Offer for Softtechnet

NewMedia SPARK PLC 26 May 2000 Not for release, publication or distribution in, into or from the United States, Canada, Australia or Japan NewMedia SPARK plc ('SPARK') Recommended Offer for Softtechnet.com plc ('Softtechnet') Summary of the Offer The Boards of SPARK and Softtechnet announce the terms of a recommended offer, to be made by Peel Hunt plc, on behalf of SPARK, for the whole of the issued and to be issued share capital of Softtechnet. Key features of the Offer: - The Offer is on the basis of 4 new SPARK Shares and 1 new SPARK Warrant for every 10 Softtechnet Shares. - The Offer values each Softtechnet Share at 24p and the entire existing issued share capital of Softtechnet at approximately £33.5 million. The Offer represents a premium of 65.5 per cent. over the closing middle-market price of 14.5p for each Softtechnet Share on 25 May 2000. - The Board of Softtechnet, which has been advised by Grant Thornton, is unanimously recommending that Softtechnet Shareholders accept the Offer. - Irrevocable undertakings have been received from the Board of Softtechnet, Standen Consult Limited and PNT Capital Advisors (an adviser to Softtechnet) to accept the Offer in respect of shareholdings which amount, in aggregate, to 11,065,000 Softtechnet Shares, representing approximately 7.92 per cent. of the existing issued ordinary share capital of Softtechnet. In the event that a competing offer is announced by a third party, these undertakings will remain binding. - Tony Sarin, the Chief Executive of Softtechnet, has agreed to join the Board of SPARK as an executive director upon the Offer becoming unconditional in all respects. Reasons for the Offer: - The Enlarged Group will have a strong balance sheet, having invested approximately £130 million in its portfolio and having cash resources of over £45 million. - Softtechnet brings significant expertise and infrastructure in the Indian technology and Internet markets which SPARK has identified as an area for expansion. - SPARK will benefit from Tony Sarin, Softtechnet's Chief Executive, joining the Board of SPARK in an executive capacity. He will also act as Chairman of the wholly owned Indian investment subsidiary, SPARK India. Sanjit Talukdar, a Softtechnet director, will be appointed as CEO of SPARK India and will have a key advisory role within the Enlarged Group. - The merger of SPARK and Softtechnet represents a pioneering example of two quoted technology and Internet investment companies choosing to come together in order to create a stronger and enlarged group. Commenting on the Offer: Mike Whitaker, Chief Executive of SPARK, said: 'The merger of Softtechnet with SPARK will further strengthen the Enlarged Group's balance sheet, give us access to investment and businesses co-operation opportunities in the strategically important Indian market, and will also consolidate our position as the leading technology and Internet investment Group quoted in the UK.' Tony Sarin, Chief Executive of Softtechnet, said: 'We are pleased to announce this merger with SPARK. SPARK has a developed an infrastructure and a strong management team which can build on the progress we have made since our AIM admission, particularly in relation to our developments in the Indian market. The specialist Internet and technology investment strategy of SPARK complements our strategy of pre-IPO investments, resulting in a combined ability to nurture investee companies from inception to IPO. The Board of Softtechnet now believes that the need for consolidation in the industry is apparent and that the business can be developed faster towards its maximum potential by merging with another leading participant. Becoming part of the SPARK Group should provide an exciting opportunity to create an enlarged business and allow Softtechnet Shareholders to participate in the activities of the largest specialist Internet and technology investment company quoted in the UK.' This summary should be read in conjunction with the accompanying full announcement. The Offer will be subject to the terms and conditions set out or referred to in Appendix I to the accompanying full announcement. Enquiries: Michael Whitaker - NewMedia SPARK plc: 020 7851 7600 David Davies - Peel Hunt plc: 020 7418 8900 Tony Sarin - Softtechnet.com plc: 020 7713 6886 Gerald Beaney - Grant Thornton: 020 7728 2589 Tim Anderson / Isabel Petre - Buchanan Communications: 020 7466 5000 The availability of the Offer to persons outside the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements. The Offer will not be made, directly or indirectly, in, into or from or by use of the mails or any other means or instrumentality (including, without limitation, facsimile transmission, telex, telephonic or electronic transmission) of interstate or foreign commerce of, or any facilities of a national securities exchange of, Australia, Canada, Japan or the United States, and will not be capable of acceptance by any such use, means, instrumentality or facilities or from within Australia, Canada, Japan or the United States. Accordingly, copies of this announcement and any other documents relating to the Offer are not being, and must not be, mailed, transmitted or otherwise distributed or sent in or into or from Australia, Canada, Japan or the United States and persons receiving this announcement (including custodians, nominees and trustees) must not distribute or send it in, into or from Australia, Canada, Japan or the United States. Doing so may render invalid any related purported acceptance of the Offer. Peel Hunt plc, which is regulated in the United Kingdom by The Securities and Futures Authority Limited, has approved this document solely for the purposes of Section 57 of the Financial Services Act 1986. Peel Hunt plc is acting for SPARK and no-one else in connection with the Offer and will not be responsible to anyone other than SPARK for providing the protections afforded to customers of Peel Hunt plc nor for giving advice in relation to the Offer. Grant Thornton is acting for Softtechnet and no-one else in connection with the Offer and will not be responsible to anyone other than Softtechnet for providing the protections afforded to clients of Grant Thornton nor for giving advice in relation to the Offer. The new SPARK Shares and new SPARK