ACCEPTANCE LEVEL UPDATE

Kohlberg Kravis Roberts & Co LP

21 March 2024

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF U.S. SECURITIES LAW

FOR IMMEDIATE RELEASE

21 March 2024

RECOMMENDED FINAL CASH OFFER

for

Smart Metering Systems plc ("SMS")

by

Sienna Bidco Limited ("Bidco")

a newly formed company wholly-owned by funds advised by Kohlberg Kravis Roberts & Co. L.P. and its affiliates

ACCEPTANCE LEVEL UPDATE

Introduction

On 7 December 2023, the boards of directors of SMS and Sienna Bidco Limited ("Bidco"), a newly formed company wholly-owned by funds advised by Kohlberg Kravis Roberts & Co. L.P. and its affiliates, announced that they had reached agreement on the terms and conditions of a recommended cash acquisition by Bidco of the entire issued and to be issued ordinary share capital of SMS (the "Acquisition"), to be effected by means of a Court-sanctioned scheme of arrangement (the "Scheme") under Part 26 of the Companies Act 2006 (the "Companies Act").

On 18 January 2024, Bidco announced that Bidco had determined, with the consent of SMS and the Takeover Panel, to implement the Acquisition by way of a recommended takeover offer (as defined in section 974 of the Companies Act) (a "Takeover Offer") rather than by way of the Scheme. Under the terms of the Takeover Offer, Bidco continues to offer SMS Shareholders 955 pence in cash for each SMS Share (the "Offer"). The Offer is final and will not be increased, except that Bidco reserves the right to increase the offer price and/or otherwise improve the terms of the Acquisition if the Takeover Panel otherwise provides its consent.

On 24 January 2024, the full terms and conditions of the Takeover Offer and the procedures for acceptance (the "Offer Document"), together with the related Form of Acceptance, were published and posted to SMS Shareholders (and for information purposes, to holders of options under the SMS Share Plans and persons with information rights). The Offer Document and the Form of Acceptance are available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, at SMS's website at https://www.sms-plc.com/.

This announcement should be read in conjunction with the full text of the Offer Document. Capitalised terms used in this announcement shall, unless otherwise defined, have the same meanings as set out in the Offer Document. Unless otherwise stated, all times referred to in this announcement are to London times.

No third-party proposal or indication of interest

The SMS Board confirms that, from the date of KKR's initial approach in respect of the Acquisition to the date of this announcement, it has not received any formal proposals or indications of interest in respect of an offer to acquire the entire issued, and to be issued, ordinary share capital of SMS from any third parties.

Acceptance level update

In accordance with Rule 17 of the Takeover Code, Bidco is pleased to announce that, as at 6.00 p.m. (London time) on 20 March 2024 (being the last Business Day prior to the date of this announcement), valid acceptances of the Offer ("Valid Acceptances") had been received in respect of a total of 52,972,725 SMS Shares, representing approximately 39.64 per cent. of SMS's existing issued share capital.

So far as Bidco is aware, as informed by SMS, included within the above are Valid Acceptances in respect of 141,341 SMS Shares (representing, in aggregate, approximately 0.1 per cent. of SMS's existing issued share capital) which were the subject of irrevocable undertakings in favour of Bidco to accept (or procure the acceptance of) the Offer, as given by the SMS Directors in respect of their own beneficial holdings of SMS Shares.

SMS Shareholders are reminded that, as a summary and subject to the fuller description in the Offer Document, the Acceptance Condition shall be satisfied should Bidco receive Valid Acceptances and/or acquire or agree to acquire SMS Shares which carry more than 50 per cent. of the voting rights then exercisable at a general meeting of SMS.

Accordingly, as at 6.00 p.m. (London time) on 20 March 2024, Bidco has received Valid Acceptances of the Offer in respect of 52,972,725 SMS Shares (representing approximately 39.64 per cent. of SMS's existing issued share capital), which Bidco may count towards satisfaction of the Acceptance Condition to its Offer.

