TIDMCNS
RNS Number : 7652B
Corero Network Security PLC
06 April 2017
6 April 2017
Corero Network Security plc
("Corero" or the "Company")
Placing and Subscription to raise GBP5.6 million, approval of
waiver of obligations
under Rule 9 of the Takeover Code and Notice of General
Meeting
Corero, the AIM listed network security company, is pleased to
announce that, further to the announcement on 30 March 2017, it has
conditionally raised approximately GBP5.6 million (before expenses)
through a Placing and Subscription at a Placing Price of 5 pence
per new Ordinary Share. Due to the level of demand from existing
shareholders, Jens Montanana, the Company's Chairman, has agreed to
reduce the amount he will subscribe for and has conditionally
agreed to subscribe for approximately GBP3.4 million of the
Subscription and Placing, increasing his shareholding in the
Company to approximately 44 per cent. of the issued share capital
of the Company as enlarged by the Transaction.
Highlights
-- Placing and Subscription of up to 112,000,000 new Ordinary
Shares at the Placing Price of 5 pence per Ordinary Share to raise
up to GBP5.6 million (before expenses)
-- The Placing Price represents a discount of 5 per cent. to the
Company's closing mid-market share price on 5 April 2017, being the
latest practicable date prior to this announcement
-- The net proceeds will be used to support SmartWall sales and
marketing activities in the US and Europe, for further development
of the SmartWall product and for the general working capital
requirements of the Group
-- The Placing and Subscription are conditional, inter alia,
upon Independent Shareholders approving the Whitewash Resolution
and Shareholders approving the other Resolutions at a General
Meeting. A circular containing a Notice of General Meeting will be
sent to Shareholders today
Capitalised terms in this announcement shall have the same
meaning as in the Circular that will be posted to shareholders
today.
Introduction
The Company has today announced a conditional Placing and
Subscription to raise up to approximately GBP5.6 million before
expenses by the issue and allotment by the Company of up to
112,000,000 new Ordinary Shares at the Placing Price of 5 pence per
Ordinary Share to certain institutional investors, the Concert
Party and other investors. In the announcement made by the Company
on 30 March 2017, Jens Montanana indicated that he proposed to
subscribe for no less than GBP4.2 million in the Subscription and
Placing, thereby increasing his shareholding in the Company to
above 50 per cent. However, due to the level of demand from
existing shareholders to participate in the Placing, Jens Montanana
has agreed to reduce the amount that he will subscribe for in the
Subscription.
The Concert Party consists of Jens Montanana and Andrew Miller.
As at the date of this announcement Jens Montanana has an interest
in 69,303,990 Ordinary Shares, representing 34.1 per cent of the
Company's current issued share capital and Andrew Miller has an
interest in 891,437 Ordinary Shares, representing 0.4 per cent of
the Company's current issued share capital. The Concert Party
therefore has an aggregate holding in the Company of 70,195,427
Ordinary Shares, representing 34.5 per cent of the Company's
current issued share capital. In addition, the Concert Party has an
interest in the Company of a total of 2,921,000 Existing CP Share
Options. Should the Concert Party exercise its rights under the
Existing CP Share Options in full, and assuming no other Ordinary
Shares are issued by the Company, then the Concert Party would have
an interest in the Company of 73,116,427 Ordinary Shares
representing 35.4 per cent of the Company's issued share capital as
enlarged by the exercise of the 2,921,000 Existing CP Share
Options.
Under the terms of their Subscription Agreements, Jens Montanana
and Andrew Miller have conditionally agreed to subscribe for
68,696,010 Subscription Shares and 200,000 Subscription Shares
respectively as part of the Transaction. Upon the issue of
Subscription Shares to the Concert Party, it will together hold
44.1 per cent of the Enlarged Share Capital. Conditional on the
passing of the Resolutions, the Company is also proposing to grant
share options to each member of the Concert Party under the
Company's existing share option scheme, immediately following the
General Meeting, which will vest subject to certain performance
criteria. It is proposed that the Concert Party will be granted an
aggregate of 2,913,000 New CP Share Options. Should the Concert
Party exercise its rights under its Existing CP Share Options and
New CP Share Options in full and the Transaction be completed, and
assuming no other Ordinary Shares are issued by the Company
following the date of the Circular (except for the New Ordinary
Shares) and the Transaction is fully subscribed, then the Concert
Party would have an interest in the Company of 144,925,437 Ordinary
Shares, representing 45.1 per cent of the Company's issued share
capital at that date.
