Acquisition

Datacash Group PLC
06 May 2006

        DataCash Group Plc: DATA / Index: AIM / Sector: Support Services



8th May 2006

                DataCash Group plc ('DataCash' or 'the Company')


    Proposed acquisition of Proc Cyber Services (UK) Limited ("Proc Cyber")

                              ("the Acquisition")


Highlights of the Acquisition


  • DataCash is proposing to acquire the entire issued share capital of Proc
    Cyber Services (UK) Limited through the issue of 44,913,111 Ordinary Shares
    to Mr Ashley Head ("the Vendor") which values Proc Cyber at £61.3 million
    based on DataCash's closing share price of 136.5 pence per Ordinary Share

  • Proc Cyber is a provider of risk management, payment processing, payment
    out solutions and financial reconciliation services predominantly to the
    online gaming markets

  • The Acquisition provides several potential benefits to DataCash

      • Opportunities to cross-sell Proc Cyber's services to DataCash's
        existing and prospective customers

      • Proc Cyber provides products and services which DataCash has
        identified there is a requirement to develop

      • Increased software development capability

      • Further expansion into fast growing online gaming market

      • Increased scale

      • Entering other geographies

  • On completion of the Acquisition the Vendor will own 50 per cent. of the
    issued share capital of the Enlarged Group

  • The Vendor is also entitled to subscribe for additional Ordinary Shares to
    match the exercise of existing share options

  • The Acquisition is conditional, inter alia, upon the approval of
    shareholders of DataCash for the Acquisition and for a waiver granted by the
    Panel in respect of the requirements which would otherwise arise for the
    Vendor to make an offer for the whole Company under Rule 9 of the City Code
    on Takeovers and Mergers ("Rule 9")

  • The AIM Admission Document incorporating the proposed waiver of Rule 9 is
    being posted to Shareholders today



David Bailey, Chairman of DataCash, commented: "This is an exciting opportunity
in the evolution of DataCash and we believe the combination of DataCash and Proc
Cyber will enhance the Group's product set, market competitiveness and market
opportunity. The two companies are complementary in their activities and the
combination creates a business that will be well placed to support the payment
processing needs of the online gaming industry, cross-border retailers,
international telecoms operators and others in the fast-growing, but
increasingly complex, e-commerce world."



Enquiries

DataCash
David Bailey, Chairman                                    0870 727 4781
Andrew Dark, Chief Executive

Investec Investment Banking
Keith Anderson                                            020 7597 5970
Daniel Adams

St Brides Media & Finance
Isabel Crossley                                           020 7242 4477



Investec Investment Banking, a division of Investec Bank (UK) Limited, which is
authorised and regulated by the Financial Services Authority and is a member of
the London Stock Exchange plc, is acting as Nominated Adviser and Broker for the
Company in relation to the Proposals, and will not be responsible to any other
person for providing the protections afforded to its customers or for providing
advice in relation to the Proposals.



                DataCash Group plc ("DataCash" or "the Company")


 Proposed acquisition of Proc Cyber Services (UK) Limited ("Proc Cyber") ("the
                                 Acquisition")


Introduction


The Company has today announced it has conditionally agreed to acquire the
entire issued share capital of Proc Cyber from the Vendor. The acquisition of
Proc Cyber provides a number of opportunities for DataCash, including the
expansion of its product offering in areas such as risk management and fraud
screening and an increased exposure to growing e-commerce market segments.


Proc Cyber is a provider of risk management, payment processing, payment out
solutions, and financial reconciliation services. Proc Cyber predominantly
services the online gaming markets.


The Acquisition is a reverse takeover within the meaning of the AIM Rules and,
as required by those rules, is subject to the approval of Shareholders in
general meeting. Shareholder approval will also be required to approve, on a
poll, the Waiver granted by the Panel.


An Extraordinary General Meeting of the Company is being convened for 31 May
2006 to approve the Acquisition and the waiver described above. The Company's
intention is to hold its AGM for the year immediately prior to the EGM.


Information on Proc Cyber


Background

Proc Cyber is a provider of risk management, payment processing, payment out
solutions and financial reconciliation services to companies operating
principally in the online gaming markets.