The percentages of SMS Shares referred to in this announcement are based on figures of 133,606,918 SMS Shares in issue as at close of business in London on 20 March 2024 (being the last Business Day prior to the date of this announcement), in accordance with information publicly available to Bidco as at the date of this announcement.

Interests in securities

As at the close of business in London on 19 March 2024, the interests in, or rights to subscribe in respect of, relevant SMS securities held by persons acting in concert with Bidco were:

Name	Nature of interest	Number of SMS Shares	Percentage of SMS's issued share capital
Fundlogic S.A.S.	Ownership of SMS Shares	423,393	0.32
Calvert Research and Management	Ownership of SMS Shares	104,045	0.08

Cash settled derivatives and short positions referenced to SMS Shares

Name	Nature of interest	Number of SMS Shares	Maturity / Close out Date	Reference Price
Fundlogic S.A.S.	Short position held via cash-settled derivative	423,393	N/A	683 pence

Save as disclosed in this announcement, as at the close of business in London on 19 March 2024, neither Bidco, nor any Bidco Director, nor, so far as the Bidco Directors' are aware, any other person acting, or deemed to be acting, in concert with Bidco:

·     had any interest in, or right to subscribe in respect of, any relevant SMS securities;

·     had any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell  or any delivery obligation or any right to require another person to take purchase or take delivery of relevant SMS securities;

·     had procured an irrevocable commitment or letter of intent to accept the terms of the Offer in respect of relevant SMS securities; or

·     had borrowed or lent any relevant SMS securities, save for any borrowed shares which have been either on-lent or sold.

Action to be taken

SMS Shareholders who have not yet accepted the Takeover Offer are urged to do so as soon as possible but in any event by no later than 1.00 p.m. on the Unconditional Date, which is 24 March 2024 (or such other date set by Bidco as described further in the Offer Document). Given that the Unconditional Date of 24 March 2024 falls on a Sunday, SMS Shareholders who have not yet accepted the Takeover Offer are urged to do so in accordance with the procedures further detailed below by 6.00 p.m. on Friday 22 March 2024, being the last Business Day prior to the Unconditional Date, in order to ensure that the Form of Acceptance is received or the TTE instruction is settled (as applicable) by no later than 1.00 p.m. on the Unconditional Date of Sunday 24 March 2024 (or such other date set by Bidco as described further in the Offer Document).

SMS Shareholders may accept the Takeover Offer in accordance with the following procedures:

·     To accept the Takeover Offer in respect of SMS Shares in certificated form (that is, not in CREST), you must complete and return the Form of Acceptance accompanying the Offer Document, along with your share certificate(s) and/or other document(s) of title, to Computershare Investor Services PLC, Corporate Actions Projects, Bristol, BS99 6AH as soon as possible and, in any event, so as to be received no later than 1.00 p.m. on the Unconditional Date, which is 24 March 2024 (or such other date set other Bidco as described further in the Offer Document). Given that the Unconditional Date of 24 March 2024 falls on a Sunday, SMS Shareholders who have not yet accepted the Takeover Offer are urged to do so by 6.00 p.m. on Friday 22 March 2024, being the last Business Day prior to the Unconditional Date, in order to ensure that the Form of Acceptance is received by no later than 1.00 p.m. on the Unconditional Date of Sunday 24 March 2024. Further details relating to the procedure for acceptance of the Offer in respect of such certificated SMS Shares is set out in section 12.1 of Part I of the Offer Document and in the Form of Acceptance.

·     Acceptances in respect of SMS Shares in uncertificated form (that is, in CREST) should be made electronically through CREST so that the TTE instruction settles no later than 1.00 p.m. on the Unconditional Date, which is 24 March 2024 (or such other date set by Bidco as described further in the Offer Document). Given that the Unconditional Date of 24 March 2024 falls on a Sunday, SMS Shareholders who have not yet accepted the Takeover Offer are urged to do so by 6.00 p.m. on Friday 22 March 2024, being the last Business Day prior to the Unconditional Date, in order to ensure that the TTE instruction is settled by no later than 1.00 p.m. on the Unconditional Date of Sunday 24 March 2024. Further details relating to the procedure for acceptance of the Offer in respect of such uncertificated SMS Shares are set out in section 12.2 of Part I of the Offer Document. If you are a CREST sponsored member, you should refer to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Full details on how to accept the Offer are set out in section 12 of Part 1 of the Offer Document.