Warrants to be issued pursuant to the Offer have not been, nor will they be, registered under the United States Securities Act of 1933, as amended nor under the relevant securities laws of Australia, Canada, Japan or any state of the United States and may not (except in the case of the United States, pursuant to an applicable exemption from the Securities Act) be offered, sold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the United States. This announcement does not constitute an offer or invitation to purchase any securities. Not for release or distribution in, into or from the United States, Canada, Australia or Japan. NewMedia SPARK plc ('SPARK') Recommended Offer for Softtechnet.com plc ('Softtechnet') Introduction The Boards of SPARK and Softtechnet announce the terms of a recommended offer by SPARK to acquire the whole of the issued and to be issued share capital of Softtechnet. The Offer will be made by Peel Hunt plc on behalf of SPARK. The Offer values each Softtechnet Share at 24p and the entire issued share capital of Softtechnet at approximately £33.5 million. The Offer is conditional, inter alia, upon SPARK Shareholders passing appropriate resolutions to authorise the directors of SPARK to allot the new SPARK Shares and the new SPARK Warrants and on the admission of the new SPARK Shares and new SPARK Warrants to trading on AIM. The resolutions are to be proposed at an Extraordinary General Meeting of SPARK. Certain terms used in this announcement are defined in Appendix II. Terms of the Offer On behalf of SPARK, Peel Hunt plc will offer to acquire, on the terms and subject to the conditions set out in Appendix I and the further terms to be set out in the formal Offer Document and the Form(s) of Acceptance, all of the Softtechnet Shares. The Offer will be made on the basis of: 4 new SPARK Shares and 1 new SPARK Warrant for every 10 Softtechnet Shares and so in proportion for any other number of Softtechnet Shares held. Fractional entitlements to new SPARK Shares and new SPARK Warrants will be disregarded and will not be issued to Softtechnet Shareholders. The Offer values each Softtechnet Share at 24p and the issued share capital of Softtechnet at approximately £33.5 million. This represents a premium of approximately 65.5 per cent. over the closing middle-market price of 14.5p for a Softtechnet Share on 25 May 2000, being the last dealing day prior to the date of this announcement. Recommendation The Board of Softtechnet, which has been so advised by Grant Thornton, considers the terms of the Offer to be fair and reasonable. Accordingly, the Board of Softtechnet intends unanimously to recommend all Softtechnet Shareholders to accept the Offer, as the directors of Softtechnet have irrevocably undertaken to do in respect of their own beneficial shareholdings. In providing this advice, Grant Thornton has taken into account the commercial assessments of the directors of Softtechnet. Background to and reasons for the Offer Since its flotation on AIM in October 1999, SPARK has made substantial progress. The Company has invested approximately £130 million in a portfolio of 39 investments, including the £85 million acquisition of the leading Swedish incubator Cell ICD and its portfolio in March of this year. SPARK is now the largest specialist Internet and technology investment company quoted in the UK, with offices in London and Stockholm, a substantial and well-diversified investment portfolio, and one of the largest specialist investment teams operating in this area. SPARK's preliminary results for the period to 31 March 2000, which are also announced today, show a pre-tax profit of approximately £2.9 million together with further unrealised portfolio gains transferred to reserves of approximately £18 million. SPARK's stated net asset value as at 31 March 2000 was approximately 60p per share, including cash resources of approximately £33 million. SPARK has made further investments since 31 March and its present cash resources are approximately £23 million. SPARK's aim is to build further upon its leadership position in this area, and the acquisition of Softtechnet will represent a significant further step forwards. The two companies are highly complementary, and advantages of the merger include: - The Enlarged Group will have a strong balance sheet, having invested approximately £130 million in its portfolio and having cash resources of over £45 million. Both Boards believe that balance sheet strength is of considerable importance in current turbulent market conditions. - Softtechnet brings significant expertise and infrastructure in the Indian technology and Internet markets. SPARK had identified the Indian market as a particularly attractive area for expansion but has to date lacked the expertise to develop an Indian investment division of its own. The Enlarged Group will benefit from a wholly owned Indian investment subsidiary to be re-named SPARK India, which is strategically positioned to make significant further investments in this area. - SPARK will benefit from Tony Sarin, Softtechnet's Chief Executive, joining the SPARK Board in an executive capacity. He will also act as Chairman of SPARK India. Sanjit Talukdar will be appointed as CEO of SPARK India and will have a key advisory role within the Enlarged Group. SPARK also hopes to retain the interest and advisory input of a number of other Softtechnet non-executive Directors and strategic advisers. The merger of SPARK and Softtechnet represents a pioneering example of two quoted technology and Internet investment companies choosing to come together in order to create a stronger and enlarged group. Both Boards believe there are at present too many quoted Internet investment companies, and that many of them lack the scale of organisational or financial resources necessary to operate effectively in this area. SPARK therefore anticipates further consolidation in this area, and believes that the Enlarged Group will be strongly placed to lead this consolidation. Proposed director and proposed CEO of SPARK India Tony Sarin is a senior equity partner of Morley & Scott, a top thirty-five UK firm of chartered accountants. As well as being one of the four senior partners on the firm's executive committee, he is responsible for advising a substantial corporate client