Lexis®PSL Corporate.

Market Tracker Trend Report Trends in UK public M&A deals in 2017 1 2 3 6 8 41 18 16 51 27 33 57 45 20 29 58 25 54 60 46

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y PSL Corporate team ® Regulatory and political issues regime (‘PUSU’) offerstheup and shut up put or Possible saleFormal processes arrangements Offer-related undertakingsIrrevocable pensions and employees business, - intentions bidder’s of Disclosure opinions trustees’ schemes pension and representatives’ Employee Deal structure Deal value and volume hostile? or recommended response: Target transactions Public-to-private UK and international bidders international and UK Competing and potential competing bids competing potential and Competing Industry focus consideration of Nature offer the Financing

Deals included reportDeals the in The Lexis 10. 11. 12. 13. 14. 15. 16. Executive summar 1. 2. 3. 7. Contents approach and Background 9. 4. 5. 6. 8.

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Market Tracker Trend Report Trends in UK public M&A deals in 2017 - . here (26 for Main Market companies and (26 1 Background and approach Comprising 34 possible offers subject to a PUSU deadline, 8 formal sales process announcements and one commencement of offer periodoffer of initiat commencement one and announcements process formal sales deadline, 8 to a PUSU subject offers 34 possible Comprising

1 of a company. the sale including options its exploring it was that confirming review announcement strategic a target’s ed by The final date for inclusion of developments in this report is 31 December 2017. Reference has been madeto deal The forinclusion of date final developments31 report Decemberthis in 2017. is noteworthy. considered if date after this developments This report augmentsavailable and updates our is reportwhich respect in of the first2017 half of announced in 2017. We reviewed a total of 90 transactions that were subject to the Takeover Code (the Code): 47 firm 47 Code): reviewed a total of Code 90 (the We transactions subject were that the Takeover to announced 2017. in 43 offers (25 possiblefor andcompanies, offers Main Market companies) 22 forAIM December 2017. and 31 which announced were between for AIM companies) 1 January17 2017 References appropriate. as numbers, whole to down or been up rounded report this have in included The percentages ‘Rules’to and Mergers references are the Rules Code). to of the City (the Code on Takeovers This report the currentdynamics into provide to and can an insight aims what we of UK public M&A activity 2017 in expect see to 2018. in conducted has LexisNexis examine to research current market trends respect in Market Tracker of UK public M&A deals

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 1 Executive summary Rangers also seen Government have plc. International Football Club proposals We of foreign for scrutiny greater ownership of UK businessesand assets sectors defence, key in energy and civil telecoms as such nuclear, and transport, for the introduction of mandatory and voluntary notification obligations and forthe interveneto power transactionsin smaller businesses involving certain in industries. unlike in 2016, whichsaw a strong media the interest in technology, & telecommunications (TMT) 2016, in and supportunlike professional firm (13%), offers announced were for targets operating financial in services services In 2017, sector. mining, metals & extractions engineering and manufacturing (10%) (10%), computing & IT (10%), services (13%), sectors). other sectors (among propertyand (10%) was where also the year thePanel sought and obtained a court order requiringCunnigham Mr David 2017 Appeal Board mandatory a Rule and 9 compliant make King comply with to offer the ruling of thefor Takeover However, we have seen an increase have the in we use of only shares consideration. There been has However, a five-foldincrease facility the in number and match’ of deals featuring where a ‘mix consideration offered with 2016) (compared facility ‘mix match’ and over featuringwas a for comprised cash and shares.2017 Every firm offerannounced in also seen one have billion. deal target entitling We shareholders,£1 addition in cash and to consideration, share value rights contingent subjectto (CVRs) certain to conditions. with no one sector being seentargetedspecifically deal have activityWe several different across sectors2017, in However, by the end of 2017, we saw return a with we normality, theto scheme structure being of deals used 62% in the end by of 2017, However, announced. Schemes remained the preferred structureon the largerdeals withschemea structurebeing used of the largest deals. 9 outin of 10 of certain saw a continuance trends observed years, recent in including the popularity2017 of the use of the scheme structure (particularly andthe popularity among continued the larger deals) of cash consideration. by US’s Vantiv, Inc., while the smallest deal of the year was the £15.5 million offer Panmure forby plc Gordon Co. & Inc., while the smallest deal was of the the £15.5 year Vantiv, US’s by Merchant Capital In contrast with LLC. Atlas previous years, UK bidders accounted and US’s LLC QInvest Qatar’s UK bidders of aggregate for deal value). 4% accounted of aggregatefor deal 2016, value 36% (in the we use the of saw offer structure implement to increasea there that so takeover Inthe first 2017 half of was almost split between an even the number of offers and schemes of arrangement announced. may This be attributable the increase to the in number of hostile offers and mandatory offers made during that period. The number of firm offers announced in 2017 was slightly lower than than numberlower the slightly was of firm offers announced in The2017 number of firm offersannounced in 2016: billion, £45 but deal value fallen(2017: has more third a significantlyjustover by 51) 2016: 47, (2017: 2016 seen though more have even we doubling than of the number of deals announced billion), valued above £67.3 was the billionWorldpay £8 offer Group for plc The largest deal of 2017 5 deals). deals, 2017: 12 billion (2017: £1 Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn impact on activity deal clarity of and indeed trade deal, lack the deals as on persist a transitional on Brexit to itself the continues “deadline”.’ deal the near we closer ‘Expectations of a relatively buoyant start to H1 2018 at least as comparable as 2017 have already borne already out (based have on the 2017 as comparable least as at ‘Expectations 2018 start buoyant a relatively of H1 to (negative) greater uncertain a much more — Brexithave will is, however, 2018 The numberH2 outlook offers of announced). for Adam Cain, Senior Associate, Pinsent Masons LLP decline in the number of bids announced in 2017 when compared to 2016, deal pipelines deal for second the look quarter healthy of 2016, when to compared 2017 in number the decline bids of announced in bodes which for public increased M&A well activity latter the in part2018, 2018.’ of remained surprisingly buoyant in 2017 as market participantsperhaps normal. new the is opportunitiesmarket Clearly what as to adjust in 2017 in buoyant remainedsurprisingly identified strategic bidders and those have conditions that market spherethe public of M&A current the been by created have opportunities been not deterredacquisition wider the by have economic and geopolitical outlook. a slight was there Although ‘Despite the backdrop of wider political uncertainty created by the UK’s impending exit from the EU, public M&A impendingexit wider of activitypolitical from‘Despite backdrop the EU, the uncertainty UK’s the by created

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 2 Schemes Offers 62% 61% 38% 39% Firm offers: Structure by number of deals deals of number by Structure offers: Firm There have been no instances of deal structures being being structures deal of instances no been have There switched from an offer to a scheme or vice versa in 2017 in versa vice or scheme to a offer an from switched Deal structure 1 Waterman Group made were that period. plc) during that Waterman As hostile to offers, althoughtechnically there possible, has beennever a hostile bid implemented a scheme by mandatory and, to as offers, underCode,the a bidderrequiresPanel a Rule if 9 offer it wishesconsent make to for an offereeway of ascheme by of arrangement and therefore Rule 9 offers, generally structured are offers. as Interestingly, the first half of 2017 a marked,albeit saw short-lived, shift thein thepreference first for2017 a using halfscheme of to Interestingly, structure of firm offersa takeover: were 52% structured asschemes and were48% structured as offers. temporaryThis blip can be and mandatory 2017) and deal1 during H2 explained2017 thethe in surge number by deals during of hostile H1 bids (5 mandatory offers for Hornby plc, Dragon-Ukranian2017: Properties H1 during (all andDevelopment plc and offers(3) to a scheme (or vice versa). vice a schemeto (or announced in 2016: of the 51 firm offersannounced of the 51 announced 2016: in for Main Market companies and for 25 (26 2016 in structured were schemes as 61% AIM companies), structured were and 39% contractual as offers. no bidders made announcementan that In2017, switchingthey were deal structure from an offer structure among of choice firm bidders: of the 47 (25 for Main Market offers announced2017 in (62%) 29 companies and for 22 AIM companies), were structuredwere (38%) a scheme as and 18 structured These figures of an offer. way by broadlyare line in with figures forfirm offers Structuring the deal to suit the the suit to deal the Structuring circumstances Schemesof arrangement remain the deal of circa 60% being circa of takeovers structured of plus schemes as arrangement.’ of Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn identity of shareholder registers of UK corporates have meant that contractual offers have not always beenalways the not bestroute contractual offers have that meant identity shareholder of registers have UK corporates of be form most the to structure deal of appropriate and hostile competitive continue in they control, secure order 100% in to the goes long-term which against trend 2017 between split H1 in for change the This accounts schemes offersand situations. in or a board recommendation; and significant and substantive (in terms of terms identity (in importantlybut more substantive and shareholding) of and significant size or a board recommendation; complex, for ideal are hand other the on arrangement of Schemes offer. the of favour in undertakings commitments or and shape in support. changes the shareholder of Whilst certainty less level the is on there mergers where recommended ‘When looking structure deal the at between split schemes and contractual offerswe need remind theourselvesto of and/ tension competitive certainty, less deal greater is therewhere contractualsituations offersto following: are suited best

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 3 20 2016 31 Offers Schemes 18 2017 29 Firm offers by deal structure: vs 2017 2016 Schemes generally remain the preferredSchemes generally remain structure on deals the larger an earlier stage than an offer, an earlier with no stagepossibility an offer, than of minorityshareholdings. Schemes of arrangement popular are amongst bidders for a number of reasons, including certainty of obtaining 100% present the relevant at a scheme, and voting control: ifa majority approved value) by (in number in representing 75% and sanctionedmeeting(s) the court, by will be binding on a target’s all shareholders, giving the bidder full at control

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 4 for £2.01 billion. Seefor £2.01 table entitled 2017 2016 6% Offers 12% below for further information. 94% Schemes ection Deal 2: value 88% S ’ in ’ in Firm offers by aggregate deal value: 2017 vs 2016 Millennium & Copthorne Hotels plc City by Developments Limited Top 10 largest 2017 deals in 10 Top between £15.5m and £27.4m) firmly announced in 2017, 6 were 6 structuredas offers wereand 4 structured asschemes. firmly announced2017, in and £27.4m) between £15.5m In 2017, as in 2016, a scheme structure was used largest where deals firmly the deal 2016, in as value waslarger 9 of the size. 10 in In 2017, structured were between schemes. as (ranging The sole £8b and £2.01b) deal structured an offer as announced 2017 in was the offer for ‘ an offer structureConversely, tended (rangingto used be smallest 10 deals whenthe deal the valuesmallerof size: was in Deal size affects structure Adam Cain, Senior Associate, Pinsent Masons LLP shareholders. Proceeding down the scheme route also obviates the need the shareholders. undertake obviates to also scheme the down Proceeding route a squeeze-out leads which procedure, shareholders lengtheninga timetable the an holdingof dissenting to in context the in contractual a offer of andresult can further.’ even up acquisition ‘Schemes structure deal the arrangement of remain for bidders choice of This contextthe in recommended of acquisitions. attributable clearly is fact the to a bidder elects which that implement a transaction scheme of to arrangement of way by from target the approval company’s 75% received only having despite target the of company control can obtain 100% Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn larger deals (note also the bid activity in the AIM market already seen this year), the increasingly more challenging dynamic for more challenging increasingly the bid the activity also seen already year), (note market deals this AIM larger the in a necessity of less hostile in bidders for offer result will strictures.’ ‘Generally schemes are the preferred and most practicable route for larger, complex friendly deals and have accounted for a ‘Generally accounted schemes preferred the complex are friendly and have and most deals practicable for larger, route transactions. split to market numbersee tendbetween main of relatively equal a we AIM - significant On offers schemes.and In some is Whilst there expectation and recommendations. sizes deal be by will driven bring, this will fewer of 2018 what of terms

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 5 Worldpay Group Group Worldpay which represented which represented Superglass Holdings plc by Sergey Sergey Holdings plc by Superglass London Stock Exchange Group plc Group Exchange Stock London 2017 2016 Schemes Offers and for and for Panmure Gordon & Co. plc by QInvest LLC and Atlas and Atlas LLC QInvest plc by & Co. Gordon Panmure 67.3 Dragon-Ukrainian Properties and Development plc by Dragon Dragon plc by Dragon-Ukrainian and Development Properties ARM Holdings plc by SoftbankARM Holdings plc by Corp. Group 88% 45 12% was lower, at £14.22 million, but the offer was increased on 27 June 2017 to £16.4 million). on 27 June 2017 was increased £14.22 million, but the offer at lower, was Firm offers: Structure by deal value deal by Structure offers: Firm 2017 vs 2016: Deal2017 vs 2016: value(£billions) , which accounted for 30.1% of the aggregate deal value in 2016. Excluding these two ‘tent pole’ pole’ ‘tent these two in 2016. Excluding deal value 30.1% of the aggregate for , which accounted being the lowest (the initial offer for (the initial offer being the lowest being the highest and the £15.5 million offer for the £15.5 million offer being the highest and . Deal valueand volume 2 although we have not seen any ‘tent pole’ deals in 2017, we have seen a number of large deals despite the current the current deals despite seen a number of large have deals in 2017, we pole’ ‘tent not seen any have although we the 8 June election result recently and more vote uncertainty the Brexit of both political and economic climate following minority Government. Conservative and resultant Of the 47 firm offers announced in 2017, 12 (26%) had a deal value of over £1 billion compared to 5 (10%) in 2016. compared over £1 billion value of Of in 2017, 12 (26%) had a deal announced the 47 firm offers the excluding however, with £1.3 billion in 2016 (note, £959.5 million compared 2017 was for deal value average The £444 million). Accordingly, 2016 was for deal value Softbank/ARM the average Holdings and LSE/Deutsche Börse deals, In 2016 the biggest deal was the £24.4 billion offer for In the £24.4 billion offer 2016 the biggest deal was for offer billion £20.3 the saw 2016. 2016 also for deal value aggregate the 36.2% of Deutsche Börseby AG for offers the £8.75 million smallest deals of 2016 were joint The £22.66 billion. 2016 was for deal value the total deals, III LP Partners Investment Headway by Limited Fund Environmental Ludgate Kolesnikov not been replicated to date. to not been replicated for services financial The value deals: the £8 billion offer industry both the highest and the lowest saw Inc. Vantiv, plc by LLC Capital Merchant Limited Investments Capital Deal volume in 2017 (47 firm offers) was slightly lower than in 2016 (51 firm offers). The aggregate value of deals value of firmly aggregate The offers). than in 2016 (51 firm lower was slightly in 2017 (47 firm offers) Dealvolume This with 2016 (just compared a third £67.3 billion). over approximately by £45 billion, down in 2017 was announced period with the same 2015 in compared 61% by down value deal aggregate saw which 2016, from trend the continues mega-deals numerous which has being announced 2015 saw that It however, £163 billion). (around should be noted, Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn attracting and/or triggering regulatory scrutiny, review or intervention. The time, cost and transaction or intervention. The review cost — these of deals time, risk attracting triggering regulatory scrutiny, and/or impact an inevitably public the out on markets — will appetite the in bidders be of have played to for some continue which of probably will activity see greatest the 2018.’ these targets. in however, mid-market The to sector, smaller ‘I expect to see a handful of the mega-value or tent poke deals in 2018. There were a couple of such possible deals which failed which possible deals such of There a couple were ‘I expect see to a handful mega-value the of 2018. in poke deals or tent beenreflective having is publicised)appetite. is increasingly which all That it said, becoming market of (not 2017 in progress to larger—which targetsdeals, involve thereby international the off complex to pull operations withmore difficult typically

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 6 Main Main Main Main Main Main Main Main Main Main shares target’s Market for Wales Wales Bidder Bidder France United Canada Scotland Scotland England & England & Singapore States and States Isle of Man nationality Luxembourg United States shares shares shares structure Cash and Cash and Cash and and CVRs Cash only Cash only Cash only Shares onlyShares onlyShares onlyShares Cash, shares Consideration Consideration trade (target) services Investment Professional Professional Engineering & & Engineering & Engineering manufacturing manufacturing Industry sector leisure & tourism leisure leisure & tourism leisure Financial servicesFinancial servicesFinancial servicesFinancial Travel, hospitality, hospitality, Travel, Travel, hospitality, hospitality, Travel, Retail & wholesale . Top 10 largest deals in 2017 10 largest Top was recommended for were Main Market the companies, target by 9 boards: 10 all Deal Offer Scheme Scheme Scheme Scheme Scheme Scheme Scheme Scheme Scheme structure £4 £2.1 £3.9 £3.7 £3.8 Deal £2.17 £2.31 value £2.96 £2. 01 £2. 01 billion billion billion billion billion billion billion billion billion* £8 billion 10 largest deals Section 6: Nature of consideration of Nature Section 6: Deal ranged billion. There from £2.01 billion £8 was a variety to of consideration structures cash deals: used the in 10 top cash and and shares cash, value and shares rights. contingent only, shares only, Every one of the structuredwere schemes, as made 4 were UK bidders, by largest deal. Deal deals and value 1 was a P2P among the10 Hotels plc City by Developments Limited WS Atkins plc SNC- Atkins WS by Lavalin Group Inc. Millennium & Copthorne Berendsen SA plc Elis by Amec Wheeler Foster plc John by Group Wood plc BlackstoneManagement Partners and CVC LLC Capital Partners Limited Booker Group plc by Tesco plc GroupPaysafe plc by Management plc by LifeStandard plc Intu PropertiesIntu plc by Hammerson plc Aberdeen Asset Ladbrokes Group Coral Holdingsplc GVC by plc Worldpay Group plc Worldpay by Inc Vantiv, * The offer price in the offer for Ladbrokes Coral/GVC could be as low as £3.2 billion or as £4high as billion depending on the value of contingent value rights. See further Adam Cain, Senior Associate, Pinsent Masons LLP 2017, although this is in part in is this although attributable M&A also rival fact the gigantic acquisition of the to to absence deals an was there that 2017, SoftBank. still ARMof Holdings is there by that Melrose bid for however GKN by The hostile takeover indicates clearly current appetite London the foran in complex, market.’ high-value public acquisitions ‘Given the wider economic and geopolitical uncertainty, it may not be hugely surprising to note that overall deal values fell in fell in values deal overall that wider the note ‘Given be economic not and geopolitical to hugely surprising it may uncertainty,

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 7 ), InterQuestGroup plc by Touchstone Innovations plc by by plc Innovations Touchstone Hornby plc Phoenix by UK Ltd ASA Resource Group plc Rich by , ) offered cash only consideration consideration only cash offered ) ). ) offered andcash loan alternative note hawbrook Group plc Street Capital Pollen by Limited the target been has undervalued theoffer does reflect not the future of the potential target’s assets/business on for share terms deals, the share are financial that (baseddilutive on NAVs) recent the use of offer caps use ofone theexclusive form of consideration / lack of cash alternative when oflack premium for (especially control compared with shareholder value expected be to thecreated in medium term) risks for employees, location and integration strategic differences Shawbrook Group plc Street Capital Pollen by Limited o o o o o o o o ASA ResourceASA Group plc, the only target failed that to wasembroiled solvency in producea defence circular, during theissues offer period, itsshares had been suspended from AIM and administrators joint had been the administrators announced appointed. Accordingly, the boardthat executive authority did not have form to the joint Further, an opinion or publish a defence circular. administrators transfers share refused any to consent to during administration. while one (17%) hostile offer ( whileone (17%) Limited Chisbridge UK bidderswere hostile of (50%) Half consideration. foreign were bidders bidders. and half (50%) Industry were mining, sectors which saw hostile offers2017 in metals and extractions, products, consumer financial services, professional services and banking and finance. 5 out of 6 target boards published a defence in circular Reasons target boards have with Rulecompliance 25.1. include: rejecting offers for given o o o o o o o o Other instances where a target board recommended has shareholdersthat an offer the accept which target board considers undervalued the bidder have to the target is wherethe offer has become unconditionalrespects all in (eg, S and BC Partners LLP Hostile offers were of the2017 hostile firm offers (5) announced in 83% million for AIM companies and varied from size in £15.8 hostile offer announcedwas and £466 million. One (17%) for million relation a Mainin Market £842.4 to company of hostile offers featured (2) 33% (increased £868 to million). onlyshares consideration ( IP Group plc andGemfields Pallinghurst by plc Limited of hostile offers ( 50% (3) Investments LimitedPro and and BC Partners LLP ) Gemfields Gemfields ), the cash ), (which lapsed (which Panmure Gordon plcPanmure & Co. Dragon-Ukrainianand Properties Target response: recommended or hostile? recommended response: Target 3 offerwere preferablethoseto offered Pallinghurst. by that offeredthat commoditiesexposureto volatile more and with less attractive prospects. This a rare is example of a target board recommending an offerthough considerseven it to theterms financial be otherwise Although Fosun ‘fair than and reasonable’. termsthe Gold’sof offerits was not ‘fair andreasonable’, nil-premium offer Pallinghurst from Fosun the and that 18.2%Goldtheto implied premium offerat an valuewas Theindependent of the Pallinghurst offer. committee further its highlighted belief the Pallinghurst that offer assets inferior with shareholders Gemfields dilute would theboard recommended thecompeting Fosun offer by Gold though even terms it considered financial that the of theoffer Rather, were not ‘fair andreasonable’. committee recommended Gold the Fosun offer because it believed the certain that cash exit on offer madethe offer morematerially attractivethe than unsolicited all-share offer and no definitive recommendation for unlistedthe securities alternative). for offer recommended competing a was There Goldplc Fosun by Holdings Limited after the hostilePallinghurst offerby became wholly committeeof independent Gemfields’ unconditional). unlisted securitiesfair were and alternative reasonable and therefore not could recommend whether or not the target shareholders should elect for the unlisted securities the For purposesalternative. report, of this noted have we ‘recommended’offeran as this the by board, butthere factwas in relation the in cash a split to (recommendation consideration offer was recommended only, with the the with only, recommended was offer consideration financial advisers being unable to advise the independent directors of the target board whether or not the terms ofthe Bidco unlisted fair were alternative and share the independent directorsreasonable. Accordingly, were not able form to an opinion on whether the terms of the there was a 50% increase in hostile offers in 2017 compared compared in 2017 in hostile offers increase a 50% was there with 2016. Recommended ( offer recommended one In Merchant Capital and LLC Atlas LLC QInvest by Development plc by Dragon Capital Investments Limited Investments Capital Dragon plc by Development structured as hostile (unsurprisingly, and 13% (6) were than schemes). rather In 2016, 76% (39) offers contractual no 12% (6) received the outset, at recommended were recommended were (2) 4% recommendations, definitive became (1) 2% and hostile were (3) 6% afterrevision, Accordingly, hostile after recommendation. losing their Firm offers Firm began (40) 85% 2017, in Of announced firm47 the offers no definitive 2% (1) received with a recommendation, ( recommendation