Settlement

Subject to the Takeover Offer becoming or being declared unconditional, settlement of the consideration to which any SMS Shareholder is entitled under the Offer will be effected: (i) in the case of acceptances received, complete in all respects, by the date on which the Offer becomes or is declared unconditional, within 14 calendar days of such date; and (ii) in the case of acceptances received, complete in all respects, after such date but while the Offer remains open for acceptance, within 14 calendar days of such receipt, save for those SMS Shareholders who acquire their SMS Shares on or after the Offer becoming or being declared unconditional, pursuant to options or awards granted under the SMS Share Plans, or who hold their SMS Shares through the SMS SIP trust. Those SMS Shareholders should refer to the provisions at section 13.3 of Part I of the Offer Document. 

Cancellation of admission to trading on AIM, compulsory acquisition and re-registration

SMS Shareholders are reminded that, as stated in the Offer Document, assuming the Takeover Offer becomes or is declared unconditional and Bidco has, by virtue of acceptances of the Takeover Offer or otherwise, acquired, or agreed to acquire, SMS Shares carrying not less than 75 per cent. of the voting rights then exercisable at a general meeting of SMS Shareholders, it is intended that the admission to trading of the SMS Shares on AIM will be cancelled.

If Bidco receives acceptances of the Takeover Offer in respect of, and/or otherwise acquires or unconditionally contracts to acquire, 90 per cent. or more of the SMS Shares by nominal value and voting rights attaching to such shares to which the Takeover Offer relates and the Takeover Offer has become or been declared unconditional, Bidco intends to exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining SMS Shares in respect of which the Takeover Offer has not been accepted on the same terms as the Takeover Offer.

It is also intended that, following the Takeover Offer becoming or being declared unconditional and Bidco, by virtue of acceptances of the Takeover Offer or otherwise, having acquired, or having agreed to acquire, SMS Shares carrying not less than 75 per cent. of the voting rights then exercisable at a general meeting of SMS Shareholders, SMS will be re-registered as a private limited company.

Such cancellation of admission to trading on AIM of SMS Shares and re-registration of SMS as a private limited company would significantly reduce the liquidity and marketability of any SMS Shares in respect of which the Takeover Offer has not been accepted at that time and their value may be affected as a consequence.

Any remaining SMS Shareholders (unless their SMS Shares are acquired by Bidco pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act) would become minority shareholders in a majority controlled private limited company and may therefore be unable to sell their SMS Shares. There can be no certainty that SMS would pay any further dividends or other distributions or that such minority SMS Shareholders would again be offered an opportunity to sell their SMS Shares on terms which are equivalent to or no less advantageous than those under the Takeover Offer.

Questions

If SMS Shareholders have any questions about this announcement or the Offer Document, or are in any doubt as to how to complete the Form of Acceptance, please contact the Shareholder Helpline operated by Computershare, the receiving agent in respect of the Takeover Offer, on [phone]. Please use the country code if calling from outside the UK. Lines are open between 8:30 a.m. and 5:30 p.m. Monday to Friday (except public holidays in England and Wales). Calls from outside the UK will be charged at the applicable international rate. Different charges may apply to calls from mobile telephones. Please note that calls may be monitored or recorded and Computershare cannot provide advice on the merits of the Takeover Offer or the Acquisition or give any financial, legal or tax advice. Additional Forms of Acceptance are available from the Receiving Agent upon request.