base. Tony has been invited to sit on various committees, including the Bank of England Small Business Panel advising on Asian businesses and the Asian Business Association where he was recently elected as Vice-Chairman. The Asian Business Association works directly under the umbrella of the London Chamber of Commerce where Tony was recently elected as a Council Member. He is a member one of the sub committees of the UK Government's Task Force for 'New Deal' and is a director of Quercus Enterprises Limited, a property investment company Sanjit Talukdar has over ten years' investment related experience. He has worked with leading financial institutions including Credit Suisse First Boston and Foreign and Colonial Emerging Markets Limited, where he launched one of the first open-ended funds to invest in India. He is a director of PNT Capital Advisors, one of the founding shareholders of Softtechnet and formerly investment sub-adviser to the Aberdeen India Fund. Sanjit was a board member of Aberdeen India from March 1997 until its merger in May 1999. He is a professional economist and holds degrees from both Oxford University and the London School of Economics. Irrevocable undertakings to accept the Offer Irrevocable undertakings have been received from the Board of Softtechnet, Standen Consult Limited and PNT Capital Advisors (an adviser to Softtechnet) to accept the Offer in respect of shareholdings which amount, in aggregate, to 11,065,000 Softtechnet Shares, representing approximately 7.92 per cent. of the existing issued ordinary share capital of Softtechnet. In the event that a competing offer is announced by a third party, these undertakings will remain binding. New SPARK Warrants The Board of SPARK will use its reasonable endeavours to have the new SPARK Warrants admitted to trading on AIM no later than the date of admission of the new SPARK Shares to trading on AIM. Each new SPARK Warrant will give a right to subscribe for one SPARK Share at any time during the three years from the date of admission of the new SPARK Warrants to trading on AIM, at an exercise price of 75p per new SPARK Share. The Board of SPARK wishes to make the new SPARK Warrants available to all continuing shareholders in SPARK and, accordingly, a bonus issue of new SPARK Warrants is expected to be made, following the Offer being declared or becoming unconditional in all respects, by SPARK to existing shareholders in SPARK on the basis of 1 new SPARK Warrant for every 10 existing SPARK Shares held. Softtechnet's directors and employees The Board of Softtechnet has agreed to resign upon the Offer becoming or being declared unconditional in all respects. SPARK has confirmed that, in the event that the Offer becomes or is declared wholly unconditional, the existing employment rights, including pension rights, of all employees of Softtechnet will be fully safeguarded. Softtechnet Warrants The Board of SPARK will make appropriate proposals in due course to holders of Softtechnet Warrants to ensure that their interests are safeguarded. Disclosure of Interests in Softtechnet Stanley Hollander, a non-executive director of SPARK, holds 375,000 Softtechnet Shares. Cancellation of trading on AIM of Softtechnet Shares As soon as it is appropriate and possible to do so and subject to the Offer becoming or being declared unconditional in all respects, SPARK intends to apply for the cancellation of trading of Softtechnet Shares on AIM. In addition, on receipt of sufficient acceptances or other acquisition of Softtechnet Shares, SPARK intends to apply the provisions of sections 428 to 430F of the Companies Act 1985 to acquire compulsorily any Softtechnet Shares that have not been assented to or acquired pursuant to the Offer or otherwise. Overseas Softtechnet Shareholders The availability of the Offer to Softtechnet Shareholders not resident in the UK or who are citizens in countries other than the UK, may be affected by the laws of the relevant jurisdiction. Softtechnet Shareholders who are not resident in the UK should inform themselves about and observe any applicable requirements. Unless otherwise determined by SPARK and Softtechnet, the Offer will not be made, directly or indirectly, in into or from, or by use of the mails of, or by any means or instrumentality (including, without limitation, facsimile transmission, telex or telephone) or interstate or foreign commerce of, or any facilities of a national securities exchange of, the United States nor will it be made in into or from Canada, Australia or Japan and, subject to certain exemptions, the Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within the United States, Canada, Australia or Japan. In addition, unless otherwise determined by SPARK and Softtechnet or except as required or permitted by applicable law, copies of this announcement and any other documents related to the Offer are not being, and must not be, mailed or otherwise distributed or sent in or into or from the United States, Canada, Australia or Japan and persons receiving such documents (including custodians, nominees and trustees) must not distribute or send them in, into or from the United States, Canada, Australia or Japan. The new SPARK Shares and new SPARK Warrants to be issued pursuant to the Offer have not been and will not be, registered under the US Securities Act of 1933, as amended, or under any of the relevant securities laws of any state or district of the US, Canada, Australia or Japan. Accordingly, unless an exemption under such Act or other laws is available, the new SPARK Shares may not be offered, sold, transferred or delivered, directly or indirectly, in into or from the US, Canada, Australia or Japan or to or for the account or benefit of any US, Canadian, Australian or Japanese person. This announcement and related materials do not constitute an offer of securities for sale in the US, Canada, Australia of Japan. General The Offer Document, containing the full terms and conditions of the Offer, and the AIM admission document in respect of the new SPARK Shares and the new SPARK Warrants will be posted to Softtechnet Shareholders as soon as practicable and in any event within 28 days of the date of this announcement. This announcement does not constitute an offer or invitation to purchase securities. A circular to SPARK