Proc Cyber was incorporated as a shelf company in 1998. The entire issued share
capital of Proc Cyber was transferred to Ridgeway Nominees Limited on 18 March
2002. Ridgeway Nominees Limited executed a declaration of trust in favour of,
and held all of the issued shares in Proc Cyber as nominee and trustee for, Mr.
Martin Moshal. The shares were then sold by Ridgeway Nominees Limited to the
Vendor on 30 September 2003, when the Vendor became involved in the
establishment of the business operations of Proc Cyber and the Vendor granted
Ridgeway Nominees Limited a charge over the shares in Proc Cyber to secure the
Vendor's payment obligation under the sale agreement. Ridgeway Nominees Limited
has entered into a release of this charge. The Vendor at the same time granted
an option over these shares in Proc Cyber back to Ridgeway Nominees Limited
exercisable at any time by Ridgeway Nominees Limited for such price as the
parties could agree and failing such agreement at fair value as established by
an independent expert. This option has been terminated, such termination to take
effect immediately prior to Completion. In consideration for the termination of
this Option, the Vendor has agreed to pay Ridgeway Nominees Limited the sum of
£17.5 million one year after Completion. The satisfaction of this payment may be
made from the proceeds of a sale of Ordinary Shares in DataCash by the Vendor,
subject to compliance by the Vendor with the orderly market provisions of the
lock-in agreement between the Vendor, the Company and Investec.


Proc Cyber initially started operating in 2003 in order to provide payment
processing support to customers of Microgaming, an online gaming software
provider. More recently Proc Cyber has begun to expand into markets other than
the online gaming market, having recently won a contract with a provider of
voice over Internet protocol services to provide a fully managed fraud and risk
prevention service.


Proc Cyber has its main operations in the UK and South Africa and employs 233
people. Proc Cyber provides its services through its wholly owned South African
subsidiary, Proc-Cyber SA, which is located in Cape Town and employs 229 staff.
Proc-Cyber SA was incorporated in 2004 and acquired the trade and assets of
Mercantrade in January 2005. Immediately prior to this acquisition,
Mercantrade's only activity was to provide Proc Cyber with back office fraud and
risk management services.


At the end of 2003, a 50:50 joint venture was set up between Proc Cyber and CSC,
a banking service provider, to form CSC24Seven, a company incorporated in
Cyprus. CSC24Seven provides e-wallet solutions, branded as PaySpark, and
pre-paid card products. For the year ended 30 September 2005 CSC24Seven reported
turnover of approximately £619,000.


In November 2005 Proc Cyber subscribed for 40 per cent. of Chase Top
Technologies, a payment services provider incorporated in China. Chase Top
Technologies gives Proc Cyber the ability to process domestic Chinese debit and
credit cards.


In November 2005, Proc Cyber disposed of its interests in Smart Voucher and
Ukash, which provide vouchers which can be redeemed at supporting online
customers and are a method of depositing money in addition to debit or credit
cards. Ukash remains a payment processor to Proc Cyber.


For the year ended 30 September 2005, Proc Cyber Group reported an increase in
turnover on continuing operations (which excludes Proc Cyber's interests in
Smart Voucher and Ukash) of approximately 43 per cent. from £6.6 million to £9.5
million. Profit before tax on continuing operations rose to £4.7 million from
£2.1 million. As at 30 September 2005 the Proc Cyber Group reported a cash
balance of £2.1 million.


Business Model

Proc Cyber offers outsourced services that can be split into the following four
categories:

•                    Risk management

•                    Payment processing

•                    Payment out solutions

•                    Financial reconciliation


Risk management

Proc Cyber provides its proprietary risk system, Risk Sentinel, to online
customers to allow them to assess the risk of their transactions in real-time
and reduce the back office administration arising from seeking to counter
fraudulent transactions. The risk system also provides customers with access to
third party verification services which helps them comply with their regulatory
obligations.


The risk system offers rules-based settings that can be tailored to the
customer's business requirements. The risk system is integrated into Proc
Cyber's payment gateway allowing the customer to manage risk on their customer
payment processing account during the period between authorisation and
settlement of a transaction.


