12th Sep 2006 07:03
Travelzest plc12 September 2006 12 September 2006 Travelzest plc ("Travelzest" or the "Company") PROPOSED PLACING OF 4,206,349 ORDINARY SHARES AT 126 PENCE PER SHARE PROPOSED ACQUISITION OF itravel2000.com RE-ADMISSION TO TRADING ON AIM RULE 9 WHITEWASH Travelzest plc, the British on-line travel group offering specialist travelprogrammes, announces that it has entered into an agreement to purchase theentire issued share capital of itravel2000.com for a consideration of up toCan$51.5m which will be satisfied partly in cash and partly by the issue ofExchangeable Shares. itravel2000.com is a privately owned Canadian on-line travel agent specialisingin the sale of travel and travel related products. Sales are made by internetweb sites and a customer call centre located in Mississauga, Ontario, Canada. The Company is proposing to raise £11 million from a debt facility to financethe acquisition which is being provided by Barclays Corporate Leverage Finance.It is also proposing to raise £5.3 million, before expenses, through the issueof 4,206,349 Placing Shares by private placing, at a price of 126 pence perPlacing Share to finance certain aspects of the Debt Facility and to provideworking capital for the Enlarged Group. The Placing Shares will representapproximately 26.8 per cent. of the Enlarged Issued Share Capital. At thePlacing Price, the Company's market capitalisation on Admission will be £19.7million (the proforma market capitalisation on Admission, assuming that theInitial Consideration Shares are issued is £29.7 million). The Placing and Acquisition are dependent upon shareholder approval to be soughtat an EGM to be held at the offices of Daniel Stewart on 5 October 2006 Commenting on the acquisition Chris Mottershead, Travelzest's Chief Executive,said: "One of the key elements of Travelzest's strategy is to create a travel groupwhich achieves profits throughout the year. itravel2000.com is one of Canada'slargest privately owned online travel retailers, with a long and establishedtrack record. It has grown its gross sales from Can$30 million in 2001 toCan$178 million in 2005. Importantly, the greater proportion of its business isgenerated in the winter months when many Canadians like to travel abroad, andwill therefore provide counter-seasonal revenue and profit to the predominantlysummer-based revenues and profits of Travelzest's businesses in Europe." The associated admission document is available for one month, free of charge, atthe offices of Daniel Stewart & Company plc, Becket House, 36 Old Jewry, LondonEC2R 8DD. Further information on the Acquisition and Travelzest is below. Enquiries: Christopher Mottershead 020 7747 7231 Travelzest plc Paul Shackleton/Jonny Franklin-Adams 020 7776 6550 Daniel Stewart & Company plc Emma Kane/ Samantha Robbins/ Duncan McCormick 020 7822 0200 Redleaf Communications Limited Daniel Stewart & Co. plc, which is regulated by the Financial ServicesAuthority, is acting as nominated adviser and broker to the Company. It will notbe responsible to any person other than the Company for providing theprotections afforded to its customers or for advising any other person on thecontents of any part this announcement. The responsibilities of Daniel Stewart &Co. plc as the Company's nominated adviser under the AIM Rules are owedsolely to the London Stock Exchange and are not owed to the Company or anyDirector or Shareholder or to any other person, in respect of any decision toacquire Ordinary Shares in reliance on any part of this announcement orotherwise. Daniel Stewart & Co. plc is not making any representation orwarranty, express or implied, as to the contents of this announcement. Introduction itravel2000.com is a privately owned on-line travel agent specialising in thesale of travel and travel related products. Sales are made by internet web sitesand a customer call centre located in Mississauga, Ontario, Canada. Theconsideration will be up to Can$51.5 million (£24.5 million) comprising aninitial adjusted payment based on Can$42 million (£20.0 million) and a deferred,contingent payment of up to Can$9.5 million (£4.5 million). The initial paymentconsists of cash of Can$21 million (£9.95 million) and the issue of 7,938,780Exchangeable Shares. These shares are required to be exchanged on a one for onebasis for shares in Travelzest within five years of completion of theAcquisition. The deferred, contingent payment is dependant on the performance ofitravel2000.com for the financial year ending 31 October 2007 and consists of upto Can$4.75 million (£2.26 million) in cash and the issue of such number ofExchangeable Shares as would have a market value of Can$4.75 million (being1,795,676 Exchangeable Shares at the Current Exchange Rate and at the PlacingPrice). The Company is proposing to raise up to £11 million from the Debt Facility tofinance the Acquisition. The Company is also proposing to raise £5.3 