8th May 2006 07:00
Datacash Group PLC06 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 opportunityin the evolution of DataCash and we believe the combination of DataCash and ProcCyber will enhance the Group's product set, market competitiveness and marketopportunity. The two companies are complementary in their activities and thecombination creates a business that will be well placed to support the paymentprocessing needs of the online gaming industry, cross-border retailers,international telecoms operators and others in the fast-growing, butincreasingly complex, e-commerce world." Enquiries DataCashDavid Bailey, Chairman 0870 727 4781Andrew Dark, Chief Executive Investec Investment BankingKeith Anderson 020 7597 5970Daniel Adams St Brides Media & FinanceIsabel Crossley 020 7242 4477 Investec Investment Banking, a division of Investec Bank (UK) Limited, which isauthorised and regulated by the Financial Services Authority and is a member ofthe London Stock Exchange plc, is acting as Nominated Adviser and Broker for theCompany in relation to the Proposals, and will not be responsible to any otherperson for providing the protections afforded to its customers or for providingadvice 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 theentire issued share capital of Proc Cyber from the Vendor. The acquisition ofProc Cyber provides a number of opportunities for DataCash, including theexpansion of its product offering in areas such as risk management and fraudscreening and an increased exposure to growing e-commerce market segments. Proc Cyber is a provider of risk management, payment processing, payment outsolutions, and financial reconciliation services. Proc Cyber predominantlyservices 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 ingeneral meeting. Shareholder approval will also be required to approve, on apoll, the Waiver granted by the Panel. An Extraordinary General Meeting of the Company is being convened for 31 May2006 to approve the Acquisition and the waiver described above. The Company'sintention 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 outsolutions and financial reconciliation services to companies operatingprincipally in the online gaming markets. Proc Cyber was incorporated as a shelf company in 1998. The entire issued sharecapital of Proc Cyber was transferred to Ridgeway Nominees Limited on 18 March2002. 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 theVendor on 30 September 2003, when the Vendor became involved in theestablishment of the business operations of Proc Cyber and the Vendor grantedRidgeway Nominees Limited a charge over the shares in Proc Cyber to secure theVendor's payment obligation under the sale agreement. Ridgeway Nominees Limitedhas entered into a release of this charge. The Vendor at the same time grantedan option over these shares in Proc Cyber back to Ridgeway Nominees Limitedexercisable at any time by Ridgeway Nominees Limited for such price as theparties could agree and failing such agreement at fair value as established byan independent expert. This option has been terminated, such termination to takeeffect immediately prior to Completion. In consideration for the termination ofthis 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 bemade 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 thelock-in agreement between the Vendor, the Company and Investec. Proc Cyber initially started operating in 2003 in order to provide paymentprocessing support to customers of Microgaming, an online gaming softwareprovider. More recently Proc Cyber has begun to expand into markets other thanthe online gaming market, having recently won a contract with a provider ofvoice over Internet protocol services to provide a fully managed fraud and riskprevention service. Proc Cyber has its main operations in the UK and South Africa and employs 233people. Proc Cyber provides its services through its wholly owned South Africansubsidiary, 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 ofMercantrade in January 2005. Immediately prior to this acquisition,Mercantrade's only activity was to provide Proc Cyber with back office fraud andrisk 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 inCyprus. CSC24Seven provides e-wallet solutions, branded as PaySpark, andpre-paid card products. For the year ended 30 September 2005 CSC24Seven reportedturnover of approximately £619,000. In November 2005 Proc Cyber subscribed for 40 per cent. of Chase TopTechnologies, a payment services provider incorporated in China. Chase TopTechnologies gives Proc Cyber the ability to process domestic Chinese debit andcredit cards. In November 2005, Proc Cyber disposed of its interests in Smart Voucher andUkash, which provide vouchers which can be redeemed at supporting onlinecustomers and are a method of depositing money in addition to debit or creditcards. Ukash remains a payment processor to Proc Cyber. For the year ended 30 September 2005, Proc Cyber Group reported an increase inturnover on continuing operations (which excludes Proc Cyber's interests inSmart Voucher and Ukash) of approximately 43 per cent. from £6.6 million to £9.5million. 