The risk management services are offered as either:

  • A non-back office service: this is where a customer uses tools provided by
    Proc Cyber to assist it in completing these same activities in-house; or

  • A back office service: this is where a customer subcontracts control of
    certain segments of its business to Proc Cyber (e.g. risk analysis). Proc
    Cyber makes decisions and carries out actions on behalf of the customer
    according to pre-agreed terms. The back office service is tailored to each
    customer's specific requirements.


Proc Cyber provides teams of risk analysts that take action on the results of
the risk system. These teams operate a 24 hour continuous service and interact
with customers' call centres. Proc Cyber's risk rules and processes are
integrated into customers' business processes.


Proc Cyber has developed applications which it uses to perform the operational
functions which are integrated into the customer's systems. Some examples of the
systems are a bulk emailing product with standard template and multi-language
capability, a customer authorisation document management system and risk
analysis applications.



Payment processing

Proc Cyber provides its payment gateway, which is integrated into the systems of
a number of acquiring banks, payment processors and e-wallets, to allow a
customer access to many payment processing channels and financial instruments.


The payment gateway can accommodate business rules, set by the customer,
allowing the customer to manage its banking relationships. It also allows access
to risk, verification and multi-currency services. Proc Cyber provides a 24 hour
service which continuously monitors the system and handles client queries.


Through Chase Top Technologies, Proc Cyber offers customers access to domestic
Chinese debit and credit card payment processing. Chase Top Technologies is in
turn integrated into Proc Cyber's payment gateway, allowing it to offer the
payment processing channels and risk system of Proc Cyber to Chinese customers.


Payment out solutions

Proc Cyber currently provides various channels to customers allowing them to
make payments of winnings to their consumers. This service makes use of links
with various third parties, which enables Proc Cyber to offer its customers a
single point of access for the submission and administration of payments out.
Payment out options include wire transfer, cheques, ACH, CFT, debit card and
e-wallet refunds.


Financial reconciliation

Proc Cyber provides management information solutions to customers to reconcile
their transactions and provide exception reports. It also provides summary
reporting which allows a customer to manage its outstanding funds, reserves,
wires and fees, in multiple currencies.


In addition to the above services, through CSC24Seven, its joint venture with
CSC, Proc Cyber operates an e-wallet and pre-paid card issuing service utilising
the banking facilities provided by CSC.


Proc Cyber's principal revenue streams are:

•              fees based on transaction value and volume;

•              fees charged for use of the risk management system and
               verification services;

•              fees charged per payment product provided; and

•              monthly service fees.


Relationship with Microgaming

Proc Cyber is a payment processor to some of the clients of Microgaming, a
provider of online gaming software. Many of Proc Cyber's key clients, including
its three largest customers, which accounted for approximately 60 per cent. of
its revenues for the financial year ended 2005, use the Microgaming software,
into which the Proc Cyber risk and processing systems are embedded. Through an
Isle of Man company called Internet Technologies Limited, Mr Martin Moshal
provides advisory services to Microgaming. The Vendor has granted the Option to
the Option Holder, which is a company wholly owned by Amber Nominees Limited, as
nominee for the Trust, the sole beneficiary of which is Mr Martin Moshal.



Background to and Reasons for the Acquisition


DataCash has grown organically to date. However, the Directors believe that
there are opportunities for enhanced growth through acquisition in order to,
amongst other things, increase the scale of the business, expand the Company's
product offering and extend its geographical reach.


There are a number of opportunities which the Directors and Proposed Directors
believe the Acquisition will present to the Company, which include:

  • cross-selling of services: Proc Cyber has a more extensive range of
    services, particularly in the area of risk management and fraud screening,
    which has the potential to be sold to DataCash's existing and prospective
    customers;

  • reduced software development risk: DataCash has identified a requirement
    to develop a number of products and services which have already been
    developed by Proc Cyber. Selling Proc Cyber's services into DataCash's
    customer base reduces the risk and cost associated with developing and
    marketing these products;

  • faster time to market of new products: increased software development
    capability has the potential to enable the Enlarged Group to respond to
    demand for new services;

  • further expansion into the gaming market: online gaming (poker, casino,
    fixed odds) is a fast growing market. Proc Cyber's focus on poker and casino
    operators with DataCash's focus, within this sector, on fixed odds betting
    operators provides a combination which offers a diverse range of industry
    specific services;

  • increased scale: the Acquisition will form a group which processed over
    £6.0 billion in aggregate of transaction value on behalf of its customers
    for the year ended 31 December 2005 giving it greater credibility with
    existing and new customers; and

  • entering other geographies: DataCash's business is predominantly serving
    UK customers while that of Proc Cyber is outside of the UK.