Since (i) the proposed subscription of Subscription Shares by
Jens Montanana and the Concert Party will result in Jens Montanana
and the Concert Party increasing its shareholding; and/or (ii) the
exercise of any CP Share Options (being any Existing CP Share
Options or New CP Share Options), would increase the percentage of
Ordinary Shares in which Jens Montanana and the Concert Party has
an interest, without a waiver of the obligations under Rule 9 of
the Takeover Code (commonly referred to as a "Whitewash"), Jens
Montanana and the Concert Party would be obliged to make a general
offer to Shareholders under Rule 9 of the Takeover Code in either
circumstance. The Panel has agreed to a waiver, subject to the
Whitewash Resolution being approved at the General Meeting (on a
poll) by Independent Shareholders who hold in excess of 50 per
cent. of the Independent Shares.
The Transaction and the grant of New CP Share Options are
therefore each conditional, inter alia, upon Shareholders approving
the Whitewash Resolution and the Transaction is also conditional
upon Shareholders approving the resolutions that will grant the
Directors the authority to allot the New Ordinary Shares and to
disapply statutory pre-emption rights in respect of the New
Ordinary Shares, at the General Meeting. Admission is expected to
occur no later than 8.00 a.m. on 25 April 2017 or such later time
and/or date as Cenkos and the Company may agree. The Placing and
Subscription are not underwritten.
The purpose of the Circular is to explain the background to, and
the reasons for, the Resolutions and the proposed Transaction and
to explain why the Board considers the Transaction to be in the
best interests of the Company and its Shareholders as a whole, and
why the Board recommends that you vote in favour of Resolutions 2
and 3 and the Independent Directors alone recommend that you vote
in favour of the Whitewash Resolution.
Corero Network Security plc - Nature of Business
Corero is positioned to be a leader in real-time,
high-performance distributed denial-of-service ("DDoS") mitigation
solutions. Service providers, hosting providers and online
enterprises rely on Corero's award winning technology to eliminate
the DDoS threat to their environment through automatic attack
detection and mitigation, coupled with comprehensive network
visibility, analytics and reporting. Corero's next generation
technology provides a First Line of Defense(R) against DDoS attacks
in the most complex environments while enabling a more cost
effective economic model than previously available.
Background to and reasons for the Transaction
The Transaction is being undertaken to support the execution of
the Company's business plan which is focused on selling into the
target market for its SmartWall Threat Defense System ("SmartWall")
product, namely service providers including telecommunication ISPs,
data centre hosting providers, multiple service operators and
mobile operators and online enterprises.
The Company's SmartWall products enable it to address the
growing service provider market demand for DDoS protection
solutions. The Board believes that the SmartWall has several
competitive differentiators to its peers and that Corero is well
positioned to capitalise on the evolving DDoS defence market and
the increasing requirement for real-time, automatic DDoS
mitigation. This is a market the SmartWall was designed to
address.
As set out in a trading update released by the Company on 9
February 2017 and the audited accounts of the Company for the year
ended 31 December 2016 (published today), the Company had net cash
at 31 December 2016 of $2.9 million. Corero recorded an EBITDA loss
(operating loss before depreciation, amortisation and financing)
for the year ended 31 December 2016 of approximately $5.1 million
(2015: EBITDA loss $6.4 million). In order to get to the position
of being cash generative, the Company requires further financing
support. Since the trading update on 9 February 2017, the Board has
explored various forms of financing, both equity and debt, and
following consultation with key Shareholders, has concluded that an
equity fundraising is the most appropriate form of financing for
the Company.
Use of proceeds
The Company intends to raise up to GBP5.6 million before
expenses via the Placing and Subscription. The estimate of expenses
for the Transaction is expected to be approximately GBP0.15
million.
The net proceeds of the Transaction will be deployed to support
SmartWall sales and marketing activities in the US and Europe, for
further development of the SmartWall product and for the general
working capital requirements of the Group.
If the Resolutions are not approved by the requisite number of
Independent Shareholders and Shareholders (as applicable) and/or
the Placing and Subscription do not proceed for any other reason,
the Company will be required to immediately secure alternative
financing for the purposes set out above from alternative
sources.