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 cashbalance of £2.1 million. Business Model Proc Cyber offers outsourced services that can be split into the following fourcategories: • Risk management • Payment processing • Payment out solutions • Financial reconciliation Risk management Proc Cyber provides its proprietary risk system, Risk Sentinel, to onlinecustomers to allow them to assess the risk of their transactions in real-timeand reduce the back office administration arising from seeking to counterfraudulent transactions. The risk system also provides customers with access tothird party verification services which helps them comply with their regulatoryobligations. The risk system offers rules-based settings that can be tailored to thecustomer's business requirements. The risk system is integrated into ProcCyber's payment gateway allowing the customer to manage risk on their customerpayment processing account during the period between authorisation andsettlement 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 ofthe risk system. These teams operate a 24 hour continuous service and interactwith customers' call centres. Proc Cyber's risk rules and processes areintegrated into customers' business processes. Proc Cyber has developed applications which it uses to perform the operationalfunctions which are integrated into the customer's systems. Some examples of thesystems are a bulk emailing product with standard template and multi-languagecapability, a customer authorisation document management system and riskanalysis applications. Payment processing Proc Cyber provides its payment gateway, which is integrated into the systems ofa number of acquiring banks, payment processors and e-wallets, to allow acustomer 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 accessto risk, verification and multi-currency services. Proc Cyber provides a 24 hourservice which continuously monitors the system and handles client queries. Through Chase Top Technologies, Proc Cyber offers customers access to domesticChinese debit and credit card payment processing. Chase Top Technologies is inturn integrated into Proc Cyber's payment gateway, allowing it to offer thepayment processing channels and risk system of Proc Cyber to Chinese customers. Payment out solutions Proc Cyber currently provides various channels to customers allowing them tomake payments of winnings to their consumers. This service makes use of linkswith various third parties, which enables Proc Cyber to offer its customers asingle point of access for the submission and administration of payments out.Payment out options include wire transfer, cheques, ACH, CFT, debit card ande-wallet refunds. Financial reconciliation Proc Cyber provides management information solutions to customers to reconciletheir transactions and provide exception reports. It also provides summaryreporting 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 withCSC, Proc Cyber operates an e-wallet and pre-paid card issuing service utilisingthe 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, aprovider of online gaming software. Many of Proc Cyber's key clients, includingits three largest customers, which accounted for approximately 60 per cent. ofits revenues for the financial year ended 2005, use the Microgaming software,into which the Proc Cyber risk and processing systems are embedded. Through anIsle of Man company called Internet Technologies Limited, Mr Martin Moshalprovides advisory services to Microgaming. The Vendor has granted the Option tothe Option Holder, which is a company wholly owned by Amber Nominees Limited, asnominee 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 thatthere are opportunities for enhanced growth through acquisition in order to,amongst other things, increase the scale of the business, expand the Company'sproduct offering and extend its geographical reach. There are a number of opportunities which the Directors and Proposed Directorsbelieve 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 theissued share capital of Proc Cyber in consideration for the issue of theConsideration Shares and the grant of the Top-Up Rights. Under the terms of theAcquisition Agreement the Vendor has given the Company warranties andindemnities (including in relation to taxation) regarding the Proc Cyber Groupand the Company has given the Vendor limited warranties inter alia regarding itsauthority and capacity to enter into the Acquisition Agreement and the accuracyof information concerning itself in the AIM Admission Document. Under the terms of the Acquisition Agreement, the warranties given by the Vendorto the Company (other than those relating to title of the Proc Cyber shares) aresubject 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 inescrow to satisfy any claims made by the Company for a breach of the AcquisitionAgreement (or accompanying tax deed) by the Vendor. The amount of theConsideration Shares held in escrow will reduce on the expiry of the Lock-inPeriod to 33.3 per cent. of the Consideration Shares. Immediately following Completion, the shareholding of the Vendor in DataCashwill be, in aggregate, 44,913,111 Ordinary Shares, representing exactly 50 percent. of the Enlarged Issued Share Capital (not taking into account the exerciseof any of the Completion Options which may occur between the date of theAcquisition Agreement and Completion). Pursuant to the Acquisition Agreement,the Company and the Vendor have agreed a top-up mechanism whereby whenever anyof the Completion Options is exercised, the Vendor will have the right tosubscribe for the same number of Ordinary Shares (the "Top-Up Rights"), at thesame 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 ShareCapital. The Vendor may, however, elect not to exercise this right so, while hisholding cannot ever exceed 50 per cent. as a result of exercising the Top-UpRights, it may decrease below 50 per cent. in the event that the Top-Up Rightsare not exercised. Whether or not the Vendor chooses to waive his Top-Up Rightswith respect to a particular Completion Option(s) the Top-Up Rights remain inplace for the exercise of any subsequent Completion Option(s). The Vendor has 20business days in which to exercise this right following notice from the Companythat a Completion Option has been exercised, such notification to be no morethan 10 business days following the issue of Ordinary Shares pursuant to theCompletion Option. This right will exist for so long as any Completion Optionsremain capable of being exercised. On exercise of the Option, the Option Holder will be entitled to exercise theTop-Up Rights in respect of the number of Option Shares that it holds and theVendor's Top-Up Rights will be reduced proportionately. The Top-Up Rights are only triggered by the exercise of Completion Options andare not triggered by the grant