millionfrom the Placing to provide working capital for the Enlarged Group and tofinance the costs of the Proposals. Owing to the size of the Acquisition, whichconstitutes a reverse takeover of the Company under the AIM Rules, thetransaction is conditional on and requires the prior approval of theShareholders, which is being sought at the EGM to be held on 5 October 2006. Additionally, because the vendors (CanCo) will have the right (pursuant to theexercise of rights under the Exchange Agreement) to own more than 30 per cent.of the Enlarged Issued Share Capital immediately following the Acquisition,CanCo would normally be required under Rule 9 of the Code to make a generaloffer for the Ordinary Shares not owned by CanCo. The Panel has, however, agreedto waive this obligation subject to the approval of the Shareholders. Background information on Travelzest Travelzest is a travel group with high quality brands offering specialistholiday programmes. The Company has the following trading subsidiaries: VFB Holidays VFB Holidays, the Group's original subsidiary company was incorporated on 5February 1974 with Michael Bruce-Mitford and his wife as directors. In thefinancial year to 31 October 2005 VFB provided approximately 24,000 holidays andreported a turnover of approximately £11 million. VFB is currently promoting approximately 350 holiday cottages throughout Francefor the summer 2006 season, and has booking arrangements with over 150 hotels,most of which are privately owned and are located in rural or semi-rurallocations. VFB undertakes occasional inspections of the cottages to ensure thatstandards are maintained. VFB specialises in cottage holidays in France, but also has a number of otherholiday programmes including: Short Breaks, France a la Carte (hotelaccommodation), Corsica, Escorted Tours and River Cruises. Holiday Express Limited ("Holiday Express") Holiday Express is a UK on-line travel agent, specialising in on-line travelfulfilment services and online travel sales. Holiday Express' retail business(acting as travel agent), providing package holidays, charter flights and skibooking services, accounts for the vast majority of its revenue and theremainder of its revenue is generated through acting as a tour operator. HolidayExpress operates through a number of travel website domain names, including: - www.holiday.co.uk- www.flight.co.uk- www.discountholidays.com Holiday Express has also recently established a new tour operator called FarAway Holidays specialising in holidays to Thailand, South Africa, Vietnam andother long haul destinations. Holiday Express was acquired on 3 October 2005. Best of Morocco Limited ("Best of Morocco") Best of Morocco is a tour operator specialising in tailor-made holidays toMorocco for individuals or small groups. It provides a personalised service andits experienced staff help each customer select the hotels/resorts from a rangewhich are appropriate for the customer's style of holiday. Best of Morocco isthe premier agent in the UK for the Marathon des Sables, a foot race that takesplace in the Sahara Desert in April each year, covering some 230km. Best ofMorocco was acquired on 30 November 2005. Peng Travel Limited ("Peng Travel") Peng Travel was formed in 1971 to arrange naturist holidays for the UK market.Since then, it has grown to become Britain's leading naturist tour operator.Peng Travel offers to customers a range of naturist resorts worldwide. PengTravel was acquired on 5 May 2006. Fair's Fare Limited ("Fair's Fare") Fair's Fare is a UK firm of airfare analysts, offering travel planning servicesto both private and business clients. Fair's Fare seeks out price options onmajor airlines, but primarily for long-haul travellers in the first and businessclass cabins. Fair's Fare was acquired on 9 June 2006. Strategy Travelzest intends to continue to acquire a number of specialist niche travelbusinesses and online travel agents in order to create a travel group of highquality brands and distribution businesses. The Directors are looking forcompanies which are able to demonstrate a successful track record during thelast two years. The Directors intend that companies which join the Group in thefuture will be specialist by virtue of the types of travel that they sell orhave strong online distribution capabilities. Specialist travel may be bydestination, by type of holiday (for example skiing or golf) or by customertype. Travelzest is also interested in acquiring internet based traveldistribution companies and counter-seasonal profitable travel companies in orderto create a travel group which achieves profits in the winter and summerseasons. The Proposed Acquisition itravel2000.com is a privately owned online travel agent specialising in thesale of travel and travel related products. Sales are made through variousinternet web sites and a customer call centre located in Mississauga, Ontario.Founded in 1994, itravel2000.com