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 8 The global M&A possible offer by forplc IWG (announced on December 23 (announced 9 (60%) was rejected9 (60%) the target by board (the potential competing offers for Bovis Homes Group plcplc Galliford Redrow and by by plc, Try possible FIH Group offers for Unilever plc andUnilever N.V., plc,Revolution Bars Group plc, RedstoneConnect plc, TheProperty Group plc, Franchise Healthcare Spire Group plc and Gocompare.com Group plc) met were with no definitive recommendation (40%) 6 potential competingoffers (the for Group Exova Partners SAS, PAI and Holdingplc by Jacobs by AG possible offers Bison for GroupBrave plc, StanleyThe Gibbons possible Group this offer plc (although was noted the boardby beingas Rurelec unsolicited), plcand the potential competingWorldpay offer for Group JP by Morgan Bank) Chase o o as it saw ‘no merit, it saw ‘no as either financial or strategic, for shareholders’ Unilever’s the it didbasis and not that ‘see furtherfor any discussions’. informationFor about global M&A trends 2017 in discussed the Lex at Mundi Global Seminar on Cross- and reported November Borderin 2017, Transactions LexisNexis,by see News Analysis: marketplace. Corporation or itsaffiliates or Corporation board made has no IWG’s December 2017, As 31 at 2017). definitiverecommendation This forthis possible offer. deal terminated on 1 February 2018. not been (high there deal value) have many Globally, American for a few (eg, exceptions save hostile bids 2017, in IndustriesPPG failed hostile offer billion forfor €26.9 Akzo Dutch Nobel). One there reason that may for is this be of risk failure and a greater public embarrassment, for example, Kraft offer Heinz’s forUnilever. (£114.5 billion $143 With a proposed offerUS value of the widely reportedbillion), possible offer forUnilever plc The by Kraft Heinz would have Company N.V. and Unilever been the biggest deal had of the it year progressed the to thepossible firm offeroffer — which stage. However, was spearheaded significant CapitalKraft 3G by (a Heinz shareholder) Buffett and backed Warren (another by significant Kraft Heinzshareholder) — announced on and hastily withdrawn February on 20 February 2017 17 approach, was an unwelcome released and Unilever 2017, a statement on the same the as announcement of day the possible offerthe that possible offer fundamentally undervalued rejected and Unilever Unilever the proposal o o The sole remaining possible offer which neither terminated norprogressed the firm to offer stage by was the the end of 2017 ofBrookfield affiliates Asset Management, Inc. and Onex , possible offer ) being rejected Deals in focus: FIH Group Dealsfocus: in plc FIH Six hostile bids were announced during 2017 during announced bids were Six hostile plc (by Fosun Goldplc Fosun (by Holdings Hayward Limited), Tyler Group plc and Exova Group plc Element (by Materials Limited) — these 4 possibleTechnology offers became recommended offerstheat firm offer stage Company Limited), Gordon Limited), DaddsCompany Group Limited, GroupPaysafe plc, plc, WS Imagination Technologies plc,Atkins Aberdeen Asset Management plc and The Prospect Limited) Japan Fund received no definitiverecommendation 4 (22%) (possible offersPharma for plc,Quantum Gemfields (which became(which recommended the firm at offer stage) recommended were the target by board (56%) 10 (possible offers for CoralLadbrokes Group plc, Aldermore Group plc, Millenium & Copthorne Hotels plc, Revolution Bars Group Pub plc Stonegate (by 4 (22%) were rejected were the target by 4 (22%) board (possible Touchstone plc, InterQuest Group for offers plc,Innovations Shawbrook Group plc,Berendsen plc o o o offers beingrejected the by target’s board. Theusual reason for rejectingthe an offer that is target has been undervalued but saw one we possible offer ( Groupfor plc FIH Dolphin Limited by Fund forpolitical reasons (see of ASA. Trading of ASA’s shares on shares AIM was suspended on of ASA’s of ASA. Trading financial position. July28 pending clarification on ASA’s and strategic FSPs (excluding offers Possible reviews) has seen number a ofpossible As2017 with firm offers, published its offer document on 25 July 2017 setting out published its offer document 2017 25 on July employees, management, relationits ASA’s in to intentions places of business and fixedassets attempt andit that will obtain understandingto a greater of ongoing disputes between ASA and its other management disputes) (among the resolve in best disputes to such and endeavor interests trading price of ASA shares. On the same day, ASA’s board ASA’s tradingofprice ASA shares.On the same day, itsannounced it intended continue that discussions to seeking within RPI various from about assurances RPI its regarding ASA, intentions shareholders that advised were no take actionto relation the in offer to the and that board anotherwould make announcement due in course. ASA It is thought to be thoughtIt is to the first has optedcompany time a UK administration go a cash-only into to rather accept than offertakeover from one of its minorityshareholders, Rich announced RPI a firm offer Investments LimitedPro (RPI). a significantthe to at premium July 2017 for ASA on 12 Of the 15 possible offers2017: terminated in which Of the 15 o o Of the 18 possible offersOf which progressed the 18 firm a offer in 2017: o below).

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 9

financial terms level of control will enable oflevel control Marlin implement Bidco to its stated procure Shawbrook to that intention applies the UK Listing to Authority for the cancellation of its listing on the OfficialList theand London Exchange to Stock for the cancellation of its Shawbrook that likely it is trading.admission to Consequently, shareholders Offer who the Final do notcould, accept result,as a Thisown a minority would an unlisted interest in company. significantlyreduce the liquidity Shawbrook of Shares. the Independent Directors,Accordingly, been who have so and Goldmanadvised Merrill Sachs BofA Lynch by recommendInternational, now shareholders that the accept theas Independent Offer, Final Directors now will be doingin respect of their own beneficialshareholdings.’ Shawbrook Groupand plc BC by Partners Pollen StreetLLPTarget Capital board Limited recommendationunconditional following‘The Independent Directors believe the Final that to continue offer becomingOffer undervaluesShawbrook and its prospects.the However, Independent Directors also recognise the Final the that, in event Offeris declared wholly unconditional, Marlin have Bidco will obtained a verycontrolShawbrook. significant of of level This only are considered to be fair and reasonable.’ be fair to and reasonable.’ considered only are Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn ‘The stranded andmany nuanced elementsthe examplego of thethat behind Gemfieldsillustrative and an acute is case to whethertheas opinion thenarrow to contrast offerin an whether accept board a to by to as recommendation basis), absent a higher offer for Gemfieldsbasis), emerging.’ issued ordinary share capital of Gemfields) and/or, as applicable, issued ordinary capital share and/or, of Gemfields) per of the cent. approximately 1.61 optionsshare (representing issued ordinary capital share of Gemfields on a fully diluted Officer of Gemfields) and Janet Boyce (Chief FinancialOfficerOfficer of of and Boyce Janet Gemfields) irrevocably undertaken have Gemfields) to respectin do their of approximately 0.08own per (representing shares of the cent. recommend shareholders that Offer the Fosun to accept as so secure a relatively more attractive for outcome their investment, theas Independent Committee, Ian Harebottle Executive (Chief Pallinghurst Offer theto posesindependent futurethe of and the given derisory of theCompany, nature Unsolicited the IndependentPallinghurst Offer, Committee to intend to more commoditiesto volatile and with less attractive prospects. the given challenges the Unsolicited that … Consequently, Pallinghurst Offer. PallinghurstThe Offer. IndependentCommittee alsoreiterate their belief the Unsolicited that Pallinghurst Offerwould dilute Gemfieldsshareholders inferiorwith assets offerthat exposure (“Pallinghurst”) announced on 19 May 2017 (the “Unsolicited (the (“Pallinghurst”) 2017 May announced on 19 Pallinghurst Offer”), Fosun the andwould that at a Offer is note per the premium implied18.2 cent. to value of the Unsolicited of the belief the certain that cash exit on offer Fosun from Gold more materially is attractive the than unsolicited all- nil-premiumshare offer Pallinghurstfrom LimitedResources Cazenove has taken into account the assessments commercial of account Cazenove taken into has Committee. Independent the Notwithstanding the Independent the above, Committee are advised by J.P. Morganterms thethe Cazenoveof financial to as advised J.P. by considerFosunthe terms financial of that the Offer Offer, Fosun Morgan notare fair and reasonable. In providing its advice, J.P. Target board recommendationfair and reasonable despite‘The Independent Committee of Gemfields, been who have so offer not being Drafting Examples Gemfields plc by Fosun Gold Holding Limited (lapsed)

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 10

the Falkland Islands Government (FIG) has the or has grant power withhold own to assets to Islands Government licences and land (FIG) thethe in Falkland Falkland currently holds. FIC Islands, stated that has including the closely FIG licences it is that monitoring the situation and will proposedscrutinise any change of ownership Islands Law with for Falkland compliance the approach Dolphin by and its beneficialowner Elsztain,Eduardo ‘consternationthein citizen an Argentinian was causing Islands’; Falkland the prospect a subsidiary of Argentinian-related (FIC) with Islands Company operations of FIH of the Falkland control based undermine to view business and threatens the ‘seriously interests FIC solely of its Islands, FIH’s employees’; in the in Falkland and o o o ownership of FIC, which read: Staunton announces that on the extended closing date (5 April 2017), it held and had received acceptances in respect of 34.74% of it held and had received respect in acceptances of 34.74% on announces the that extendedStaunton April 2017), (5 date closing issued capital. share FIH’s As the revised condition was not acceptance satisfiedthe offer lapses, bringing the offer period to an end. 10 April 2017—Letter from received it has announces that a letterFIH from the Chief Executive the in context of the FIG change the in beneficial of any Falkland Islands Government Dolphin announces that it was considering making a possible cash offer at an 11% premium to the considerationtheto premium value offered by 11% Dolphin it was considering announces that making a possible cash offerat an Staunton. its reiterates rejectionFIH possible offer of Dolphin’s approach 2017. on 3 April 6 April 2017—The Rowland Purpose Trust 2001 offer lapses and reiterates its desire to enter into a constructive and its into reiterates enter to desire dialogue with a view making with FIH to Staunton’s an offerto at a premium offer. 30 March 2017—No increase its announces that offerfinal is Staunton wouldand not be increased. statement 31 March 2017—Dolphin considers increasing possible offer value o 23 March 2017—Dolphin respondsDolphinCodethe of to responds help with 21.3 FIHitsit had confirmingthat evaluationsoughtinformation of FIH underfrom Rule to rejection o o which the50%to offermorevoting than the relates rights of normallyFIH generalexercisableat an meeting. The extended is date closing 5 April 2017. to 20 March 2017—Politically board rejecting it is announces that possibleFIH’s offer Dolphin’s approach,charged statingthat: rejection On the first closing date (16 March 2017), Staunton holds and receives acceptances in respect of 33.72% of FIH’s issued share capital.FIH’s Staunton holdsrespect in of andreceives acceptances 33.72% of 2017), March (16 On the first closing date In response lowers condition poor threshold acceptance to from Staunton levels not acceptance less 90% than to shares of the FIH The ‘put up or shut up’ deadline was 17 April 2017. up orThe up’ shut deadline ‘put was 17 16 March 2017—Revised acceptance condition The Rowland Purpose Trust 2001 (RPT) announces through its bid vehicle Staunton Holdings Limited (Staunton), a recommended (RPT) 2001 The announces through its Holdings Rowland Purpose bid Limited Staunton vehicle Trust (Staunton), all-cash offerFIH, for structuredcontractualas a offer. 15 March 2017—Possible competingBermuda-incorporated board written it has announces that requesting Dolphin Limited (Dolphin) FIH’s Fund to information to offer byenable is a Dolphin makingcompetingThis possible evaluate to a cash offer. offer. Dolphin FIH Group plc byPossible The Rowland offer for Purpose FIH Group Trust plc200110 by February (lapsed) Dolphin 2017—OfferFund Limited for (terminated) FIH Deals in Focus

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Trends in UK public M&A deals in 2017 11 Dolphin, noting FIG’s announcement, confirms that it had sought an extension to its PUSU deadline; however the Takeover Panel Takeover announcement, it hadthat confirms soughtthe an extension deadline; however Dolphin,to itsPUSU noting FIG’s confirmed no that extension was possibleFIH. withoutconsent theof result,As a isconfirmsDolphin it no that longer to intending an offer FIH,make for bringingthe offer period to an end. country, you may lose status, this may you and would then fromcountry, require qualifying obtain licence a the government to any land. interest in there a change is beneficialIn in the event ownership, request I youinform that as me soonreasonablyas practicable, that to ensure the Government ongoingcan review status the company’s without delay.’ 13 April 2017—Dolphin withdraws beneficial interest in your company. beneficialcompany. your interest in ‘specified a company’ is company forthe purposes1999the of Your (Non-Residents)SectionLand changeUpon 3. of Ordinance any beneficialownership, is it necessaryFalklandconsider to forthewhether Islands should company the of theGovernment remain a Falkland which Islands permitswithout landthe in to obtainingacquire it licence. a ‘specifiedcompany’, current ‘specifiedcompany’ Islands Company’s consideredIfstatus to was Falkland no longer the in be generalinterests the of ‘The Islands Government been has Falkland received informed a proposal have you the in transferthat result which may of the

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 12 received a where Street Capital Pollen ). ) or a large shareholder be could the one (as making an offer Industrial Multi Property plc Hansteen by Holdings plc Trust InterQuest Group plcChisbridge by Limited Shawbrook Group plc Street Capital Pollen by Limited and BC Partners LLP Touchstone Innovations plc Innovations IP Group by plc Touchstone was the case in was the case in also seenshareholders we have already heldsupporting Conversely, a 40% stake the in offeree). the opinionthe of board rejectingthe (as was casein an offer On 25 August, Axis announced a final increased offer price of £477.6 million (ie, a 2% increase), it that hadstating done 2% increase), a (ie, million On August, 25 Axis£477.6 announcedincreased a final offer of price bringso to certainty the transaction. to The resolutions approving the scheme passed were and the scheme became effective 2 on October2017. support offersShareholder hostile in By seen their very target have we nature, shareholders lend support bidders to hostile successful in bid situations. In some cases, shareholders with substantial holdings targets in been have the instigators initial of an offer (as being made The board of Novae recommended the initial offer made by Axis on 5 July 2017 of £467.6 million, butthe offer price £467.6 The of board of Novae recommended offerthe initial made by Axis 2017 5 on July led among dissent to some shareholders, who believed the offer that undervalued Oneshareholder company. the following(Neptune offer reduced UK Axis’s Mid 5% andnumber Cap to a its Fund) of shareholding Novae in from 16% hedge Capital, funds Grove MVN (Sand Asset Management and Kite Lake Capital) bought Novae in shares (presumably) expecting an uplift the in offerthemvoting rights.to give and price shareholders a more informed make to value decision the of their intrinsic to shares.’ as the KW board and the independent committee of KWE announced KW that agreed has make June to 2017, On 13 proposal a newavailable would alternative available which New Offer), Under alongsidebe (the the the original offer. considerationthe Newpayable Offer, for each KWE Schemeis made Share up shares,of andspecialcash a dividend. Limited by Holdings plc Capital Axis Group Offer for Novae ‘We agree there meaningful that is value should that be extracted from KWE and would welcome a sale if priced and structured appropriately. urge the their Board fiduciaryWe of Directorsconductduties and hono[u]r to a strategic review alternatives of all KWE, to available including a cash salethird unaffiliated parties to and anover orderly liquidationCompany of the A moretime. robust strategic attract review the has potential to additional value-enhancing offers allow andthus KWE Scheme a KWE Share shareholder New KW would receive 0.667 Shares. Soros Fund one largest of KWE’s shareholders the transaction. its voiced However, over concerns On 2017, 2 May manager the as investment fund of privateManagement investment Quantum Partners LLC the sent KWE LP to board a letter regarding the proposed transaction and stated it was disappointed that with the terms of the transaction as its as well understanding of the process leading the agreement: to shareholder) to sell their shares to Hansteen on or before 3 May 2017 so that they so would no that longer be shareholders sellshareholder) of to Hansteen their to shares on or before 2017 3 May IMPT its at next general meeting. Inc. Holdings, Wilson Kennedy by plc Estate Real Europe Wilson Kennedy Offer for the board of Kennedy Wilson Europe Real Estate plc (KWE) billion proposed recommended the £1.5 April 2017, On 24 merger share all with Kennedy Wilson Holdings, Inc. (KW). The consideration payable under the offer was for each KWE minority shareholder of IMPT, Alpha Trust Limited (which held 18.7% of the share capital of IMPT and £10.3 million of of the capital share of IMPT held and Limited 18.7% £10.3 (which minority Alpha Trust shareholder of IMPT, unsecuredIMPT’s opposed subordinated debt), the offerin as its viewthe offer failed achieve to maximum shareholder its voice oppositionvalue. to It continued throughout the offer period, for example, year responsein financial to IMPT’s Alpha stated‘the that offer undervalueby grossly to Hansteen continues endresults for [the 2016, IMPTboard of and million and £27.75 Hansteen resolved10%,revised Subsequently, rejectto to have its offer by upwards Alpha] the offer’. it received irrevocable undertakings from Alpha Holdings and significant Antler Investment minority Limited (another In 2017, we have seen target have we shareholders vocalising their opinionson board-recommended transactions takeover In 2017, on occasion an increased resulted in which have offer consideration. formsprice or alternate of plc Holdings Hansteen by plc Trust Property Multi Industrial Offer for While the £25.23 million cash only offer for recommendation from the target’s board,the approach was not welcomed shareholders. all by One significant Negative responses by shareholders to target board target recommendations to shareholders by responses Negative

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Trends in UK public M&A deals in 2017 13 announcement also disclosed IP Group that had received a non-binding letter from Imperial of intent College favour in issued share capital.Touchstone’s Accordingly, 15.3% of oftheoffer improved represented which price, approximately IP Group had received supportTouchstoneshareholders for the offer improved representing, from89.7% in aggregate, issued capital. share of Touchstone’s On 20 June 2017, IP Group announced a firm offer for Touchstone on the basis of 2.1575 IPeveryGroup shares for 2.1575 Touchstone IP Group on ofthe announcedbasis a firm offer for JuneOn 2017, 20 after that board announced June on 28 2017 Touchstone’s capital the IP raising). by Group’s (adjusted share Touchstone rejectedit consideration of the offer, the offer becauseconcluded it the offer fundamentally undervalued Touchstone. Touchstone IP Group shares forevery Touchstone — IP2.2178 Group announced offer an improved for July 2017, On 18 represented a 2.8% (which share uplift adjustedcapital for onIP theraising. originalGroup’s The offer price), 51.8% of Touchstone’s issued capital. share of Touchstone’s 51.8% Inaddition, further irrevocablehard undertakingsobtained were and Lansdownefrom thein of each Invesco day later on which the Rule 2.4 announcement was made. A further letter was also received of from intent Lansdowne. By the issued IP Group had hard irrevocable of Touchstone’s undertakings 29.9995% covering close 2017, of 23 business on May capitalshare support and letters issued capital. 44.346% share of any covering favour in Total of intent of Touchstone’s issued share capital.Touchstone’s offerto of be madeby 74% IP Grouptherefore represented little a over group, including establishinggroup, a clear understanding of future corporate arrangements. governance Touchstone’s theon indicated to basis IP GroupTouchstone subsequently2017 announced23 on May a possible offer for be adjusted for a proposed (to as well IP as Group capital equity raising), raise. The possibleboard on 4 April 2017 offer announcement statedirrevocable a hard that undertakingthe of in possiblefavour offer had been receivedfrom Woodford, along with letters which, when from combined, Woodford of intent and represented Invesco, approximately Following the rejection, Touchstone’s board learned that three of Touchstone’s largest Asset shareholders board learned (Invesco Following the rejection, three that of Touchstone’s Touchstone’s Management Woodford Management Investment (‘Woodford’) Limited LLP (‘Invesco’), and Lansdowne Developed of the ordinary capital share — who (Lansdowne) also togetherMarkets of IP Group Ltd held Master Fund almost 51% engage to with IP Group see to —wereif mergera keen for Touchstone be could Touchstone’s agreed. Subsequently, board engaged meetings in with IP Group rejected ultimately a resolution could the proposal other things) (among as not be found valuations relation of the in the relative companies to or the wider strategic objectives of the enlarged On 4 April 2017, IP Group plc (IPG) made an indicative proposal to the board of Touchstone Innovations plc (Touchstone). IP Groupmade plc plc Innovations an indicative proposal (IPG) (Touchstone). the board to of Touchstone On April 4 2017, IP Groupshares for the each of issued to and issuedbe The indicative proposal envisagedcomprising an offer 2.1490 implyingwithcombination an at-market theof Chairman Touchstone, to terms, according (such of shares Touchstone The proposalno the premium prior close). to was unanimously board rejected day who stated the Touchstone that by notthey could see for basis further any discussion. Offer for Touchstone Innovations plc by IP Group plc IP Group by plc Innovations Touchstone Offer for Adam Cain, Senior Associate at Pinsent Masons LLP, the firmAdam Cain,which Senioradvised Associate IP Group Pinsent at MasonsTouchstone on thesuccessful LLP, acquisition of announcement was crucial in ensuring that this bid was successful. More generally, winning the support of strategically support the strategically of winning generally, More successful. was bid this that ensuring in crucial was announcement basis.’ a offerunilateral on a possible whenkey shareholderslaunching is significant ‘Obtaining irrevocable‘Obtaining undertakings 2.4 Rule the of shareholders date the institutional at and letters from key intent of

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 14 InterQuest’s issued capital. share the of level shareholder support had dropped shareholders to of the issued capital share holding approximately 18.9% following a sale of one of the supporting shareholder shareholder’s holdings. support On July, 28 fell further 17.9%) (to withtwo additional shareholders who hadoriginally supported the boardnotified InterQuestthey hadthat accepted InterQuest offer. announced Augustshareholder that on 7 Chisbridge’s 15%, supportwith oneshareholder had to fallen selling offer. its and shares another Chisbridge’s accepting Chisbridge with receiving respectin acceptances representing shares of 58.32% of The offerclosed August2017, 8 on materially undervaluedmaterially and itsthe company prospects, and advised shareholders that no take action respect in of the offer. Chisbridge announced it had that received non-binding letters of support from certainOn InterQuest 6 June 2017, of InterQuest’s issued capital. share Theshareholders announcement stated these that holding approximately 20.1% shareholders believed the offer that significantly undervalued that InterQuest. 2017 InterQuest 27 July announced on On 18 May 2017, Chisbridge Limited (Chisbridge) announced a hostile cash offer (with loan note alternative) announcedforAIM- a hostile(with Chisbridge cashloan offer alternative) Limited note (Chisbridge) 2017, May On 18 listed InterQuest plc structured (InterQuest), Chisbridge of a contractual a was newly-incorporated way by offer. formedcompany the direction at of InterQuest directors Gary Ashworth, were Eldridge (who Chris Bygrave and David directors of InterQuest). InterQuest’s independent directors announced it theon that unable they were recommend that basis to the offer, Offer for InterQuest Group plc by Chisbridge Limited Chisbridge Offerby InterQuestplcfor Group Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn this case was indicative of the ability of a group of shareholders to be able to successfully negotiate better terms from Vantiv better ability the of negotiate shareholders of from case indicative be a group of was Vantiv terms successfully able to this to on its nature.’ a secondary bid (principally engagement this of set and for tone the future successful London listing) to have an impact an on public M&A have to activity. past the Some engagement goes in be still not as much track on it will of easy to engagement the was investor the of public the space in demonstratedwhich this casebehind however scenes. the A recent been forum the of context the has in actions corporate of limited success the Although bidsituation. forum Worldpay the in ‘Shareholder activism its in certainly is more forms form new traditional and the engaged of going stewardship responsible