Principal Terms of the Acquisition


The Company has conditionally agreed to acquire from the Vendor the whole of the
issued share capital of Proc Cyber in consideration for the issue of the
Consideration Shares and the grant of the Top-Up Rights. Under the terms of the
Acquisition Agreement the Vendor has given the Company warranties and
indemnities (including in relation to taxation) regarding the Proc Cyber Group
and the Company has given the Vendor limited warranties inter alia regarding its
authority and capacity to enter into the Acquisition Agreement and the accuracy
of information concerning itself in the AIM Admission Document.


Under the terms of the Acquisition Agreement, the warranties given by the Vendor
to the Company (other than those relating to title of the Proc Cyber shares) are
subject to limitations, including a cap limited to the value of £30.7 million.
From Completion, 50 per cent. of the Consideration Shares are to be held in
escrow to satisfy any claims made by the Company for a breach of the Acquisition
Agreement (or accompanying tax deed) by the Vendor. The amount of the
Consideration Shares held in escrow will reduce on the expiry of the Lock-in
Period to 33.3 per cent. of the Consideration Shares.


Immediately following Completion, the shareholding of the Vendor in DataCash
will be, in aggregate, 44,913,111 Ordinary Shares, representing exactly 50 per
cent. of the Enlarged Issued Share Capital (not taking into account the exercise
of any of the Completion Options which may occur between the date of the
Acquisition Agreement and Completion). Pursuant to the Acquisition Agreement,
the Company and the Vendor have agreed a top-up mechanism whereby whenever any
of the Completion Options is exercised, the Vendor will have the right to
subscribe for the same number of Ordinary Shares (the "Top-Up Rights"), at the
same exercise price as is payable pursuant to the relevant Completion Option(s),
in order to maintain a 50 per cent. holding of the Enlarged Issued Share
Capital. The Vendor may, however, elect not to exercise this right so, while his
holding cannot ever exceed 50 per cent. as a result of exercising the Top-Up
Rights, it may decrease below 50 per cent. in the event that the Top-Up Rights
are not exercised. Whether or not the Vendor chooses to waive his Top-Up Rights
with respect to a particular Completion Option(s) the Top-Up Rights remain in
place for the exercise of any subsequent Completion Option(s). The Vendor has 20
business days in which to exercise this right following notice from the Company
that a Completion Option has been exercised, such notification to be no more
than 10 business days following the issue of Ordinary Shares pursuant to the
Completion Option. This right will exist for so long as any Completion Options
remain capable of being exercised.


On exercise of the Option, the Option Holder will be entitled to exercise the
Top-Up Rights in respect of the number of Option Shares that it holds and the
Vendor's Top-Up Rights will be reduced proportionately.


The Top-Up Rights are only triggered by the exercise of Completion Options and
are not triggered by the grant or exercise of any other share options or share
option related instruments over Ordinary Shares, or by any other issue of
Ordinary Shares or other event.


Pursuant to the Acquisition Agreement, the Company and the Vendor are each
entitled in certain circumstances to terminate the Acquisition Agreement prior
to Completion in which case a break fee of £375,000 is payable to the
terminating party.


The Acquisition is conditional, inter alia, on (1) the passing of the
Resolutions and (2) the Waiver.


It is expected that Completion will take place on 1 June 2006.


Option Agreement


The Vendor has granted the Option to the Option Holder over such number of
Ordinary Shares issued to the Vendor from time to time pursuant to the
Acquisition Agreement (comprising the Consideration Shares and the Ordinary
Shares issued pursuant to the exercise of the Top-Up Rights) as does not exceed
the lower of (i) 29.9 per cent. of the Company's issued share capital from time
to time and (ii) 82.5 per cent. of the Ordinary Shares issued to the Vendor
pursuant to the Acquisition Agreement up to a maximum of 38,275,458 Ordinary
Shares (the "Option Shares"). The Option Holder is an Isle of Man company called
Hurlstone Limited, which is wholly owned by Amber Nominees Limited, as nominee
for the Trust. The trustee of the Trust is Ridgeway Associates Limited of whom
the directors are David Spencer, Ita McArdle, Philip Games, David Karran, Moira
McHarrie and Ann Woods and the directors of the Option Holder are Bernice Oates,
Howard Prior and Jonathan Sykes. The sole beneficiary of the Trust is Mr Moshal.