or exercise of any other share options or shareoption related instruments over Ordinary Shares, or by any other issue ofOrdinary Shares or other event. Pursuant to the Acquisition Agreement, the Company and the Vendor are eachentitled in certain circumstances to terminate the Acquisition Agreement priorto Completion in which case a break fee of £375,000 is payable to theterminating party. The Acquisition is conditional, inter alia, on (1) the passing of theResolutions 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 ofOrdinary Shares issued to the Vendor from time to time pursuant to theAcquisition Agreement (comprising the Consideration Shares and the OrdinaryShares issued pursuant to the exercise of the Top-Up Rights) as does not exceedthe lower of (i) 29.9 per cent. of the Company's issued share capital from timeto time and (ii) 82.5 per cent. of the Ordinary Shares issued to the Vendorpursuant to the Acquisition Agreement up to a maximum of 38,275,458 OrdinaryShares (the "Option Shares"). The Option Holder is an Isle of Man company calledHurlstone Limited, which is wholly owned by Amber Nominees Limited, as nomineefor the Trust. The trustee of the Trust is Ridgeway Associates Limited of whomthe directors are David Spencer, Ita McArdle, Philip Games, David Karran, MoiraMcHarrie 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 Mancompany called Internet Technologies Limited. Microgaming develops and providesonline gaming software and many of Proc Cyber's key clients, including its threelargest customers, which accounted for approximately 60 per cent. of itsrevenues for the financial year ended 30 September 2005, use the Microgamingsoftware. The Option is exercisable in tranches of 900,000 Option Shares and the exerciseprice will be £1.27 per Option Share. Until the Option is exercised over anyOption Shares the Vendor will retain all voting and other rights in relation tothose Option Shares. As a result of these arrangements, the Option Holder isconsidered to be acting in concert with the Vendor for the purposes of the CityCode. Relationship Agreement Following Admission, the Vendor will be regarded as a controlling shareholder ofthe Company for the purposes of the City Code. In addition, the Vendor is chiefexecutive of Proc Cyber's largest customer, Carmen Media, and a non-executivedirector of Netgiro, one of Proc Cyber's payment processors. The Option Holderwill 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 theRelationship Agreement on Completion, the principal purpose of which is toensure that following Admission, the Enlarged Group is capable of carrying onits business independently of the Vendor, the Trust and the Option Holder andthat transactions and relationships between the Enlarged Group and the Vendor,the Trust and the Option Holder are at arm's length and on normal commercialterms. Current Trading and Prospects DataCash Further to the Company's preliminary results announcement which it released on11 April 2006, 2006 has started encouragingly with first quarter results aheadof the comparable period last year with a new record for the Company ofapproximately 7 million transactions being processed during March. The pipelineof sales prospects remains healthy and the Directors and Proposed Directors areconfident 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 servicesincluding one with a provider of voice over Internet protocol services, and theDirectors and Proposed Directors believe that there are a number ofopportunities for the business to seek for further growth. Enlarged Group The Directors and Proposed Directors believe the Enlarged Group will benefitfrom, amongst other things, the opportunity to cross-sell Proc Cyber's servicesinto DataCash's customer base, the elimination of the need for DataCash todevelop products and services that Proc Cyber has already developed, and anincrease in scale through the combination of the two businesses. In view ofthis, the Directors and Proposed Directors consider that the prospects for theEnlarged 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 andPaul Burton, Managing Director of Proc Cyber, will join the Board of theEnlarged Group. The board of the Enlarged Group immediately following Completionwill 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 andwas involved in establishing the business of Proc Cyber where he led businessdevelopment. Previous roles have included Senior Vice President and Manager ofAfrica region for MasterCard International and Director of Technology andElectronic Banking for The National Commercial Bank in Saudi Arabia. Mr Head iscurrently a non-executive director of Netgiro and chief executive of CarmenMedia. Ashley Head has entered into a letter of appointment with the Company,conditional on Completion, pursuant to which he will be appointed as anon-executive director for an initial term of three years. Mr Head's fee is tobe fixed at £50,000 per annum, subject to review by the Board annually. Theappointment may be terminated for various causes of a standard nature. Mr Headwill be entitled to be reimbursed for all reasonable expenses incurred by him inthe performance of his duties. Mr Head will be subject to restrictionsconcerning the ownership of intellectual property rights and subject to dutiesof confidentiality. Upon termination, no benefits (other than those accruingduring 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 responsibilityfor the day-to-day operations of the business. Prior to this he was managingdirector of Mercantrade (which was acquired by Proc Cyber), having previouslyserved as its financial director. Mr Burton holds a B.com, a B.compt (hons) andCA (S.A.), and is a member of the South Africa Institute of CharteredAccountants. Paul Burton's current service contract with Mercantrade is to be terminated onCompletion and he is to enter into a new service agreement with Proc Cyber asManaging Director. His new service agreement will also confirm his duties as anexecutive director to