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 15

announced competing ). Deals Focus—FIH in Group plc Gemfields Fosun Goldby plc Holdings Limited, that pursuant to Rule 2.6(d) and Section 4 of Appendix 7 of the Code, and Section Rule pursuant 2.6(d) to that 4 of Appendix 7 of the Code, ruled Competing and potential competing bids 4 result in an increasein offer in result value forthe targets,thecompeting exception beingFund Limited’s offer Dolphin Trust by million ThePurpose Rowland Group with for the plc possible FIH (compared offer million) of £37.3 (£41.41 which was rejected (lapsed)) for2001 political reasons (see of JP Morgan Chase Bank and Vantiv, Inc. On 5 July 2017, JP Morgan announced Chase it did to not that intend Inc. On 5 July 2017, of JP Morgan Bank Chase and Vantiv, Following PUSU announced Vantiv a firmtwo Worldpayextensions, offer for a firm for Worldpay. offermake for billion£8 structured of a scheme way by of arrangement. The occurrence of potential and actual competing bid scenarios indicates a competitive landscape for UK M&A in there been has a significantreduction However, thein number of actualcompeting offers compared with 2017. being an actual in Further, competing bid scenario or a potential competing bid scenario didnot generally2016. Redrow proposal was not the in interests of Bovis shareholders the as cash element of the offerwould require shareholderscrystallise to andMarch Galliford value the current Bovisat valuation. bid Redrow’s terminated on 13 terminated on 5 April. Try’s Thetheat firm target subject potential competing to offers which ended up securing2017) (of the largest deal Worldpayreceived competing potential offersfrom each offer Worldpaystage Group plc.was 2017, On 4 July October 2017, Deltic announced an Offer. statement a not make to of intention October 2017, The the extent largest (to the offer valuespecified was announcements in competing bymade bidders)potential billion and bids for were Bovis the Homes Main Market construction Group plc, £1.19 at in coming company, stating possibleit wasin 2017 March Bovis made Rulea 2.4 announcement on 13 2017, March billion. On 13 £1.1 Tryoffer discussions plcwith each of and GallifordRedrow plc. The Bovis boardrejected both possible offers it believedas neither reflectedthe underlying valuethe of Bovis business. The concludedboard also the that On 31 July 2017, Revolution Bars plc announced receivedit has that an approach Company from Pub Stonegate July 2017, On 31 Deltic Group plc announced a potential competing offer for Revolution Bars. August 2017, Limited. On 15 a firm offer forRevolution Bars Panel and the August 2017) subsequently 24 Stonegate announced (on and Section Rule pursuant 2.6(d) to that of4 Appendix Limited)1 (Ranimil of 7 the parent Code company Deltic’s either announce a firm 10 tooffer bidintention or a no statement. On Octobermust 5.00pm by on 10 2017 There was one instance of multiple competing bidders for a transaction. Exova Group plc was subject competing to April On 19 bids from bidders 3 and made one Rule 2.4 March 2017. announcement of them relation all in on to 27 Group LimitedElement announced Technology Materials recommended a deadline) the PUSU initial (within 2017, all-cash offer for Exova. PanelThe either announce a firm tooffer bid intention or a no each of the remaining bidders must 5.00pm by on 2 June 2017 statement. Both remaining bidders subsequently an offer. announced make they did to not that intend On 13 June 2017, Gemfields plc announced it hadthat received an approach from, andin activewas possible offer June 2017, On 13 negotiations Gold with Fosun Holdings Limited. This was a potential competingPallinghurst offerto Resources Fosun announced a 2017 firm 20 June On 2017. hostile firmLimited’s offer May 19 for Gemfields, announced on Pallinghurstannounced that its offer for Gemfields had become 2017, 26 June offer on for Gemfields,however, offer lapsedwith itsterms. in accordance wholly unconditional, a result, Fosun’s as In 2017, there was 1 actual competing bid (2016: 7) ( there wasactual 1 competing bid (2016: In 2017, namely 9), possible offers for competing 10 (2016: potential bid scenarios withPallinghurst’s andunsolicited offer) Exova Group plc, Bovis Homes Group plc, Group plc, Group Worldpay plc, FIH Gemfields plc and Revolution Bars Group plc. Despite competitive this landscape, firm offers competitivewere bymade potential bidders for only of the targets of the 6) 50% the (3 subject of the potential competing offers. Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn latest change and this has and is expected and is has impact for an friendly the and this bids. change competing of Even bidder, latest on prevalence the have to respect with target the required combined the and intentions group to regarding and clarity/preparedness diligence of level the further thebalance weighted has offer participation against competingposition in bids.’ intention a firm get to to ‘Participating in a competitive bid process is increasingly the reserve the increasingly most the of is robust. bid process ‘Participating If a competitive target the in particular of is strategic the for hostile bidder some.deter not or value offers The may opportunistic real dynamic a however tension competitive steal, the being timetable Code the to effective changes become latest the to January more 8 challenging, 2018 and continues has

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 16 6 June 2017—Pallinghurst offer becomes wholly unconditional and Fosun offer lapses 30 June 2017—valid acceptances of the existing issued capital share of Gemfields.Pallinghurst holds and received has The respect in valid acceptances of 75.18% and offeroffer2017. 18 is July extended until extended Pallinghurst’s shareholders, making the offerto be wholly unconditional. Gemfields rejection the reiterates of the offer on the itgrounds undervalues that Gemfields and its prospects. 27 June 2017—GemfieldsGemfields offerhas lapsed (in itsand therefore announces response Fosun’s document)that Gemfields that concludes tells shareholders it that view the board’s despite offer Pallinghurst the accept to whether consider’ ‘seriously should shareholders independent to seriouslysignificantly undervalues Gemfields. consider Pallinghurst’s offer cash offer. cash 2 Pallinghurst the offer announces that is wholly unconditionalrespects, in all offer lapsednow has in Fosun’s andresult,as a with itsaccordance terms. Gemfieldsthe that ordinary notes resolution Pallinghurstrequired the to approve offer was passed majority by the requisite of 31 May 2017—hostile opinionGemfields itsreiterates rejection the of possible offer approach, is it that derisorystating and undervalued and company, the recommends shareholders that no take action respect in of the hostile offer. 20 June 2017—Fosun competing announces an actualFosun competing offer for Gemfields valuedmillion. at£256 competing The aoffer is recommended all offer Pallinghurst a listing has on the Gemfields Johannesburg Exchange Stock (JSE). shareholders are forreceive, to set each Pallinghurst shares. The offer issuedvalues the share entire capital£211.45 of held,share Gemfields 1.91 at approximately million. Gemfieldsannounced, ‘unsolicited’ confirming consideringtheon itwas that the same offer date, and advisedthat its shareholders of no take actionthe of respectthe announcement in At date Pallinghurst47.09% the Group held of the offer. Gemfields’issued share capital. Gemfields plc by PallinghurstGemfields Resources plc by LimitedFosun South African-incorporated Pallinghurst A competing bid situation emerged between two 2017, foreign May bidders. On 19 Gold Holdingsannounced a hostile all-share offer for Gemfields, structured contractualway of a byLimited offer. (lapsed) Deals in Focus The announcement of this potential competing bid adds another dimension to 21st Century Fox’s bid In for Century Sky. Fox’s Theannouncement potential competingof this bid addsanother dimension 21st to Century Comcast Century reportedly relation a possible in to but acquisition, Fox 21st approached 21st November 2017, agreedFox a sale to (aftera spin-off Comcast’scertain to of rival,Corporationthe Disney businesses) in December2017. possible offer announcement theif that states deal proceedstheto firm offer stage, itwill be structuredcontractuala as offer and conditionalwill be shares of on valid carryingacceptances in aggregate50% morevoting than the rightsof Sky. in competing offer to 21st Century Fox’s offer. Comcast’s possible offer, at £12.50 (implying share per a dealvalue of at Comcast’s possible Centuryoffer. offer, Fox’s 21st competing offerto Comcast’s pershare. £10.75 offer of Century Fox’s 21st to represents a premium of 16% billion), approximately £22.1 Post 31 December 2017 update 2017 December 31 Post Comcast Corporation announced possiblea all-cash US’s offer forSky February On 27 plc, a is 2018, which possible Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn ‘Even and despite the sterling efforts of Fox to satisfy the regulators, the Comcast possible competing bid at circa 16% more 16% efforts sterling the and despite to ‘Even satisfy Fox Comcast competingof circa at the theregulators, bid possible relinquish.’ to inwell time may be significant stake has a Fox now tabled Sky it has to bebeat. Whilst will difficult Fox what than

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 17 ). 7 6 ) at £8 billion, £8 ) at and the 5 ). Another two £1 billion Another two). £1 6% 7% 2% 2% 11% 14% 4 35% 9.9% 4.7% 10.7% Electric plc Riccardo by Silva and Word 3 As a % of aggregate deal value 2 1 Worldpay Group plc by Vantiv, Inc. Group plc Vantiv, Worldpay by 0 £2.9billion £4.1 billion £6.1 billion £4.6 billion £4.8 billion £1.97 billion £2.81 billion £2.81 £955 million £955 £15.35 billion £904.2 million Total sector deal value Total Transport Firm offer by industry type Computing & IT Financial services Financial Top 10 sectors by aggregate deal value deal value 10 sectors aggregate by Top Consumer products Retail & wholesale trade & wholesale Retail Mining, metals & extraction & metals Mining, Media & telecommunications & Media Paysafe GroupPaysafe plc Blackstone by Management Partners and CVC Capital LLC Partners Limited Sector Property Panmure Gordon & Co. plc by QInvest LLC and Atlas Merchant Capital and LLC Atlas Gordon LLC plc QInvest Panmure by & Co. Investment Computing & IT Travel, Travel, leisure &hospitality, tourism Financial servicesFinancial Banking & finance ) accounted for less 0.04%. than ) accounted Professional servicesProfessional Industry focus Retail & wholesale trade Mining, metals & extraction Engineering & manufacturing Travel, hospitality, leisure & tourism leisure hospitality, Travel, 5 sector and the support services sector. Unlike in previous in review periods, Unlike not around centred has one or two public M&A sectors, activity but across 2017 in professionalseveral different industries. Firm(13%), offers services were made for targets operating financial in services and property mining, metals & extractions engineering and manufacturing (10%) (10%), computing & IT (10%), (13%), sectors other By sectors). contrast, the (among majority occurred of bidder the in TMT activity (60%) (10%) 2016 in manufacturing, retail & wholesale trade, professional investment, services, and property. Standard LifeStandard plc, and of aggregate 35% for just billion and under accounted Deals the in financial servicesindustry £15.35 totalled justover deal value million offer whereas for the sole deal the in industry TMT £16.58 (the AulettaMarco Other sectors billion plus individual engineering & tourism, leisure hospitality, deal values travel, were: which saw £1 & The financial servicesindustry the highest saw value deal ( lowest value deal ( plus value made deals were for targets operating the in financial servicesindustry (Aberdeen Asset Management by plc

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 18 Financial services (£15.4 billion) (£15.4 services Financial Travel, leisure & hospitality, tourism billion)(£6.1 Engineering and manufacturing billion) (£4.8 Retail & wholesale trade (£4.6 billion) Investments (£4.13 billion) (£2.91 services Professional billion) Property (£2.81 billion) Banking and finance(£1.97 billion) Computing & IT (£904.2 million) extraction & metals Mining, (£954.8 million) Other (£315.4 million) 34% 14% Deal value by industry type industry by value Deal 1% 3% 11% 2% 4% 6% 10% 6% 9% ‘Expect for strategic growth hunt partners)corporates and traditional targets see mature, to mid-term the more in (as for growth M&A and defensive activity space.’ and tech bouyant the in Fintech Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 19 Nature of consideration Nature - 38 (76%) were all-cash were offers (76%) - 38 all-share were offers - 9 (24%) cash, value and shares rights contingent (Ladbrokes (CVRs) Group Coral Holdings plc GVC by plc), cash and a loan (InterQuest alternative note Group plc and Chisbridge by Limited), MerchantCapital and Atlas cashand unlistedan Gordon LLC securities plc QInvest by (Panmure alternative Co. & LLC) Johannesburg Stock Exchange) Johannesburg Exchange) Stock 6 (67%) were made were UK bidders by listed incorporated on the and Main England in 4 Market) (2 and (and Scotland in 6 (67%) which listed 1 is on the Main Market and (of the other 3 onWales AIM) made (Prospect incorporated were foreign by bidders Ltd) Japan in Stock Co., and listed on (1 the Tokyo 3 (33%) GoldExchange incorporated and Sibanye and Ltd) 2 (Pallinghurst Resources South in Ltd Africa and listed on the 38 (81%) offered andthese of one 38: formconsideration of only, (81%) 38 9 (19%) involved a combination a of consideration types involved 9 (19%) 6 Cash continues to be the consideration of choice in UK public M&A public UK in choice of consideration be the to continues Cash o o o o o o o The UK and FTSE equity100 prices more widely reacted have positively post-Brexit. be This of the a result weakening may of the British pound interest rates. low As and continuing a direct see may result, we a rise being shares in offered alone or combination with in other consideration types. will monitor developments We and report future in on this trend reports. 2017 saw deals with consideration comprised of: comprised consideration with deals saw 2017 o o o Aswhich featuredproportiona cash and of consideration, 2017 there higher slightly wasa percentage of firm offers in (8%). compared with 2016 considerationshares (13%) 100 breaking record highs in May 2017 and the growing strength be of other another may major indices factor behind breaking 2017 record May in 100 highs of the 9 firm that note offers interesting it to is announced featuring sharesconsideration: only rise. However, this o o down from 2016, where cash featured form deals 96% andof in all was the exclusive of consideration 80% in of deals. down from 2016, the (continuing type 2017 bidders in by consideration used frequently most the was consideration only cash Although the as most popular consideration use structure), of only shares consideration increased fromtrend (1 from 2% 2016 which represents a 900% although indicate that increase. This the a in UK may is 2017, in deals) (9 19% to deal) 2016 in period of political and economic uncertainty, there confidencein is some of our strongestlistedcompanies. The FTSE o firm In summaryoffers had a ofcashaccounting the 38 47 element, combination in as an alternative, or either solely, 62% of anddeals. itformwas consideration theexclusive is of in This 2017, of firm offersannounced in total forin 81% Firm offers Firm 2017: firm offersOfannounced the in 47 o investment risk and bidder shareholders look to expand their stock of international company investments.’ company international of stock expand their look to shareholders bidder and risk investment ‘The impact negative least) on short UK plc UK economic and the outlook generally mid-term opportunity an to provides (at plcUK the shareholders as look diversify consideration, mixed to for biddersforeign their or cash/share a deploying share Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 20 ) 2017 2016 2% 0% Warrants Shares and possible offer for InterQuest Group Skyepharma plc by Vectura Group plc 4% 2% unlisted Cash and securities Hydro International plc by Hanover Investors alternative ) 0% share 2% Cash and alternative possible offer for Unilever plc and Unilever N.V. by The Kraftpossible offerHeinz forUnilever plc andUnilever N.V. 2% 2% notes*** Cash and loan 8% ) to £114.5 billion ( £114.5 ) to ) 13% shares** of cash and Combination 2% Dee Valley Group plc offerTrentWater by SevernLimited Firm offers in 2017 & 2016*: Nature of Consideration 19% and Shares only 10 specified the likely form of consideration (3 cash only, 6 cash and shares and 1 shares only), and specified 6 andcash andshares shares 1 only), the likely (3 form consideration10 cash only, of billion) £114.5 5 specifiedto million (ranging considerationthe likely fromof level £33.7 ) (this possible offer terminated on 1 February 2018). The possible offerannouncement specified possible offerterminatedFebruary the ) (this on 1 2018). possible offer of by forBrookfieldplcaffiliates IWG Asset Management Inc. and Onex Corporation or its 14 specified the likely form of consideration (7 cash only, 3 cash and shares, 2 shares only, 1 1 andspecified cash share 3 andshares,cash shares 2 only, the likely formconsideration (7 of 14 cash only, and 1 cash,alternative and shares CVRs) 4 did not specify the form likely of consideration

26 specified the likely form of consideration (11 cash only, 3 shares only, 9 andcash shares, 1 shares and cash, shares 3 only, cash only, specified(11 26 the likely formconsideration of CVRs, and 1 cash and and 1 cash alternative share and loan alternative), note million ( £15.8 specified(ranging considerationthe likely fromof level 15 plc Chisbridgeby Limited (terminated) Company Consideration structures involving shares have become morepopular have shares structures involving Consideration 82% stage ( affiliates but only) not the amount form likely oflikely consideration. of consideration (cash Of the 18 possible offers subject to a PUSU deadline announced which progressed to the firm offer stage in 2017: possible offers Ofdeadlinesubject announced thePUSU 18 which progressedto a theto firm offer stage in • • there was one possible offer which neitherterminated nor progressedtheto firm offer December 2017, As 31 at Of the 15 possible offers deadlinesubject announcedOf2017: terminatedPUSU and in to a the 15 • • Of the 342017: possiblein and offers FSPs strategicdeadlinesubject reviews) announced (ie, PUSU excluding to a • • Possible offers 62% Cash only * Based on a total of 47 firm offers announced in 2017, 51 in 2016 51 in * Based on a total firm ofoffers 47 announced2017, in ** Includes, a transaction for 2016, where shares and a partial cash alternative were offered ( ***Includes, 2 transactions for 2016, where a loan note alternative was offered ( Management LLP

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 21 included included Berendsen plc by by plc Berendsen Booker Group plc by Tesco BookerGroup plc Tesco by , £2.17 billion offer for , £2.17 ., billionoffer £3.7 for , Ladbrokes shareholders Coral would be entitled to ). An unlisted securities). was offered alternative as an alternative Kennedy Wilson Europe Real Estate plc Kennedy-Wilson by Holdings, Inc. Worldpay Group plc by Vantiv, Inc Group plcVantiv, Worldpay by Ladbrokes Group Coral Holdings plc GVC by plc Ladbrokes Group Coral Holdings plc GVC by plc and £1.5 billion offer for and £1.5 , £3.2 billion offer for Journey Group plc Harwood by Capital LLP) surpasses the number of deals featuring a mix and match facility in 2015 (4 deals) also. Interestingly, the 5 deals Interestingly, also. deals) (4 surpasses the number of deals featuring facility a mix and match 2015 in billion. £1 for all were over featuring facilities mix 2017 in and match Eachof thebillion £8 offer for InterQuest shareholders the given were option of electingof the all cash receive loan to to an alternative as notes consideration they would be entitledThe42 were under loan to pence, had the a offer. notes nominal value of non-transferable. and bearing, interest Mix & match This (1 deal). increased has five-fold deals) compared (5 2016 with Usage facilities of mix 2017 in and match Usage of loan note alternatives in 2017 (1 deal) was 50% lower than usage in 2016 (2 deals). (2 deal) was usage 50% than lower 2016 in (1 Usage of loan 2017 in alternatives note A loan was offered alternative note Chisbridgeby Limitedrespectin of its offercash InterQuest for Group plc. fund managed Atlas. by GordonPanmure shareholders entitled were elect, to respect in of their of all receive Bidco shares, shares. to Bidco will shares be unlisted and not admitted trading stock to on exchange any and will be subject restrictions to on transfer. 2017 saw one instance of unlisted securities alternative consideration (which is in line with what we saw in 2016 saw one instance of unlisted line securities in with 2016 saw in is what we consideration (which alternative 2017 ( million offer Panmure for their in £15.5 MerchantCapital and LLC’s Atlas LLC cash QInvest consideration to by The waseffected acquisition through coincidentallyGordonwas the plc smallest (which deal of2017). & Co. owned company a wholly-owned a and and by controlledQInvest by Ellsworthy Limited (Bidco), subsidiary ofa a ‘mix and match facility’, giving facility’, target and match shareholdersa ‘mix the option of varying the proportions of new bidder shares and cash receivable respect in of their holding of target shares. This method of giving target shareholders of consideration, a choice subject the elections to of other target shareholders, made the offers attractivemore termsin of taxation options. andinvestment Whereshareholder elections not could be satisfiedin werethey full, scaled down on a pro-rata basis. Unlisted securities alternative plc Elis SA range of £3.2 to £4 billion). For the For purposes report, of this range billion). of £3.2 calculated our £4 statistics to have we and data analysis on the the CVRs that assumption will be of zero value consideration no and will be contingent that payable. Loan notes alternative Thevalue of the CVRs, which would (thebe satisfied ‘Loanwould Notes’), of the issue by by loan be GVC notes determined reference by the of the outcome to Department Media of Digital, and Sport’s Culture, current ‘Review of Gaming Machines and Social Responsibility Review’) ‘Triennial Measures’ (the the regulation relating to of fixed-odds betting and terminals its estimated impact on the run-rate profitability UK of business, afterCoral’s Ladbrokes giving effect mitigations. to any The total value consideration, of the if contingent billion paid, £0.8 total giving in (therefore up to is a consideration Alternatives to all-cash to Alternatives and all-share offers rights value Contingent In the offer for for shares new each Ladbrokes GVC and a potential further share, Coral value 42.8 ofup to pence cash in and 0.141 32.7 pence per structured share a CVR. as

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 22 the OfferLoan Noteholderstheas boardChisbridge of may elect). InterQuest Shareholders of light in should carefully, consider objectivestheir own investment and tax position, whether electthey wish to for the OfferLoan underNotes the Loan and strongly are Note Alternative advised seek to their own independent financial advice before suchmaking election.’ any The OfferLoan will Notes at 3 interestbear cent.per per annum the Bankabove of England base lending from rate time to time but interest will be this accrued andonly paid when the OfferLoan redeemed. are Notes The Offer Loan on are, Notes the face of the OfferLoan Instrument,Note redeemable 30 on of an earlier the sale in event save the of all September 2027, interests of the OfferLoan Note HoldersChisbridgein to an unconnected payments under party. third the Offer However, LoanNotes subject are the terms of the to Subordination Deed and it cannot be guaranteed redemption that on will occur that InterQuestdate. Shareholders who elect receive Offer to Loan Notes the must terms of the to accede Subordination Deed. A summary of the terms of the Subordination Deed set is out in Part B of Appendix IV. The form of undertaking the Subordination to accede to Deed forms part Shareholders of the Form of Acceptance. holding InterQuest uncertificated in Shares formobtain may formsuch on request from Neville Registrars the in manner (subject Chisbridge the to may below. set out paragraph in 12 terms of the Subordination time after Deed), any at the tenth anniversaryLoan of such Notes, of issue of elect the date to redeem part or all any of the Offer(or any Offer Loan Notes Loan Notes or part Offer of any Loan certainheldNotes by of ‘As an alternative to the cash to consideration alternative an which they would ‘As otherwise be InterQuest entitled receive, to Shareholders can elect receive Offer to Loan Notes, which will issuedbe theon pence nominal in value of Offer of 42 basis Loan forNotes each InterQuest Share. InterQuestShareholders must elect receive either to cash or OfferLoan fortheirNotes holding entire of InterQuestShares. There no is optionfor InterQuest Shareholders the accept to Offer and electreceiveto partly andcash partly Offer Loan Notes. The Offer beenLoan resolution by a have created Notes the of and constituted are the by 2017 May Board of Chisbridge on 31 OfferLoan InstrumentNote executedas a deedChisbridge.by The of the Offer issue Loan conditionalwill Notes be theon Offer being declared whollyunconditional. The Offer Loan Notes will not be transferable. No application will be made for the OfferLoan to be Notes listed stock or dealt on exchange. in any The OfferLoan not will Notes qualifyingbe corporate bonds for Shareholders InterQuest for purposes Kingdom taxation United who individuals. are InterQuest Group plcLoan by noteChisbridge alternative Limited

required be to included the in Scheme Document.’ The Takeover Panel determined has of the an estimate that The Takeover of the Code not is value of a CVR with Rule 24.11 accordance in the value of each CVR would beThere zero. will be no interest conferred a CVR by on the economic activities of Ladbrokes or the Enlarged GVC Coral, Group generally. be issued, and these in circumstances the Ladbrokes Coral Shareholders additional will not receive any consideration under the terms of the CVR Instrument. In these circumstances, assessment process are such that theLoan that assessment process Note such are Principal agreed is Value or determined be no to Loan zero, Notes will the Wider Ladbrokes Group. Coral The Loan Note Principal capped is Value a maximum at pence of 42.8 plus an upward adjustment If for the results the time of the value of money. Triennial Review on the profitabilityTriennial the of CoralLadbrokes theUK estimated Business taking effect account into of any circumstances themitigating in UK businesses carried on by Effective Date, 35 Effective pence for each Date, CVR suchheld by CVR Holder. The the assessment process referred will evaluate (i) in to ofpotential impact certain any) arising from measures (if the determined means of assessment an process by set out the in CVR Instrument and summarised below if no Maximum or (ii) Measures Enacted are Stakes the first by anniversary the of Note Principal Value’), and thereforeNote Principal Value’), the amount of cash payableultimately a Loan Note holder to upon redemption of Measures Enacted, are their Loan Notes, ifTriennial will be (i) by GVC on the date of this Announcement of this on (‘CVR the date GVC by Instrument’). Under the terms of the CVR Instrument, the principal value of each Loan the CVR Note that Holder entitled is (‘Loan to principal value of Loan Note plus an upward adjustment for the time value value (‘CVR’). of right of a contingent money way by The CVRs been have constituteddeed a by poll entered into Share that they hold, that Share Ladbrokes Shareholders Coral will be additionentitled receive (in the Shares cash to to and GVC 42.8offered) contingent entitlementto in a pence of up Contingent value rights‘Under for the each Ladbrokes terms of the Acquisition, Coral Drafting Examples Ladbrokes Coral Group plc by GVC Holdings plc