is one of Canada's largest privately ownedonline travel retailers. In 2004, there were just over 3,000 International Air Transport Association(IATA) approved travel agents in Canada. The advent of online travel booking haslowered the barriers to entry and made the market more competitive, both inpricing and product offerings, in a short period of time. itravel2000.com has grown its gross sales from Can$30m in 2001 to Can$178m in2005. The greater proportion of itravel2000.com's business is winter-based, thusproviding counter-seasonal revenue to the predominantly summer-based revenues ofTravelzest's businesses in Europe. Despite the pricing pressures faced by the suppliers and tour operators, in partdue to high oil prices and events such as terrorism and natural disasters,commission rates and incentives payable to itravel2000.com have not reduced inrecent years. However, some suppliers are providing incentives to consumers suchas discounted fares and online booking options to encourage buying directly fromthe supplier. itravel2000.com's strategy is to diversify its revenue mix by increasing itsair, car and hotel offerings and so reducing the dependence on predominantlywinter package holiday product offerings. itravel2000.com has invested in thedevelopment of software applications to assist these on-line activities. Subject to the passing of the proposed Resolutions at the EGM, Travelzest willacquire itravel2000.com for an aggregate initial consideration of Can$42 million(subject to a completion adjustment) of which Can$21 million will be paid incash on completion and 7,938,780 Exchangeable Shares will be issued inExchangeCo. CanCo will be entitled to exchange the Exchangeable Shares on a onefor one basis for the Consideration Shares. Contingent consideration, dependingon the future performance of the business, of a maximum of Can$9,500,000 will bepayable, 50 per cent. in cash and 50 per cent. in Exchangeable Shares. Pursuantto the terms of the Acquisition Agreement the Vendors have the right until 31January 2009 to appoint one director to the board of the Company. CanCo will have the potential to own, pursuant to the terms of the AdditionalConsideration under the Acquisition Agreement, such number of Ordinary Shares aswould have a market value of Can$4.75 million. At the Current Exchange Rate andat the Placing Price this would represent for CanCo an aggregate shareholding of38.32 per cent of the then issued share capital of the Company. However, the exchange rate and the share price at the date the AdditionalConsideration is payable may result in the actual percentage of CanCo'saggregate shareholding in the Company being in excess, or far in excess, of38.32 per cent. Immediately following Admission, CanCo will have the right pursuant to theExchange Agreement to own 7,938,780 Ordinary Shares (which would equate to anaggregate of 33.63 per cent. of the then issued share capital of the Company,assuming the Current Exchange Rate and the Placing Price). Details of the Debt Facility The Company has entered into a conditional Debt Facility pursuant to which ithas agreed to raise debt of up to £11 million. The proceeds of the DebtFacility, which will be drawn in one amount, will be used to satisfy, interalia, the cash element of the consideration to be paid to the Individual Vendorsfor the Acquisition and to contribute £500,000 to the Blocked Account for thepurposes of later satisfying certain deferred and contingent considerationpayments in respect of certain other acquisitions. The Debt Facility isconditional, inter alia, upon the passing of Resolutions by the Shareholders,completion of the Acquisition (save as regards any condition in the AcquisitionAgreement relating to the Debt Facility itself being unconditionally available)and Admission. Current trading and prospects The Directors intend to make further acquisitions during the next 12 months.They have identified a number of targets which would enhance the Group'sportfolio. Current trading is in line with expectations and the Directors lookforward to the remainder of the year with confidence and expect itravel2000.comto make a strong contribution during the winter months (in its normal course ofbusiness). Competition The Directors believe that Travelzest's UK tour operators operate in a nichemarket compared to that of the large tour operators (being Thomson Holidays,Airtours, Thomas Cook and First Choice), who typically provide package holidaysto mainstream package holiday destinations. Whilst the Directors understand thatthere is competition amongst the smaller tour operators in the sector, theyintend to take advantage of the economies of scale as the Group grows. itravel2000.com competes with two of the large UK tour operators who ownCanadian travel businesses and is in competition with Canadian travel businessessuch as Air Transat and large US on-line travel agencies such as Expedia