Shareholders explaining the Offer and convening an Extraordinary General Meeting to seek approval for the Offer will also be despatched at the same time. The directors of SPARK accept responsibility for the information contained in this announcement other than that relating to Softtechnet or the Softtechnet Group, but including the statements expressed to be opinions of the directors of SPARK. To the best of the knowledge and belief of the directors of SPARK (who have taken all reasonable care to ensure such is the case), the information contained herein for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The directors of Softtechnet accept responsibility for the information contained in this announcement relating to Softtechnet and the Softtechnet Group. To the best of the knowledge and belief of the directors of Softtechnet (who have taken all reasonable care to ensure such is the case), the information contained herein for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information. The Offer will comply with the rules and regulations of the London Stock Exchange and with the Code. The new SPARK Shares issued pursuant to the Offer will be issued credited as fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and other interests of any nature whatsoever. The new SPARK Shares will rank pari passu in all respects with the existing SPARK Shares including the right to receive and retain in full all dividends and other distributions declared, made or paid after the date of this announcement. Softtechnet Shares to be acquired pursuant to the Offer are to be acquired fully paid and free from all liens, equities, charges, encumbrances, rights of pre-emption and other third party interests of any nature whatsoever and together with all rights now or hereafter attaching thereto, including, without limitation, the right to receive and retain in full all dividends and other distributions declared, made or paid hereafter. The Offer will extend to all existing issued or unconditionally allotted and fully paid Softtechnet Shares and to any Softtechnet Shares that are unconditionally allotted or issued prior to the time and date on which the Offer closes (or such earlier time and/or date, not (without the consent of the Panel) being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances or, if later, the first closing date of the Offer, as SPARK may decide) as a result of the exercise of Softtechnet Warrants or otherwise. The Offer is conditional, inter alia, upon SPARK Shareholders passing appropriate resolutions to authorise the directors of SPARK to allot the new SPARK Shares and the new SPARK Warrants and on the admission of the new SPARK Shares and new SPARK Warrants to trading on AIM. The Board of SPARK intends to vote in favour of such resolutions in respect of its own beneficial holdings of SPARK Shares. Full acceptance of the Offer (assuming no exercise of Softtechnet Warrants) would result in the issue of up to 55,850,000 new SPARK Shares representing approximately 18.2 per cent. of the enlarged issued share capital of SPARK following the completion of the Offer. Peel Hunt plc, which is regulated in the United Kingdom by The Securities and Futures Authority Limited, has approved this document solely for the purposes of Section 57 of the Financial Services Act 1986. Peel Hunt plc is acting for SPARK and no-one else in connection with the Offer and will not be responsible to anyone other than SPARK for providing the protections afforded to customers of Peel Hunt plc nor for giving advice in relation to the Offer. Grant Thornton is acting for Softtechnet and no-one else in connection with the Offer and will not be responsible to anyone other than Softtechnet for providing the protections afforded to clients of Grant Thornton nor for giving advice in relation to the Offer. APPENDIX I CONDITIONS AND FURTHER TERMS OF THE OFFER The Offer, which will be made by Peel Hunt plc on behalf of SPARK, will comply with the applicable rules and regulations of the London Stock Exchange and the Code and will be governed by English law and subject to the jurisdiction of the English courts and will be subject to the terms and conditions set out below and as set out in the formal Offer Document. Conditions of the Offer The Offer will be conditional upon: (i) valid acceptances being received (and not, where permitted, withdrawn) by not later than 3.00 p.m. London time on the first closing date of the Offer (or such later time(s) and/or date(s) as SPARK may, subject to the rules of the Code, decide) in respect of not less than 90 per cent. (or such lesser percentage as SPARK may decide) in nominal value of the Softtechnet Shares to which the Offer relates, provided that this condition shall not be satisfied unless SPARK and/or any of its wholly-owned subsidiaries shall have acquired or agreed to acquire (pursuant to the Offer or otherwise) Softtechnet Shares carrying in aggregate more than 50 per cent. of the voting rights then exercisable at a general meeting of Softtechnet including for this purpose (to the extent, if any, required by the Panel) any such voting rights attaching to any Softtechnet Shares that are unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances whether pursuant to the exercise of any outstanding subscription or conversion rights or otherwise. For the purposes of this condition: (a) the expression 'Softtechnet Shares to which the Offer relates' shall be construed in accordance with sections 428 to 430F of the Act; (b) shares that have been unconditionally allotted shall to the extent (if any) required by the Panel be deemed to carry the voting rights that they will carry upon issue; and (c) valid acceptances shall be treated as having been received in respect of any Softtechnet Shares that SPARK and its subsidiaries shall, pursuant to section 429(8) of the Act, be treated as having acquired or contracted to acquire by virtue of acceptances of the Offer; (ii) the passing at an Extraordinary General Meeting of SPARK (or at any adjournment thereof) of such resolution(s) as are necessary to approve, implement and effect the Offer and the acquisition by SPARK of Softtechnet pursuant thereto; (iii) the London Stock Exchange agreeing to admit to trading on AIM the new SPARK Shares and the new SPARK Warrants to be issued