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 23 the Acquisition.’ number of Bidco Shares, the number which of to Bidco Shares each validly electing eligible Scheme Shareholder entitled is beshall reduced pro rata valid all elections to received. If elections be to scaled have down, those Scheme Shareholders who validly elect for the Bidco Unlisted Share will instead receive additionalAlternative Cash Consideration received lieuin had of the such they Bidco would Shares have elections not been scaled down. The will only Bidco Unlisted Alternative Share be made andavailable implemented part as if valid of the Acquisition elections for the received are Bidco Unlisted Alternative Share respectin representing aggregate, Bidco in Shares least at of, 2.5 per of the cent. total number of expected Bidco Shares be immediatelyto issue in following the Effective If Date. elections below amount received, are this elections such all beshall deemed and be Scheme to invalid Shareholders who validly elected for the will Bidco Unlisted Alternative Share instead receive Cash Consideration respect in of the Scheme whichShares subject were an election such to accordance in with the terms of ‘Under Scheme the Bidco Unlisted Alternative, Share or resident Shareholders Scheme than (other Shareholders located a Restricted in elect, Jurisdiction) may respect in of all (but not some of their only) Scheme receive Bidco Shares, to lieu in Shares of the which Cash Consideration they are to entitled respect in Scheme of such under Shares the terms of the Acquisition on the following basis: Bidco Shares for each Scheme0.518411 Share subject scaling down any described as to If the below. implemented, is Bidco Unlisted Alternative Share fractional entitlements will be Bidco Shares to rounded the down to nearestwhole number and of BidcoShares willbe disregarded. Scheme Shareholders will be required elect to for the Bidco respect in Unlisted Alternative Share not just some (and of all of theironly) holding Gordon of Panmure Shares. The conditional is Bidco Unlisted on Alternative the Share Scheme becoming effective. Thenumber to Shares of Bidco be issued the will pursuant be Bidco Unlisted to Alternative Share a maximumlimited to number of representing Bidco Shares per of the cent. total number of expected Bidco Shares 12.5 theTo be immediatelyto issue in following the Effective Date. extent valid that elections received are respect in of a higher Panmure GordonMerchant & Co. plc Capital by QInvest LLCUnlisted LLC and securities Atlas alternative The conditional is Mix upon Facility and Match the Merger effective.’ becoming to receive cash may be receive cash exchanged may to for an entitlement to for Booker versa)) vice (or Shares additional New Tesco Shareholders will be included the in Scheme Document. Further details of the the (including Mix Facility and Match action a valid order in take election, make to to the deadline for making elections, and the on basis which entitlement the Mix and Match Facility. Any such Booker such Shareholder Any will the Mix Facility. and Match pence cash in for and Shares 42.6 New Tesco receive 0.861 each Booker it holds. Share The will not Mix affect Facility and Match the entitlement of Bookerany Shareholder who does an election not make under Consideration due to them, although an announcement will will announcement an although them, to due Consideration be made extent of the approximate which elections to under the will be Mix Facility satisfied. and Match who an election make under the Mix Facility and Match will not know or Shares the the exact number of New Tesco amount settlement of cash theywill receive until of the Merger Booker Shareholders off-setting make theTo elections.extent electionsthat cannot be satisfiedin they full, will be scaled down on a pro rata basis. As a result, Booker Shareholders Shares, subject the elections to of other Booker Shareholders. Elections made Booker by Shareholders under the Mix and will be Facility satisfiedMatch theto only extentother that Facility, Charles Wilson, the Chief Executive OfficerFacility, of Booker irrevocablyhas undertaken elect to per cent. receive 100 to respect in Shares holding entire of his of BookerNew Tesco amount will be of cash that paid under the terms of the Merger will not be varied of elections a result as made under the Mix In connection with the Mix Facility. and Match and Match in which they receive New Tesco Shares and Shares cash respect in whichin they receive New Tesco the total numberof their holdings of Booker Shares. However, will be that Shares issued and the maximum of New Tesco ‘Booker Shareholders certain than (other Overseas Shareholders) will be entitled elect to vary to the proportions Tesco plc by Booker MixGroup and plc match facility

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 24 £6.04 billion £6.04 £2.8 billion £2.8 2016 2017 2017 vs 2016: P2P2017 vsOffers 2016: £355.3 million£355.3 19 17 £145.6 million£145.6 Public-to-private transactions Public-to-private Average value deal Aggregate deal value (3) sectors (3) 14 offers (82%) were on a consideration cash only basis, one deal offers (82%) offered cash and unlisted securities14 alternative, one deal offered andcash a andloan alternative one note offered shares only million offer £15.5 values ranged from to £2.96 billion computing deals occurred financial andservices andmore the in half professional than ofIT P2P (2) services (4), (69%) of aggregate P2P deal value of aggregate P2P (69%) structured9 deals were schemes as and structured 8 were offers as (including one partial that offer)industries activity bankingsaw P2P and & finance healthcare computing & IT, professional were services deals), (2 recommended were the target by board (76.5%) the outset at being remaining 4 offers(23.5%) (the out of 17 13 hostile) 6 out 17 17 (35%) were UK bidders, and these deals amounted to £1.85 billion and accounted for billion less a third than and accounted UK were bidders, and these deals amounted £1.85 to (35%) 17 6 out 17 deal value, of aggregate P2P (31%) non-UK were bidders, (65%) and these two for deals amounted over £4.22 billion to accounted thirds out of 17 11 Numberof P2P offers o o o o o o o o o o o o Union will be maintained. Of note: o o We anticipate this trend in P2P activity to continue into 2018, despite the continuing political despite the continuing and economic activity trend this P2P in 2018, anticipate into We continue to uncertainties exist that the in UK. reasons for activity the Possible increased of level P2P include historically may funds and interest PE rates low seeking funding use of the make UK PE the to from Regional Europe (through exit before membership. fromDevelopment Fund) and European EU Investment the UK’s However, Fund uncertainty what form to as remains Brexit and will take the whether Single Market to and Customs access 7 which saw 14 P2P deals announced with an aggregate P2P value of £2.35 billion, giving deal value an average of which saw 14 million. around £168 transactions the in volume of P2P while there been appears 2017 in slowdown have a slight to Accordingly, thedeals being announced significantly are largerin value. compared 2016, to than forthan those 2016. in giving dealvalue an average billion), billion (£6.07 £6 was just over The 2017 deals in aggregate deal value of P2P deal value (aggregate million. This represents a moreof £357 doubling than of deal value compared with 2016 demonstrating activity PE that million), to continues being £2.8 billion, deal with value an average of £145.6 the larger towards deals.move This increase aggregate in deal values follows on from the second half of 2016, 2017 saw a steady flow of P2P takeover activity. Of the 47 firm offers announced, 17 (36%) were private-equity(36%) 17 activity. saw a steadyfirmtakeover P2P 47 offers flow of announced, theOf 2017 AIM companies and 6 Main Market companies), backedor bids investment management (including (11 buyouts) of 37% deals: (19 and included one announced2016 thethan partialnumber P2P in slightly is lower This of offer. is higher 2017 average the in P2P deals aggregate dealand value for However, 2016). firm offersannounced in

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 25 AIM AIM AIM Main Main Main Main Main Main shares Market for target’s target’s Market for structure Cash only Cash only Cash Cash only Cash only Cash only Cash only Cash only Cash only Cash Shares only Shares Consideration Consideration Travel, Travel, finance (target) services Financial Financial Banking & extraction Healthcare hospitality, hospitality, Investment Industry sector Computing & IT Computing & IT Computing Support services Mining, metals & Mining, leisure & tourism leisure Deal Offer Offer Offer Scheme Scheme Scheme Scheme Scheme Scheme structure

Deal £868 £550 value £75.2 £2.96 billion £223.9 £101.5 £620.3 £230.4 million million million million million million million million £211.45 Top 10 P2P deals in 2017 10 P2P Top Deal

Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn ‘We have seen and expect to continue to see strong growth in P2P/ PE backed M&Abacked PE activity seen is expect and see‘We have globally UK however the to — strong growthP2P/ in continue to but activity activity continent the this of to compared levels muted terms expectedseeing is slightly relative in persist to into buyers consortia and in on own their investors.’ other PE with international with 2018,

Management LLP and Penta Capital LLP Capital Management LLP and Penta Circle Holdings plcby Toscafund Asset Asset Toscafund plcby Holdings Circle Company Limited (lapsed) Limited Company Revolution Bars Group plc by Stonegate Pub Pub Stonegate plc by Bars Group Revolution Gemfields plc by Pallinghurst Resources Limited Pallinghurst Resources by Gemfields plc Servelec Montagu Funds plc by Group Limited and CanaryLimited Limited Bidco Taliesin Property Fund Limited Wren Bidco Bidco Wren Limited Property Fund Taliesin Imagination Technologies Group plc by Canyon Canyon plc by Group Technologies Imagination LLC Partners, Bridge Capital Group Limited Group Exova Group plcby Element Materials Technology Technology Materials Element plcby Group Exova Shawbrook Group plc by Pollen Street Capital Capital Street Pollen plc by Group Shawbrook LLP (hostile) and BC Partners Limited Partners LLC and CVC Limited Partners Capital LLC Partners Paysafe Group plc by Blackstone Management Blackstone plc by Group Paysafe

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 26 2017 2016 ElectricWord plc by 6% and Equity 11% subscription to bidco/ PE funds and debt finance 27% 29% Debt finance*** 2% InterQuestGroup plc by Chisbridge Limited raising 2% equity capital Debt finance & 14% different sources* Equity 16% subscription to bidco/ PE Fund ) 20% finance 5% Existing cash Existing reserves & debtreserves & 2017 vs 2016: proportions of firms offers funded by cash from from cash by funded offers firms of proportions vs 2016: 2017 Financing the offer Financing 31% 1 debt and equity capital raising 1 existingcash and resources debt finance 1 debtexisting finance, consideration andresources cash shares 6 equity funds subscription bidco/PE to funded4 were debt by and equity funds subscription bidco/PE to consideration3 debt and finance shares 2 existingcash and resources consideration shares 12 were funded were existing by cash reserves12 only one (but that note bidder reserved debt switch the to to right finance if market conditions favourable were (Novae Group plc AXIS by Capital Holdings Group Limited)), by financed8 were debtshareholderof (includingby onlyway loans) 8 37% o o o o o o o o o reserves** loan documents need go on to display. Debt continues to beDebtto used fundcontinues to transaction, but with raising the of risk a possible counter rise to interestrates in inflation, bidders appearto be useto more up reserves willing cash (in wholefinance to in or part)acquisitions. The its Panel continued has practice of granting limited dispensations from the requirement to under Rule 26.2(b) disclose market flextermsin facilities agreementsthe offer until orscheme document isposted. the gives This delay lead arranger an opportunity syndicate to before the debt days for 28 in the up to offer documentis published andthe 16 out of 47 of these deals (34%) were financed were in whole in or partof these by deals (34%) 51 existingout reserves of 47 cash (compared 25 with out of 16 to (compared representing a decrease the in use out of cash deals (47%) of reserves. 38 18 2016), deals in of such (49%) financed were in whole in or part This shareholder of by by (includingdebtway loans). 2016) in deals (55%) out of 49 27 represents decline a slight the in use of debt facilitiesdeals. finance to Group, Inc.) where (WS addition in debt plc using SNC-Lavalin Atkins to facilities by fund to the saw one deal 2017 in We the bidderacquisition, offeredsubscription receipts and a private subscriptionplacement of receipts. * Based on 38 firm 2016 offers 49 in involving a cash element2017; in ** Existing cash reserves includes funds made available under intra group loan arrangements ***Debt finance includes two deals financed by shareholder loans ( Riccardo Silva and Marco Auletta o o o o o o o shares, and equity a combination of two subscriptions/PE funding or (or moreof these). 2017): all 81% of firm in offers Of for firm theinvolved consideration 38 a(accounting offerscash that element o o There has been a variety of funding structures in 2017. There been has a variety of funding structures 2017. in offeredconsiderationshares onlyconsideration werefinanced by and shares. 38 accordingly deals (19%) 9 out of 47 involvedconsiderationcash in some form wereand funded bycash, debt, consideration (81%) firm offers out of 47 Existing Cash Existing

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 27 he offeris beingfinanced by to beloans provided Auletta by ofeach Silva Riccardo and to Marco pursuant to toBidco, Bidco consideration provided Chisbridge by support in of the Cash offeris beingfinanced by loan facilitiesprovided Luke by of each Johnson and Gary Ashworth. limited number of selected minority investors, including their respective limited partners, directly who may a contribute minority equity of Bidco’s funding of the offer. InterQuest Group plcGary Ashworth and Clare irrevocably undertaken have the On loan basis, of full the accept that alternative. note acceptance to by Chisbridge to InterQuestin million cash £10.54 shareholders. offerthein Chisbridge result by will payment of approximately The cash Limited The consideration payable shareholders Paysafe to willcombination beby a financedof equitytheby to invested be Blackstone and and debt CVC be to provided Funds Funds under facilities an interim agreement arranged Credit AG, by Suisse London Branch, Jefferies andStanley Morgan Bank Limited.International The equity funding being of Bidco is provided the Blackstone by and on basis. the a 50:50 CVC Each of the Funds Funds Blackstone and expects the CVC Funds Funds potential equity discuss to syndication during the offer periodvery with a Electric Word plc by RiccardoT Silva and respectively (£17,850,699 and £619,354 Marco for £17,231,345 loan agreementsbetween entered into June each of them 2017 on 26 Auletta aggregate). in Paysafe Group plc by Blackstone Management Partners LLC and CVC Capital Partners Limited Novae Group plc by Axis CapitalThe if market conditions favourable, are consideration from will be existing new funded cash or, resources from AXIS’s Holdingsborrowings. Limited Deals in Focus Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn and reserves and that in light of the deadlines under the PUSU regime it can be particularly the (notwithstanding under challenging deadlines the PUSU the of and reserves light in and that timeframe.’ get a facility to a tight in place in debt markets) buoyant ‘The continued use of cash to fund acquisitions reflects that corporates and funds have ready access to enormous piles cash reflectsready access ‘Thecorporates fundand have acquisitions to funds cash use of that continued

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 28 In contrast with previous years, UK bidders bidders UK years, previous with contrast In accounted for 36% of aggregate deal value value deal aggregate of 36% for accounted UK and international bidders UK and international 15 (32%) were made by UK bidders — which is a slight proportional increase when compared with 2016, where 29% where with 2016, proportional is a slight when compared UK bidders — which by made increase 15 (32%) were by UK bidder made were (15 deals) of firm offers 71% of firm with 2016, where when compared decrease is a slight non-UK bidders — which by made 32 (68%) were by non-UK bidders made were (36 deals) offers 9 geographical expansion and we expect see further and we to expansion geographical activity in 2018. billion). A US bidder featured most frequently in bids made by non-UK bidders: 8 deals (ie, accounting for 25% of deals for accounting bidders: 8 deals (ie, non-UK in bids made by most frequently billion). A US bidder featured which featured another of Qatari bidder and a featured bidders (1 of which also US featured bidders) foreign made by of US deals value total The in 13 deals. a US bidder featured 2016 where from a decrease Luxembourg), a bidder from US deals in 2016 for deal value than the aggregate is lower which £13.23 billion in aggregate, just over to amounted has increased deal value average US bidders has decreased, the number of deals featuring (£15.12 billion). Although financial and for as a tool viewing UK companies growth, seek international to in 2017. US bidders continue (slightly) bidders accounted £28.64 billion (64%). This is in stark contrast with the comparable period in 2016, where non-UK period in 2016, where with the comparable is in stark contrast This (64%). £28.64 billion bidders accounted decline in a considerable has been there Accordingly, deal value. £64.53 billion (96%) of aggregate for bidders accounted currency fluctuations the recent is a little surprisingThis given bidders. foreign deals being made by the number of large their advantage. use to bidders would expect would foreign which we value UK sterling low and a historically value (£8 plc had the highest deal Group Worldpay for offer Inc.’s Vantiv, US’s Of a non-UK bidder, the deals made by • • foreign value in 2017 and deal aggregate for almost £16.25 billion (36%) of the accounted by UK bidders offers Firm Non-UK bidders continued to feature most frequently in public M&A transactions in 2017 — 32 out of 47 firm offers were were in public M&A transactions firm in 2017 — 32 out of 47 offers frequently most feature to Non-UK bidders continued of the deals (4 number of the largest in a significant UK bidders being involved bidders —2017 has seen foreign made by in 9 of the 10 involved were bidders foreign 2016, where to is in stark contrast This deal size). deals by 10 (40%) largest Of in 2017: announced deals. the 47 firm(90%) largest offers Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn are still strong in the US (US corporates with weighty balance sheets and US PE bidders weighty with sheets corporates amounts dry-powder). balance PE of large with US and (US strong US the still in are expectWe see to more activity from North buyers). Asian (Japanese and Chinese administration has had an impact had an has administration on buyers. some US bidders foreign the dominate league table. The to fundamentals buyers continue will US that assume There to no reason is ‘The weakened dollar and US businesses’ sentiment (from despair at the one end to real concerns at the other) with the Trump Trump the with other) the at concerns one the real end at to despair (from ‘The sentiment businesses’ and US dollar weakened

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 29 - £2.5 billion £2.29 billion £1.79 billion £1.38 billion £2.96 billion £4 billion*** £15.5million £256 million £37.3 million £35.5 million £27.4 million £26.4 million £16.4 million £10.28 billion £477.6 million £227.2 million £16.58 million £130.5 million £157.87 million Total deal value Total 1 1 1 1 1 1 1 1 1 1 6 3 2 2 2 2 2 1 1 Number of bidders** Italy China Japan Jersey France Cyprus Canada Sweden Bahamas Bermuda Guernsey Isle of Man Hong Kong South Africa US and Qatar United States United Cayman Islands Cayman Bidder country* British Virgin British Virgin Islands United States & Luxembourg States United is an individual, the nationality of the ultimate bidder nationality the of the ultimate is an individual, remained ongo lapsed or completed, (whether they analysed were by non-UK bidders that made table includes all firm offers This ** 2017) 31 December ing as at contingent value of on the to £4billion dependant range of £3.2 billion value has a deal Coral) for Ladbrokes offer deal (GVC’s This *** rights value * Where a bid vehicle was used, this table refers to the country of incorporation of the ultimate bidder, or, where the ultimate bidder the ultimate where or, bidder, the country of the ultimate to incorporation of this table refers used, was a bid vehicle Where * Table of origin–non-UK bidders of origin–non-UK Table

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 30 Debt finance & reserves cash Existing consideration shares debt reserves cash Existing & reserves, cash Existing consideration shares debt & Consideration shares & debt Equitysubsciptions to bidco/PE funds Equitysubsciptions to bidco/PE funds debt & Debt finance & equity capital raising Existing cash reserves cash Existing Consideration shares 35% 9% UK bidders UK - 3% 6% 23% 9% 6% 3% 3% 3% 1 (3%) wasby financeddebt, shares and andcash, 1 (3%) wasby financeddebt and capital raising 1 (3%) 11 (35%) were financedwere solelyby existing reserves, cash (35%) 11 financed were solelyby debt, 7 (23%) wasby financed equity subscription funding,to 3 (9%) bidco/PE wasby financed equity subscription fundingto bidco/PE and 2 (6%) debt, wasby financeddebt andshares, 2 (6%) wasby financeddebt and cash, 1 (3%) wasby financed and cash shares, 1 (3%) Bid financing by non by financing Bid

o o o o o o o o o o o foreign deals by bidders cash reserves and debt used were (44%) fundfunding whole to (in Accordingly, or part) in 14 deals. was (44%) used whole (in or part) in 14 in o o o o Cash formed deals made an element non-UK by of of thethe consideration 32 29 in bidders. Of these 29: o o o Financing non-UK bids Financing

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 31 Equity subsciptions debt & funds to bidco/PE Existing cash reserves cash Existing Consideration shares Debt finance & reserves cash Existing consideration shares & shares Consideration debt Equity subsciptions to funds bidco/PE 40% 7% 7% Bid financing by UK bidders UK by financing Bid 12% 7% 7% 20% Cash formed an element of consideration in 9 of the 15 deals madeCash formed UK bidders. by an element See of consideration 9 of in the 15 pie chart below for a break down of funding arrangements. Financing UK bids Financing UK bidders relied more on existing cash reserves fund to acquisitions.

