY 2021

INCREASED AND FINAL RECOMMENDED CASH OFFER

for

TELIT COMMUNICATIONS PLC ("TELIT")

by

TRIESTE ACQUISITIONS HOLDING LIMITED ("BIDCO")

to be effected
by way of a scheme of arrangement
under Part 26 of the Companies Act 2006

INCREASED AND FINAL[1] RECOMMENDED OFFER FOR TELIT

Introduction

On 25 May 2021, the boards of Telit and Bidco announced the terms of a recommended cash offer made by Bidco for the entire issued and to be issued ordinary share capital of Telit other than the Telit Shares held by funds managed by DBAY (the "Acquisition") at a price of 220 pence in cash per share.

Capitalised terms defined in the Scheme Document have the same meanings given in this announcement, a copy of which is available on Telit's website at: https://www.telit.com/about/investor-relations/possible-offers/.

Increased and Final Recommended Cash Offer

The Telit Board welcomes the announcement by DBAY on 20 July 2021, in which it has increased its offer price to acquire the entire issued and to be issued ordinary share capital of Telit to 229.5 pence in cash per Scheme Share and declared its offer final (the "Increased Final Cash Offer").

The financial terms of the Increased Final Cash Offer are final and will not be increased, except that Bidco reserves the right to increase the amount of the offer price if there is an announcement on or after the date of this announcement of an offer or a possible offer for Telit by a third party offeror or potential offeror. 

The Telit Board continues to believe that the Acquisition is in the best interests of Telit shareholders as a whole, and accordingly unanimously recommends that shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting due to be held on 28 July 2021. 

The Telit Board refers to the Background and Reasons for its recommendation set out in paragraph 4 of Part 1 of the Scheme Document and in addition notes:

·      the Increased Final Cash Offer is at a material premium to Telit's historical trading since the events of 2017. It is at a 70.8 per cent. premium to the volume weighted average price per Telit Share to the 6 months to 2 November 2020 (being the last Business Day before the Previous Offer Period began), a premium of 10.6 per cent. to the Closing Price on 17 March 2021 (being the last Business Day before the Offer Period began) and a premium of 41.9 per cent. to the volume weighted average price per Telit Share for the 12 months to 20 February 2020 (before the market decline in the first quarter of 2020);

·      the Telit Board has been open to competing offers and confirms that it is not currently in receipt of any approaches or offers from any other party;

·      in the event the Increased Final Cash Offer is not implemented, there is likely to be overhang on the Company's share price as trading in the shares since the announcement of the Acquisition has been supported by hedge funds. Accordingly, the Increased Final Cash Offer represents an opportunity for Telit Shareholders who want to realise their investment in Telit in cash to do so at a price that may not be reflected in the market should the Acquisition lapse; and

·      the Increased Final Cash Offer has been declared "final", with no further increases to be made⁽¹⁾.

Reconfirmation of unanimous recommendation regarding the Acquisition and Increased Final Cash Offer

The Telit Directors, who have been so advised by Rothschild & Co as to the financial terms of the Increased Final Cash Offer, consider that the Increased Final Cash Offer undervalues Telit and its longer-term prospects. In providing advice to the Telit Directors as to the financial terms of the Increased Final Cash Offer, Rothschild & Co has taken into account the commercial assessments of the Telit Directors.

However, the Telit Directors have considered, a number of factors in addition to value such as those set out in paragraph 4 of Part 1 of the Scheme Document and the ones outlined above, and accordingly and after careful consideration, the Telit Directors continue to believe that the Acquisition is in the best interests of Telit Shareholders as a whole and recommend unanimously that Telit Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting.

Alternative Offer

In relation to the Alternative Offer and for the reasons set out in paragraph 4 of Part 1 of the Scheme Document, together with risk factors and other investment considerations set out in paragraph 5 of Part 5 of the Scheme Document, the Telit Directors cannot form an opinion as to whether or not the terms of the Alternative Offer are fair and reasonable and reconfirm that they are not making any recommendation or giving any advice to Scheme Shareholders as to whether or not they should elect for the Alternative Offer. Scheme Shareholders are strongly recommended to take into account the disadvantages and advantages highlighted above, as well as their individual circumstances, when deciding whether or not to elect for the Alternative Offer in respect of their holding of Scheme Shares.