Enquiries

Morgan Stanley (Joint Financial Adviser to KKR) Shirav Patel / Francesco Puletti / Andrew Foster / George Chalaris / Nagib Ahmad	[phone]
Macquarie Capital (Joint Financial Adviser to KKR) Adam Hain / Ashish Mehta	[phone]
FGS Global (PR Adviser to KKR) Faeth Birch / Alastair Elwen / Sophia Johnston	[e-mail] [phone]
Smart Metering Systems plc Miriam Greenwood, Chairman / Tim Mortlock, Chief Executive Officer / Gail Blain, Chief Financial Officer / Dilip Kejriwal, Head of Investor Relations	[phone]
RBC Capital Markets (Joint Financial Adviser and Joint Broker to SMS) Mark Preston / Evgeni Jordanov / Matthew Coakes / Sam Jackson	[phone]
Investec Bank plc (Joint Financial Adviser and Joint Broker to SMS) Chris Baird / Henry Reast / James Rudd / Shalin Bhamra	[phone]
Cavendish Securities plc (Nomad and Joint Broker to SMS) Neil McDonald / Peter Lynch / Adam Rae	[phone]
Instinctif Partners (Public Relations Adviser to SMS) Tim Linacre / Guy Scarborough	[e-mail] [phone] [phone]

Simpson Thacher & Bartlett LLP is acting as legal adviser to KKR and Bidco.

Hogan Lovells International LLP is acting as legal adviser to SMS.

Important Notices

RBC Europe Limited (trading as RBC Capital Markets), which is authorised by the Prudential Regulatory Authority ("PRA") and regulated by the Financial Conduct Authority ("FCA") and the PRA in the United Kingdom, is acting for SMS and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than SMS for providing the protections afforded to clients of RBC Capital Markets, or for providing advice in connection with this announcement or any matter referred to herein.

Investec, which is authorised by the PRA and regulated by the FCA and PRA in the United Kingdom, is acting exclusively as financial adviser to SMS and for no one else in connection with the matters referred to in this announcement and will not be responsible to any person other than SMS for providing the protections afforded to clients of Investec, nor for providing advice in relation to the Scheme Document, the content of this announcement and/or the Scheme Document or any matter referred to in this announcement and/or the Scheme Document. Neither Investec nor any of its subsidiaries, branches or affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Investec in connection with this announcement, any statement contained herein or otherwise.

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

Morgan Stanley & Co. International plc ("Morgan Stanley") which is authorised by the PRA and regulated by the FCA and the PRA in the UK is acting as financial adviser exclusively for KKR and no one else in connection with the matters set out in this announcement. In connection with such matters, Morgan Stanley, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to their clients or for providing advice in connection with the contents of this announcement or any other matter referred to herein.

Macquarie Capital (Europe) Limited ("Macquarie Capital") which is regulated by the FCA in the UK is acting as financial adviser exclusively for KKR and no one else in connection with the matters set out in this announcement. In connection with such matters, Macquarie Capital, its affiliates and their respective directors, officers, employees and agents will not regard any other person as their client, nor will they be responsible to any other person for providing the protections afforded to their clients or for providing advice in connection with the contents of this announcement or any other matter referred to herein. Macquarie Capital (Europe) Limited is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of Australia), and its obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.  Any investments are subject to investment risk including possible delays in repayment and loss of income and principal invested.  Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Capital (Europe) Limited.

Further Information

This announcement is for information purposes only and does not constitute or form any part of an offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of an offer to buy any securities, pursuant to the Acquisition or otherwise. The Acquisition shall be made solely by means of the Offer Document which, together with the Form of Acceptance, shall contain the full terms and Conditions of the Acquisition, including details of how to accept the Takeover Offer. SMS Shareholders are strongly advised to read the formal documentation in relation to the Takeover Offer once it has been dispatched. Each SMS Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences to it (or its beneficial owners) of the Acquisition.

The statements contained in this announcement are made as at the date of this announcement, unless some other time is specified in relation to them, and publication of this announcement shall not give rise to any implication that there has been no change in the facts set forth in this announcement since such date.

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

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

Overseas Shareholders

The release, publication or distribution of this announcement in or into certain jurisdictions other than the United Kingdom may be restricted by law. Persons who are not resident in the United Kingdom should inform themselves of, and observe, any applicable requirements.

