Proposed Disposal of the Kantar Business

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Proposed Disposal of the Kantar Business WPP SCANGROUP PLC Registration Number: C.11/2006 PROPOSED DISPOSAL OF THE KANTAR BUSINESS CIRCULAR TO SHAREHOLDERS THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you require clarification on the content of this Circular, please seek guidance from your stockbroker, investment banker, or any other professional adviser. This Circular has been prepared in compliance with the requirements of the Capital Markets Act (Cap. 485A of the Laws of Kenya), the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations, 2002, the Capital Markets (Licensing Requirements) (General) Regulations, 2002 and the Nairobi Securities Exchange Listing Manual, 2013. The Capital Markets Authority has approved the issue of this Circular. Approval of this Circular is not to be taken as an indication of the merits of the proposed transaction or a recommendation by the Capital Markets Authority. As a matter of policy, the Capital Markets Authority and the Nairobi Securities Exchange do not assume any responsibility for the correctness of any statements or opinions made or reports contained in this Circular. Date of issue: 30 April 2020 1 TABLE OF CONTENTS 1. KEY DATES ................................................................................................................................................ 3 2. DEFINITIONS ............................................................................................................................................. 4 3. CORPORATE INFORMATION ..................................................................................................................... 8 4. LETTER FROM THE CHAIRMAN ................................................................................................................. 9 5. KANTAR AFRICA BUSINESS ..................................................................................................................... 14 6. GLOBAL TRANSACTION .......................................................................................................................... 16 7. THE INDEPENDENT KANTAR TRANSACTION COMMITTEE ..................................................................... 17 8. COMMERCIAL TERMS OF THE DISPOSAL ............................................................................................... 19 9. RATIONALE FOR THE DISPOSAL .............................................................................................................. 21 10. IMPACT OF DISPOSAL ............................................................................................................................. 23 11. RECOMMENDATION OF THE INDEPENDENT KANTAR TRANSACTION COMMITTEE AND THE BOARD .. 25 12. THE SHARE PURCHASE AGREEMENT ...................................................................................................... 26 13. STATUTORY AND GENERAL INFORMATION ........................................................................................... 29 14. DOCUMENTS AVAILABLE FOR INSPECTION ............................................................................................ 30 ANNEXURE: REPORT OF THE INDEPENDENT ADVISOR .................................................................................... 31 2 1. KEY DATES Due date for lodgement of proxy forms 11.00 a.m. (East African Time) on 25 May 2020 General Meeting 11.00 a.m. (East African Time) on 27 May 2020 Expected date of completion of the Disposal Second quarter of 2020 The above timetable is indicative only. The Company may vary any of the above dates without notice, subject to the Capital Markets Act, the NSE Listing Rules and other applicable law. 3 2. DEFINITIONS In this Circular, unless otherwise stated and as the context allows, the words in the first column have the meaning stated opposite them in the second column. Words in the singular include the plural and vice versa, words signifying one gender include the other gender, and references to a person include references to juristic persons and associations of persons: “Agreed Enterprise Value” means the agreed enterprise value for the Kantar Africa Business for the purposes of the Disposal, being USD 63.58 million as detailed in section 8.1 of this Circular; “Bain Capital” means Bain Capital Private Equity (Europe) LLP, its affiliates, and the funds managed and/or advised by the foregoing, but excluding the portfolio companies of such funds; “Board” means the board of directors of Scangroup acting collectively and comprising the persons listed in section 3 of this Circular; “Business Day” means a day (excluding Saturdays, Sundays or public holidays) on which banks are open for general banking business in Nairobi, London, New York and Luxembourg; “CAK” means the Competition