the Company. Mr Burton's salary is to be South AfricanRands 540,000 per annum subject to annual review by the boards of Proc Cyber orthe Company. Proc Cyber may also pay Mr Burton a discretionary bonus at the endof each financial year of the Company. The contract may be terminated forvarious causes of a standard nature. Additionally, either party may terminatethe contract by giving to the other party not less than six months prior writtennotice. Mr Burton is entitled to certain benefits including becoming a member ofProc Cyber's provident pension fund. Mr Burton is entitled to 20 working days'holiday in each calendar year. Mr Burton is subject to restrictions concerningthe ownership of intellectual property rights and subject to duties ofconfidentiality and non-compete covenants. Upon termination, no benefits (otherthan those accruing during the notice period) are due to him. Mr Burton'scontract is to be governed by South African law. Dealing Restrictions The Vendor has agreed to enter into a lock-in agreement whereby he undertakes tothe Company and Investec that he will not sell or otherwise dispose of anyinterest that he holds in the Consideration Shares or any Ordinary Shares issuedpursuant to the exercise of the Top-Up Rights during the Lock-In Period, subjectto certain exceptions including the transfer of Option Shares to the OptionHolder in accordance with the terms of the Option Agreement, the sale ofConsideration Shares or any Ordinary Shares issued pursuant to the exercise ofthe Top-Up Rights in order to satisfy (whether in whole or in part) anyliability for claims under the Acquisition Agreement and the acceptance of atake-over offer for the Company. The Vendor has also undertaken only to effect adisposal of the Consideration Shares or any Ordinary Shares issued pursuant tothe exercise of the Top-Up Rights through the Company's broker for twelve monthsafter the end of the Lock-In Period. The Option Holder has also agreed to givesimilar undertakings to the Company and Investec on Completion in respect of theOption Shares. City Code The City Code is issued and administered by the Panel. The City Code applies toall takeovers and merger transactions, however effected, where the offereecompany is, inter alia, a listed or unlisted public company resident in the UKand to certain categories of private limited companies. DataCash is such acompany and its Shareholders are therefore entitled to the protections affordedby 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 withshares in which persons acting in concert with him are interested, carry 30 percent. 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 inshares which in the aggregate carry not less than 30 per cent. of the votingrights of a company subject to the City Code and such person, or persons actingin concert with him, acquires an interest in any other shares which increasesthe percentage of shares carrying voting rights in which he is interested, thatperson is normally obliged to make a general offer to the holders of any classof equity share capital whether voting or non-voting and also to the holders ofany other class of transferable securities carrying voting rights. For the purposes of the City Code, persons acting in concert comprise personswho, pursuant to an agreement or understanding (whether formal or informal)co-operate to obtain or consolidate control of a company or to frustrate thesuccessful outcome of an offer for a company. A person and each of itsaffiliated persons will be deemed to be acting in concert all with each other. Immediately following Completion, the Vendor will control 50 per cent. of thevoting share capital of the Company (not taking into account the exercise of anyof the Completion Options which may occur between the date of the AcquisitionAgreement and Completion), and will have the benefit of the Top-Up Rights.Therefore a further increase in the aggregate shareholding of the Vendor andthose parties deemed to be acting in concert with the Vendor will be subject tothe provisions of Rule 9 of the City Code. The Panel has agreed, subject to the Resolution number 2 set out inthe notice of Extraordinary General Meeting being passed on a poll by theShareholders 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 Rulesand is therefore conditional upon the approval of Shareholders being given atthe Extraordinary General Meeting, details of which are set out below. Application will be made for the Existing Ordinary Shares and the ConsiderationShares to be admitted to trading on AIM and it is expected that Admission willbecome effective and that trading in the Ordinary Shares on AIM will commence on1 June 2006. Annual General Meeting The Board has discovered that there was an inadvertent delay in sending out thenotice of annual general meeting, sent with the Company's recently publishedannual report when printed. As a result it is not possible to hold the annualgeneral meeting on the date originally scheduled. As an extraordinary generalmeeting (as set out below) is to be called for 31 May 2006, the Board hastherefore decided that the annual general meeting be reconvened for the samedate as the extraordinary general meeting. Shareholders should thereforedisregard the notice of annual general meeting sent with the Company's recentlypublished annual report and refer to the new notice set out in the AIM AdmissionDocument convening an annual general meeting of the Company to be held atDescartes 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 GeneralMeeting 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 beproposed: • 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 contextrequires 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 theCapital" 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 31Meeting" 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 CompanyShares" "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 ExchangeRelated Shares:
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