Mr Moshal provides advisory services to Microgaming through an Isle of Man
company called Internet Technologies Limited. Microgaming develops and provides
online gaming software and many of Proc Cyber's key clients, including its three
largest customers, which accounted for approximately 60 per cent. of its
revenues for the financial year ended 30 September 2005, use the Microgaming
software.


The Option is exercisable in tranches of 900,000 Option Shares and the exercise
price will be £1.27 per Option Share. Until the Option is exercised over any
Option Shares the Vendor will retain all voting and other rights in relation to
those Option Shares. As a result of these arrangements, the Option Holder is
considered to be acting in concert with the Vendor for the purposes of the City
Code.


Relationship Agreement


Following Admission, the Vendor will be regarded as a controlling shareholder of
the Company for the purposes of the City Code. In addition, the Vendor is chief
executive of Proc Cyber's largest customer, Carmen Media, and a non-executive
director of Netgiro, one of Proc Cyber's payment processors. The Option Holder
will be regarded as acting in concert with the Vendor. The Company, the Vendor,
the Trust and the Option Holder have therefore agreed to enter into the
Relationship Agreement on Completion, the principal purpose of which is to
ensure that following Admission, the Enlarged Group is capable of carrying on
its business independently of the Vendor, the Trust and the Option Holder and
that transactions and relationships between the Enlarged Group and the Vendor,
the Trust and the Option Holder are at arm's length and on normal commercial
terms.


Current Trading and Prospects


DataCash

Further to the Company's preliminary results announcement which it released on
11 April 2006, 2006 has started encouragingly with first quarter results ahead
of the comparable period last year with a new record for the Company of
approximately 7 million transactions being processed during March. The pipeline
of sales prospects remains healthy and the Directors and Proposed Directors are
confident of the outlook for the year.


Proc Cyber

Trading in Proc Cyber for its 2006 financial year has begun ahead of budget.
Proc Cyber has won several new contracts to provide a variety of its services
including one with a provider of voice over Internet protocol services, and the
Directors and Proposed Directors believe that there are a number of
opportunities for the business to seek for further growth.


Enlarged Group

The Directors and Proposed Directors believe the Enlarged Group will benefit
from, amongst other things, the opportunity to cross-sell Proc Cyber's services
into DataCash's customer base, the elimination of the need for DataCash to
develop products and services that Proc Cyber has already developed, and an
increase in scale through the combination of the two businesses. In view of
this, the Directors and Proposed Directors consider that the prospects for the
Enlarged Group in the current financial year are encouraging.


Directors and Proposed Directors


Board changes

On completion of the Acquisition, Ashley Head, the Chairman of Proc Cyber and
Paul Burton, Managing Director of Proc Cyber, will join the Board of the
Enlarged Group. The board of the Enlarged Group immediately following Completion
will be as follows:


  • Ashley Head, Non-Executive Chairman
  • David Bailey, Deputy Non-Executive Chairman
  • Andrew Dark, Managing Director, UK
  • Paul Burton, Managing Director, South Africa
  • Keith Butcher, Commercial Director
  • Gavin Breeze, Director of Business Development
  • Nicholas Temple, Non-Executive Director


Details of the Proposed Directors


Ashley Head, aged 55

Mr Head has many years experience in the payment processing/banking industry and
was involved in establishing the business of Proc Cyber where he led business
development. Previous roles have included Senior Vice President and Manager of
Africa region for MasterCard International and Director of Technology and
Electronic Banking for The National Commercial Bank in Saudi Arabia. Mr Head is
currently a non-executive director of Netgiro and chief executive of Carmen
Media.