The availability of the Takeover Offer to SMS Shareholders who are not resident in and citizens of the UK may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens and therefore persons who are not resident in the UK should inform themselves of, and observe, any applicable legal or regulatory requirements of their jurisdictions. Any failure to comply with such requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Offer disclaim any responsibility or liability for the violation of such restrictions by any person.

Unless otherwise determined by Bidco or required by the Takeover Code, and permitted by applicable law and regulation, the Takeover Offer may not be made directly or indirectly, in or into, or by the use of mails or any means or instrumentality (including, but not limited to, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or of any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Offer may not be capable of acceptance by any such use, means, instrumentality or facilities. Copies of this announcement and any formal documentation relating to the Takeover Offer are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in or into or from any Restricted Jurisdiction and persons receiving such documents (including, without limitation, agents, custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction. Doing so may render invalid any related purported acceptance of the Takeover Offer.

This announcement does not constitute an offer or invitation to purchase or subscribe for any securities or a solicitation of an offer to buy any securities pursuant to this announcement or otherwise in any jurisdiction in which such offer or solicitation is unlawful.

The Acquisition shall be subject to the applicable requirements of the Takeover Code, the Panel, the London Stock Exchange, the Financial Conduct Authority and the AIM Rules. Further details in relation to Overseas Shareholders will be contained in the Offer Document.

Additional Information for US Investors

The Takeover Offer relates to the shares of a Scottish company and is being made by means of a contractual takeover offer under the Takeover Code and under English and Scots law. The Offer is being made in the United States pursuant to all applicable laws and regulations, including, to the extent applicable, to holders of SMS Shares resident in the United States ("US SMS Shareholders") pursuant to Section 14(e) and Regulation 14E under the US Exchange Act as a "Tier II" tender offer, and otherwise in accordance with the requirements of the Takeover Code. Accordingly, the Takeover Offer is subject to the disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments that are different from those applicable under US domestic tender offer procedures and law. The Takeover Offer is being made in the United States by Bidco and no one else. The Takeover Offer will be made to US SMS Shareholders on the same terms and conditions as those made to all other SMS Shareholders to whom an offer is made. Any information documents, including the Offer Document, will be disseminated to US SMS Shareholders on a basis comparable to the method that such documents are provided to the other SMS Shareholders to whom an offer is made.

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

To the extent permitted by the Takeover Code and applicable law, in accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, Bidco, certain affiliated companies and their nominees or brokers (acting as agents) may make certain purchases of, or arrangements to purchase, shares in SMS outside of the US, outside the Takeover Offer, during the Offer Period and the period in which the Takeover Offer remains open for acceptance. Also, to the extent permitted by the Takeover Code and applicable law, in accordance with normal UK practice and pursuant to Rule 14e-5(b) of the US Exchange Act, each of Morgan Stanley, Macquarie Capital, Cavendish, Investec and RBC will continue to act as a connected exempt principal trader in SMS Shares on the London Stock Exchange. If such purchases or arrangements to purchase were to be made they would be made outside the U.S. and would comply with applicable law. Any such purchases by Bidco or its affiliates will not be made at prices higher than the price of the Takeover Offer provided in this announcement unless the price of the Takeover Offer is increased accordingly. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com/.

Neither the U.S. Securities and Exchange Commission (the "SEC") nor any securities supervisory authority of any state or other jurisdiction in the United States has approved or disapproved the Takeover Offer or reviewed it for its fairness, nor have the contents of the Offer Document or any other documentation relating to the Takeover Offer been reviewed for accuracy, completeness or fairness by the SEC or any securities supervisory authority in the United States. Any representation to the contrary is a criminal offence in the United States.

It may be difficult for US SMS Shareholders to enforce their rights and claims arising out of the US federal securities laws in connection with the Takeover Offer, since Bidco and SMS are located in countries other than the US, and some or all of their officers and directors may be residents of countries other than the US.

US SMS Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's jurisdiction and judgement.