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 32

The CA 2006, s , was the ambit of the CA 2006, s 955 to enforce its enforce to rulings, and unlikely it is upholding the decision of the Panel

that it commenced that proceedings thein decision announced . CA 2006, s 955 Court grants an Order requiring Mr King a mandatory make to offer of the Companies Act 2006 2006) seeking (CA an order requiring Mr King section 955 is clearly to provide a means whereby the Takeover Panel can its seek decisions have to clearly is provide to a means whereby the Takeover provides the thecourt order—wherean wordedcourt that provision a is way make this in may has CA 2006, s 955 provides, among other if on things, that the applicationof the Panel,the courtsatisfied is the of below Regulatory and political issues clearly of the intent does that not mean the court’senforced—however, that function act to is a rubberstamp as CA2006, 955 s sought order the pronounce not or pronounce to whether discretion a if had Parliament intended the court that expressed a discretion, such should it would have not have intention that that a personthat a rule-based contravened has requirement or requirement a disclosure that there a reasonablethat is likelihood a person that a rule-based will contravene requirement, or . Among other things, the court considered that: 10 o o o o o under the Takeover Code (Panel on Takeovers and Mergers v King) Code on (Panel Takeovers under the Takeover o furtherFor details on the case, see Case Analysis: Among other things, the court determine had to what, on a proper construction of court’s discretion and determined the court that discretion refuse to did an order grant have to terms of in 955 o o o Panelused has Takeover its Thispowers the under is first time the several it has other that given enforcement options it. power it to available will exercise this frequently, that Panel. it granted the order sought the Takeover by and on December 22 The 2017 court heard the case October in 2017 to complywith to its rulings. CA2006, 955 s orderthe court it thinks any make may to compliance fitsecure the with requirement: o Douglas Park to acquire more 30% rightsDouglas than acquire of the voting Rangers to in Park and consequence in had incurred obligationan a mandatory make Codeto 20 offer at a of pence price per Rangersunder share the forthe Takeover of all Rangersshares not already held Mr King by and members concert of his party. The Board directed Mr King that should announce a Rule offer9 compliant forthe of all Rangers shares alreadynot held andhim by membersconcert his of 2017. 12 April party by Panel the Takeover April 2017 Mr King failed comply and to on 13 Court of Session, under Edinburgh failing to make a Rule 9 offerfailing make and to imposing cold-shoulderingthe sanction on (Mrindividuals two Morton and Mr Garner) for breaches of the of Introduction section of the Code. 9(a) its rulings seeks enforce to Panel court order Takeover Appeal Board (Board) published its the Takeover 2017, March On 13 Executive and of the Hearings Committee Mr King that acted concert in with Messrs George and Letham, George Taylor Takeover Panel sanctions enforcement and Panel Takeover Appeal made Board several public Panel, have Hearings sanctions Committee and Takeover for the Takeover In 2017, Codebreaches, including commencing proceedings obtaining court a against (and order persona against) King) for (Mr Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn the appropriate course of action of course appropriate the notwithstanding its for preference agreed context the in of mediated approaches even disciplinary actions.’ the the various breaches arising on the Bumi case. before ventured not if it is it has that places The hold not will back from King Panel the going into case that demonstrates ’Therelyto itson firstPanel the to sought has seek it is particular of the casetime as King is powers a 9 enforcement Rule interest respect with and comment effectiveness the public increased the to scrutiny is this to The backdrop court order. enforcement disciplinary the following actions this saw following disciplinary the of on We public takeovers. functions regulator key the of

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 33 . followingits a ruling by Hearings Committeebreach a relatingto Takeover Panel pair gives the shoulder cold Takeover statement the Hearings Committee imposed the cold-shouldering sanction effective forsixyears relationin to Mr Morton, and effective for years relationin to two Mr Garner. Cold-shouldering a person the is most serious disciplinary power exercisable the Panel by – the sanction only has ever been used twice before and both in instances was applied relation breaches in to a mandatory of an obligation make to 9. Seeoffer LNB to Rule further, pursuant News: the Mr a potential breach course Morton by of its into investigation of an obligationannounce a mandatory to offer under Rule 9 of the Code. This false information had been provided of with deceiving the intention the Executive into believingHubco purchasea in of Investmentsshares plc that Groundlinks by owned Limited, the company a trustees by of a Morton family trust, had actually been made on behalf of Mr Garner beneficiary. as As of their a result prolonged and serious attempted deception of the Panel during the course of its investigation, In January 2017, the Takeover Panel issued a theTakeover In January 2017, of the Code. The ruling found Bob that Morton and John Garnerhad committed serious breaches of the of section 9(a) Introduction sets the Code to (which out which persons the to rules according dealing with the Panel must provide information the and Panel). assistance to The Hearings Committee found Mr Morton that and Mr Garner had provided false information theExecutive to in Misleading the Panel Executive – Messrs Morton and Garner in relation to Hubco Investments plc Investments Hubco to relation in Morton Garner and – Messrs Executive Panel the Misleading

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 34 in section 3: Target response: section in Target 3: Deals in Focus: FIH Group plcDeals FIH Focus: in the merged would be company able raise to prices or reduce service quality either at wholesale or retail levels buying purchase power groceries to from suppliers otherprices and lower Booker that at would beable use Tesco’s to wholesalers not Booker be might that the result able raise could compete its (with to prices) o o The CMA concludes that Tesco’s purchase of Booker does not raise competition concerns. Among otherThe things, the CMA CMA Tesco’s concludes that found existing that strong competition wholesale in and retail made that: it unlikely o o In particular, Tesco does not supply the catering sector Tesco which 30%In particular, Booker of to its over makes sales. Nonetheless,the CMA considered the impact of andthe deal Booker-supplied every in shop were local wherearea Tesco a present examine to whether of these be it might areas any in profitable forthe to mergedraise company prices reduceor service either levels retail in or wholesale. The CMA provisionally concluded the of level competition that the in grocery wholesale and retail markets would be to sufficient asuch defeat strategy. 20 December 2017 Phase 2 deadline is 27 December 2017. December 2 deadlinePhase 27 is 2017. 14 November 2017 The of acquisition Booker CMA publishesdoes its not provisionalTesco’s findingsreport andconcludes provisionally that concerns. competition raise a retailer as and Booker a wholesalerThe as CMA found Tesco that do not compete head-to-head most in of their activities. investigation). theIn its CMA does 1 investigation, Phase relation other in raised not a conclusion reach to concerns about the transaction about theas concerns local markets for grocery retailing to sufficient were meet test tothe the fast-track transaction to 2.Phase 12 July 2017—referral forThe CMA refersPhase thetransaction after for 2 investigation a Phase the parties requested reference. a fast-track The CMA’s 2 investigation requires regulatory clearances. 30 May 2017—CMA launches The its on issuing comment the invitation to CMA same 1 investigation, launches a Phase day. Phase 1 investigation29 June 2017—fast trackThe CMA receives a ‘fast-track’ and Booker an in-depth the 2 (ie, case Group Phase accelerate referral to to from Tesco referral requested Tesco makes a recommended makes cash andstructured offer share for Booker, andTesco Tesco as a Booker scheme of arrangement. Group both operate within the retail & wholesale trade and industry, their combination raised anti-trust and issues recommended or hostile? or recommended Booker Group plc by27 TescoJanuary plc 2017—recommended cash and share offer FIH Group plc by The Group, an AIM-listedFIH with operations company Islands and the UK, the in Falkland subject is a firm and to possible Rowland Purpose These terminate following poor shareholderacceptance for Rowland PurposeThe competing2017. offerthein first half of Trust 2001 (lapsed) offer andthein competing casethe of politically charged surroundingTrust’s issues offer, Dolphin and its beneficial owner Elsztain, Eduardo citizen an Argentinian – see further Deals in Focus Deals announced H1 2017 facing regulatory challenges facing 2017 H1 announced Deals Theregulatory landscape led and completing the competition in delay to of some lapsing and have even issues of the biggest offers2017. in a hung the in Parliament surprise culminated that result The general snap election April 2017, called Theresa by on 18 May the subsequent minority (and Conservative uncertainties and Government) the and continuing DUP alliance around the mechanics an increasingly contributed testy of all to Brexit have political and economicclimate. Competition issues in deals in issues Competition

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 35 rse matter, that it was blocking that rse matter, the the creation merger avoid to ö not the merger can proceed, including any conditions that will apply. The statutory deadline is 1 May 2018 (with 8 week (with not the merger The can proceed, statutory will apply. conditions that including any deadline 2018 1 May is extension). After further consideration of representations received considered and having further advice she had that requested from Ofcom, she announces also was minded the now that SoS refer to the bid the CMA to broadcasting on commitment to standards grounds. 20 September 2017—SoS reaches SoS final decision andrefers weeks24 on theto groundsboth CMA CMA Phaseinvestigation. has 2 forto a refers deal to CMA the proposedinvestigate transaction and provide advice the who SoS, to will then a final decision come to on whether or for Phase 2 investigation merger. 29 June 2017—SoS mindedshein a Parliamentthat confirms minded-to was to statementSoS refer the merger for a morefurther, detailed,Phase 2 to refer merger the CMA by on mediainvestigation plurality grounds. for Phase 2 investigation12 September on media 2017—SoS pluralityground minded grounds to refer merger for Phase 2 investigation on commitment to broadcasting standards 21 April 2017—extension the deadline for of submission the public interest The of the General announces light that, in SoS Election on 8 June 2017, of deadline for June 2017. 20 until report the CMA by and Ofcom the proposedCMA into extended is acquisition 2017 May from 16 and Ofcom report20 June 2017—Ofcom receipt confirms of SoS and CMAOfcom reports comment substantivelybut unableremains to the on matterthe of CMA reports 16 March 2017—SecretarySecretary Media for and Sport Culture, of State intervenes on the in media acquisition public interest grounds of media of State intervenesplurality broadcasting and commitment to The standards a European triggers EIN Intervention issuing by (EIN). Notice the on public interestrequirement for Ofcom report to on the effectsthe of proposed transaction theon publicinterest grounds andthe CMA grounds on jurisdictional matters, namely whether arrangements progress in are which, or if contemplation in carried effect, into the in creationwill of result a European relevant merger situation. The reports 2017. May 16 due are by it obtained on 7 April 2017) and, if either or a European intervention an intervention been (EIN) has notice notice issued it obtained on 7 April 2017) respectively, approval of the Secretary of theunder Enterprise Act (EA 2002) sections 2002 and 42 The of State. 67 Secretary did indeed of State refer the matter Ofcom by on for and investigation the CMA. agreed Disney has that 21st acquire to DecemberAn additional 2017 deal the dimension is this announcement to on 14 consideringPanel principle’‘chain is whetherTakeover Century (afterthe a spin-off Fox andthecertain of businesses), of the Code applies. under Note 8 on Rule 9.1 to leave the EU. Were it not for the Brexit perhaps Were the vote, European competition the EU. authority leave taken a differentto have may approach. Sky plc by Twenty-First billion pre-conditional cash offer 15 forSky December2016 plc announced on £11.7 Twenty-First Century Fox, Inc.’s Century Fox, also beenhas subject regulatory to hurdles and political intervention. The offer announcedwas Inc.as beingsubject to pre-conditions othersatisfaction things) of (among competition the receipt relating waiver) to of EU clearance (which (or have prohibited this merger, for the benefit prohibited merger, competition this have of Europeanin financial markets. The merger between Deutsche Börse and the London Exchange significantlyreduced competition Stock would have a creating by de facto monopolyin the crucial area of clearing of fixedincome instruments. theAs parties failedto offer the remedies required to address our competition decided has concerns, the Commission prohibit to the merger.’ Although stated, the Commission the in LSE/Deustsche B importantit is of monopoly, a referendum the consider political to vote the proposed backdrop to the ie, UK’s merger, London Stock Exchange billion all-share £20 offerDeutsche forthe LondonStock Börse Exchange Group plc lapses AG’s followingEuropeanthe Group plc decision prohibit to the merger. Commission’s by Deutsche BörseIn a statement on the decision block Margerethe to the proposed said: Vestager CompetitionAG Commissioner, merger, cannot the allow creation‘Commission of monopolies. happened That what would is have case. we this That in why is Deals in Focus Although outside our review period,were butthat worth it is considering brieflycouple a of announced2016 deals in blocked or competition delayed by regulators publicor by interest reviews under the Enterprise Act 2002. Deals announced in 2016 facing regulatory challenges facing 2016 in announced Deals

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 36 epura plc by Hytera Communications Corporation Limited unauthorised access and to provide rights of access to premisesunauthorised provide and to to and rights information access of access relevant so agencies that including the Home Office compliance can audit with the security measures. Hyteraalso andundertaken have Sepura the continue to UK service repair and maintenance for the relevant radio devices for long as required is as theHome by Office. 12 May 2017—SoS accepts statutory he accepted announces has that SoS undertakings from the parties the and deal that will therefore notundertakings be referred the CMA to for further assessment. The scheme became2017. effective 24 May on 8 May 2017—SoS proposes line in with announces advice that SoS from the Home Office, he was accept proposingdraft to undertakingsfrom Hytera to accept undertakingsand Sepura instead ofmaking a reference the CMA to for a more investigation. detailed 2) (Phase instead of The undertakingsreferring information sensitive that provide and technology assurance protected is the and maintenance ensure to the CMAof UK capabilities servicing in and maintaining radio devices used emergency by services the in UK. The undertakings require Hytera and Sepura implement to protect to enhanced controls information sensitive and technology from security aspects complete and to submit this of the proposed transaction on midnight Thursday and 2017 until has 4 May report with s 44). EA accordance 2002, (in the SoS to 4 May 2017—CMA reportsCMA reports decisions on the jurisdictional SoS. The to report and competition aspects the CMA’s contains and to SoS summaries of representations received. also receives representation SoS from the Home Office. 27 and 28 March 2017—notification writes SepuraBEIS to and Hytera respectively the minded was confirmingthat interveneSoS to on national security of possiblepublic representations interest grounds and invites for consideration before a final decision. to coming intervention 10by AprilSoS on2017—SoS national issues security a public interveningis issues confirmingthat he SoS interest interventionthein (PIIN) notice deal on national security PIIN grounds The CMAwill prepare a report on the competition and national and 58(1)). 42(2) with ss EA accordance 2002, grounds (in The CMA provisionally finds that Fox’s anticipated acquisition is is thein not anticipated publicacquisition interest. The TheFox’s CMA finding provisionally provisional is that due finds mediato plurality concerns, but not because of of a lack a genuine broadcasting commitment to standards the in UK. S million recommended cash offer for Sepurathesubject Hytera’s £74 was of a (onpublic groundsinterestintervention of national security) the Secretary by for the Department of State for Business, Energy after & Industrial (BEIS) Strategy Sepurashareholders had approved the scheme of arrangement 9 February (on 2017). views of the independent directorsof Sky before determining whether will trigger the Disney Transaction a mandatory Century under of upon the Code (ie, principle) the of 21st chain a result Disney as bid obligation under Note 8 on Rule 9.1 stake Sky. 39% in Fox’s Post 31 December 201723 update January 2018—CMA publishes provisional findings report 21st Century Fox and Disney announce that they have entered into an agreement, under which Disney will acquire 21st an agreement, entered into Century and under they have Disney announce that 21st which Disney Fox will acquire 21st Transaction,Under wouldCentury Transaction). theDisney (after spin-off a Disney Fox certain of (Disney businesses) Century would seek Fox to shareholding 21st it that and was anticipated 39% that Sky, in Century Fox’s 21st acquire of Sky it does not already own. complete its planned of the 61% acquisition obligations Century Fox’s Panel, response, in does announced the Disney that Transaction not 21st alter TheTakeover under the Code with respect its to pre-conditionalPanel Takeover further offer statedfor Sky. it that The will seek the 14 December 2017—Disney’s to acquire 21st Century Fox Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn Government is seeking is Government can expect we — so what proposed the see and until effect(which to reforms unless take in legislation be will be impacted to approval) and likely Brexit are turn in assessment a number by proposed the of as EC require will changes concerns.’ publicof interest scent any allay to negotiations from and back-room sidelines the pressures intervention, of threats that an increased focus on the UK public interest and securing more comprehensive grounds to review and block review on the bids is to grounds securing and focus increased more an on comprehensive UK public the interest that Security National but what Infrastructure and paper, Review consultation agenda, set clearly as BEIS’s the outGovernment’s in existing the importantis framework that recognition does clear the toolsandthetriggers is offerthe bear not mind in to that ‘In the 12 instances of intervention since the introduction of the Enterprise Act, none have resulted in a deal being a deal in blocked; resulted Act, introduction the Enterprise none the of since have intervention of instances ‘In 12 the merger pan out. will Sky/Fox the This appears that be way the to concessions. gone following through have deals the instead, can expect we — yes Melrose the seen already in bid for GKN. this have evident see is It to more interactions. We As for 2018

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 37 . published ahead of the Protectionism and investment manifesto Market Tracker Trend Report—Trends Report—Trends Trend Tracker Market in relation the in Government’s to review of the national security implications . consultation , the process commenced with Theresa campaign speech May’s her (in bid for leadership Government proposals increase powers to intervene to mergers in which raise national security concerns an expanded version power of (modelled the ‘call-in’ on the existing to power within the Enterprise Act 2002) Government scrutiniseallow to a broader range of transactions for nationalsecurity within a voluntary concerns notificationregime, including projects andasset sales a mandatory notificationregime for critical in areas are foreignwhich to national investment security(egcivil transport, defence, energy, telecommunicationsnuclear, sectors) lower the threshold whereby ministers can scrutinise investment to businesses with a UK turnover of over £1 million thelower threshold whereby ministers canbusinesses £1 scrutinise to with a UK of over turnover investment 25% or the over, requirementremove of supply share for of, a merger increase a business’s to o o o o and telecommunications) and a co-operationand telecommunications) mechanism between Member and which can the Commission be States activated when a specificFDIin one or affectseveral Member may States the security orpublic order of another. informationFor about foreign restriction investment regimes discussed the Lex at Mundi Global Seminar on Cross- and reported LexisNexis, by see News analysis: Border November in 2017, Transactions restrictions and Germany the in US See LNB News: proposals unveiled the European Commission set to up a EuropeanSeparately, legal framework for screening foreign The proposed the EU. into legaldirect framework the introduces possibility investments (FDIs) for the European screen to Commission on grounds of public order and national security affect for cases may which in FDIs projects or includes projectsprogrammes interest (this of EU and programmes transport), the of in research, areas space, energy Such reforms may include: may reforms Such o o Thealso focuses consultation on longer termreforms, withthe Governmentfollow the to examplesintending of other developed, open more and it substantive countries make how scrutinises changes to the national security implications of foreign The investment. reforms would focus on adequate of whether scrutiny significant in foreigninvestment most critical businesses national securitythe raises UK’s any and providing concerns the ability act to circumstances in where be might this the case. As part of short-term reforms, the Government proposed has amending of passing the way Enterprise Act (by 2002 secondary relation businesses in to operating the use legislation) dual and military (i) in use sector parts and (ii) of the advanced technology sector to: o o In October 2017, BEIS launched BEIS a In October 2017, of foreign ownership proposing or control, new powers intervene to mergers in which raise national security concerns, including those smaller businesses. involving Under the current regime, the Government only is able intervene to mergers in companies with involving a UK turnover million where or the over. of UK share supply 25% ofincreases more to £70 than plant project was subject to substantial scrutiny. Further, the Conservativeplant project Further, Party’s was subject substantial scrutiny. to general election, stated relation reforming that, in to rules8 June 2017 on takeovers and mergers: ‘We also take shall action protect to our critical infrastructure. foreign that will ownership ensure important of companies We controlling infrastructure does not undermine British security or services. essential already strengthened have We ministerial respect in scrutiny of civil nuclear power and a similarly will take robust approach a limited range across of other sectors, energy’. and defence telecoms, as such however, has traditionally has been months, the rhetoric open changed has foreignhowever, to In the and investment. last foreign 18 ownership of UK companies become has (re-)politicised the in UK. As noted our in UKin public M&A 2016 deals in of the Conservative Partyconfirming andherintroduce to Primenew Minister) willingness powers forthe government interveneto UK in public M&A and be capable defend to in making of ‘stepping a sector’, express reference US- to bidder Pfizer’s failed approach. As a furtherthe nuclear C HinkleyPoint power example of politicalintervention 2016, in foreign investment there been has an increase protectionist in Recently, typified sentiments globally, theby Brexitthein UK andvote the relation the in building to of a wall alongrhetoric the Mexican Donald of President Trump border the However, in US. been Canada, have US, screening Australia, India, China, (the Japan) countries foreign for decades. investment many been thereIn Europe, have instances of political interventions takeovers. in The with the Nordic UK (along countries), Further Government powers to intervene in mergers raising national security concerns and scrutinise scrutinise and security concerns national raising mergers in intervene to powers Government Further

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 38 ) and PCP 2017/2 Proposed Takeover Proposed Takeover . and in relation these in which to consultations ) and (ii) bidder) and (ii) statements ( of intention which (among other things) called for reforms other things) which including (among a response statements response PCP2017/1 . manifesto Takeover Panel proposes requiring bidders fuller make plans of takeover disclosure to Takeover Takeover Panel consults on proposed amendments to Takeover Code Panel on consults proposed amendments Takeover to Takeover - the location headquarters of the offeree’s and headquarters functions - the target’s and research development functions, - the balance of the skills and functions of the target’s employees and management, and given during the course of an offer, and wherethe during given the course post-offerof offer, an undertaking such durationhas a of longer year, a than reports be to are published least at annually the prohibition on a bidder from14 days fromthe announcement publishing of its an offerfirm document for an offer make without to consentthe theintention of target board a new requirement for a bidder statements make to the time at of its of intention Rule 2.7 firmintention announcement addition document) (in including statements to the in offer/scheme the requirement for bidders and targets publish reports to on post-offer undertakings andintention statements the expansion requirements of content for bidder statements with regard of the intention target’s to business, employees and pension schemes, which require the bidder state to its regarding: intentions for the 12 month period following a withdrawnfor or lapsed35.1) the 12 offer(Rule for six following months offer an a statement(Rule make notto 2.8) of intention during the competition reference where an offer periodcompetition referenceof a result endsas a to a authority and 12.1(b)(i)), (Rule o o o o o o o Takeover Panel responds proposals to requiring bidders fullerTakeover make plans of takeover disclosure to o See further LNB News: o o Key changes to thechanges Code to include: Key o requirement for bidders be to clear about from their intentions the outset of the bid process and promises ensuring all and undertakings made the in course bids of takeover can be legally enforced afterwards. Bidder intention statements Bidder intention The Code changes relation bidder in to statements been appear have made to policy pursuant to proposals on takeovers and mergers the in highlighted Conservative Party o Rule Also of 2.8note, has beenbeingThe as Panel‘significant’. willnormally regard values relative of more 75% than amended enable so to as a bidder specify to the statement circumstances which in be a no intention set may aside. See further LNB News: Code amendments on asset sales and other matters Among other things, the amendments a bidder the Codeassets’ to prevent fromthe of ‘significant purchasing target: o o The Code changes in relation to asset sales have been made following two cases in late 2016 (SVG Capital plc by (SVG The Code changesbeen asset relation in salesto have made following two 2016 cases late in HarbourVest Partners, and Bond International Software LLC plc Software Constellation by Inc.) which in the offeree board receipt in offer of takeover a decided that bettercould value be deliveredshareholdersto company through the selling of its all assets party, a third to returning the proceeds shareholders to effectively and winding (ie, up the company assetsof provisions the purchasing Code by key of theenabling target a bidder instead). circumvent to Takeover Code changes Code Takeover Panel issued papers consultation July in and September in The settingTakeover out proposed the changes Code to in asset salesrelation (i) competition in to with an offer ( the Panel published its December 2017, respectively. On 11 the changes resulted in Codeto (effectiveJanuary 8 have 2017). sales Asset Theresa May’s Government in 2017 and in 2016 that it continues to be a concern apparently — at least for — at some apparently be stakeholders.’ a concern to it continues that 2016 and in 2017 in Government Theresa May’s Selina Sagayam, Head of UK Transactional Practice Development, Gibson Dunn ‘Recently discussions have centered around the effectiveness the around Panelrespect the centered with of of bidder the to enforcement have ‘Recently discussions or undertakingscommitments from its from to rules evident but a change statement emanating the it is in resulted which