andTravelocity. Warrants On 27 April 2005, the Company issued Warrants to Christopher Mottershead andMidicorp over an aggregate of 20 per cent. of the Company's issued share capitalin accordance with the terms of the Warrant Instrument. The Deed of Confirmationcontains a provision whereby, should the Company issue further capital, aproportional number of further Warrants will be issued to ChristopherMottershead and Midicorp, with a strike price equal to the share issue price atthat time. Pursuant to the terms of the Warrant Instrument, a further 1,000,000Warrants will be issued to Midicorp at a price of 126 pence per share as aresult of the issue of the Placing Shares and the Consideration Shares and suchnumber of Warrants will be issued to Christopher Mottershead at a price of 126pence per share so that he will hold Warrants equivalent to 10 per cent. of thethen enlarged issued share capital as a result of the issue of the ConsiderationShares. Immediately following the Original Admission, Merchant Securities Limited wasgranted 86,900 Warrants. In addition Merchant Securities Limited will be grantedfurther Warrants following Admission based on 3 per cent. of the monies raisedby Merchant Securities Limited as part of the Placing. Share Options The Directors believe it is important that directors and employees of theCompany are appropriately and properly motivated and rewarded. To assist in therecruitment, retention and motivation of employees of high calibre, asnecessary, the Directors consider that the Company must have an effectiveremuneration strategy. To this end, the Directors have established the EMIScheme and an unapproved option scheme under which eligible persons will beinvited to participate at the discretion of the remuneration committee of theBoard. Details of the Placing The Company is proposing to raise £5.3 million, before expenses, through theissue of 4,206,349 Placing Shares at a price of 126 pence per Placing Sharepursuant to the Placing Agreement. The Placing has been split into two tranches. The first tranche of £1.2 million(the VCT Placing Shares) will be VCT qualifying and admission of the VCT PlacingShares will occur, subject to passing Resolutions 3, 4 and 5. Proceeds of theVCT Placing will be used for working capital purposes within the UK. The secondtranche of £4.1 million (the Non-VCT Placing Shares) will be issued up to fivedays later. £1.5 million of the proceeds of the Non-VCT Placing will be paidinto the Blocked Account in accordance with the terms of the Facility Agreement.The remaining £2.6 million will be used to pay the expenses of the Proposals andfor ongoing working capital for the Enlarged Group. The Placing is not conditional on the Acquisition. However, as a conditionprecedent under the Facility Agreement, the Company is obliged to provideevidence that at least £4 million is raised through the issue of the PlacingShares. The Placing Shares will represent approximately 26.84 per cent. of the EnlargedIssued Share Capital. Following Admission, the Existing Ordinary Shares willrepresent approximately 73.16 per cent. of the Enlarged Issued Share Capital. Atthe Placing Price and assuming the Initial Consideration Shares have beenissued, the Company's market capitalisation will be £29.7 million. Upon Admission, the Directors (and persons connected and/or associated withthem) will hold, in aggregate, approximately 19.59 per cent. of the EnlargedIssued Share Capital. The Placing Shares will rank pari passu in all respects with the ExistingOrdinary Shares. Dealings in the VCT Placing Shares on AIM are expected tocommence on 6 October 2006. Dealings in the Non-VCT Placing Shares on AIM areexpected to commence on 9 October 2006. It is expected that CREST accounts willbe credited on the respective days that the VCT Placing Shares and Non-VCTPlacing Shares are admitted to AIM and that certificates will be despatched byfirst class post by 19 October 2006. Directors Biographical details of the Directors are as follows: Michael Bruce-Mitford, Non-Executive Chairman, aged 60, incorporated VFBHolidays in 1974 with his wife Francoise. Michael was Chairman of theAssociation of Independent Tour Operators from 1987 to 1990 and served on itsgoverning council for a total of nine years. In addition to the awards won byVFB, the French Government honoured Michael in 1991 with the Medaille duTourism, and subsequently in 2002 they awarded him the Government's gold medal. Christopher Mottershead, Chief Executive, aged 47, was managing director of TUIUK between 2001 and 2004 with responsibility for Thomson Holidays, Lunn Poly,Travelhouse and other travel businesses based in the UK. Prior to this, he wasPresident and CEO of North American Leisure Group, part of Airtours plc (nowMytravel plc). He joined Airtours Holidays in 1993 where his roles includedmanaging director and finance director. He joined Airtours from Aspro Travel &Inter European Airways