The receipt of cash pursuant to the Takeover Offer by a US SMS Shareholder as consideration for the transfer of its SMS Shares pursuant to the Takeover Offer will likely be a taxable transaction for United States federal income tax purposes and under applicable United States state and local, as well as foreign and other, tax laws. Each U.S. SMS Shareholder is strongly advised to consult an appropriately qualified independent professional legal, tax and financial adviser immediately in connection with making a decision regarding this transaction, including with respect to the tax consequences of the Takeover Offer applicable to them, including under applicable U.S. state and local, as well as overseas and other, tax laws.

Forward Looking Statements

This announcement (including information incorporated by reference in this announcement), oral statements made regarding the Acquisition, and other information published by KKR, Bidco or SMS may contain statements about Bidco and SMS that are or may be deemed to be forward looking statements. All statements other than statements of historical facts included in this announcement may be forward looking statements. Without limitation, any statements preceded or followed by or that include the words "targets", "plans", "believes", "expects", "aims", "intends", "will", "may", "shall", "should", "anticipates", "estimates", "projects", "is subject to", "budget", "scheduled", "forecast" or words or terms of similar substance or the negative thereof, are forward looking statements. Forward looking statements include statements relating to the following: (i) future capital expenditures, expenses, revenues, earnings, synergies, economic performance, indebtedness, financial condition, dividend policy, losses and future prospects; (ii) business and management strategies and the expansion and growth of Bidco's or SMS's operations and potential synergies resulting from the Acquisition; and (iii) the effects of government regulation on Bidco's or SMS's business.

Such forward looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of Bidco and SMS about future events, and are therefore subject to risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward looking statements, including: increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the timing and success of future acquisition opportunities or major investment projects. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward looking statements. Such forward looking statements should therefore be construed in the light of such factors. Neither Bidco nor SMS, nor any of their respective associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward looking statements in this announcement will actually occur. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward looking statements, which speak only as of the date hereof. All subsequent oral or written forward looking statements attributable to any member of the Bidco Group or the SMS Group, or any of their respective associates, directors, officers, employees or advisers, are expressly qualified in their entirety by the cautionary statement above.

Bidco and SMS expressly disclaim any obligation to update any forward looking or other statements contained herein, except as required by applicable law or by the rules of any competent regulatory authority, whether as a result of new information, future events or otherwise.

Disclosure Requirements of the Takeover Code

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

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

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

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

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Panel's website at http://www.thetakeoverpanel.org.uk/, including details of the number of relevant securities in issue, when the Offer Period commenced and when any offeror was first identified. If you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure, you should contact the Panel's Market Surveillance Unit on [phone].

Electronic Communications

Please be aware that addresses, electronic addresses and certain information provided by SMS Shareholders, persons with information rights and other relevant persons for the receipt of communications from SMS may be provided to Bidco during the Offer Period as required under Section 4 of Appendix 4 of the Takeover Code to comply with Rule 2.11(c) of the Takeover Code.

Publication on Website and Availability of Hard Copies

A copy of this announcement and the documents required to be published by Rule 26 of the Takeover Code shall be made available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on SMS's website at www.sms-plc.com by no later than 12 noon (London time) on the Business Day following the date of this announcement. For the avoidance of doubt, neither the contents of this website nor the content of any other website accessible from hyperlinks on such website is incorporated into, or forms part of, this announcement.

In accordance with Rule 30.3 of the Takeover Code, SMS Shareholders, persons with information rights and participants in the SMS Share Plans may request a hard copy of this announcement by contacting Computershare Investor Services PLC during business hours on [phone] or by submitting a request in writing to Registrar at Computershare Investor Service PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY. In accordance with Rule 30.3 of the Takeover Code, a person so entitled may also request that all future documents, announcements and information in relation to the Acquisition should be sent to them in hard copy form. If you have received this announcement in electronic form or via a website notification, hard copies of this announcement and any document or information incorporated by reference into this document will not be provided unless such a request is made.

General

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

Rounding

Certain figures included in this announcement have been subjected to rounding adjustments. Accordingly, figures shown for the same category presented in different tables or forms may vary slightly and figures shown as totals in certain tables or forms may not be an arithmetic aggregation of the figures that precede them.

 

END