The Placing and Subscription
Details of the Placing
The Company has conditionally raised approximately GBP2.1
million before expenses by the conditional Placing of up to
42,803,990 Placing Shares at the Placing Price to the Placees.
The Placing is conditional, inter alia, upon:
a) the passing of the Whitewash Resolution by Independent Shareholders on a poll;
b) the passing of the Resolutions (excluding the Whitewash
Resolution) at the General Meeting by Shareholders;
c) the Placing Agreement becoming or being declared
unconditional in all respects and not having been terminated in
accordance with its terms prior to Admission;
d) the Subscription Agreements becoming or being declared
unconditional in all respects and not having been terminated in
accordance with their terms prior to Admission; and
e) Admission becoming effective by no later than 8.00 a.m. on 25
April 2017 or such later time and/or date (being no later than 8.00
a.m. on 9 May 2017) as Cenkos and the Company may agree.
If any of the conditions are not satisfied, the Placing Shares
will not be issued and all monies received from the Placees will be
returned to the Placees (at the Placees' risk and without interest)
as soon as possible thereafter. The Placing is not being
underwritten.
The Placing Shares will be issued free of all liens, charges and
encumbrances and will, when issued and fully paid, rank pari passu
in all respects with the Existing Ordinary Shares, including the
right to receive all dividends and other distributions declared,
made or paid after the date of their issue.
Application will be made to the London Stock Exchange for the
admission of the Placing Shares to trading on AIM. It is expected
that Admission will occur and that dealings will commence at 8.00
a.m. on 25 April 2017 at which time it is also expected that the
Placing Shares will be enabled for settlement in CREST.
Details of the Subscription
The Company has conditionally raised GBP3.5 million before
expenses by the conditional Subscription of 69,196,010 Subscription
Shares at the Placing Price by each of Jens Montanana, Andrew
Miller and Andrew Lloyd. Each of Mr Montanana, Mr Miller and Mr
Lloyd have entered into a Subscription Agreement with the Company
pursuant to which each has conditionally agreed to subscribe for a
specific number of Subscription Shares set out in that person's
Subscription Agreement. None of the Subscription Agreements are
conditional on any other Subscription Agreement but each
Subscription Agreement is subject to the same conditions.
The Subscription is conditional upon the passing of the
Whitewash Resolution by Independent Shareholders on a poll, the
passing of the Resolutions (excluding the Whitewash Resolution) at
the General Meeting by Shareholders and Admission. The Subscription
is not being underwritten.
The Subscription Shares will be issued free of all liens,
charges and encumbrances and will, when issued and fully paid, rank
pari passu in all respects with the Existing Ordinary Shares,
including the right to receive all dividends and other
distributions declared, made or paid after the date of their
issue.
Application will be made to the London Stock Exchange for the
admission of the Subscription Shares to trading on AIM. It is
expected that Admission will occur and that dealings will commence
at 8.00 a.m. on 25 April 2017 at which time it is also expected
that the Subscription Shares will be enabled for settlement in
CREST.
Directors' Participation in the Transaction and Related Party
Transaction
Under the terms of the Subscription Agreements, Jens Montanana,
Andrew Miller and Andrew Lloyd, each a Director of the Company,
have conditionally agreed to subscribe for new Ordinary Shares as
part of the Subscription. The interests of the Directors on 5 April
2017 (being the last practicable date prior to publication of this
announcement) are, and immediately following Admission will be, as
follows:
Director Number Number Resulting Resulting
of Ordinary of New number holding
Shares Ordinary of Ordinary as a percentage
held on Shares Shares of the
5 April subscribed held immediately Enlarged
2017 (being for in following Share Capital
the last the Subscription Admission
practicable
date prior
to publication
of this
announcement)
Jens Montanana 69,303,990* 68,696,010** 138,000,000 43.8%
Andrew Miller 891,437 200,000 1,091,437 0.3%
Andrew Lloyd 0 300,000 300,000 0.1%
Total 70,195,427 69,196,010 139,391,437 44.2%
* of which 21,700,181 Ordinary Shares are held in the name of
JPM International Limited, which is wholly owned by Jens Montanana,
and 29,850,000 Ordinary Shares are held in the name of The New
Millennium Technology Trust.
** which will be subscribed for by JPM International Limited,
which is wholly owned by Jens Montanana, or by The New Millennium
Technology Trust, of which Jens Montanana is a beneficiary.
