QINETIQ GROUP PLC (Incorporated and Registered in England and Wales No
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you are recommended to seek your own financial advice immediately from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser. If you have sold or otherwise transferred all your Ordinary Shares in QinetiQ, please send this document, together with the accompanying Form of Proxy, as soon as possible, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected for delivery to the purchaser or transferee. If you have sold or otherwise transferred only part of your holding, you should retain these documents. The distribution of this document and accompanying documents in or into jurisdictions other than the United Kingdom may be restricted by local law and therefore persons into whose possession this document comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws or regulations of such jurisdictions. QINETIQ GROUP PLC (Incorporated and registered in England and Wales No. 04586941) Proposed disposal of QinetiQ’s US Services division and £150 million capital return to shareholders by way of share buyback and Notice of General Meeting This document should be read as a whole. Your attention is drawn to the letter from the Chairman of QinetiQ which is set out on pages 2 to 7 of this document and recommends you to vote in favour of the resolutions to be proposed at the General Meeting referred to below. Your attention is also drawn to the risk factors set out in Part II (Risk Factors) of this document. Notice of a General Meeting of QinetiQ Group plc, to be held at 10.00 a.m. on 13 May 2014 at the offices of Ashurst LLP, Broadwalk House, 5 Appold Street, London EC2A 2HA, is set out at the end of this document. The Form of Proxy for use at the meeting accompanies this document and, to be valid, should be completed and returned to the Company’s registrars, Equiniti at Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA as soon as possible and, in any event, so as to arrive by no later than 10.00 a.m. on 9 May 2014. Completion and return of the Form of Proxy will not preclude Shareholders from attending and voting in person at the General Meeting, should they wish to do so. J.P. Morgan Limited (which conducts its UK investment banking business as J.P. Morgan Cazenove) (‘‘J.P. Morgan Cazenove’’) which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for QinetiQ and no one else in connection with the Disposal and will not be responsible to anyone other than QinetiQ (whether or not a recipient of this document) for providing the protections afforded to its clients or for giving advice in connection with the Disposal, the contents of this document or any of the transactions, arrangements or other matters referred to or contained in this document. UBS Investment Bank which is authorised by the Prudential Regulation Authority and regulated in the United Kingdom by the Financial Conduct Authority and the Prudential Regulation Authority is acting exclusively for QinetiQ and no one else in connection with the Disposal and will not be responsible to anyone other than QinetiQ (whether or not a recipient of this document) for providing the protections afforded to its clients or for giving advice in connection with the Disposal, the contents of this document or any of the transactions, arrangements or other matters referred to or contained in this document. Apart from the responsibilities and liabilities, if any, which may be imposed upon J.P. Morgan Cazenove and UBS Investment Bank by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, neither J.P. Morgan Cazenove nor UBS Investment Bank accepts any responsibility whatsoever nor makes any representation or warranty, express or implied, concerning the contents of this document, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by them, or on their behalf, in connection with QinetiQ or the Disposal and nothing in this document is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Each of J.P. Morgan Cazenove and UBS Investment Bank accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which they might otherwise have in respect of this document or any such statement. The delivery of this document shall not imply that there has been no change in the Company’s affairs or that the information set forth in this document is correct as of any date subsequent to the date hereof. DIRECTORS, COMPANY