where he was group finance director. Colin McKinlay, Group Finance Director, aged 37, has held a number of seniorfinancial positions within the travel industry. Operating at an internationallevel, he has extensive experience in periods of aggressive growth and expansionand the handling of restructuring and turnaround environments. Colin waspreviously Chief Financial Officer of Thomas Cook UK & Ireland where he wasresponsible for all aspects of finance, IT, and central support functions duringa period of record profitability. Prior to this, he enjoyed a nine year careerin MyTravel Group (formerly Airtours Plc). During that time he gainedconsiderable international experience both in continental Europe and Canadawhere he was Chief Financial Officer of MyTravel's North American Leisure Group,working closely with its then Chief Executive Chris Mottershead. Colin qualifiedas a Chartered Accountant at Coopers & Lybrand in Manchester. Richard Hall, Non-executive Director & Company Secretary, aged 65 is a CharteredAccountant and has carried out the duties of finance director and companysecretary for a number of international companies, including INMOS InternationalPlc. He was finance director of Information Technology Plc from 1986 to 1988 andNational Telecommunications Plc from 1988 to 1989, both of which companies werelisted on the Official List. Since 1989, Richard has run his own consultancywith a number of non-executive directorships including another AIM quotedcompany offering corporate, commercial and financial advice to major clients. Hejoined the board in 2003 prior to the company joining the OFEX market. Peter Thomson, Non-executive Director, aged 73, started his career at ICIPaints. After 2 years in North America, he was successively marketing manager,general sales manager and European manager, and was involved in developing theDulux brand. He moved on to Courtaulds Plc as group marketing director and wassubsequently group managing director of the seven office furniture companiesthen owned by Wagon Industrial Holdings. Since 1983, he has worked with a numberof small or medium-sized developing companies as a part-time director oradviser. Lock-ins and orderly market arrangements The Acquisition Agreement provides that CanCo, as a condition to closing, willenter into a direct undertaking with the Company and Daniel Stewart, that for aperiod of two years following completion of the Acquisition, CanCo shall notsell or dispose of any interests in the Exchangeable Shares (or the InitialConsideration Shares into which such Exchangeable Shares may be exchanged) heldby it and that for a period of twelve months following expiry of this period, itwill only sell Initial Consideration Shares derived from exchanging suchExchangeable Shares if any such disposal is first notified to the Company'sbrokers and is effected through the Company's brokers (after consultation within good faith with the Company's brokers) from time to time in an orderlymanner. Similar provisions will apply to further Exchangeable Shares issued byExchangeCo (and any Contingent Shares issued by the Company) as AdditionalConsideration. The City Code The terms of the Proposals give rise to certain considerations under theTakeover Code. Brief details of the Panel, the Takeover Code and the protectionthey afford are given below. The Takeover Code is issued and administered by the Panel. The Takeover Code isdesigned principally to ensure fair and equal treatment of all shareholders inrelation to takeovers. Under Rule 9 of the Takeover Code, where any person acquires, whether by aseries of transactions over a period of time or not, an interest in shares which(taken together with shares in which persons acting in concert with them areinterested) carry 30 per cent. or more of the voting rights of a company, thatperson is normally required by the Panel to make a general offer in cash to theholders of any class of equity share capital or other class of transferablesecurities carrying voting rights in that company to acquire the balance oftheir interests in the company at the highest price paid by that person or anyperson acting in concert with it in the previous 12 months. Rule 9 of the Takeover Code further provides that, inter alia, where any person,together with persons acting in concert with him, is interested in shares whichin the aggregate carry not less than 30 per cent. of the voting rights of acompany but does not hold shares carrying more than 50 per cent. of such votingrights and such person, or any such person acting in concert with him, acquiresan interest in any other shares which increase the percentage of shares carryingvoting rights in which he is interested, such person is normally required by thePanel to make a general offer in cash to holders of any class of equity sharecapital or other class of transferable securities carrying voting rights of thatcompany to acquire the balance of