Authority of Kenya, established under the Competition Act (Chapter 504 of the Laws of Kenya); “Capital Markets Act” means the Capital Markets Act (Chapter 485A of the Laws of Kenya); “Circular” means this Shareholders’ Circular dated 30 April, 2020; “CCC” means the COMESA Competition Commission; “CMA” means the Capital Markets Authority, established under the Capital Markets Act; “COMESA” means the Common Market for Eastern and Southern Africa; “Company” or means WPP Scangroup Plc, a public limited liability company “Scangroup” incorporated under the laws of the Republic of Kenya with registration number C.11/2006 and listed on the Nairobi Securities Exchange; “Debenture” means a debenture dated 19 August 2011 in favour of CFC Stanbic Bank Limited (now Stanbic Bank Limited) which has been executed by Millward Brown East Africa Limited and various members of the Group in relation to a KES 500,000,000 term loan and spot foreign currency dealing facility and for the purposes of this definition, Debenture also includes any cross-guarantees provided by Millward Brown East Africa Limited in favour of Stanbic Bank Limited; “Directors” means the members of the Board, being the persons listed in section 3 of this Circular; “Disposal” means the proposed disposal by the Group of 100% of its interest in the Kantar Africa Business to the Joint Venture; “EBIT” means earnings before interest and tax; “EBITDA” means earnings before interest, tax, depreciation and amortisation; 4 “FCC” means the Fair Competition Commission, Tanzania; “FCCPC” means the Nigerian Federal Competition and Consumer Protection Commission; “First Completion” means the first completion of the Global Transaction which took place on 5 December 2019, when the Joint Venture was established and subsequently acquired over 90% of the Global Kantar Business; “General Meeting” or means the meeting of the Shareholders of Scangroup to be held in “GM” accordance with an Order issued by the High Court of Kenya in Miscellaneous Application No. E680 of 2020 on Wednesday 29 April 2020 at 11.00 a.m. East African Time. Due to the ongoing Government restrictions on public gatherings, Shareholders will not be able to attend this meeting in person but will be able to register for, access information pertaining to the Resolution, follow the meeting and vote electronically or by proxy; “Global Transaction” means the sale of the Kantar Global Business by WPP to the Joint Venture; “Group” means Scangroup and its subsidiaries (excluding members of the Target Group); "Independent Advisor" means Dyer & Blair Investment Bank Limited, who were appointed by the Company to act as an independent advisor; "Independent Advisor means the report prepared by the Independent Advisor in relation Report" to the Disposal as described in this Circular; “Independent Kantar means the independent committee of the Board established for the Transaction Committee” purpose of reviewing the terms of the Disposal, comprising the or “Independent following independent, non-executive directors: Patricia Ithau Committee” (Chairperson), Richard Omwela and Pratul Shah; “International Research means International Research and Marketing Group Holdings and Marketing Group Limited, a private limited liability company incorporated in Holdings” accordance with the laws of Mauritius under registration number 094608 C1/GBL; “Joint Venture” means the joint venture established on First Completion by Bain Capital (holding a 60% interest) and WPP plc (holding a 40% interest) for the purposes of owning and operating the Kantar Global Business; “Kantar” means the Kantar Africa Business and the Kantar Global Business; “Kantar Africa Business” means the Company’s data research, consulting and analytics businesses conducted by the Millward Brown Companies and the or “Africa Business” Kantar TNS Companies; “Kantar Global Business” means the global data, research, consulting and analytics business or “Global Business” sold or to be sold by the WPP Group to the Joint Venture (including WPP plc’s indirect interest in the Kantar Africa Business); “Kantar Square” means Kantar Square Two B.V., a private limited liability company (besloten vennootschap met beperkte aansprakelijkheid) under Dutch law, having its official seat in Rotterdam, its office address at Laan op Zuid 167, 3072 DB Rotterdam, the Netherlands and 5 registered in the Dutch Commercial Register under number 74179373, being a company within the Joint Venture structure and the purchasing entity in respect of the Disposal; “Kantar TNS Companies” means Research and Marketing Group Investment Limited and its subsidiary companies operating in Kenya, Nigeria, Ivory Coast, Senegal, Ghana, Cameroon and the United Kingdom; “KES” means Kenyan Shillings, the lawful currency of Kenya; “Locked Box Date”
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