SECRETARY, REGISTERED OFFICE AND ADVISERS Directors Mark Elliott (Non-Executive Chairman) Leo Quinn (Chief Executive Officer) David Mellors (Chief Financial Officer) Michael Harper (Deputy Chairman and Senior Independent Non-Executive Director) Noreen Doyle (Non-Executive Director) Admiral Sir James Burnell-Nugent (Non-Executive Director) Paul Murray (Non-Executive Director) Susan Searle (Non-Executive Director) Company Secretary Jon Messent Registered Office Cody Technology Park Ively Road Farnborough Hampshire GU14 0LX Joint Sponsor and joint financial J.P. Morgan Limited adviser 25 Bank Street London E14 5JP Joint Sponsor and joint financial UBS Limited adviser 1 Finsbury Avenue London EC2M 2PP Joint financial adviser Stone Key Partners LLC 2 Sound View Drive 2nd Floor Greenwich CT 06830 Legal Advisers to the Company Ashurst LLP as to English Law Broadwalk House 5 Appold Street London EC2A 2HA Legal Advisers to the Company Stroock & Stroock & Lavan LLP as to US Law 180 Maiden Lane New York NY 10038 Legal Advisers to the Joint Sponsors Herbert Smith Freehills LLP Exchange House Primrose Street London EC2A 2EG Auditors and Reporting Accountants KPMG LLP to the Company 15 Canada Square London E14 6GL Registrar Equiniti Limited Aspect House Spencer Road, Lancing West Sussex BN99 6DA i EXPECTED TIMETABLE OF PRINCIPAL EVENTS Event Expected time/date Announcement of the Disposal ............................. 7.00 a.m. on 22 April 2014 Latest time and date for receipt of Forms of Proxy ............... 10.00 a.m. on 9 May 2014 General Meeting ....................................... 10.00 a.m. on 13 May 2014 Longstop date for completion of the Disposal .................. 20 August 2014 Notes: Future dates are indicative only and are subject to change by the Company, in which event details of the new times and dates will be notified to the FCA and, where appropriate, to Shareholders. References to times in this document are to London time. ii TABLE OF CONTENTS Page PART I—LETTER FROM THE CHAIRMAN OF QINETIQ GROUP PLC .................. 2 PART II—RISK FACTORS .................................................. 8 PART III—PRESENTATION OF INFORMATION ................................... 10 PART IV—FINANCIAL INFORMATION RELATING TO THE US SERVICES DIVISION ........ 12 PART V .............................................................. 14 SECTION A—UNAUDITED PRO FORMA FINANCIAL INFORMATION ................... 14 SECTION B—ACCOUNTANTS’ OPINION ON PRO FORMA FINANCIAL INFORMATION ..... 17 PART VI—PRINCIPAL TERMS OF THE PROPOSED DISPOSAL ....................... 19 PART VII—ADDITIONAL INFORMATION ....................................... 22 PART VIII—DEFINITIONS .................................................. 30 PART IX—DOCUMENTS INCORPORATED BY REFERENCE ......................... 33 NOTICE OF GENERAL MEETING ............................................ 34 1 PART I—LETTER FROM THE CHAIRMAN OF QINETIQ GROUP PLC Incorporated and registered in England and Wales, Registration No. 04586941 Directors: Registered Office: Cody Mark Elliott (Non-Executive Chairman) Technology Park Leo Quinn (Chief Executive Officer) Ively Road David Mellors (Group Finance Director) Farnborough Michael Harper (Deputy Chairman and Senior Independent Hampshire Non-Executive Director) GU14 0LX Noreen Doyle (Non-Executive Director) Admiral Sir James Burnell-Nugent (Non-Executive Director) Paul Murray (Non-Executive Director) Susan Searle (Non-Executive Director) 25 April 2014 Dear Shareholder Proposed disposal of QinetiQ’s US Services division and £150 million capital return to shareholders by way of share buyback and Notice of General Meeting Introduction On 22 April 2014, the Board of QinetiQ announced that it had entered into a conditional agreement to sell its US Services division (excluding Cyveillanceᓼ) to The SI Organization, Inc. for an initial cash consideration of US$165 million (approximately £100 million), together with a potential earnout of up to US$50 million in cash. The earnout is based on the gross profit performance of the US Services division in the financial year ending 31 March 2015. Following completion of the Disposal and subject to prevailing equity market conditions, it is the Company’s intention to return £150 million to Shareholders by way of an on-market share buyback. This return of capital is equivalent to 10.2 per cent of the Company’s market capitalisation as at 17