their interests in the company at the highestprice paid by that person or any person acting in concert with it in theprevious 12 months. Under the Takeover Code, a concert party arises when persons who, pursuant to anagreement or understanding (whether formal or informal), co-operate to obtain orconsolidate control of that company. Under the Takeover Code, control means aninterest or interests in shares carrying in aggregate 30 per cent. or more ofthe voting rights of a company, irrespective of whether such interest orinterests give de facto control. The number of Contingent Shares that may be issued to CanCo is dependent on boththe exchange rate of the Can$ to the £ and the share price of the OrdinaryShares. Following Admission, CanCo will, pursuant to the provisions of the AcquisitionAgreement and the Exchange Agreement (on and subject to exercise of its rightsto exchange the Exchangeable Shares for Initial Consideration Shares) own inaggregate 7,938,780 Ordinary Shares representing approximately 33.63 per cent.of the then issued share capital of the Company and have the potential to own upto (on and subject to exercise of their respective rights to exchange theExchangeable Shares for Contingent Shares, being 1,795,676 Contingent Shares atthe Current Exchange Rate and at the Placing Price), in aggregate, such numberof Ordinary Shares as would have a market value of Can$4.75 million (being9,734,456 Exchangeable Shares at the Current Exchange Rate and at the PlacingPrice, which would represent 38.32 per cent. of the then issued share capital ofthe Company (assuming full Additional Consideration is paid)). However, theexchange rate and the Company's share price at the date the AdditionalConsideration is payable may result in the actual percentage of CanCo'saggregate holding in the Company being in excess, or far in excess, of 38.32 percent. The Panel has deemed that the Concert Party exists. Following completion of theAcquisition, any decrease in the Current Exchange Rate or decrease of the shareprice of the Ordinary Shares will have a further dilutive effect to Shareholdersas this would increase the number of Contingent Shares to which CanCo would beentitled as Additional Consideration. If the share price of the Ordinary Shareswere to increase by 10 per cent. of the Placing Price and if the CurrentExchange Rate were to increase by 10 per cent. (against the Can$) then CanCowould have the potential to own up to 37.92 per cent. of the issued sharecapital of the Company. If the market price of the Ordinary Shares were to decrease by 10 per cent. ofthe Placing Price and if the Current Exchange Rate were to decrease by 10 percent. (against the £) then CanCo would have the potential to own up to 38.80 percent. of the issued share capital of the Company. If the share price of the Ordinary Shares were to become 5.5 pence then theConcert Party would hold in excess of 75 per cent. of the Ordinary Shares The Panel has been consulted by Daniel Stewart on behalf of the Company and hasagreed that it will not require CanCo to make a general offer for OrdinaryShares in the Company which might otherwise arise as a result of the exercise ofits respective rights to exchange the Exchangeable Shares for ConsiderationShares pursuant to the terms of the Acquisition Agreement, subject to Resolution2 (as set out in the notice convening the Extraordinary General Meeting) beingpassed on a poll by the Shareholders. To be passed, Resolution 2 will require asimple majority of the votes cast by the Shareholders on a poll. For so long as they hold in aggregate interests in shares carrying between 30and 50 per cent. of the Company's voting rights, and for so long as they areconsidered to be acting in concert, the Concert Party members will be unable toacquire further interests in Ordinary Shares (except for the Ordinary Sharesissued in relation to Additional Consideration) without triggering a Rule 9mandatory bid. Dividend policy The Directors intend that distributable profits will be re-invested in theCompany and accordingly do not anticipate paying a dividend in the immediatefuture. Definitions The following definitions apply throughout this announcement, unless the contextrequires otherwise: "Acquisition" the proposed acquisition by Travelzest of 100 per cent. of the issued and outstanding share capital of itravel2000.com "Acquisition Agreement" the conditional agreement dated 12 September 2006 between the Company, CallCo, ExchangeCo, the Vendors and Itravel2000.com in relation to the Acquisition "Additional Consideration" the contingent consideration to be paid by the Company to the Vendors following the audit of itravel2000.com for the year ending 31 October 2007 "Admission" the re-admission of the Existing Ordinary Shares and the admission of Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules "AIM" the AIM market of the London Stock Exchange "AIM Rules" the rules for AIM