The participation in the Placing and Subscription by Jens
Montanana, Andrew Miller and Andrew Lloyd, as Directors of the
Company, constitutes a related party transaction pursuant to the
AIM Rules. Richard Last and Ashley Stephenson, being the only
Directors who will not participate in the Placing and Subscription,
consider, having consulted with Cenkos, the Company's nominated
adviser, that the participation in the Placing and Subscription by
these Directors, as set out above, is fair and reasonable insofar
as Shareholders are concerned.
The Company also proposes to grant share options over Ordinary
Shares to each member of the Concert Party immediately following
the General Meeting, conditional on the passing of the Whitewash
Resolution. It is proposed that Jens Montanana and Andrew Miller
will receive 994,000 New CP Share Options and 1,919,000 New CP
Share Options, respectively. If the Whitewash Resolution is not
approved by the requisite number of Independent Shareholders, the
grant of New CP Share Options to the members of the Concert Party
will not proceed.
The Takeover Code
The Takeover Code is issued and administered by the Takeover
Panel. The Takeover Code applies, inter alia, to all public
companies which have their registered office in the United Kingdom.
The Company is such a company and Shareholders are therefore
entitled to the protections afforded by the Takeover Code.
Under Rule 9 of the Takeover Code, any person who acquires an
interest (as such term is defined in the Takeover Code) in shares
which, taken together with the shares in which he and persons
acting in concert with him are interested, carry 30 per cent. or
more of the voting rights in a company that is subject to the
Takeover Code, is normally required to make a general offer to all
of the remaining shareholders to acquire their shares. Similarly,
when any person, together with persons acting in concert with him,
is interested in shares which in aggregate carry not less than 30
per cent. of the voting rights but does not hold shares carrying
more than 50 per cent. of the voting rights of such a company, a
general offer will normally be required if any further interests in
shares are acquired which increases the percentage of shares
carrying voting rights by any such person. Such an offer would have
to be made in cash at a price not less than the highest price paid
by him, or by any member of the group of persons acting in concert
with him, for any interest in shares in the company during the 12
months prior to the announcement of the offer. A shareholder will,
in such circumstances, incur an obligation to make a mandatory
offer unless the consent of the Takeover Panel to a waiver of such
an obligation is obtained.
Shareholders should be aware that if the Whitewash Resolution is
passed and the Subscription completes, then following completion of
the Transaction, Jens Montanana will hold an interest in Ordinary
Shares carrying more than 30 per cent., but not more than 50 per
cent., of the voting rights of the Company's voting share capital.
As such, for the purposes of the provisions of Rule 9 of the
Takeover Code, any further increase in Jens Montanana's interest in
Ordinary Shares will be subject to the provisions of Rule 9 of the
Takeover Code.
Shareholders should also be aware that if the Whitewash
Resolution is passed and the Subscription completes, then following
completion of the Transaction, the Concert Party will also hold an
interest in Ordinary Shares carrying more than 30 per cent., but
not more than 50 per cent., of the voting rights of the Company's
voting share capital. As a result, for as long as they continue to
be treated as acting in concert, any further increase in the
Concert Party's interest in Ordinary Shares will also be subject to
the provisions of Rule 9 of the Takeover Code. Furthermore, Andrew
Miller will not be able to increase his percentage interest in
Ordinary Shares through or between a Rule 9 threshold without Panel
consent.
The Concert Party
Under the Takeover Code, a concert party arises when persons
acting together pursuant to an agreement or understanding (whether
formal or informal), actively co-operate to obtain or consolidate
control of, or frustrate the successful outcome of an offer for the
Company. Control means an interest or interests in shares carrying
an aggregate of 30 per cent. of more of the voting rights of the
Company irrespective of whether the holding or holdings give de
facto control.
The Company's largest Shareholder and Non-Executive Chairman,
Jens Montanana, together with Andrew Miller, Chief Financial
Officer, have an aggregate holding in the Company of 34.5 Ordinary
Shares at the date of this announcement. As set out in a circular
issued by the Company dated 14 July 2010 and a circular issued by
the Company dated 25 February 2013, Jens Montanana and Andrew
Miller are deemed by the Takeover Panel to be acting in concert for
the purposes of the Takeover Code. Both members of the Concert
Party are Directors and employees of the Company.