pursuant to the Offer and (unless or to the extent the Panel agrees otherwise) such admission becoming effective in accordance with Chapter 16 of the Rules of the London Stock Exchange, as appropriate, or (if determined by SPARK and subject to the consent of the Panel) the London Stock Exchange agreeing to admit such shares to AIM subject only to (i) the allotment of such shares and/or (ii) the Offer becoming or being declared unconditional in all respects; (iv) no relevant authority having intervened in a way that would or might reasonably be expected to: (a) make the Offer or its implementation or the acquisition or proposed acquisition by SPARK of any Softtechnet Shares, or the acquisition of control of Softtechnet by SPARK, void, unenforceable and/or illegal or, to an extent that is material in the context of the Offer, directly or indirectly restrain, restrict, prohibit, delay or otherwise interfere with the implementation thereof, or impose additional conditions or obligations with respect thereto, or otherwise challenge or require amendment of the Offer or the acquisition or proposed acquisition of any Softtechnet Shares, or the acquisition of control of Softtechnet by SPARK to an extent which is material in the context of the Offer; (b) as a result of the Offer, require, prevent or delay the divestiture or alter the terms of any proposed divestiture by SPARK or Softtechnet or any member of the wider SPARK Group or the wider Softtechnet Group of all or any material part of their respective businesses, assets or properties or impose a material limitation on the ability of any of them to conduct any of their respective businesses or to own any of their respective assets or properties or any part thereof in any such case in a manner or to an extent which is material in the context of the wider SPARK Group or the wider Softtechnet Group (as the case may be) taken as a whole; (c) impose any material limitation on the ability of SPARK or of any member of the wider Softtechnet Group to exercise effectively, directly or indirectly, any rights of ownership in respect of shares or other securities (or the equivalent) in, or to manage or control, Softtechnet or, to an extent material in the context of the wider Softtechnet Group taken as a whole, any member of the wider Softtechnet Group; (d) as a result of the Offer, require SPARK or any member of the wider Softtechnet Group to offer to acquire any shares or other securities (or the equivalent) in any member of the wider Softtechnet Group owned by any third party or to sell or offer to sell any shares or other securities (or the equivalent), such acquisition or sale being material in the context of the wider Softtechnet Group taken as a whole; (e) result in a material delay in the ability of SPARK, or render SPARK unable, to acquire some or all of the Softtechnet Shares or require or prevent or materially delay divestiture by SPARK of any such shares or other securities of Softtechnet; (f) result in any member of the wider Softtechnet Group ceasing to be able to carry on its business under any name which it at present uses where such use is material to the business of the wider Softtechnet Group taken as a whole; (g) impose any material limitation on, or result in any material delay in, the ability of any member of the wider SPARK Group or wider Softtechnet Group to integrate or co-ordinate its business, or any part thereof, with the business(es) of any part of the wider SPARK Group or the wider Softtechnet Group in any such case being material in the context of the wider group concerned taken as a whole; or (h) otherwise materially and adversely affect the business, assets, or profits of the wider Softtechnet Group, taken as a whole, to an extent that is material in the context of the wider Softtechnet Group taken as a whole, and all necessary filings having been made, all regulatory and statutory obligations having been complied with, in each case in any relevant jurisdiction, all applicable waiting and other time periods during which any relevant authority could have intervened, in respect of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control of, Softtechnet by SPARK, having expired, lapsed or terminated; (v) all authorisations and determinations necessary in any jurisdiction for or in respect of the Offer or the acquisition or proposed acquisition of any shares or other securities in, or control of, Softtechnet by SPARK having been obtained in terms and in a form reasonably satisfactory to SPARK from all relevant authorities or (without prejudice to the generality of the foregoing) from any persons or bodies with whom any member of the wider Softtechnet Group has entered into contractual arrangements and such authorisations and determinations together with all authorisations and determinations necessary for any member of the wider Softtechnet Group to carry on its business remaining in full force and effect at the time at which the Offer becomes or is otherwise declared unconditional in all respects and all filings necessary for such purpose having been made and there being no notice of any intention to revoke, suspend, restrict, modify or not renew any of the same having been received; (vi) save as disclosed in writing to SPARK or its advisers in connection with the Offer prior to 24 May, 2000 there being no provision of any agreement, arrangement, licence or other instrument which is material to the Softtechnet Group taken as a whole to which any member of the wider Softtechnet Group is a party or by or to which any member of the wider Softtechnet Group or any part of its assets may be bound, entitled or subject or any circumstance that, as a result of the Offer, the proposed acquisition by SPARK of the Softtechnet Shares or any of them, or change in the control or management of any member of the wider Softtechnet Group or otherwise, would or might reasonably be expected to result in (to an extent that is material in the context of the wider Softtechnet Group taken as a whole): (a) any moneys borrowed by, or any other indebtedness, actual or contingent of, or grant available to, any such member being or becoming repayable or capable of being declared repayable immediately or earlier than the repayment date provided for in such agreement, arrangement, licence or