The Telit Directors reconfirm their strong recommendation that, in deciding whether or not to elect for the Alternative Offer, the Telit Shareholders should take their own independent financial, legal and tax advice and consider carefully the disadvantages and advantages of electing for the Alternative Offer (including, but not limited to, those set out in paragraph 5 of Part 5 of the Scheme Document) in light of their own financial circumstances and investment objectives.

Procedures for the Meetings and Forms of Proxy

As announced on 14 July 2021, the Court Meeting and the General Meeting relating to the Scheme have been reconvened to be held on 28 July 2021 at 10.00 a.m. and 10.15 a.m. (or as soon thereafter as the Court Meeting concludes or is adjourned) respectively at the offices of CMS Cameron McKenna Nabarro Olswang LLP at Cannon Place, 78 Cannon Street, London, EC4N 6AF. Forms of Proxy in respect of the Court Meeting and the General Meeting should therefore now be returned (in accordance with the instructions printed on them) to Link Group, PXS 1, 10th Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL, United Kingdom so as to be received as soon as possible and in any event not later than:

· 10.00 a.m. on 26 July 2021 in respect of the Court Meeting; and

· 10.15 a.m. on 26 July 2021 in respect of the General Meeting.

The Election Return Time to submit elections for the Alternative Offer is 11:00 a.m. on 29 July 2021.

Telit Shareholders who have already submitted Forms of Proxy for the Court Meeting and the General Meeting and do not wish to change their voting instructions, need take no further action as their Forms of Proxy will continue to be valid in respect of the Court Meeting and the General Meeting.

Telit Shareholders who have submitted Forms of Proxy for the Court Meeting and/or the General Meeting and who now wish to change their voting instructions, should contact Link Group on +44 (0) 371 664 0321. Calls are charged at the standard geographic rate and will vary by provider. Calls from outside of the United Kingdom will be charged at the applicable international rate. Lines will be open between 9:00 a.m. to 5:30 p.m., Monday to Friday excluding public holidays in England and Wales. Link Group cannot provide advice on the merits of the Acquisition nor give any financial, legal or tax advice.

Telit Shareholders are also reminded that completion and return of a Form of Proxy, or the appointment of a proxy electronically using CREST, will not prevent them from voting at the Court Meeting or the General Meeting either in person or via the Virtual Meeting Platform. Please refer to the Scheme Document and the Virtual Meeting Guide for further information. 

Enquiries

Telit Communications PLC     

Rothschild & Co (Financial adviser under Rule 3 of the Code to Telit)

FinnCap (Financial adviser, Nomad and broker to Telit)

FinElk (Public relations adviser to Telit)

Important notices

Rothschild & Co, which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser under Rule 3 of the Code to Telit in connection with the matters set out herein and for no one else and will not be responsible to anyone other than Telit for providing the protections afforded to its clients or for providing advice in relation to the matters set out herein. Neither Rothschild & Co nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Rothschild & Co in connection with any statement contained herein, the Acquisition or otherwise.

FinnCap, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively for Telit and for no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than Telit for providing the protections afforded to its clients or for providing advice in connection with the subject matter of this announcement.

Further information

This announcement is for information purposes only and is not intended to and does not constitute, or form any part of, an offer to sell or subscribe for or any invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise. The Acquisition will be made solely through the Scheme Document and the accompanying Forms of Proxy and Form of Election, which contain the full terms and conditions of the Acquisition. Any approval, decision or other response to the Acquisition should be made only on the basis of the information in the Scheme Document.  Telit Shareholders are strongly advised to read the formal documentation in relation to the Acquisition.  Each Telit Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences to it (or its beneficial owners) of the Acquisition.

This announcement has been prepared for the purpose of complying with English law and the Takeover Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside England.

This announcement does not constitute a prospectus or prospectus equivalent document.