Should the Transaction complete, the Concert Party would on
Admission in aggregate hold 139,091,437 Ordinary Shares of the
Company representing 44.1 per cent. of the Company's Enlarged Share
Capital at that date. Further if the Transaction completes and the
Concert Party exercise their rights under both the Existing CP
Share Options and New CP Share Options in full, and assuming no
other Ordinary Shares are issued by the Company following the date
of this anouncement (except for the New Ordinary Shares) and the
Placing and Subscription is fully subscribed, then the Concert
Party would have an interest in the Company of 144,925,437 Ordinary
Shares representing 45.1 per cent of the Company's issued share
capital at that date. Full details of the Concert Parties interests
on Admission and potential interest in Ordinary Shares if the
members of the Concert Party exercise their rights under the CP
Share Options are set out below:
Director Number Existing Number Number Resulting Resulting Number Resulting
of Ordinary holding of Existing of new number holding of New holding
Shares as CP Share Ordinary of Ordinary as CP Share as a
held a Options Shares Shares a Options percentage
on 5 percentage held subscribed held percentage to be of the
April of on 5 for immediately of granted Enlarged
2017 the April in the following the conditionally Share
(being Existing 2017 Subscription Admission Enlarged on the Capital
the last Share (being Share passing assuming
practicable Capital the last Capital of the the
date practicable Resolutions exercise
prior date of all
to prior of the
publication to CP Share
of this publication Options
announcement) of this and
announcement) assuming
no further
issue
of
Ordinary
Shares
Jens
Montanana 69,303,990* 34.07% 425,000 68,696,010** 138,000,000 43.8% 994,000 43.4%
Andrew
Miller 891,437 0.44% 2,496,000 200,000 1,091,437 0.3% 1,919,000 1.7%
Total 70,195,427 34.51% 2,921,000 68,896,010 139,091,437 44.1% 2,913,000 45.1%
* of which 21,700,181 Ordinary Shares are held in the name of
JPM International Limited, which is wholly owned by Jens Montanana,
and 29,850,000 Ordinary Shares are held in the name of The New
Millennium Technology Trust.
** which will be subscribed for by JPM International Limited,
which is wholly owned by Jens Montanana, or by The New Millennium
Technology Trust, of which Jens Montanana is a beneficiary.
Further detail of the Concert Party's interests in the Company
prior to and subsequent to the Transaction, both before and after
any potential exercise of their rights over the Existing CP Share
Options and the New CP Share Options, is set out in paragraph 3 of
Part III of the Circular.
The Concert Party is not financing the Subscription from any
debt facility or other instrument.
Rule 9 Waiver
The issuance of 68,696,010 Subscription Shares to Jens Montanana
pursuant to the Transaction will result in Jens Montanana being
beneficially interested in approximately 43.8 per cent. of the
Enlarged Share Capital. Further, the issuance of 68,896,010
Subscription Shares to the Concert Party pursuant to the
Transaction, which includes the subscription by Jens Montanana,
will result in the Concert Party being beneficially interested in
approximately 44.1 per cent. of the Enlarged Share Capital.
In addition, conditional on the passing of the Resolutions, the
Concert Party will have an interest in the Company of a total of
2,913,000 New CP Share Options and the Concert Party currently has
an interest in the Company of a total of 2,921,000 Existing CP
Share Options. Should the Concert Party exercise their rights under
the CP Share Options in full and the Transaction be completed, and
assuming no other Ordinary Shares are issued by the Company
following the date of this announcement (except the New Ordinary
Shares) and the Placing and Subscription is fully subscribed, then
the Concert Party would have an interest in the Company of
144,925,437 Ordinary Shares representing 45.1 per cent of the
Company's issued share capital at that date.
The Panel has agreed to waive the obligation on Mr Montanana and
the Concert Party to make a general offer that would otherwise
arise as a result of their subscription of Subscription Shares as
part of the Transaction and/or the exercise of Existing CP Share
Options and/or the grant of New CP Share Options, subject to the
approval of the Independent Shareholders, taken on a poll. The
waiver of the obligation on Mr Montanana and the Concert Party to
make a general offer that would otherwise arise as a result of the
exercise of CP Share Options is being made retrospectively as
certain Existing CP Share Options were granted on 3 April 2013, 12
May 2014, 24 April 2015 and 7 January 2017, further details of
which are set out in paragraph 3 of Part III. Accordingly, the
Whitewash Resolution is being proposed at the General Meeting to
approve the Rule 9 Waiver in respect of the Concert Party
participating in the Subscription and/or for the future exercise of
any of the Existing CP Share Options and/or the grant and future
exercise of the New CP Share Options. None of the Placees or
Subscribers (who include the Concert Party) will be entitled to
vote on the Whitewash Resolution.