Ashley Head has entered into a letter of appointment with the Company,
conditional on Completion, pursuant to which he will be appointed as a
non-executive director for an initial term of three years. Mr Head's fee is to
be fixed at £50,000 per annum, subject to review by the Board annually. The
appointment may be terminated for various causes of a standard nature. Mr Head
will be entitled to be reimbursed for all reasonable expenses incurred by him in
the performance of his duties. Mr Head will be subject to restrictions
concerning the ownership of intellectual property rights and subject to duties
of confidentiality. Upon termination, no benefits (other than those accruing
during the notice period) are due to him.


Paul Burton, aged 35, Managing Director, South Africa

Mr Burton joined Proc Cyber in January 2005 where he has overall responsibility
for the day-to-day operations of the business. Prior to this he was managing
director of Mercantrade (which was acquired by Proc Cyber), having previously
served as its financial director. Mr Burton holds a B.com, a B.compt (hons) and
CA (S.A.), and is a member of the South Africa Institute of Chartered
Accountants.


Paul Burton's current service contract with Mercantrade is to be terminated on
Completion and he is to enter into a new service agreement with Proc Cyber as
Managing Director. His new service agreement will also confirm his duties as an
executive director to the Company. Mr Burton's salary is to be South African
Rands 540,000 per annum subject to annual review by the boards of Proc Cyber or
the Company. Proc Cyber may also pay Mr Burton a discretionary bonus at the end
of each financial year of the Company. The contract may be terminated for
various causes of a standard nature. Additionally, either party may terminate
the contract by giving to the other party not less than six months prior written
notice. Mr Burton is entitled to certain benefits including becoming a member of
Proc Cyber's provident pension fund. Mr Burton is entitled to 20 working days'
holiday in each calendar year. Mr Burton is subject to restrictions concerning
the ownership of intellectual property rights and subject to duties of
confidentiality and non-compete covenants. Upon termination, no benefits (other
than those accruing during the notice period) are due to him. Mr Burton's
contract is to be governed by South African law.


Dealing Restrictions


The Vendor has agreed to enter into a lock-in agreement whereby he undertakes to
the Company and Investec that he will not sell or otherwise dispose of any
interest that he holds in the Consideration Shares or any Ordinary Shares issued
pursuant to the exercise of the Top-Up Rights during the Lock-In Period, subject
to certain exceptions including the transfer of Option Shares to the Option
Holder in accordance with the terms of the Option Agreement, the sale of
Consideration Shares or any Ordinary Shares issued pursuant to the exercise of
the Top-Up Rights in order to satisfy (whether in whole or in part) any
liability for claims under the Acquisition Agreement and the acceptance of a
take-over offer for the Company. The Vendor has also undertaken only to effect a
disposal of the Consideration Shares or any Ordinary Shares issued pursuant to
the exercise of the Top-Up Rights through the Company's broker for twelve months
after the end of the Lock-In Period. The Option Holder has also agreed to give
similar undertakings to the Company and Investec on Completion in respect of the
Option Shares.


City Code


The City Code is issued and administered by the Panel. The City Code applies to
all takeovers and merger transactions, however effected, where the offeree
company is, inter alia, a listed or unlisted public company resident in the UK
and to certain categories of private limited companies. DataCash is such a
company and its Shareholders are therefore entitled to the protections afforded
by the City Code.


Under Rule 9 of the City Code ("Rule 9"), with effect from 20 May 2006, where
(i) any person acquires an interest in shares which, when taken together with
shares in which persons acting in concert with him are interested, carry 30 per
cent. or more of the voting rights of a company subject to the City Code or (ii)
any person, together with persons acting in concert with him, is interested in
shares which in the aggregate carry not less than 30 per cent. of the voting
rights of a company subject to the City Code and such person, or persons acting
in concert with him, acquires an interest in any other shares which increases
the percentage of shares carrying voting rights in which he is interested, that
person is normally obliged to make a general offer to the holders of any class
of equity share capital whether voting or non-voting and also to the holders of
any other class of transferable securities carrying voting rights.


For the purposes of the City Code, persons acting in concert comprise persons
who, pursuant to an agreement or understanding (whether formal or informal)
co-operate to obtain or consolidate control of a company or to frustrate the
successful outcome of an offer for a company. A person and each of its
affiliated persons will be deemed to be acting in concert all with each other.