other instrument, or the ability of any such member to borrow moneys or incur any indebtedness being withdrawn or inhibited; (b) any such agreement, arrangement, licence or other instrument being terminated or adversely modified or any onerous obligation or liability arising or any material and adverse action being taken or arising thereunder; (c) the assets, rights, liabilities, obligations, interests or business of any member of the wider Softtechnet Group under any such agreement, arrangement, licence or instrument or the interests or business of any such member in or with any other person, firm, company or body (or any arrangements relating to any such interests or business) being terminated or adversely modified or affected; (d) any such member ceasing to be able to carry on its business under any name which it at present uses; (e) any assets or interests of or the use of which is enjoyed by any such member being or falling to be disposed of or charged or any right arising under which any such asset or interest could be required to be disposed of or charged or could cease to be available to any member of the wider Softtechnet Group, in each case otherwise than in the ordinary course of business; (f) any change in or effect on the ownership or use of any intellectual property rights owned or used by any member of the wider Softtechnet Group; (g) the creation or enforcement of any mortgage, charge or other security interest over the whole or any material part of the business, property or assets of any such member or any such security interest (whenever and wherever arising or having arisen) becoming enforceable; or (h) the value of any such member or their respective financial or trading position being prejudiced or adversely affected or materially and adversely modified; or (i) the creation of any liability (actual or contingent) of any member of the wider Softtechnet Group; (vii) no member of the wider Softtechnet Group having, save as announced on or before 24 May 2000 by Softtechnet on the London Stock Exchange (such information being 'publicly announced') or save as fairly disclosed in writing to SPARK or its advisers in connection with the Offer prior to 24 May 2000: (a) (save as between Softtechnet and, on a pre-emptive basis, any member of the wider Softtechnet Group which is a wholly owned subsidiary of Softtechnet or upon the exercise of rights to subscribe for Softtechnet Shares pursuant to the existing Softtechnet Warrants on or prior to 24 May 2000) issued or agreed to issue or authorised or proposed the issue of additional shares of any class, or of securities convertible into or exchangeable for, or rights, warrants or options to subscribe for or acquire, any such shares or convertible securities or redeemed, purchased or reduced any part of its share capital; (b) recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus, dividend or other distribution other than to Softtechnet or to a member of the wider Softtechnet Group which is a wholly- owned subsidiary of Softtechnet; (c) acquired or disposed of or transferred, mortgaged or charged or created any security interest over any assets or any rights, title or interest in any asset (including shares and trade investments) which in any such case is material in the context of the wider Softtechnet Group taken as a whole or merged with any body corporate or authorised or proposed or announced any intention to propose any merger, demerger, acquisition, disposal, transfer, mortgage, charge or security interest (in each case other than in the ordinary course of business); (d) made or authorised or proposed or announced an intention to propose any change in its share or loan capital and details of which have been disclosed to SPARK or its advisers in connection with the Offer prior to 24 May 2000; (e) issued, authorised or proposed the issue of any debentures or incurred or increased any indebtedness or contingent liability which is material in the context of the wider Softtechnet Group taken as a whole; (f) purchased, redeemed or repaid or proposed the purchase, redemption or repayment of any of its own shares or other securities or reduced or made any other change to any part of its share capital to an extent which (other than in the case of Softtechnet) is material in the context of the Softtechnet Group taken as a whole; (g) entered into any contract, reconstruction, amalgamation, commitment or other transaction or arrangement otherwise than in the ordinary course of business which is material in the context of the wider Softtechnet Group taken as a whole; (h) entered into or varied any contract, transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a loss making, long-term, onerous or unusual nature or magnitude or which involves or could involve an obligation of a nature or magnitude which is material in the context of the wider Softtechnet Group taken as a whole save in the ordinary course of business; (i) entered into any contract, transaction or arrangement which would be materially restrictive on the business of any member of the wider Softtechnet Group; (j) waived or compromised any claim otherwise than in the ordinary course of business which is material in the context of the wider Softtechnet Group taken as a whole; (k) entered into or varied the terms of or terminated any service agreement with any of the directors of Softtechnet in any material respect; (l) taken any corporate action or had any legal proceedings started or threatened against it for its winding-up, dissolution or reorganisation or for the appointment of a receiver, administrator, administrative receiver, trustee or similar officer of all or any of its assets or revenues or any analogous proceedings in any jurisdiction or for the appointment of any analogous person in any jurisdiction; (m) taken any action to commence or institute any legal proceedings or to settle, compromise or discontinue any legal proceedings which have already been commenced or suffered any claims or had any legal proceedings instituted against it or admitted any liability in any such claim or proceedings, failed to take action to refute or defend any such claim or proceedings or taken any action to settle or compromise any such claim or proceedings; (n) made any amendment to its memorandum or articles of