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 39 fact the Code that only required them be to referenced in the offer Furthermore,document. the requirements to make additional statements intention public make and reports to post-offeron any undertakings andstatementsintentions are be to unlikely viewed particularly as onerous or revolutionary by market participants. virtue of RS 2017/2 appear be to the driven policy by proposals virtue of RS 2017/2 publicrelating to M&A activity put forward the Conservative by reference the fact makes to government.Indeed, 2017/2 PCP commentary boththose “recent proposals account and into take public relation discussion takeovers in to and mergers”. the most profound have the change to likely which is Arguably, and long-lasting impact the is restriction on hostile bidders after14 days publishing offerthe Ruledocuments than less 2.7 announcement.This will clearlya hostile in result bidder being placed a disadvantageous in position from a tactical perspective it will reduce as on the pressure the board of a target expedite to their response. This change appears make to the difficultprospect of making ahostile even bid, takeover more challenging, particularly with the added of risk interlopers process. bid the entering bringThe to forward moves the of timing the intention much impactstatements have to unlikely are on prevailing market practice, bidders given possibly than a hostile in (other typically are situation) clear on the manner and form of their statementsintention the time at of the Rule 2.7 announcement orthodoxy include been bidders to for prevailing has the and statementssuch announcement, that in notwithstanding the response, whereas if the Rule 2.7 announcement and the offer document it would only published were have on the same day, As days. a consequence of the amendments the the Code, to 14 time periodminimum for available the board of the target to prepare its last response been has on 39” “Day circular increased. Post-offer intentionnew statements regime and post-offer mean a target that The changes introduced on8 January 2018 undertakings: and a biddercompany required now are publish reports to on a post-offerany intention statements and post-offer undertakings provided are that during the offer period.contrasts This the with previous practice of providing private reports the Panel to on matters.such also stated bidders that should take 2017/2 PCP Interestingly, attempting qualify avoid care to to statements intention the by usage “present” as of such words and or that “current” intentions the usage the bidder terms by of such wouldnot be considered qualifyingas statements. the intention The been proposals the Code have by transplanted that into

any likely repercussions likely of the bidder’sany strategic plans on thelocation of the target’s headquarters and the functions of its headquarters. its intentions to make any material change material the in balance any make its to intentions ofthe skills or functions of the target’s employees and management; and its intentions for any research andresearch development forits any functions intentions of the target; o o o mean a target company has at least 28 days to formulate its to mean least targeta days at has 28 company document. now Thechanges the introduced Code on to January8 2018 a shortera period. for proposal this the board was that The rationale 2017/2 PCP in produce timeof the to its greater target response would have Rule 24.1 of the Code prevents now a bidder from publishing an Rule 24.1 following14 days the publication offerof document than less theRule 2.7announcement unless the target board consents to are required to cover the same requiredare items. cover to Publication and timing of offer documents in thein offer documentation. By virtuethe of changes introduced a bidder required now is state to its intentions on 8 January 2018, theagain in offer document it that producessuch and statements and employee representatives form to an opinion the to as meritsrelative of the offertheir and give views theon offeror’s proposalstime sufficient in in for those to opinions be included are now required now are be to made the in Rule 2.7 announcement, the in offer as well as document. The stated rationale forthese pension the allow targetchanges to is fund company’s trustees What intention statements statements intention By virtue of the amendments Rule 2.7, to are required to be made o o January 2018. A bidder required now is set to out: January 2018. o It is clear however that in recent years, recent in that the Panel increased has clearIt however is its focus statements in on intention culminating made a bidder, by certain targeted introduced the changes were Code to that on 8 where a bidder definition by is conduct unableto detaileddue diligence and therefore specific state any forthe intentions target’s business. the target’s been has business control once obtained, without givingparticular detail and theextent nature to as review. of that This approach been has seen the in context of hostile offers, Marketcommon practice itfor is that way a such evolved in has a bidder undertake to state it intends to that a general review of is an expectationis from the these statements Panel that intention targeted are and relevant for shareholders and not therefore general nature. in An end to generic statementsUnder Rule of the 24.2 an offer Code, documentmust set out of intention? the bidder’s position on a number of proscribed matters. There on the 2018 Codeintention changes in relation to statements of Commentary from Adam Cain of Pinsent Masons LLP

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 40 . 2017 2016 3%** 3% On going On Section 4: Competing and potential competing bids competing Sectionpotential and Competing 4: 24% Potential 26% competing offers 39% 47% Withdrawn Possible offers (made under 2.4): outcomes* 2.4): under (made offers Possible 57% offers 53% Possible offers and the put up or shut up (‘PUSU’) regime (‘PUSU’) up shut or up put the and offers Possible Progressing to firm 11 Of the 34 possible offers, there were 10 (29%) potential competing bidders with three potential competing bidders competing potential competing bidders with three 10 (29%) potential were there Of the 34 possible offers, for offer Technology Limited’s Materials plc, Element Group Worldpay for offer Inc.’s a firm offer to (Vantiv, progressing for an became which of one and Gemfields) competing actual offer Gold Limited’s Holding Fosun and plc Group Exova further see actualand bids, potential on details competing For bid. also one possible offer which was ongoing as at 31 December 2016 (possible offer for Punch Taverns plc by Emerald Emerald by plc Taverns Punch for offer (possible 2016 31 at December as ongoing was which offer possible one also in 2017. but terminated Limited) Partners Investment with 2016. 15 (44%) possible compared in 2017 being withdrawn in the number of possible offers an increase was There in 2016. withdrawn were (39%) only 13 possible offers during 2017 whereas withdrawn were offers There was a slight decline in the number of possible offers progressing to firm offers in 2017 when compared with 2016. with 2016. compared offers in 2017 when to firm progressing decline in the number of possible offers a slight was There (57%) offers in 2016, 19 out of 33 possible offer during 2017, whereas in a firm resulted 18 out of 34 (53%) possible offers stage. the firm offer to progressed Onex Inc. and Asset Management, Brookfield of by affiliates for IWG plc (possible offer In 2017, one possible offer was in 2018. terminated 2016, there In 2017 but at 31 was ongoing as December (3%) or its affiliates) Corporations Possible offers Possible There targets. to 30 relation bidder in a potential made under Rule 2.4 in 2017 identifying offers 34 possible were There to relation in bidders competing potential (three bidders multiple identifying announcements offer possible three were competing potential two plc and Group Homes Bovis to bidders in relation competing potential two plc, Group Exova plc). Group Worldpay to bidder in relation ‘put up or shut up’ deadline (PUSU) regime. 19 (41%) firm offers (which had progressed from possible offers identifying offers identifying possible from progressed (which had 19 (41%) firm offers regime. deadline (PUSU) up or shut up’ ‘put formal sale process from subject a PUSU deadline and a further to (which had progressed a bidder) were 3 (6%) offers Holdings Harbour Group plc and Sutton Technologies plc, Choo Imagination for Jimmy stage (offers firm the offer to The Panel. Takeover the from not subject dispensation deadline due to the PUSU to were accordingly, plc) and, to 2016 (32 deals or 63%). compared lower was without a PUSU deadline in 2017 beginning of firm offers percentage Firm offers Firm companies to 25 relation in Code under Rule 2.7 of the announcement offer periodIn began with a firm 2017 an offer not subject to the automatic were 47 firm 25 (53%) of the offers (11 Main Market Accordingly, and 14 AIM companies). ** The possible offer for IWG plc by affiliates of Brookfield Asset Management and Onex Corporation or its affiliates at 31 was ongoing as but terminatedDecember on 1 February and 2017 the possible 2018 offerTaverns forplcPunch by Emerald InvestmentPartners Limited was ongoing but December terminated as at 31 2016 on 1 February 2017. * Based on 34 transactions and transactions 33 in 2017 in 2016.

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 41 For oneFor an offer target plc), period (Bowleven commenced with an announcement it had a that initiated strategic review of The its options, target including a sale announced termination of the of its company. strategic review and offer period 2017. on 4 April As at 31 December 2017, 2 out 8 of theformal sales progressed processes terminated ongoing, and are 2 have to 4 have December 2017, As 31 at the firm offer stage. as a 2016 commencedThe2017) in offer periodrelationin to one(which progressedtarget the to firm offer stage in formal sale Harbour process (Sutton Holdings plc). reviewsStrategic For a furtherFor commencing an announcementwith it that was a formal8 targets, sale an offer period began2017 in In eachcase, the Panel granted dispensations targets). from (10 process, decrease a slight from the same period 2016 in the Code requirements interested party for any participating be to publicly process (i) identified that in to be (ii) and subject the compulsory to deadline. 28-day None of the targets PUSU sought a dispensation from the prohibition on arrangements. related offer other or fees inducement Formal sale processes sale Formal Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn ‘We might well expect well ‘We might see to global moreto offers form due their or feeton domesticfully taken falling have before they form on or a new possibility enhanced up the bid- of given not Theintroducing of has politicalGovernment pressures. blocking powerssectors.’ for targets material or significant in

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 42 PUSU extension grantedPUSU & then possible offers terminated going On within initial PUSU deadline PUSU initial within Possible offers terminated deadline PUSU initial within extension grantedPUSU & then firm offer announced Firm offer announced 41% 3% Possible offers and PUSU deadlines PUSU and offers Possible 12% 32% below in relation to PUSU extensions for details. details. PUSU extensions for to in relation below table 12% for Revolution Bars Group plc, possible offer by Jacobs Holding AG for Exova Group plc and possible offer by PAI Partners PAI by plc and possible offer Group for Exova AG Holding by Jacobs possible offer plc, Bars Group Revolution for with Rule 2.6(d), and section 7 4 of Appendix clarify positions in accordance their plc) had to Group Exova SAS for Company Pub Stonegate by Group plc Bars (Revolution target relevant for the same made being a firm offer following Limited). Technology Materials Element plc by Group and Exova Limited In one potential competing offer (possible offer for FIH Group plc by Dolphin Fund Limited), the potential competing potential the Fund Limited), by Dolphin Group plc FIH for (possible offer offer In competing one potential consent to refused because the target statement make a firm offer to a no intention announce bidder (Dolphin) had to The by previously been made offer had and a firm was unwelcome offer competing a PUSU extension (as the potential to extension an grant to would not be able it to Dolphin that confirmed Panel Takeover The 2001). Trust Purpose Rowland of the target. without the consent Group Limited by the Deltic offer (possible competing offers potential were that bidders in 3 other possible offers The In the possible offer for Worldpay Group plc by Vantiv, Inc., 2 PUSU extensions were granted the first extension granted granted the first extension granted were extensionsPUSU 2 Inc., Vantiv, by plc Group Worldpay for In the possible offer second of the day final the on announced being firma with offer days 3 for extension was second the and days 7 for was PUSU extension period. withdrawn were that PUSU extensions in possible offers within their 28-dayterminated PUSU deadline. in 2017 (73%) withdrawn 11 out of the 15 possible offers first 4 extensions granted were for further periods of 28 days each, and the fifth extension was for 1 day (and a firm offer for furtherday (and a firm for 1 each, and the fifth were periods was of 28 days extension extensionsgranted first 4 day). on that announced was 2 (the first extensions granted were extensions 3 PUSU plc, Avingtrans by plc Tyler Group Hayward for In the possible offer on the last being announced with a firm offer further 7 days), for the last extension each and being for periods of 28 days extension. of the final PUSU day plc, Hayward Tyler Group plc, and The Prospect Japan Fund Limited. The latter 3 targets were subject multiple PUSU to were 3 targets latter The Limited. Japan Fund Prospect The and plc, Group Tyler Hayward plc, 7 and between 2016, they varied (in 1 and 28 days between in 2017 varied of extensions length granted The extensions. See 28 days). for IWG plc 2017 (possible offer at 31 ongoing within its initial PUSU periodremained as December One possible offer or its affiliates). Corporation Onex Inc. and Asset Brookfield Management, of affiliates by – the granted were extensions 5 PUSU Ltd, Co. Prospect, by Fund Limited Prospect Japan The for In the possible offer PUSU extensions in possible offers progressing to firm offers to firm progressing PUSU extensions offers in possible initial offer stage did so within their to the firm 28-day (78%) which progressed In 18 possible offers 2017, 14 out of the PUSU periods. with six in 2016). One or (compared firm offers to progressed that 4 targets to in relation granted PUSU extensions were Group Worldpay plc, for Copthorne Hotels Millennium & possible offers to in relation granted PUSU extensions was more PUSU ExtensionsPUSU

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 43 Description The possible offer progressed to a firm offer on 31 May 2017. The possible May 31 offer progressedfirmto a offer on On 22 May 2017, Jacobs announced that it did not intend to make an offer announced make Jacobs itfor did to not that intend bringingExova, 2017, On May 22 the offer periodclose.to a an offer announced make itfor did to not that intend bringingExova, the PAI 2017, May On 26 offer periodclose.to a subjected was PUSU Theto Prospectby January10 2017. made was A possible on offer of TPJF 5 separate extensions before a firm offerwas made. extensions respectively4 of the days the 5 PUSU granted Panel by each of were 28 TPFJ’s at extensionrequest. the allow parties PUSU to was the granted Panel The by of 1 day 5th to discussions. ongoing their conclude Bars. Partners PAI 27 Elementby andMarch were made PAI on offersPossible for by Jacobs,by Exova 2017. was imposed. Element announced a recommended all- April 2017 deadline of 24 A PUSU the of result As a deadline). PUSU the(ie, within initial 2017 19 April cash offer for on Exova (as the firmfirm offer offer wasannouncement, a bid and Rule structed 2.6(d) asa scheme of arrangement) section from days the 4 of Appendix 53 and Jacobs 7 applied giving each of PAI firm offerannouncement clarify to intentions. their the Panel set by as The deadline extended was accordingly 2 June under 2017 until Rule 2.6(d) Partners. for both and PAI Jacobs out 2017/9 Panel in Statement August 2017. August 2017. September deadline of 12 applied and a PUSU Stonegate to deadline August 2017 of 28 A PUSU applied Deltic. to 2017 offeredStonegate recommended a all cash-offer forRevolution, structuredway of ascheme by (as the deal and Rule 2.6(d) As firm of this offer, a result of arrangement August 2017. on 24 structure was a scheme of arrangement) section 4 of Appendix 7 applied, giving Deltic 53 fromdays the firm offerannouncement clarify to intentions. its the Panel by as The deadline extended was accordingly October 10 2017 under until Rule 2.6(d) set 2017/18. out Panel in Statement a firm offer make it did to not that intend forRevolution OctoberDeltic announced on 10 2017 A potential competing offer for Worldpay was made by Vantiv on 4 July 2017. The PUSU was PUSU The 2017. Vantiv A potentialon 4 competingJuly Worldpay offer madewas by for subject two to extensions first and (the the for 7 days second for 3 days). 2017. The possible offer progressedfirmto a 9 August offer on was PUSU The 2017. 31 March AvingtransA possibleTyler madewas offerby on for Hayward subject 3 separate to extensions first (the andeach the final 28 days of two days) of 7 extension request. Haywardat Tyler’s 2017. The possible offer progressedfirmto a offer 30 on June 15 by and Deltic on 2017 31 July offers Possible for Revolution StonegateBars wereon made by Deal Fund Limited Prospect, by Fund Ltd Co. offerannounced) (firm Possible offer Possible for ProspectThe Japan Element Materials Technology Group Element Technology Materials offerannounced) Limited (firm Possible offersPossible for Group Exova by plc by (terminated), HoldingJacobs AG Partners and by SAS(terminated) PAI Limited (terminated, and by and by Limited (terminated, Limited Company Pub Stonegate offerannounced) (firm Possible offersPossible for Revolution Bars Group plc The by Deltic Group Possible offer for Hayward Tyler offer Possible for Hayward Group plc plc (firm Avingtrans by announced) offer by Vantiv, Inc. (firm Inc.offerannounced) (firm Vantiv, by Possible offer for Worldpay offer Group Possible for plc PUSU extensionsPUSU

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 44 Formal saleprocesses (FSPs) the PUSU requirements,the and PUSU feeagreement. a break from benefiting bidder preferred a on prohibition the the requirement to publicly identify bidders, prospective publicly to requirement the • • measures, such as an inducement fee or other offer-related arrangement, without Panel consent, subject to consent, Panel without arrangement, or other offer-related fee such as an inducement measures, certain exceptions. limited FSP, the the an offereeWhere, prior announces an offeror an to offer, announced to make having intention firm a Panel will normally permit dispensations under the Code from: • Rule 21.2 concert of their respective deal protection parties into or any a bidder entering a target, from Rule 21.2 prohibits 12 entities, none had made offer an reflected which (whose financialprospects the valuecompany of the were improving) and therefore it decided the FSP. terminate to offersFirm were made Choo forTechnologies Jimmy plcboth Kors (by Michael Holdings Limited) and Imagination Group Bridge plc Canyon (by Capital Partners LLC). The Stanley Gibbons Group plc announced on 21 November 2017 that it had that become clear from with discussions The Gibbons Stanley November Group 2017 plc announced on 21 numerous interested parties an offeras a that wholecompany forthe to unlikely be shareholderswas to favourable It should be noted whilst that the legacy liabilities remained, contingent and therefore it the was terminating FSP. administrators had been appointed stage. this by although that it had received approaches from several plcPebble announced Beach Systems on 1 December 2017 investors aboutinvestors a prospective equity capital raise and recapitalisation, and the given advanced of the nature proposal, itsit was discontinuing FSP. although that the strategic review had identified potential Group plc June 2017 announced on 27 Topping Frenkel board believed noneacquirers, that of the the Frenkel’s proposals appropriately reflectedthe organic growth of potential thetheit group was in andbest that interests of the shareholders, employeesindependent an as and clientscontinue to pursuing its existing business plan.company, announced)), one was made target a by operatingannounced)), the in chemicals sector and one was made Impact (Plant plc (ongoing)) a targetby operating The industry and leisure hospitality, tourism the in remaining travel, FSPs (Sportech plc (ongoing)). madewere for targets and operatingbankingTopping financial in services(terminated)) & Group plc industry (Frenkel industry finance (TheCo-Operative (terminated)). Bank plc it advanced was in that The discussion with some Co-Operative of its existing Bank plc June announced 2017 on 26 Of the 8 FSPs announced in 2017, 2 (25%) were ongoing as at 31 December 2017, and 4 (50%) terminated, and 2 (25%) terminated, and 2 (25%) and 4 (50%) December 2017, ongoing were 31 at as 2 (25%) announcedOf 2017, in the 8 FSPs 2016. 31 December were ongoingFSPs at as 30% of firmresulted in offers2016, beingannounced. In made were targets by FSPs operating the in computing & IT industry Group2 (25%) plc Technologies (Imagination were bymade targets (25%) operating 2 offerannounced) (terminated)), (firm PebbleSystems and Group Beach plc thein retail & wholesale trade industry (The Gibbons Stanley Choo offer Group plc and Jimmy plc (firm (terminated) In 2017, 8 companies announced FSPs (4 AIM, 4 Main Market), compared to 10 FSPs announced in 2016 (8 AIM, 2 Main (8 announced 2016 in FSPs compared AIM, 10 to 4 Main Market), (4 8 companies announced FSPs In 2017, the announcement was In made 6 out of 8 FSPs, the in a decrease wider (ie, Market) of about context 20%). of a strategic options.review of the company’s Selina Sagayam, Head of UK Practice Transactional Development, Gibson Dunn ‘The use of FSPs has been‘The has lacklustre from start the FSPs setting use of Practice Statement out but framework the perhaps recent the with see will a bit more we clearly more.’

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 45 Co-operation agreements Bid& Conduct agreements Bid Conduct agreement No agreements No Co-operation agreements 54% operation and bid conduct agreements conduct bid and operation - 2% 2% Usage of co 42% Offer-related arrangements Offer-related Usage of cooperation agreements has increased significantly in 2017 in significantly increased has agreements cooperation of Usage 13 Usage of cooperation agreements has increased significantly compared with usage in 2016, where 14 (27%) of deals (27%) 14 Usage of cooperation where agreements increased has compared significantly usagewith 2016, in featured agreements. such As would be expected, these agreements also included reciprocal obligations on the part of bidder and target use their to reasonable provide endeavours to each other with information or assistance for the purposes of obtaining authorisations and any clearances. Holdings Limited by LabTech Investments Ltd which was structured Investments Ltd Cooperation a contractual as agreements offer. Holdings Limited LabTech by morewere common where the target operated the in financial services andindustry the engineeringinstances) (5 & manufacturing Cooperation industry agreements instances). relation targets in to also entered were (3 into operating mining, metals investment, & extraction, thein computing & IT, property, retail & wholesale hospitality, trade, travel, sectors & tourism leisure instances each industry) across (2 andbanking and & finance instanceprofessional(1 services each). 18 deals featuring cooperation agreements18 structured were schemes, as and structured 3 deals were (offers offers as for Millenium & Copthorne Hotels plc City by Developments Limited, Cape plc Altrad by Investments SAS, Market Tech 18 out of 21 of the cooperation agreements out of 21 with targets entered were into 18 with a Main Market listing, and usage was largestfeatured agreements,aggregate such thenotdeals (by limited largest deal to value) althoughdeals: of 8 the 10 cooperation agreements and Atlas also used were the in Gordon smallest LLC plc QInvest deal by (Panmure & Co. and two other deals (The small million)) Japan Prospect Limited Prospect by Ltd Fund Co. (£15.5 Merchant Capital LLC million)). Mariana Resources Limited Sandstorm by Gold Limited (£166.85 (£114.87) and bid clearances. involved the bidder andcooperation a targetinto entering (45%) agreement 21 2017, firm offersOfannounced the in 47 Merchant Capital featured and a ‘Bid LLC) Atlas Conductand Gordon one LLC plc QInvest deal by (Panmure Co. & Agreement’ addition in cooperation a to agreement. for Note that the purposes report, of this included the have we Agreement between enteredTransaction into Kennedy Wilson Europe Real Estate plc and Kennedy Wilson Holdings, a cooperation as agreement. April 2017 Inc. on 24 Cooperation arrangements and other permitted arrangements permitted and other arrangements Cooperation which offer allows parties Cooperation agreements popularity, grown in the driven Rule in exclusion by 21.2(b)(iii) have agree cooperateto to providing and to assistance and commit information obtain to necessary official authorisations

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 46 shall be given by QInvest where beshall QInvest by given AMC provides evidence, to the reasonable satisfaction the full of that QInvest, amount of the Cash Consideration will be paid AMC the by Bidco to of the Date.’ Closing within days seven Nominated Account Bid conduct agreement (cash‘Subject and conditional to upon the Scheme becoming consideration funding)effective, AMC undertakes to andBidco with effectQInvest complyfrom with to its the Date Closing obligations under next[the procure to payment paragraph] of an amount equal the Cash Consideration to Subscription Amount. In Closing the on undertaking shall such Bidco of consideration simultaneouslyDate, with Bidco of the the QInvest issue the Exchange pursuantShares Share to Agreement, to issue AMC the AMC Bidco Shares. On or AMC before procure shall payment Date, to the Funding of an amount equal the Cash the to Bidco Nominated Account Consideration Subscription Amount plus the Option Costs Amount. paymentFacility Such of the Cash Consideration Subscription discharge Amount shall the undertaking given AMC will keep paragraph AMCby [the pursuant above]. to informedQInvest regards as its funding process and provide relevant documentation ifrequested (subject QInvest by to documentationsuch being redacted AMC by where required consentin the With writing for of confidentialityreasons). be extended may Date QInvest, the Funding not a date to after days seven than consent Such later the Date. Closing Panmure GordonMerchant & co. plc Capitalby QInvest LLC LLC and Atlas