Immediately following Completion, the Vendor will control 50 per cent. of the
voting share capital of the Company (not taking into account the exercise of any
of the Completion Options which may occur between the date of the Acquisition
Agreement and Completion), and will have the benefit of the Top-Up Rights.
Therefore a further increase in the aggregate shareholding of the Vendor and
those parties deemed to be acting in concert with the Vendor will be subject to
the provisions of Rule 9 of the City Code.


The Panel has agreed, subject to the Resolution number 2 set out in
the notice of Extraordinary General Meeting being passed on a poll by the
Shareholders at the Extraordinary General Meeting:

  • to waive the obligation on the Vendor to make a general offer to
    Shareholders under Rule 9 of the City Code which would otherwise arise on
    Completion by virtue of the issue of the Consideration Shares; and

  • to waive the obligation on the Vendor to make a general offer under Rule 9
    in connection with the issue to the Vendor of up to 1,481,364 Ordinary
    Shares pursuant to the exercise of the Top-Up Rights.

Admission, Settlement and Dealings


The proposed Acquisition will constitute a reverse takeover under the AIM Rules
and is therefore conditional upon the approval of Shareholders being given at
the Extraordinary General Meeting, details of which are set out below.


Application will be made for the Existing Ordinary Shares and the Consideration
Shares to be admitted to trading on AIM and it is expected that Admission will
become effective and that trading in the Ordinary Shares on AIM will commence on
1 June 2006.


Annual General Meeting

The Board has discovered that there was an inadvertent delay in sending out the
notice of annual general meeting, sent with the Company's recently published
annual report when printed. As a result it is not possible to hold the annual
general meeting on the date originally scheduled. As an extraordinary general
meeting (as set out below) is to be called for 31 May 2006, the Board has
therefore decided that the annual general meeting be reconvened for the same
date as the extraordinary general meeting. Shareholders should therefore
disregard the notice of annual general meeting sent with the Company's recently
published annual report and refer to the new notice set out in the AIM Admission
Document convening an annual general meeting of the Company to be held at
Descartes House, 8 Gate Street, London, WC2A 3HP at 12.00 p.m. on 31 May 2006.


Extraordinary General Meeting


A notice is being sent to Shareholders convening an Extraordinary General
Meeting of the Company to be held at Descartes House, 8 Gate Street, London,
WC2A 3HP at 12.30 p.m. on 31 May 2006 at which the following resolutions will be
proposed:

  • Resolution 1, which is subject to the passing of Resolution 2, is an
    ordinary resolution to approve the Acquisition for the purposes of the AIM
    Rules;

  • Resolution 2 is an ordinary resolution to approve the Waiver;

  • Resolution 3, which is subject to the passing of Resolution 1 above, is an
    ordinary resolution to increase the authorised share capital of the Company
    from £1,000,000 to £1,300,000; and

  • Resolution 4 is an ordinary resolution authorising the Directors under
    section 80 of the Act to allot the Consideration Shares.


Resolution 2 will be voted on by a poll of the Shareholders


Definitions


The following definitions apply throughout this announcement unless the context
requires otherwise.


"Acquisition"               the proposed acquisition of Proc Cyber by the Company pursuant to the
                            Acquisition Agreement


"Acquisition Agreement"     the agreement dated 5 May 2006 between the Company and the Vendor relating to
                            the Acquisition


"Act"                       the Companies Act 1985, as amended


"Admission"                 admission of the Enlarged Issued Share Capital of the Company to trading on AIM
                            becoming effective in accordance with Rule 6 of the AIM Rules


"Annual General Meeting"    or the annual general meeting of the Company to be held at Descartes House, 8 Gate
"AGM"                       Street, London, WC2A 3HP on 31 May 2006


"AIM"                       a market operated by the London Stock Exchange


"AIM Rules"                 the rules of AIM as issued by the London Stock Exchange


"Carmen Media"              Carmen Media Group Limited


"Chase Top Technologies"    Shenzhen Chase Top Technology Co. Limited


"City Code"                 the City Code on Takeovers and Mergers issued by the Panel


"Company" or "DataCash"     DataCash Group plc


"Completion"                completion of the Acquisition in accordance with the Acquisition Agreement