Intentions of the Concert Party
The Concert Party has confirmed that, if the Whitewash
Resolution is passed by the Independent Shareholders on a poll,
there is no agreement, arrangement or understanding for the
transfer of their Ordinary Shares to any third party. Save as set
out below, the Concert Party is not intending to seek any changes
in respect of: (i) the composition of the Board, nor the Company's
plans with respect to the continued employment of employees and
management of the Company and its subsidiaries (including any
material change in conditions of employment); (ii) the Company's
future business and its strategic plans; (iii) the location of the
Company's place of business; (iv) employer contributions into any
of the Company's pension schemes, the accrual of benefits for
existing members, nor the admission of new members; (v)
redeployment of the Company's fixed assets; or (vi) the
continuation of the Ordinary Shares being admitted to trading on
AIM.
Current trading
The Company has today released its annual audited results for
the year ended ending 31 December 2016. A copy of the annual
audited results for the year ended ending 31 December 2016 is
available on the Company's website at:
www.corero.com/investors.
Independent advice provided to the Board
The Takeover Code requires the Board to obtain competent
independent advice regarding the merits of the Transaction which is
the subject of the Whitewash Resolution, the increase of the
Concert Party's controlling position and the effect it will have on
the Shareholders generally. Accordingly, Cenkos, as the Company's
financial adviser, has provided formal advice to the Board
regarding the Transaction. Cenkos confirms that it is independent
of Jens Montanana and Andrew Miller, being the Concert Party, and
has no commercial relationship with them.
Irrevocable undertakings
The Company has received irrevocable undertakings to vote in
favour of all Resolutions, including the Whitewash Resolution, from
certain Independent Shareholders who in aggregate have a beneficial
interest in respect of 8,265,975 Ordinary Shares representing
approximately 14.2 per cent. of the Existing Ordinary Shares held
by Independent Shareholders. This includes irrevocable undertakings
to vote in favour of the Resolutions received from the Independent
Directors, who hold in aggregate 1,316,667 Ordinary Shares
representing approximately 2.3 per cent. of the Existing Ordinary
Shares held by Independent Shareholders.
In addition, the Company has received irrevocable undertakings
to vote in favour of the Resolutions, save for the Whitewash
Resolution on which they are not able to vote, from all of the
Subscribers (who include the Concert Party) and from certain of the
Placees who in aggregate have a beneficial interest in respect of
125,062,976 Ordinary Shares representing approximately 61.5 per
cent. of the Existing Ordinary Shares.
General Meeting
The Directors do not currently have the authority to allot all
of the New Ordinary Shares on a non-pre-emptive basis and,
accordingly, the Board is seeking the approval of Shareholders to
allot the New Ordinary Shares at the General Meeting.
You will find set out at the end of the Circular a notice
convening a general meeting of the Company to be held at 11.00 a.m.
on 24 April 2017 at the offices of Redleaf Communications, First
Floor, 4 London Wall Buildings, Blomfield Street, London, EC2M 5NT,
at which the following Resolutions will be proposed to approve:
Ordinary Resolutions
1. the Whitewash Resolution;
2. authority for the Directors to allot the New Ordinary Shares
up to a maximum aggregate amount of GBP1,120,000 (being up to
112,000,000 New Ordinary Shares (the maximum number available under
the Placing and Subscription)); and
Special Resolution
3. the disapplication of the statutory pre-emption rights in
connection with the allotment of up to 112,000,000 New Ordinary
Shares pursuant to the Placing and Subscription.
In accordance with the requirements of the Takeover Panel for
granting the Rule 9 Waiver in relation to the Transaction, the
Whitewash Resolution will be taken on a poll of Independent
Shareholders.
To be passed, Resolution 2 (proposed to be passed as an ordinary
resolution) will require a simple majority, and Resolution 3
(proposed to be passed as a special resolution) will require a
majority of not less than 75 per cent. of persons voting in person
or on a poll by proxy in favour of the relevant Resolution.