­operate write to to ­operate with each cash consideration payable target to shareholders connection in with the scheme. (including for(including the purposes of responding requests to for soon additional as practicable’ information) as and that both parties provide to each other ‘agreed with necessary have information and assistance relation the in filings, to and notificationssubmissions to be madesuchregulatory relationin to clearances andauthorisations’. The bid conduct agreement the in offer Panmure for Gordon set out, amongto other things,Atlas obligations on of a subscriptionprocure, way for by bidco shares, the provision of the cash funding was required that satisfy to the 2016 (2 deals). deals). (2 2016 The bid conduct agreement the in offerPaysafe for Group set outthe undertakings betweenthe target andthe bidder, undertaken has Paysafe including that ‘co-operate to satisfaction ensure with Bidco to of the Regulatory and Anti- regulatorytrust with communicating Bidco in assist any Approvals and to authority for the purposes of obtaining all clearances promptly and to provide reasonably information such Bidco may Bidco as and assistance require to for the purposes of obtaining clearance and making any any a submission, filing or relevant notification to regulatory authority Bid conduct agreements remain unpopular; as the same number of bid conduct agreements recorded were 2017 in Aberdeen or, in certain in Aberdeen circumstances, without or, the of Aberdeen,consent proceed to of an Offer way by thein circumstances described paragraph in below.’ 26 Standard LifeStandard and Aberdeen implement to intend the Merger of the Scheme, way by subject the ability to Lifeof Standard with of the the Panel consent and participants the in Aberdeen Schemes Share and to inform them of the impact of the Scheme on their awards; and manner that would have an adversemanner would impact have that on the value or rights attachingof, the New Shares; to, LifeStandard and Aberdeen will co share incentive schemes incentive share or order in settle to options or vesting under orawards its existing schemes); incentive amendment its to constitutional documents(c) any in reference to a record date after the Effective Date); (b) afterreference a record date (b) to the EffectiveDate); the allotment of further rights or options in (or shares its pursuant than to existingrespect (other of shares) period prior which completion prohibit, to of the Merger, the payment Life Standard by among (a) other things: of the in dividends than ordinary (other course or by Standard LifeStandard will be subject certain to customary restrictions on the conduct of its business during the Standard Life will convene the Life Standard General LifeStandard will convene Meeting held it so is that on the same the as Court date Meeting; Standard LifeStandard and Aberdeen will provide each other with certain information and assistance the in preparation of the Scheme Document, and the the Circular Prospectus; other order in obtaining in assist to clearance from competition and other regulatory bodies order in to satisfy clearances; the such Conditions relating to Standard LifeStandard and Aberdeen will co o o o o o o o o o o o that (in summary): (in that o agreement dated 6 March 2017 with respect conduct to of agreement dated 2017 6 March Agreement, Cooperation the of terms the Under Merger. the LifeStandard and Aberdeen agreed, have among other things, Aberdeen AssetSummary Management of Cooperation plc by Standard Agreement‘Standard Life and Aberdeen a cooperation entered into have Life plc Drafting Examples

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 47 a payment of up tolapses £5,504,943 or is withdrawn to CBFImade, where or and(with the atAcquisition the any consent time before of independentthe such Panel) lapse is not thirdor withdrawalor party makes announces an an approach transactiona competing to Imagination and transaction suchbecomes in respecttransaction effective of a subsequentlycompetingrespects.’ or is declared completes, or becomes unconditional in all Imagination TechnologiesCapital Partners, GroupBreak plc LLC by fee Canyon where Bridge FSP dispensation ‘CBFI, has Canyonbeen granted Bridgecooperation and Imagination agreementon have 26 Septemberentereddated 22 into September 2017 keya (the terms “Cooperation 2017 of whichas amendedAgreement are Agreement”), summarised sets outbelow.the (among The…… Cooperationother things): the circumstances in which Imagination is required to make

Following an FSP initiated by Imagination Technologies Groupplc, Bridge Imagination Technologies Canyon by initiated CapitalFollowingFSP an Partners, announced LLC The partiesfirma offer. dispensationwere granted a break into to enable enter fee to arrangementImagination and £5.5 million on the wording, Bridge occurrence of see a break fee (for Canyon pay (CFBI) ‘Drafting event Examples, Group Bridge plc Canyon by Imagination Capital Technologies Partners, fee dispensation where has FSP LLC—Break been granted’ below. There were two instances of the Takeover Panel granting a dispensation fromThere the prohibition two were on instances break fees of the Takeover under Note There sale no were (formal instances type process ofdispensation). this 2 on of dispensation Rule 21.2 2016. in Choo plc, Jimmy by initiated Michael KorsFollowing an FSP Holdings Limited announcedThe parties a firm offer. were granted dispensation enable Choo to Michael plc pay Jimmy to Kors an inducement fee of £8.96 million if a competing proposal completes, becomes effective is or declared or becomes unconditionalrespects. in all Break fees there was one instance of the Panel granting a dispensation from the prohibition on break fees under Note 1 on In 2017, In offerorsGemfields (Competing Fosun dispensation). by Goldplc HoldingsLimited, Rule 21.2 Gemfields undertook to million, or lesser such determined amount is as with Gold the terms of the $2 agreement, Fosun accordance in pay USD of compensation, way by if following the release of the Rule 2.7 announcement a competing offer for Gemfields (which includes the Pallinghurst offer) becomes is or declared wholly unconditional.

than 1% of the value of the offeree company calculated by reference to the price of the competing offer (or, if of if the there valueare of the offeree twocompany referenceby orcalculatedthecompeting to the of more (or, price 1% offer than competing offerors,the first competing at the time2.7; of the and announcement offer) made under Rule inducement fee any capable is (b) of becoming payable only if an offer becomes is or declared wholly unconditional. offer, providedthat: offer, the aggregate value of the inducement fee orbe fees payable(a) may the that offeree by is de minimis, company ie normally no more Where an offeror an offer announced to make has was which notrecommendedintention firm a by the board ofthe offeree company the announcement timeat of that and not remains recommended, the Panel willnormally theofferee to into consent company entering inducementan fee arrangement with competinga offeror the at time competingthe of announcementa of to its make intention firm Note 1 to Rule 21.2 1 to Note

necessary or requested identify to satisfy and/or regulatory any or competition Offer.’ the Fosun conditions to Gold with relevant all information and assistance reasonably will include the Pallinghurst Offer) becomes is or declared wholly unconditional. In addition, Gemfields Fosun will provide of this Announcementof this a competing offer for Gemfields (which lesser determined amount is as with the terms of accordance in the agreement, of compensation, way by if following the release (at Fosun’s sole election) a sum that is equal to $2m, or such sole election) equal is $2m, that to a sum Fosun’s (at agreement dated 20 June 2017 pursuant to which pursuant Gemfields to has agreement June 2017 dated 20 undertaken Gold subsidiary Fosun any to or pay to to of Fosun ‘Fosun Gold‘Fosun and Gemfields a break enteredinto payment have Break fee in recommended competing offer Drafting Examples Gemfields plc by Fosun Gold Holdings Limited

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 48 ”). The Break Break Fee the Offer third to a dueparty to announcing bid intention firm a withfor Rule 2.7 Kalibrate of the a price Code accordance in at pence or higher, 135 is that (plus of £126,000 Bidco a sum Hanover will pay Eurovestech compensate Bidco for Hanover to its abortive if any) costs VAT long the as payment fee of such not(as is determined the by “ be (the Panel to prohibited the Code) by be the Offer payable that the in event is Fee will not, however, declared wholly unconditional respects.’ all in third partythird to announcingbid a firmforintention in Kalibrate pence with Rule 135 is 2.7 of the a price that Codeaccordance at or higher; or or procure of the accept Offer fails acceptance to Eurovestech (d) respectin of of the all Kalibrate subject Shares its to irrevocable undertaking with the procedure accordance in of for acceptance First Century Fox, Inc.). Reverse break fees more are common onof) the larger offers:(83% 5 out of 6 deals which featuredreverse break fees forwere deals with a value of £500 upwards 2017. million in Kors Holdings Limited (reverse break fee of £17.92 million, deal value £896 million), Imagination Technologies Group plc Imagination Technologies million, deal value £896 million), Kors Holdings break fee Limited of (reverse £17.92 Exova Group plc million), million, deal value £550 Bridge Canyon by Capital Partners, break fee of (reverse £13.76 LLC and The break fee Group million, million) Limited Element deal of (reverse £6.203 by value Technology Materials £620.3 million). million, deal valueProspect £114.87 break fee $2 Limited Prospect US (reverse by Japan Fund Ltd Co., where onlyThis one contrasts reverse with break the fee equivalent was recorded period (Sky plc Twenty- 2016 by in Agreements which impose obligations only on the bidder not are offer-related arrangementsthein (except case of a Co-operation agreements include a reverse may break fee on under thereverse Rule in exclusion 21.2(b)(v). takeover) the occurrence of certain specifiedevents. there 6 instances were of a bidder agreeing a reverse pay break to fee the target to if the transactionIn 2017 failed to Ameccomplete: Wheeler Foster plc Johnby millionreverse Group Wood break plc fee,(£25 deal WS value £2.2 billion), Choo plc Michael Jimmy by billion), Group break fee Inc. million, of deal (reverse £50 SNC-Lavalin value by £2.1 Atkins Reverse break fees fees break Reverse of £126,000 to the bidder to on the occurrence of certain of the events, acceptance including revoked whereof Eurovestech £126,000 offer third to a dueparty Of pence higher. or 135 making a Rule announcement2.7 forthe target was that a at price particular interest, the obligation a break fee pay to extended Asset the actions cover Invesco to of another shareholder, Management its revoked of the offercircumstances. Limited, acceptance similar wherein Invesco While the Codeprohibits a target of its or any respective concert parties from deal protection entering into measures, including break fees, without there consent, no is prohibition the Panel’s on the shareholders of a target paying break While targetfees unusual, the shareholders bidder. to be motivated may agree a break to fee to where they eager are disposeto of their shareholdings a target. in There plc Investors Hanover was one by instance Technologies (Kalibrate plc, agreeing of Eurovestech a targetManagement an irrevocable (in shareholder, LLP) undertaking)break a fee pay to Break fees betweenBreak bidder shareholders the and (c) Eurovestech revokes its of the Offer acceptance revokes to a Eurovestech due (c) accordance with Rule 2.7 of the Code at a price that is 135 pence with Rule 135 is 2.7 of the a price that Codeaccordance at or higher; undertakings accordance Bidco in Hanover to Invesco by given with the procedure of for the Offer acceptance third to a due partyto announcingbid a firmforintention in Kalibrate with Rule 2.7 of the Code at a price that is 135 pence or higher; with Rule 135 is 2.7 of the a price Code that at or procure of the accept Offer fails acceptance to in Invesco (b) respect of the of all Kalibrate subject Shares the irrevocable to (a) Invesco revokes its of the Offer acceptance revokes third a to partydue Invesco (a) to announcingbid a firmforintention in accordance Kalibrate Break fee from offeree shareholder‘In that: the event Drafting Examples Kalibrate TechnologiesManagement plc by Hanover LLP Investors

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 49 ­operation ­operation and modified, failed(whenreaffirm to theyor have requested by their unanimous and unconditional GroupWood do so), to recommendation the Amec that Wheeler Foster Shareholders of the Scheme; favour in or vote following the break fee trigger(v) paragraph in above or (iii) (ii) but lapse or prior termination of the any Scheme, to the Wood Group Resolutions passed are the Group Wood at General Meeting.’ with the effectCombinationthe lapsesin that terminates or of theCode. with Rule 12 accordance No break fee will be payable if: certain already(i) occurred termination have events prior to the relevant break fee trigger;; the relevant break fee(ii) trigger was caused a material to extent Amec by Wheeler’s Foster breach of its co assistance obligations connection in with merger and control regulatory clearances and authorisations shareholder or key documentation;; Group Wood exercised has (iii) its implement to right the an Offer as Combination Co thewith in accordance Agreement circumstances in where party’s a third firm an offer make for to Amecintention Foster Wheeler has been recommended the Amec by Wheeler Foster Directors or the Amec Wheeler Foster Directors withdrawn their have recommendation of the Scheme;; prior the the relevant Amec to break(iv) fee Foster trigger, Wheeler Directors withdrawn, qualified have or adversely

a Rule 12 Event takes place on place takes or prior or the Event Longstop to Date; a Rule 12 priortheto 14 days is pm thewhich on date Regulatoryany 11.59 Condition not has been satisfied or thewaivedby bidderby long-stop date bidder invokes any of the Regulatory any bidder invokes cause proceed, Conditions so not to the to as acquisition lapse or be withdrawn; o o o o o 31 July 2017, or any Regulatory Condition has not been satisfied or waived by SNC-Lavalin or Bidco by 11.59 pm on 31 July 2017. 31 July pm on 11.59 Regulatory or any Condition not has been satisfied by or Bidco SNC-Lavalin or waivedby July 2017, 31 Exova Group plc by ElementThe bidder agreed a reverse on pay break or to fee prior the million if, long-stop of£6.203 to date: Materials Technologyo Group Limited WS Atkins by SNC-LavalinLavalin agreed a reverse Atkins break pay fee of compensation to be million way of £50 loss or damage suffered may for that any Group Inc. Regulatory any Condition on or prior invoke) to Panel to permitted is (and the Takeover or by Bidco invokes if SNC-Lavalin Atkins by Deals in Focus (v) the CMA refers a second the to Combination (v) phase review Appendix not Announcement this or conditions 1 to have such been satisfied andresult,as a Date Stop or thewaivedby Long or each case,in the lapses Combination or terminates; (with the permission of(with the Conditions set of the Panel) any the the case (in of paragraphs 12—15, out paragraphs in 15 2 to relevant “Third Party” being a regulatory authority) of Part A of Foster Wheeler to do so);; WheelerFoster do so);; to on or Group Wood before invokes (iv) Date, the Long Stop the Combination in the Circular orthe the withdraws, in Combination Circular qualifies or modifiessuchrecommendation adversein any manner or fails reaffirm to such (whenrecommendation requested by Amec (iii) Wood Group Wood does(iii) not include the unanimous and unconditional recommendation of the Group Wood Directors Group Wood to Shareholders of favour in vote to Foster Wheeler), no vote has been has Wheeler), noFoster vote held on the Group Wood Resolutions;; (ii) as at 5:00 p.m. on 15 June 2017 (or such other date as as other such date (or June 2017 5:00 at as p.m.(ii) on 15 be agreedmay writing in between Group Wood and Amec payment of, a break feepayment of £25,000,000 of, if: the Group Wood Resolutions(i) not are passed the Wood at Group General Meeting;; ‘By of compensation way loss or damage may for that any be sufferedby Amec Foster Wheelerconnectionin the with or procure the Combination, Group Wood agreed has pay, to Amec Foster WheelerReverse plc break by John fee Wood Group plc Drafting Examples

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 50 Not spe cified No undertakings Hard undertakings Semi-Hard undertakings Hard semi-hard & undertakings Soft undertakings 43% 2% 2% 21% 11% director shareholder undertakings* shareholder director - 21% Non Irrevocable undertakings CTI agreed Hale Limited purchase and agreed Hargreave to sell CTI to to aggregate in Shares Waterman 2,575,000 pence per representing share, approximately 8.37 140 perat on of the cent. 8 capital share issue in of Waterman May 2017 CTI agreed agreed purchase sell and CTI Traction AB to to to aggregate in 140 Shares 5,295,000 at Waterman per on of the 8 May cent. capital share issue in of Waterman pence per representing share, approximately 17.22 and 2017, 14 o o o in relation thein offer Waterman to Group. forthe Under the conditional sales agreements: o LLP, Circle Trustee, Lansdowne Partners, Trustee, Circle Richard Griffiths and Balderton CapitalLLP, provided semi-hard undertakings which would lapse on the making of a higher competingTosca offerby another bidderat a value is to which or equal exceeds or 30 morethan pence pershare). 110% offerby price Fund’s Waterman Group Oneby forplc deal (offer CTIEngineering Limited)Traction featuredCo. targetshareholders (AB Hale conditional Limited) saleand entering Hargreave into agreements with the bidder respect in of their target shareholdings. Completions of the sale agreements conditional were on release of the Rule 2.7 announcement CTI by within the Waterman corporate group. classified however, have, We this as an undertaking froma non-director shareholder(as he was not at the time a director of the target). Hardundertakings willremain binding party if third a competinga makes offer whereas a semi-hard undertaking will be to bindingcease if a higher competing offeris madespecified a at or above certain of a in at aexcess or price price, Fund ToscaAsset PentaManagementpercentage andCapital(eg,LLP ofthe Circle in original Holdingsoffer by plcprice * Irrevocables inthe offer Watermanfor Group pc by CTI Engineering Co. Limited did not specify their type of undertaking.Further, the undertaking was from Neil Humphrey who was not a director of Waterman Group plc at the time, but who was a director of other companies In a number of deals in 2017, irrevocable undertakings non-director by given were shareholders of bidders favour in In a number of 2017, deals in a varietycovering of matters. Non-director shareholders provided bidders with traditional irrevocable undertakings featured semi-hard deals (37%) featured hard undertakings 10 only, deals (37%) deals. Of deals, 10 these 27 (57%) 27 in featured both and hard semi-hard featured softundertakings one undertakings deal (3%) only, 5 deals (18%) only, undertakings did not specify and one deal (3%) the type of undertakings given. The prohibition on break fees and other offer-related arrangements has seenother forms of deal protection,as such irrevocable undertakings, prominence. greater gain semi-hard and undertakingsHard (non-director shareholders)

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 51 subsection Break fees between the 2.4.2 notify to (ii) third the you approach details any of any by party made with a view the making to an offer of such or a mergersuch solicitation such and also of any or discussions (whether or not breach in of the obligations set deed) out this in immediately become we of the relevant aware matter...’ Revolution BarsLimited Group plc by StonegateNon-solicitation Pub Companyshareholder and notification irrevocablePartners undertakings undertakings Ltd) in (Castlefield agree: ‘2.4 We Fund ….. 2.4.2 regarding discussions solicit not any to into or enter (i) general offerordinary Company’s forthe other class shares or any of its party third from shares any proposal or any for a merger of other entity; with any the Company and in relation to the offer for Kalibrate Technologies relation the in offer to plc. for Kalibrate Break fees (non-directorBreak shareholders) onesaw instance oftarget a shareholder agreeing, irrevocablean in undertaking, 2017 breaka fee pay to on the occurrence of certain break fee events. The obligation a break fee pay to extended actions to another by target Seeshareholder. further Offerrelated arrangements, Section discussion in 13: shareholders and bidder Materials Technology Group Limited), included Group Limited), commitments Technology Materials which pursuant the to target shareholder agreed that it would not solicit or encourage parties third a competing make offer to forthe target and a further obligation on theshareholder notify to the bidderif parties third indicatedlead offer an could interest an that to company. forthe Non-director shareholders alsonon-solicitation given have undertakings irrevocables in relationtwo in to otherdeals (Servelec Group plc and Montagu ASA Resource by Group plc Funds Investments Rich Ltd). by Pro number of hard undertakings from non-director shareholder in 2017, which may explain which may there been has why number a decline of hard undertakings from non-director shareholder 2017, in rights. topping or matching in (non-directorundertakings notification and shareholders) Non-solicitation Irrevocables from non-director shareholders bidders to 3 deals (Revolution in Bars Company Group Pub plc Stonegate by Limited,Kennedy Wilson Europe Real Estate plc Kennedy by Wilson Holdings, Inc. and Exova Group plc Element by provided solely right, one formatching a deal (Styles Group & Wood Squareplc Holdings Central by Limited) provided solely for a topping and right 6 provided for and topping both matching rights (Servelec Group plc Montagu by Funds, Group plc Hayward Avingtrans by Tyler Asset Holdings Circle Managementplc Capital Toscafund and by Penta LLP LLP, plc, plc Betsson by NetPlay and Electric (Publ) AB plc Riccardo by Auletta Silva and Word Marco and Revolution Bars There Limited). been has Company Group Pub a significant plc Stonegate decrease by thein number of non-director seen a greater have we However, deals). (18 shareholders or topping matching rights containing compared with 2016 Matching or toppingMatching rights the allow original bidder a limited period on a higher orimprove of match time which in to competing offer beforethe undertaking lapses. instances in 9 one or more irrevocable undertakings by non-directorgiven 2017, firm offersOfannounced the in 47 shareholdersor contained topping matching rights of a competing the in event bid. Of these 9 deals, two deals Technologies(GemfieldsPallinghurst by plc Investors Managementby LimitedplcResources Hanover and LLP) Kalibrate Matching or topping rights (non-director rights shareholders) or topping Matching discussions with a view to any Third with Partydiscussions a view any to Proposal and shall notify the Bidder or the Bidder Adviser Financial writing in immediately upon approach.’ such receipt of any [We] further[We] irrevocably undertake the Bidder:… to not, shall we directlythat solicit or indirectly, or initiate as a whole or (c) any other transaction which under Rule 21.1 of other transaction any a wholeas which or under (c) Rule 21.1 the Code would require shareholders approval by of the Target whichand the to Bidder not has its given prior written consent… or transaction for the transfer or all interest in substantially of any part Group or any in of theall business and assets of the Target Group, taken thereof the in context which material is of the Target involve any person any orinvolve group of persons acting concert in (other thethan Bidder and persons acting concert in acquiring with it) arrangement any Target; (b) definedthe of Code) thein (as control ‘“Third scheme Partyof offer, any Proposal” means (a) arrangement, or other issue share transaction which would Non-solicitationshareholder and notification irrevocablePartners undertakings Ltdundertakings and inFranklin (Quantum Templeton Strategic Institutional, LLC) Drafting Examples Kennedy WilsonWilson Europe Holdings, Real Estate Inc. plc by Kennedy-

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 52 then the Circle Trustee may notify may writingthen Bidco in Trustee the Circle within two of the expirydays period day ten of such that referred (b) in to the terms of the irrevocable undertaking will will lapse (which the competing accept offer).’ to Trustee theallow Circle rights (Circle Trustee,Capital) Richard Griffiths ‘Theand undertaking lapse shall on the same theas Circle basis Balderton Directors’ irrevocable undertakings respect that, in save of the of: the in event Trustee, Circle prior the Offer to becoming,(a) or being declared, an announcementunconditional acceptances, made to is as party a third by with Rule2.7 of the Code accordance in of a competing offeris a generalwhich offer issued all of for the beand which to includes issued of shares the cash Company per of the cent. value consideration equal or exceeding to 110 of the cash consideration per Ordinary available under Share Trusteethe terms of thedetermines Offer and the which Circle moreis attractive value the attributable than overall under the Offerconsiderationregard totaltheto having the of Offer and the competing offer and Bidco does announcement of such not, within(b) days ten announce a competingof such offer(a), referred in to Trustee determinesrevised values offer the which Circle each Ordinary the a price equal than or at Share greater to value of consideration per Ordinary under Share the relevant competing offer, Circle Holdings plcLLP by Tosca Fund AssetSemi-hard Management undertakings and matching / topping Bidder, in accordance with Rule 2.7 of the its in Code, accordance in place Bidder, with Rule 2.7 of the accordance in or announced is Bidder, by or lapsing of withdrawal.’ such Business Days withinCode, 10 for the avoidance of doubt,for suspension not the include shall of avoidance any the timetable revised and applicable no new, Scheme) any to or replacement Scheme or Offer has been announcedby Bidder it doesannounces that proceed to not intend with the Acquisition; or if the Offer(d) theor Scheme(which, lapses is or withdrawn proceed with the Acquisition; if the Offer theor (c) Scheme lapses is or withdrawn and noon (London time) on 19 April 2017 (or such later date as the as date later such (or April 2017 onnoon 19 (London time) parties undertaking this to agree); may if Bidder or it does announces (b) that make to not intend shareholders a general at meeting of Exova, receive to and retain the proposed dividend final 31 forthe periodto not is released of 2.35 pence by per share), December 2016 event on such terms that entitle each Exova on terms that such shareholderevent (i) pence receive not cash in less 240 for than to each Exova they holdShare conditional on Exova approval and (ii) by conditions of the Acquisition as they relate to us, our in to they relate as conditions of the Acquisition capacity a holder as of Exova be Shares, required may as or agreed between the board of Bidder and Exova (but any in (a) if the Press Announcement, if the Press subject modifications such to (a) and amendments, do as not adversely affecttermsthe and … This undertaking14. lapse shall and our obligations under this undertaking effect: have to will cease you promptly of any approach promptlyyou party a third of any by which would reasonably be expected lead offer an to to for Exova; with the Acquisition, whetherwith the Acquisition, conditionally or unconditionally means the same whatever be(by to is implemented) nor negotiationeffect such any to into enter informor to fail … solicit, directly othercompetition offer any orin indirectly, (e) undertaking (TABASCO B.V.) undertake We Bidder to before that undertaking this ‘(2) lapses not: shall we below, with paragraph accordance in 14 Group Limited Non-solicitationshareholder and notification irrevocable undertakings undertakings in and hard Exova Group plc by Element Materials Technology