"Completion Options"        the unexpired options granted by DataCash to existing and past employees to
                            acquire up to 1,481,364 Ordinary Shares


"Consideration Shares"      44,913,111 Ordinary Shares which will represent when issued at Completion
                            (ignoring any Ordinary Shares issued pursuant to the exercise of Completion
                            Options in the period between the date of the Acquisition Agreement and
                            Completion) exactly 50 per cent. of the Enlarged Issued Share Capital


"CSC"                       Creditcard Services Company SAL (Holding)


"CSC24Seven"                CSC24SEVEN.COM LIMITED


"Directors" or "Board"      the directors of the Company


"Enlarged Group"            together the Group and, following completion of the Acquisition, the Proc Cyber
                            Group


"Enlarged Issued Share      the ordinary share capital of the Company as at Admission comprising the
Capital"                    Existing Ordinary Shares, and the Consideration Shares and any shares issued
                            pursuant to the Completion Options


"Existing Ordinary Shares"  the 44,913,111 Ordinary Shares of 1p each currently in issue


"Extraordinary General      the extraordinary general meeting of the Company convened for 12.30 p.m. on 31
Meeting" or "EGM"           May 2006 (or any adjournment thereof)


"Group"                     the Company and its subsidiaries


"Lock-in Period"            the period of twelve months from the date of Admission


"London Stock Exchange"     London Stock Exchange plc


"Mercantrade"               Mercantrade (Proprietary) Limited


"Netgiro"                   Netgiro NV


"Option"                    the option granted by the Vendor to the Option Holder over such number of
                            Ordinary Shares issued to him from time to time pursuant to the Acquisition
                            Agreement (comprising the Consideration Shares and the Ordinary Shares issued
                            pursuant to the exercise of the Top-Up Rights) as does not exceed the lower of
                            (i) 29.9 per cent. of the Company's issued share capital from time to time and
                            (ii) 82.5 per cent. of the Ordinary Shares issued to the Vendor pursuant to the
                            Acquisition Agreement up to a maximum of 38,275,458 Ordinary Shares


"Option Agreement"          the option agreement dated 5 May 2006 between (i) the Vendor and (ii) the
                            Option Holder relating to the Option


"Option Holder"             Hurlstone Limited, a company incorporated in the Isle of Man with registered
                            number 115086C and registered address Royal Trust House, 60 Athol Street,
                            Douglas, Isle of Man IM1 1JD


"Option Shares"             those Ordinary Shares the subject of the Option


"Ordinary Shares" or "      ordinary shares of 1p each in the share capital of the Company
Shares"


"Panel"                     the Panel on Takeovers and Mergers


"Proc Cyber"                Proc Cyber Services (UK) Limited


"Proc Cyber Group"          Proc Cyber, Proc-Cyber SA, Payment Network Technology, CSC24Seven and Chase Top
                            Technologies


"Proc-Cyber SA"             Proc-Cyber Services SA (Proprietary) Limited


"Payment Network Technology Shenzhen Payment Network Technology Co. Limited
"


"Proposals"                 the Acquisition and Waiver


"Proposed Directors"        Mr Ashley Head and Mr Paul Burton


"Purchaser"                 DataCash


"Resolutions"               the resolutions to be proposed at the EGM


"Shareholders"              holders of Existing Ordinary Shares


"Smart Voucher"             Smart Voucher Limited


"Top-Up Rights"             has the meaning given to it in paragraph "Principal Terms of the Acquisition
                            Agreement" in this announcement


"Trust"                     Hurlstone Trust, a discretionary trust established in the Isle of Man


"UK"                        the United Kingdom of Great Britain and Northern Ireland


"Ukash"                     Universal E-Cash Limited


"Vendor"                    Mr. Ashley Head


"Waiver"                    the waiver by the Panel of the following:


                            - the obligation on the Vendor to make a general offer to Shareholders under
                            Rule 9 of the City Code which would otherwise arise on Completion by virtue of
                            the issue of the Consideration Shares; and

                            - the obligation on the Vendor to make a general offer under Rule 9 in
                            connection with the issue to the Vendor of up to 1,483,384 Ordinary Shares
                            pursuant to the exercise of the Top-Up Rights


                      This information is provided by RNS
            The company news service from the London Stock Exchange