Overseas shareholders

The release, publication or distribution of this announcement in or into jurisdictions other than the UK may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK should inform themselves about, and observe, any applicable legal or regulatory requirements. In particular the ability of persons who are not resident in the UK to vote their Telit Shares at the Court Meeting or General Meeting, or to appoint another person as proxy to vote at the Court Meeting or General Meeting on their behalf, may be affected by the laws of the relevant jurisdictions in which they are located.  Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person. This announcement has been prepared for the purpose of complying with the laws of England and Wales, Market Abuse Regulation, AIM Rules and the Code and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside of England and Wales. Unless otherwise determined by Bidco or required by the Code, and permitted by applicable law and regulation, the Acquisition will not be made available directly or indirectly in, into or from a Restricted Jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote in favour of the Acquisition by use of mail or any other means or instrumentality (including, without limitation, facsimile, email or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of, any Restricted Jurisdiction.

Copies of this announcement and any formal documentation relating to the Acquisition will not be and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in, into or from any Restricted Jurisdiction. Doing so may render invalid any related purported vote in respect of the Acquisition.

Where Bidco believes that an election for the Alternative Offer by any Scheme Shareholder may infringe applicable legal or regulatory requirements, or may result in a requirement for a registration under the securities laws of any Restricted Jurisdiction, Bidco will have the right to deem that such Scheme Shareholder has not validly elected for the Alternative Offer and such Scheme Shareholder will instead receive the Increased Final Cash Offer in respect of the Scheme Shares which were subject to such an election in accordance with the terms of the Acquisition.

Further details in relation to Telit Shareholders in overseas jurisdictions are contained in the Scheme Document.

Additional information for US investors

The Acquisition relates to the shares of a UK company and is being made by means of a scheme of arrangement provided for under the laws of England and Wales. A transaction effected by means of a scheme of arrangement is not subject to the proxy solicitation or tender offer rules under the Exchange Act and is exempt from the registration requirements of the Securities Act. Accordingly, the Acquisition will be subject to disclosure requirements and practices applicable in the UK and to schemes of arrangement under the laws of England and Wales, which are different from the disclosure and other requirements applicable to a US tender offer. Neither the SEC, nor any securities commission of any state of the United States, has approved or disapproved any offer, or comment upon the adequacy or completeness of any of the information contained in document.  Any representation to the contrary is a criminal offence in the United States.

Financial information relating to Telit included in this announcement and the Scheme Document has been or will have been prepared in accordance with accounting standards applicable in the United Kingdom that may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

The Consideration Loan Notes, the Holdco Loan Notes and the Consideration Shares to be issued pursuant to the Scheme under the Alternative Offer may not be offered or sold in the United States absent registration or an exemption from registration.  No US offer of such Consideration Loan Notes, the Holdco Loan Notes and the Consideration Shares will be made in the United States.  The Consideration Loan Notes, the Holdco Loan Notes and the Consideration Shares have not been and will not be registered under the US Securities Act or under the relevant securities laws of any state or territory or other jurisdiction of the United States and will not be listed on any stock exchange in the United States, and may not be offered, sold or delivered, directly or indirectly, in, into or from the United States. Neither the US Securities and Exchange Commission nor any US state securities commission has approved or disapproved of the Consideration Loan Notes, the Holdco Loan Notes or the Consideration Shares or determined that this announcement or the Scheme Document is accurate or complete. Any representation to the contrary is a criminal offence.

Telit Shareholders located or resident in the United States or who are otherwise US Persons will not be permitted to elect receipt of the Consideration Loan Notes pursuant to the Alternative Offer, and any purported election to receive Consideration Loan Notes pursuant to the Alternative Offer by Telit Shareholders from the United States, or which, at the sole discretion of Bidco, appear to be made in respect of Telit Shares beneficially held by persons located or resident in the United States or who otherwise appear to be US Persons will not be accepted.  Accordingly, Telit Shareholders located or resident in the United States or who are otherwise US Persons will receive cash pursuant to the Scheme, and no Consideration Loan Notes will be issued to any such Telit Shareholder.

By electing receipt of the Consideration Loan Notes pursuant to the Alternative Offer, Telit Shareholders will be deemed to represent and warrant, on behalf of themselves and any person on whose behalf they beneficially hold their Telit Shares, that they: (i) are not located or resident in the United States or otherwise a US Person; and (ii) are not electing receipt of Telit Shares pursuant to the Alternative Offer with a view to, or for offer or sale of Consideration Loan Notes in connection with, any distribution thereof (within the meaning of the Securities Act) in the United States or to US Persons.