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 53 Disclosure of bidder’s intentions - business, employees andpensions employees - business, intentions of bidder’s Disclosure disclose earlier their on the intentions in process, their in Rule 2.7 firm offerannouncements (in addition to setting the in out offer their intentions or scheme and document), be more specificthey aboutrequired specific are suchthat to make their intentions statements in intention of R&D functionsrelation any to of the target, the changes balance of to the skills any and functions of the target’s employees and management and the repercussions likely of the bidder’s strategic plans on the location of the target’s headquarters and headquarter functions • • requirements will with monitor these compliance new/revised our in We future public M&A trend reports. Code changes Code after(ie, theFollowing thechanges Codereview endto effective this of period)relationin to January 8 bidder 2018 statements bidders of intentions, required are to: 15 in thein target’s head the relocation count, of its headquarters, the combining of administrative and operational functions seen bidders setand the however, resignation of the out target their plans more board. have, comprehensively. We also saw a number of bidders stating existing that employment rights management of all 2017 and employees would be honoured and pension obligations complied with. In 15 offer or scheme documents,In15 bidders made at (or leastdefinitive current no statements intention they that had no changes. bidders post-acquisition material Despite many assurances, such any still make stated to where that intention) synergiesbe could identified changes would inevitable. be number A of negative statementswerequalified, other eg, thethan potential relocationor the target ofaccordingly the (and target’s directorshead office heademployees), office be to directorsceasing of the target, changes. post-acquisition material the bidder any make to had no intention Where bidders a position in were disclose to more detailed information, their the related reduction plans likely usually to acquisition strategicacquisition identify reviewto future operational improvements where synergies and efficiencies could be theachieved enlarged across would not do after group so it or had until decisions that not made (and any the review). In some instances, these generic statements qualified, were for example,the that existing boardthe of targetwould of delisting result a as that of the target’s following resign and/or on shares thethe acquisition Main Market or AIM, certain functions no longer may be required/will be reduced size. in We reviewed 41 offer or scheme documents that had been published by 31 December 2017 in relationin to bidder offer or scheme documents31 reviewed hadDecemberthat 41 2017 beenWe publishedby statements. intention offer or scheme documentsthe bidderissued a genericIn 11 somewouldstatement it initiate that form of post- Under the bidders Code, also are required the consider effects to of an offer on a target’s pensionscheme to and disclosethe in offer document suchits regard with to schemeintentions andtherepercussions likely those on schemes of its strategic an appropriate plans, negative make or statement. to These do provisions not apply a pension to scheme basis. contribution’ ‘defined a benefits on only pension provides which the bidder changes, a negative such must statement make or any where make Under to no it Rule has intention 24.2(b), considers its strategic plans for the no target repercussions on matters. such will have Under Rule 24.2(a) of theformal a Code, offer should setcontinuedregards as outthe employment bidder’sintentions UnderRule 24.2(a) of the target’s employees, the change conditions material of to employment, including any the impact as well likely as of strategic plans for the target on employment, fixedassets. of place business and any

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 54 to determine organisationalto and any structural changes that should be implemented benefit to Combined the Entity. does not expectSNC-Lavalin integration have review this to impacta material on the employment continued of Atkins’ employees. order in that The recognises, board however, of SNC-Lavalin the expected achieve to benefitsthe of someacquisition, operational and administrative restructuring will be required bothacross legacy organisations following completion of the acquisition. The synergy work carried out date to confirmedhas to thecost generate forpotential savings management with significant team experience and expertise deliverto an effective AtkinsSNC-Lavalin. integration and of The brand, current Atkins and Atkins including Faithful+Gould integration will remain during place in period. this Acuity, will Following completion of SNC-Lavalin the acquisition, undertake a group wide review the exercise to SNC-Lavalin positioning strategy and part an assessment will involve of this feedbackof client integrated is with the Atkins once SNC- Lavalin business. a separate will remain as Atkins business reporting through the integration line within SNC-Lavalin period. agreedBidco has the in Cooperation Agreement for that at least twoyears full financial followingthe effective it: date, periods notice terms relating to not reduce shall any or (i) fully shall pension observe (ii) or accrual contributions; the existing contractual and statutory employment rights of the management and employees Group’s Atkins’ accordance in localwith applicable custom and practice; shall law, and (iii) the remuneration that ensure terms for management Atkins and employees no are worse aggregate. in As part of the integration process, a review of the Atkins’ businesses will be completed with leadership the Atkins team Save in respect in Save redeployment of any of fixedassets in connection with the envisaged relocation of Novae personnel shared in Londonto office space alongside currentthe AXIS described as team AXIS redeploy to above, no has intention fixedassets any Acquisition. of the of result a as Novae View of the Novae Board The Novae Board pleased is the note statements to made AXISby section this in the existing 6 that contractual and statutory employment and pension rights obligations of, existingowed to, management and employees of the Novae Group willbe fully safeguarded. Whilst the Novae Board notes be there to likely a reduction that is that headcount in the in to Enlarged intention pleased Group, it is AXIS’ it is that note to employeesconsider of both AXIS androles, Novae fill to based approach..’ meritocratic a on WS Atkins plc byOfferor SNC-Lavalin intentions—strategic Group Inc. ‘Existing employment rights management of all and review to employees will be honoured and pensionobligations undertaken complied with. an integration has which plan follows place, in SNC-Lavalin the roadmap successful laid out the in Kentz and acquisition, a integration will not be certain and the impact on they will have the EnlargedGroup not known. is yet and of outcomes corporate, operational and administrative is completeis and AXIS engaged has with the appropriate stakeholders (including, if applicable, consulted having thewith detailed employee representative bodies), steps integration of the two businesses. the integration planningUntil and organisational design will be implemented. Further detailed analysis will need be to undertaken the AXIS by Directors. AXIS expects part that, as roleof his described Matthew above, with will assist the Fosh in those areas as well as indirect cost savings. However, as as indirect as those well in as areas savings. cost However, Scheme of this the date at Document, proposals remain in reductions headcount such where and how to as development has confirmedhas to thecost generate forthepotential savings Enlarged Group primarily through corporate, functional and administrative efficiencies, including reducing headcount, It is AXIS’ intention to consider employees consider to of both intention AXIS AXIS’ It is and roles Novae fill to theEnlarged within Group, based on a meritocratic approach. The synergy work conducted date to underwriting management role on the leadership of team International Division.AXIS Insurance’s Employees Albert Benchimol and Chief Executive (President Officer of expected it is Additionally, AXIS). Robert that Forster (Chief Underwriting Officerwill be appointed ofNovae) to a senior be appointed as AXIS’ Executive Chair, Europe. Among Europe. his be Executive appointed AXIS’ as Chair, responsibilities new his role, in Matthew will help guide Fosh the integration of the two businesses and will report to Management expectationFollowing completion AXIS’ it is of the Acquisition, Matthew Executivethat (Chief Officer will Fosh ofNovae) or the admission of new members. applicable All will be laws observed respect in future proposals of any on pensions. to make any changes in relation to the Novae Group’s changes relation the in Novae to any Group’s make to current pension schemes, including relation employer in to contributions, the of benefits accrual for existing members, employees, however, when Novae closed Zurich,employees, its in office however, Switzerland, plan this was closed and the related assets and liabilities transferred with the employees. There no is intention Novae operates a defined contribution(specifically, plan a group personal for pension UK employees. plan) Novae previously participated a defined in benefit Swiss plan for employment and pension rights obligations of, owed to, existing management and employees of the Novae Group will be fully safeguarded. the existing management and employees of the Novae Group. AXISthe confirms, that existingcontractual and statutory of Novae personnel to a single location in London alongside alongside London in location single a personnel to Novae of the current AXIS team. AXIS attaches importance great the skills to and experience of transition to a singletransition managing to agency and syndicate. It is envisaged the integration that process approximately will take lead completeone the and to relocation will to eventually year division of AXIS’ insurance segment insurance division and part of that,as AXIS’ of the process, Novae will adopt the AXIS International Insurance expected it is brand. Additionally, Novae that and AXIS will Details of intentions expects‘AXIS Novae that will operate within the international Drafting Examples Novae Group plc by Axis Capital Holdings Limited

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 55

and motivating the best talent the Combined across Group. a stableOnce create integration completed, is to aims Elis working environment across the Combined Group facilitate to development. employee to safeguard intends it that confirms the Elis existing employment and pension rights existing of all management and employees of Berendsen with applicable accordance in law.’ on employment or the location of places of business once integration planning complete is and detailed restructuring proposals and potential impacts known.are of Finalisation the proposed integration plan will be subject engagement to and management including stakeholders, appropriate with bodies. representative employee Aberdeen each confirmedthe and Life that Standard have existing statutory and contractual employment rights, including accrued pension rights Life Standard of all and Aberdeen employees, will be fully safeguarded upon and following completion of the Merger. Both Aberdeen and the Life Standard HMT to signatories are Charter Finance in Women and the Combined Group will set a single target reflect to companies’ commitmenttheto both importance of diversity.’ Berendsen plc byOfferor Elis SA intentions—to environment create a stable ‘Elis attaches importance great working the skills to and experience of the existing employees of Berendsen. to intends Elis approach the integration of the broader management team an openin and transparent manner with the of retaining aim Aberdeen andLife Standard will engage with and consult employees and their representative bodies with accordance in their respectivelegal obligations impacts with regard any to rationalisation and consolidation of premises where Aberdeen rationalisation and consolidation of premises where Aberdeen and Life Standard already operate from multiple locations a in close geographic proximity. and vacancies. As part of the planning process Aberdeen and Life Standard will look maximise to operational efficiencies including the turnover. Other appropriate steps will beturnover. minimise taken to the number of compulsory redundancies, including the active recruitmentmanagement and Life’s of Standard Aberdeen’s the Combined Group as at 31 December 2016 ofapproximately December 2016 the Combined Group 31 at as 9,000 the three integration period. year over will Synergies partcome in from employee departures arising from natural Combined Group. At this time estimated itCombined is this the that Group. At integration and restructuring a phased in will result reduction of approximately 800 roles from the total global headcount of Aberdeen and Life Standard expect cost achieve to synergies where duplication exists taking and by advantage of opportunities leverage to the additional scale of the to achieve the expected achieve to benefitsthere will be a the of merger, need maximise to operational efficienciescost and synergies. both companies. order in that LifeStandard and Aberdeen recognise, however, management and employees. The Combined Group will offer significant opportunities for employees in a of greater business andsize scope incorporating the skills and talent present in Offeror intentions to reduce and Life Standard attach‘Aberdeen importance great to employee numbersthe skills and experience and Life’s of Standard Aberdeen’s Aberdeen AssetLife Management plc plc offer by Standard those areas as well as indirect as those well as areas savings.cost The itsCombined head in Entity have office to will continue Montreal, Canada.’ the Combined Entity through corporate, functional and administration efficiencies, including reducingin headcount

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 56 Disengagement by employee representatives and representatives employee by Disengagement pension scheme trustees in UK M&A continued in 2017 in M&A UK continued in trustees scheme pension Employee representatives’ and pension schemes trustees’ opinions trustees’ schemes and pension representatives’ Employee 16 There were two instances of pension scheme trustees providing an opinion in 2017 (AmecThere Wheeler Foster two were instances plcJohn of pension by scheme trustees providing an opinion 2017 in there was only one pension scheme trustee’s In 2016, Group, Inc.). GroupWood plc plc and SNC-Lavalin Atkins WS by opinion Polythene (British Industries plc RPC by Group plc). The employee EEA representative workforce of Berendsen’s and stated Elis by the acquisition to that consented will strengthen wouldthe acquisition acquisition the market position of Berendsen plc. SA, and Elis which will be complementary one to another there and that was expectation an former equal that employees will Berendsen’s have rights, and equal given are opportunities, employees, current Elis’ as after the acquisition. opinion trustees’ schemes Pension plc by John Wood Group plc and Berendsen plc by Elis SA). This is in line with what we saw in 2016 (opinions in Dee in (opinions plc Johnby Group Wood This plc line in with 2016 saw in is what we and Berendsen SA). plc Elis by Limited and UK Mail Group plc Water Deutsche by AG). Post Group plc Severn Trent by Valley directorate’The both appears employee ‘union representative (which cover to and pension of Amec trustee Foster roles) Wheeler an opinion on the gave proposed deal and stated it was not possible that ascertain to the consequences relating employmentto and pension benefitsconsidered and the to incomplete, statementinsufficientbe and intention of and posed numerous questions. intentions for the targets’intentions business, employees and pension schemes earlier on the in offertimetable, when they make announcements. offer firm their opinion representatives’ Employee offers Offirmly announced the 47 in Engagement employee by representatives UK in M&A 2017. in slightly improved there only were two instances of the target’s employee representatives giving opinionan (Amec Wheeler Foster 2017, representatives scheme /pension trustees deadline, this their miss opinions must be published on the target’s website. Representatives publish and further to right a trustees also have opinions if an offerrevised.is will we However, Disengagement employee by trustee representatives and pension scheme trustees 2017. in continued monitorwhether engagement increases number and greater a of opinions appended are offer to and scheme documents requiring biddersto provide information following the their Code recent on changes (effectiveJanuary 8 2018) 2018 in Under Rule 25.9 of the the Code, targetUnder Rule board where 25.9 the under is an obligation append to its to response (or, circular offerrecommended,is the offer document itself)(a) opinionprepared by the target’sany employee representatives on the effectthe of anyoffer opinion on(b) employmentprepared by theand pensionscheme trustees on the effect document is published. receivedif of If the the offer employeebefore theon the circular/offer pension scheme(s),

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 57 Shawbrook Group plc Street Capital Pollen by Limited and BC Partners LLP Styles Group & Wood Square plc Holdings Central by Limited Sutton Harbour Holdings LLP Investors plc FB by Property Bidco Limited Limited Wren by Taliesin Fund and Canary Bidco Limited The Prospect Limited Prospect by Japan Fund Ltd. Co., plc Innovations IP Group by plc Touchstone Group plc CTI by Waterman Engineering Limited Co. Inc Group plc Vantiv, Worldpay by Group Inc. plc SNC-Lavalin Atkins WS by Deals included in the report the in included Deals Servelec Group plc Montagu by Funds Merchant Capital LLC GroupPaysafe plc Blackstone by Management Partners and CVC CapitalLLC Partners Limited plcQuantum Pharma Group Clinigen by plc Revolution Bars Company Group Pub plc Stonegate by Limited (lapsed) Millennium & Copthorne Hotels plc City by Developments Limited (lapsed) Monitise Inc. plc Fiserv, by plc Betsson by NetPlay (publ) AB Novae Group plc AXIS by Capital Holdings Limited and Atlas Gordon LLC plc QInvest Panmure by & Co. Wilson Holdings, Inc. Holdings, Wilson Ladbrokes Group Coral Holdings plc GVC by plc Gold plcLonmin Sibanye Limited by Mariana Resources Limited Sandstorm by Gold Ltd Investments Holdings Limited LabTech by Market Tech Ltd InterQuest Group plc Chisbridge by Limited PropertiesIntu plc Hammerson by plc Choo plc MichaelJimmy by Kors Holdings Limited plc Investors Hanover by Kalibrate Technologies Management LLP Kennedy Wilson Europe Real Estate plc Kennedy- by Hayward Tyler Group plc plcHayward Avingtrans by Tyler Hornby plc Ltd Phoenix by UK Fund Group Bridge plc Canyon by Imagination Technologies Capital Partners, LLC Industrial Multi Property plc Hansteen by Holdings Trust plc Limited Group 2001 plcFIH The by Rowland Purpose Trust (lapsed) Gemfields Fosun Goldby plc Holdings Limited GemfieldsPallinghurst by plc LimitedResources Gordon Dadds Group Group plc Limited Work by and Penta Capitaland Penta LLP Dragon-Ukrainian Properties and Development plc by Dragon Capital Investments Limited WS Verint SolutionsHoldingsEG Limited plc offerby Electric plc Riccardo by Auletta Silva and Word Marco Exova Group Group plc Element by Technology Materials Amec Wheeler Foster plc John by Group Wood plc ASA Resource Group plc Investments Rich Limited by Pro Berendsen SA plc Elis by plc Booker Group plc Tesco by Cape plc Altrad Authorityby Investment SAS Asset HoldingsCircle Management plc Toscafund by LLP 2017: Firm offer announcements offer Firm 2017: Aberdeen Asset Management plc Life Standard plc by Aldermore Group plc FirstRand by Limited

Market Tracker Trend Report

Trends in UK public M&A deals in 2017 58

(terminated) Worldpay Group plc Bank JPMorganWorldpay Chase by (terminated) offerannounced) Inc (firm Group plc Vantiv, Worldpay by Group offer plc (firm plc SNC-Lavalin Atkins WS by announced) Formal sale processes and strategic reviews Bowleven plc – strategic review (terminated) Group plc – formalsale Topping process Frenkel (terminated) Group plc – formalImagination Technologies sale offerannounced) process (firm Choo plcJimmy – formal sale offer process (firm announced) GroupPebble plc Beach Systems – formal sale process (terminated) ImpactPlant plc – formal sale process Sportech plc – formal sale process The Co-operative Bank p.l.c – formal sale process (terminated) The Gibbons Stanley Group plc – formal sale process Company (terminated) Company (firm offerannounced) (firm The Gibbons Stanley Groupplc Disruptive Capital by (terminated) LLP Finance plc Innovations IP Group by offer plc (firm Touchstone announced) The by Kraft Heinz plc N.V. Unilever and Unilever and BC Partners offerannounced) (firm LLP HealthcareSpire Group plc Mediclinic by International plc (terminated) The Property Group plc Belvoir Franchise by Lettings plc (terminated) The Prospect Limited Prospect, by Japan Fund Ltd Co. Revolution Bars Company Group Pub plc Stonegate by offerannounced) Limited (firm Revolution Bars Group plc The by Deltic Group Limited (terminated) Rurelec plc Patagonia by Energy Limited (terminated) Shawbrook Group plc Street Capital Pollen by Limited Paysafe Group plc by Funds managed GroupPaysafe Blackstone plc by Funds by and CVC Capital Partners offerannounced) (firm plcQuantum Pharma Group Clinigen by offer plc (firm announced) RedstoneConnect Holding plc A P Systems Limited by (terminated) IWG plc by affiliates ofBrookfield plc affiliates IWG by Asset Management, Inc. and Onex Corporation(terminated) or its affiliates Ladbrokes Group Coral Holdings plc GVC by plc (firm announced) offer Millennium & Copthorne Hotels plc City by Developments offerannounced) Limited (firm Gordon Dadds Group Group plc Limited Work by (firm announced) offer Groupoffer plc plcHayward (firm Avingtrans by Tyler announced) InterQuest Group plc Chisbridgeoffer by Limited (firm announced) Exova Group (terminated) plc Holding Jacobs by AG PartnersExova SAS (terminated) Group plc PAI by Group plcFIH Dolphin Limited by (terminated) Fund Gemfields Fosun Goldby plc (firmHoldings offer Limited announced) Gocompare.com Group plc plc ZPG (terminated) by Bovis Homes Group plc plcGalliford (terminated) by Try Bovis Homes Group plcRedrow by plc (terminated) Bison GroupBrave plc Zinc Media by Group plc (terminated) Exova Group (firm plc Element by Technology Materials announced) offer Aberdeen Asset Management plc Life Standard plc by offerannounced) (firm Aldermore Group plc FirstRand by offer Limited (firm announced) offerBerendsenannounced) (firm SA plc Elis by 2017: Possible offer announcements offer Possible 2017:

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Trends in UK public M&A deals in 2017 59

Camilla Grierson Paralegal Claudia Claudia Gizejewski Solicitor

Anna-Maria Agbebi Paralegal Tunji Emanuel Tunji Solicitor

Maria DelyferMaria Solicitor Michael Urie Market Tracker Analyst Daniel Okusaga Solicitor

Andrea Constantine Market Tracker Analyst Kavita Bassan Solicitor Darius Lewington Solicitor

Senior Associate Pinsent Masons LLP Adam Adam Cain

PSL Corporate team ® Ed Davies Davies Ed Solicitor Head of Market Tracker Jenisa Altink- Thumbadoo Market Tracker Analyst Eleanor Kelly Solicitor

The Lexis Selina Sagayam Head of UK Transactional Development Practice Gibson Dunn Head of Corporate and Competition Group James Hayden Solicitor Market Tracker Market Tracker Analyst Hana Abboud With thanks to our valued contributors: Tara Hogg Tara Solicitor

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Trends in UK public M&A deals in 2017 60 PSL ® | 2017

– AGM season – AGM Existing subscribers Lexis access can PSL Corporate Corporate PSL ® deals in H1 2017 H1 deals in provides UK in public 2017, M&A H1 deals in Trends in-depth firm and analysis of thepossible 52 offer announcements made for companies subject the to public into It includes insight 2017. Code H1 in Takeover M&A trends expect and might what we see to the in and beyond. rest of 2017 Lexis Free Content Trend | Previous Tracker Market Reports Report Trend Tracker Market analyses the latest market practice season 2017 AGM and trends emerging from general annual the FTSE 350 The report an in- takes season 2017. meeting (AGM) depth look at: the latest developments in, of and levels narrative reporting with requirementscompliance for, the reportsin annual notices, AGM and accounts; analysing developments recent and practice regarding the resolutions proposed results season; and voting this and interesting trends emerging held from AGMs andbetween November 2017. October 2016 Report: UK in public M&A Trend Trends Market Tracker lexisnexis.co.uk/MTTR/Trial

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Corporate and Corporate at Tracker Market visit please trial, a free request To (eg, announcements,(eg, prospectuses and circulars) deals and AGMs toolComparator for comparing deal features Market practice with clauses analysis for inclusion transactionin documents Direct links traded to documents company News corporate and analysis deals of and key terms Detailed, searchable summaries of traded company AGM Season 2018 – What’s new 2018? Season 2018 AGM Dividends ReportDividends Equity in Capital MarketsTrends 2017 in Market Tracker | Forthcoming Trend Trend | Forthcoming Tracker Market Reports Market Tracker Trend Reports in-depth provide Trend Tracker Market research and analysis of trends, from giving insight you the market.across • • • • • awareness to keep on of you what’sawareness to top going on the in market, with the following features: Market Tracker in Lexis in Market Tracker service, providing legal essential and commercial Lexis Market Tracker RELX (UK) Limited, trading as LexisNexis trademarks of RELX Inc. LexisNexis. © 2018 The information in this document is current December as of 31 and is subject 2017 to change without notice. Reproduction, copying or extracting by any means of the whole or part of this publication must notbe be a substitute undertaken for professional without the written advice. permission Neither the authors of the publishers. nor the publisher This publication accept any responsibility is intended to be a general for loss occasioned guide and cannot to any person acting or refraining from acting as a result of material contained in this publication.

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Trends in UK public M&A deals in 2017 61