The authorities to be granted pursuant to Resolutions 2 and 3
shall expire on whichever is the earlier of the conclusion of the
Annual General Meeting of the Company to be held on 20 June 2017 or
the date falling six months from the date of the passing of the
Resolutions 2 and 3 (unless renewed, varied or revoked by the
Company prior to or on that date) and shall be in addition to the
Directors' authorities to allot relevant securities and dis-apply
statutory pre-emption rights granted at the Company's Annual
General Meeting held on 15 June 2016.
Recommendation
The Independent Directors consider the Transaction to be in the
best interests of the Company and its Shareholders as a whole. The
Independent Directors, who have been so advised by Cenkos, consider
that the Transaction is fair and reasonable and in the best
interests of the Independent Shareholders and the Company as a
whole. In providing advice to the Independent Directors, Cenkos has
taken into account the Independent Directors' commercial
assessments.
The Independent Directors unanimously recommend that
Shareholders vote in favour of the Whitewash Resolution, as they
have undertaken to do in respect of their own beneficial holdings,
representing approximately 0.7 per cent. in aggregate of the
Existing Ordinary Shares. Jens Montanana and Andrew Miller, who are
members of the Concert Party and Andrew Lloyd, who is participating
in the Subscription, are not deemed to be independent for the
purpose of this recommendation.
The Directors consider the Placing and Subscription to be in the
best interests of the Company and its Shareholders as a whole. The
Directors as a whole unanimously recommend that Shareholders vote
in favour of all the Resolutions (excluding the Whitewash
Resolution), as they have undertaken to do in respect of their own
beneficial holdings, representing approximately 35.2 per cent. in
aggregate of the Existing Ordinary Shares.
The Transaction is conditional, inter alia, upon the passing of
the Resolutions at the General Meeting. Shareholders should be
aware that if the Resolutions are not approved at the General
Meeting, the Placing and Subscription will not proceed. Should the
Placing and Subscription not proceed, the Company cannot be certain
that suitable financing will be available in the required amounts
or on acceptable terms for the working capital requirements of the
Group.
Important Information
The distribution of this announcement and the offering of the
Firm Placing Shares, the Subscription Shares and the Offer Shares
in certain jurisdictions may be restricted by law. No action has
been taken by the Company or Cenkos Securities that would permit an
offering of such shares or possession or distribution of this
announcement or any other offering or public material relating to
such shares in any jurisdiction where action for that purpose is
required. Persons into whose possession this announcement comes are
required by the Company and Cenkos Securities to inform themselves
about, and to observe such restrictions.
This announcement contains (or may contain) certain
forward-looking statements with respect to certain of the Company's
current expectations and projections about future events. These
statements, which sometimes use words such as "anticipate",
"believe", "intend", "estimate", "expect" and words of similar
meaning, reflect the directors' beliefs and expectations and
involve a number of risks, uncertainties and assumptions that could
cause actual results and performance to differ materially from any
expected future results or performance expressed or implied by the
forward-looking statement. Statements contained in this
announcement regarding past trends or activities should not be
taken as a representation that such trends or activities will
continue in the future. The information contained in this
announcement is subject to change without notice and neither Cenkos
Securities nor, except as required by applicable law, the Company
assumes any responsibility or obligation to update publicly or
review any of the forward-looking statements contained herein. You
should not place undue reliance on forward-looking statements,
which speak only as of the date of this announcement.
Cenkos Securities, which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting solely
as nominated adviser and broker to the Company in connection with
the Firm Placing and this announcement and will not be responsible
to anyone other than the Company for providing the protections
afforded to the clients of Cenkos Securities or for affording
advice in relation to this announcement or any matters referred to
herein. The responsibilities of Cenkos Securities as the Company's
nominated adviser and broker under the AIM Rules for Companies and
the AIM Rules for Nominated Advisers are owed solely to the London
Stock Exchange plc and are not owed to the Company or to any
director of or shareholder of the Company or any other person, in
respect of his decision to acquire shares in the capital of the
Company in reliance on any part of this announcement, or
otherwise.
Enquiries:
Corero Network Security plc
Andrew Miller, CFO Tel: 01895 876
382
Cenkos Securities plc Tel: 020 7397
8900
Bobbie Hilliam - NOMAD
Alex Aylen - Corporate Broking
Redleaf Communications Tel: 020 7382
4747
Rebecca Sanders-Hewett/David Ison/Susie cns@redleafpr.com
Hudson
This information is provided by RNS
The company news service from the London Stock Exchange
END
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April 06, 2017 03:00 ET (07:00 GMT)
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