The receipt of cash consideration pursuant to the Increased Final Cash Offer by a US holder of Telit Shares as consideration for the transfer of its Scheme Shares pursuant to the Scheme may be a taxable transaction for US federal income tax purposes and under applicable US state and local, as well as foreign and other, tax laws. Each US holder is urged to consult his independent professional adviser immediately regarding the tax consequences of the Acquisition applicable to him, her or it.

It may be difficult for US holders of Telit Shares to enforce their rights and any claims they may have arising under US Federal securities laws in connection with the Acquisition, since Telit is organised under the laws of a country other than the United States, and some or all of its officers and directors may be residents of countries other than the United States, and most of the assets of Telit are located outside of the United States. US holders of Telit Shares may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US Federal securities laws.  Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's jurisdiction or judgment.

The Acquisition may, in the circumstances provided for in the Scheme Document, instead be carried out by way of a Takeover Offer under the laws of England and Wales. If Bidco exercises, with the consent of the Takeover Panel and subject to the terms of the Co-operation Agreement, its right to implement the Acquisition by way of a Takeover Offer, such Takeover Offer will be made in compliance with applicable US tender offer and US Federal securities laws and regulations, including the exemptions therefrom. In accordance with normal UK practice and pursuant to rule 14e-5(b) of the Exchange Act, Bidco or its nominees, or its brokers (acting as agents), may, from time to time, make certain purchases of, or arrangements to purchase, Telit Shares outside of the United States, other than pursuant to the Acquisition, until the date on which the Acquisition becomes effective, lapses or is otherwise withdrawn, in compliance with applicable law, including the Exchange Act. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices.  Any information about such purchases will be disclosed, as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website at www.londonstockexchange.com.

Forward-looking statements

This announcement, oral statements made regarding the Acquisition, and other information published by Bidco and Telit contain statements which are, or may be deemed to be, "forward-looking statements" with respect to Bidco or Telit.  These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often (but not always) use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could" or other words or terms of similar meaning or the negative thereof.  Forward-looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco or Telit and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on the business of Bidco or Telit.

Although Bidco and Telit believe that the expectations reflected in such forward-looking statements are reasonable, Bidco and Telit can give no assurance that such expectations will prove to be correct. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or developments to differ materially from those expressed in or implied by such forward-looking statements. These forward-looking statements are based on numerous assumptions regarding present and future strategies and environments. You are cautioned not to place undue reliance on such forward-looking statements, which speak only as at the date hereof. All subsequent oral or written forward-looking statements attributable to Bidco or Telit or any person acting on their behalf are expressly qualified in their entirety by the cautionary statement above. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this announcement. Bidco and Telit expressly disclaim any intention or obligation to update publicly or revise forward-looking or other statements contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required. 

No profit forecasts or estimates

Nothing in this announcement shall be deemed to be a forecast, projection or estimate of the future financial performance of Bidco, the Bidco Group, Telit or the Telit Group except where otherwise stated.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (a) the offeree company; and (b) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) of the Code applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified.  Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of: (a) the offeree company; and (b) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8 of the Code. A Dealing Disclosure by a person to whom Rule 8.3(b) of the Code applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3 of the Code.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4 of the Code).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified.  You should contact the Takeover Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website and availability of hard copies

A copy of this announcement will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, free of charge on Telit's website at https://www.telit.com/about/investor-relations/possible-offers/.  Neither the contents of this website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this announcement.

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments.

Source of information and bases of calculation

Unless otherwise stated, all prices for Telit Shares have been derived from the AIM Appendix to the Daily Official List and represent Closing Prices on the relevant date(s).

Volume-weighted average prices (VWAP) have been derived from Bloomberg and have been rounded to the nearest single decimal place.

General

If you are in any doubt about the contents of this announcement or the action you should take, you are recommended to seek your own independent financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser duly authorised under Financial Services and Markets Act 2000 (as amended) if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.