association; (o) been unable or admitted that it is unable to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease carrying on all or a substantial part of its business; (p) made or agreed or consented to any significant change to the terms of the trust deeds constituting the pension schemes established for its directors and/or employees and/or their dependants or to the benefits which accrue, or to the pensions which are payable thereunder, or to the basis on which qualification for or accrual or entitlement to such benefits are calculated or determined, or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to any change to the trustees involving the appointment of a trust corporation which would be material in the context of the wider Softtechnet Group taken as a whole; or (q) entered into any contract, commitment, agreement or arrangement or passed any resolution with respect to, or to effect, any of the transactions, matters or events referred to in this condition, or announced an intention to do so; (viii) since 13 March 2000, and save as publicly announced or as fairly disclosed in writing to SPARK or its advisers in connection with the Offer prior to 24 May 2000: (a) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits of Softtechnet or any other member of the wider Softtechnet Group that is material in the context of the wider Softtechnet Group taken as a whole; (b) no litigation or arbitration proceedings, prosecution or other legal proceedings having been announced, instituted or threatened in writing by or against or remaining outstanding against any member of the wider Softtechnet Group or to which any member of the wider Softtechnet Group is or is likely to become a party (whether as plaintiff, defendant or otherwise) and no enquiry or investigation by or complaint or reference to any relevant authority against or in respect of any member of the wider Softtechnet Group having been threatened in writing, announced or instituted or remaining outstanding by, against or in respect of any member of the wider Softtechnet Group and which in any such case might be likely to adversely affect any member of the wider Softtechnet Group to an extent that is material in the context of the wider Softtechnet Group taken as a whole; and (c) no contingent or other liability of any member of the wider Softtechnet Group having arisen or become apparent that might be likely adversely to affect any member of the wider Softtechnet Group that is material in the context of the wider Softtechnet Group taken as a whole; (ix) save as fairly disclosed in writing to SPARK or its advisers in connection with the Offer prior 24 May 2000, SPARK not having discovered that: (a) any financial, business or other information concerning Softtechnet or the wider Softtechnet Group that has been publicly disclosed at any time by or on behalf of any member of the wider Softtechnet Group is misleading, contains a misrepresentation of fact or omits to state a fact necessary to make the information contained therein not misleading and which was not corrected by subsequent public announcement made on the London Stock Exchange on or before 24 May 2000 and which in any such case is material in the context of the wider Softtechnet Group taken as a whole; (b) any information which affects the import of any such information to an extent that is material in the context of the wider Softtechnet Group taken as a whole; or (c) any member of the wider Softtechnet Group or any entity in which any such member has a significant economic interest is subject to any liability (actual or contingent) that has not been publicly announced, such liability being material in the context of the wider Softtechnet Group taken as a whole; (x) SPARK not having discovered that, save as publicly announced prior to 24 May 2000: (a) any past or present member of the wider Softtechnet Group has not complied with all applicable legislation or regulations of any jurisdiction with regard to the storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, which non-compliance or any other storage, disposal, discharge, spillage, leak or emission which has occurred would be likely to give rise to any liability (whether actual or contingent) on the part of any member of the wider Softtechnet Group and which is material in the context of the wider Softtechnet Group taken as a whole; or (b) there is or is likely to be any liability (whether actual or contingent) to make good, repair, reinstate or clean up any property now or previously owned, occupied or made use of by any past or present member of the wider Softtechnet Group, or in which any such member may now or previously have had or be deemed to have or have had an interest, under any environmental legislation, regulation, notice, circular or order of any relevant authority, or to contribute to the cost thereof or associated therewith or indemnify any person in relation thereto, in any such case to an extent that is material in the context of the wider Softtechnet Group taken as a whole. For the purposes of these conditions: (a) 'relevant authority' means any government, government department or governmental, quasi-governmental, supranational, statutory, regulatory or investigatory body, court, trade agency, professional association or institution or environmental body or any other body or person in any jurisdiction; (b) a relevant authority shall be regarded as having 'intervened' if it has instituted, implemented, or threatened or communicated its intention to take or make any action, proceedings, suit, investigation or inquiry or reference, or made, enacted or proposed any statute, regulation, decision or order, or taken any measures or other steps and 'intervene' shall be construed accordingly; (c) 'authorisations' means authorisations, orders, grants, recognitions, confirmations, consents, licences, clearances, permissions, exemptions and approvals; and (d) 'the wider Softtechnet Group' means Softtechnet and its subsidiary undertakings, associated undertakings and any other undertakings in which Softtechnet and such undertakings (aggregating their interests) have a substantial interest and 'the wider SPARK Group' means SPARK and its subsidiary undertakings, associated undertakings and any other undertaking in which SPARK and such undertakings (aggregating their interests) have a substantial interest and, for these purposes, 'subsidiary undertaking', 'associated undertaking' and 'undertaking' have the meanings given by the Companies Act 1985 (but for this purpose ignoring paragraph 20(1)(b) of Schedule 4A to the Companies Act 1985) and 'substantial interest' means a direct or indirect interest in 20 per cent. or more of the equity capital of an undertaking. SPARK reserves the right to waive all or any of the above conditions, in whole or in part except conditions (i), (ii) and (iii). The Offer will lapse unless all the above conditions have been fulfilled or (if capable of waiver) waived, or, where appropriate, have been determined by SPARK in its reasonable opinion to be or remain satisfied, by midnight on the day which is 21 days after the later of the first closing date of the Offer and the date on which the Offer becomes or is declared unconditional as to acceptances, or such later date as SPARK may, with the consent of the Panel, decide, provided that SPARK shall be under no obligation to waive or treat as fulfilled any of conditions (iv) to (x) inclusive by a date earlier than the latest date specified or referred to above for the fulfillment thereof notwithstanding that any such condition or the other conditions of the Offer may at any date earlier than such latest date have been waived or fulfilled and that there are at such earlier date no circumstances indicating that any of such conditions may not be capable of fulfilment. Further Terms of the Offer The Offer will lapse if the acquisition of Softtechnet is referred to the Competition Commission before the later of 3.00 pm (London time) on the first closing date of the Offer and the date on which the Offer becomes or is declared unconditional as to acceptances. In such circumstances, the Offer will cease to be capable of further acceptance and SPARK and accepting Softtechnet Shareholders shall thereupon cease to be bound by acceptances submitted at or before the time when the Offer so lapses. If SPARK is required by the Panel to make an offer for Softtechnet Shares under the provisions of Rule 9 of the Code, SPARK may make such alterations to the terms and conditions of the Offer as are necessary to comply with the provisions of that Rule. APPENDIX II DEFINITIONS The following definitions apply throughout this announcement, unless the context otherwise requires: 'AIM' the Alternative Investment Market of the London Stock Exchange 'Australia' the Commonwealth of Australia, its states, territories or possessions 'Board' The board of directors of SPARK and Softtechnet (as the case may be) 'Code' The City Code on Takeovers and Mergers 'Enlarged Group' the SPARK Group, as enlarged by the acquisition of Softtechnet 'Form(s) of the form(s) of acceptance and authority Acceptance' relating to the Offer 'Japan' Japan, its cities, its prefectures, territories and possessions 'London Stock the London Stock Exchange Limited Exchange' 'new SPARK the new ordinary shares of 2.5p each in the Shares' capital of SPARK to be issued credited as fully paid pursuant to the Offer 'Offer' the recommended offer to be made by Peel Hunt plc on behalf of SPARK to acquire all of the Softtechnet Shares on the terms and subject to the conditions set out in this announcement and in Appendix I to this announcement and to be set out in the formal Offer Document and Form(s) of Acceptance including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer including, unless the context otherwise requires, the offer to be made to the holders of the Summer Warrants 'Offer Document' the document to be issued to Softtechnet Shareholders making the Offer 'Panel' The Panel on Takeovers and Mergers 'Securities Act' the US Securities Act of 1933 (as amended) 'SPARK ' or NewMedia SPARK plc 'Company' 'SPARK Group' SPARK and its subsidiary undertakings 'SPARK India' the Mauritian subsidiary of Softtechnet, which is intended to be renamed SPARK India 'SPARK holders of SPARK Shares Shareholders' 'SPARK Shares' ordinary shares of 2.5p each in the capital of SPARK 'SPARK Warrants' the warrants to subscribe for SPARK Shares to be issued pursuant to the Offer and the bonus issue to SPARK Shareholders discussed in this announcement 'Softtechnet' Softtechnet.com plc 'Softtechnet Softtechnet and its subsidiary undertakings Group' 'Softtechnet holders of Softtechnet Shares Shareholders' 'Softtechnet the existing issued or unconditionally Shares' allotted and fully paid ordinary shares of 4p each in the capital of Softtechnet and any further such shares that are issued or unconditionally allotted before the time and date on which the Offer closes (or such earlier time and/or date, not without the consent of the Panel being earlier than the date on which the Offer becomes or is declared unconditional as to acceptances or, if later, the first closing date of the Offer), as SPARK may decide 'Softtechnet the 10,000,000 warrants to subscribe for Warrants' Softtechnet Shares outstanding at the date of this announcement 'UK' or 'United the United Kingdom of Great Britain and Kingdom' Northern Ireland 'US' or 'United the United States of America, its territories States' and possessions, any state of the United States of America and the District of Columbia and all other areas subject to its jurisdiction APPENDIX III BASES AND SOURCES OF INFORMATION (1) Unless otherwise stated, the financial information concerning SPARK contained in this announcement has been extracted from the preliminary statement of results for the period ended 31 March 2000, which was announced today. (2) The value of the Offer is based on 139,625,000 Softtechnet Shares in issue on 25 May 2000. The closing middle-market prices of the Softtechnet Shares are based on the middle-market price of Softtechnet Shares derived from the AIM Appendix to the Daily Official List of the London Stock Exchange for the relevant dates. (3) The percentage of the enlarged issued share capital of SPARK is based on 250,752,957 SPARK Shares in issue on 25 May 2000. The closing middle-market prices of SPARK Shares are based on the middle-market price of SPARK Shares derived from the AIM Appendix to the Daily Official List of the London Stock Exchange for the relevant dates.
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