companies issued by the London Stock Exchange in force at the date of this announcement "Blocked Account" a "ring fenced" account with Barclays Bank PLC which is subject to a fixed charge in favour of Barclays Bank PLC to be used to satisfy (a) part of the Additional Consideration for the acquisition of Itravel2000.com and (b) the deferred consideration for the acquisition of Fair's Fare Limited "Board" the board of directors of the Company, including a duly constituted committee of such directors "CallCo" Travelzest Holdings Inc., a company incorporated under the laws of the Province of British Columbia, Canada, with company number BC0763760, a wholly-owned subsidiary of the Company "CanCo" 6615716 Canada Inc., a company incorporated under the federal laws of the Province of British Columbia, Canada on 22 August 2006 "CanCo Holding" 6615635 Canada Inc. incorporated under the federal laws of the Province of British Columbia, Canada on 22 August 2006 "CanNewCo" the Canadian corporation to be incorporated by ExchangeCo prior to the completion of the Acquisition "Concert Party" CanCo, Starline, CanCo Holdings, Ely Trust and the beneficiaries of the Ely Trust being Edward J. Carroll, Elizabeth Carroll, Shane G. Carroll, Jonathan G. Carroll, Jeffrey D. Mackenzie and J. Brian Hewlitt "Consideration Shares" the Initial Consideration Shares and the Contingent Shares "Contingent Shares" the Ordinary Shares to be issued by the Company in exchange for the Exchangeable Shares which may be issued as part of the Additional Consideration "CREST" the computerised settlement system (as defined in the CREST Regulations) operated by CRESTCo which facilitates the transfer of title to shares in uncertificated form (as defined in the CREST Regulations) "CRESTCo" CRESTCo Limited, the operator of CREST "CREST Regulations" the Uncertificated Securities Regulations 2001 (SI 2001/3755) (as amended) "Current Exchange Rate" Can $2.0994 to every £1 as at 23 August 2006 "Debt Facility" the £11 million debt finance facility conditionally being made available by Barclays Bank PLC pursuant to the terms of the Facility Agreement "Deed of Confirmation" a deed of confirmation in respect of the Warrant Instrument dated 1 April 2005 "Directors" the directors of the Company "EGM" or "Extraordinary General the extraordinary general meeting of the Company convened for 10.00Meeting" a.m. on 5 October 2006 "Ely Trust" a discretionary inter vivos trust settled on 17 October 1997, the trustee of which is Tower Trustees Limited a corporation incorporated in Nevis and resident in St Kitts and Nevis "EMI Scheme" the Inland Revenue approved Enterprise Management Incentive Scheme adopted by the Company on 1 April 2005 "Enlarged Group" the Company together with its subsidiaries following completion of the Acquisition "Enlarged Issued Share Capital" the Ordinary Shares in issue immediately following Admission "Exchange Agreement" the exchange rights agreement between the Company, ExchangeCo and CanCo in respect of CanCo's rights to transfer the Exchangeable Shares in return for Consideration Shares "ExchangeCo" 0763756 B.C. Ltd, a company incorporated under the laws of the Province of British Columbia, Canada in respect of which CanCo will own Exchangeable Shares "Exchangeable Share Provisions" the rights, privileges, restrictions and conditions attaching to the Exchangeable Shares "Exchangeable Shares" the Class A non-voting exchangeable shares to be issued by ExchangeCo to CanCo, which shares may, pursuant to the Exchangeable Share Provisions and the terms of the Exchange Agreement be exchanged for the Initial Consideration Shares and (if any) the Contingent Shares "Executive Directors" Christopher Mottershead and Colin McKinlay "Existing Ordinary Shares" the 11,464,435 Ordinary Shares in the capital of the Company in issue at the date of this announcement "Facility Agreement" an agreement between the Company and Barclays Bank PLC in respect of the provision of the Debt Facility "Group" the Company and its subsidiaries as at the date of this announcement "Individual Vendors" the individual shareholders of Itravel2000.com being Shane G. Carroll, Jonathan G. Carroll, Jeffrey D. Mackenzie and J. Brian Hewlitt "Initial Consideration Shares" the 7,938,780 Ordinary Shares to be issued by the Company in exchange for the Exchangeable Shares to be issued by ExchangeCo on completion of the Acquisition "Itravel2000.com" 1360944 Ontario Inc. (operating as itravel2000.com), a company incorporated under the laws of the Province of Ontario with Ontario registration number 01360944 "Lock-In Agreement" the lock-in and orderly market agreement to be entered into by CanCo on completion of the Acquisition in respect of the Exchangeable Shares "Midicorp" Midicorp Corporate Finance Limited "Non-Executive Directors" Michael Bruce-Mitford, Richard Hall and Peter Thomson "Non-VCT Placing Shares" the 3,253,968 new Ordinary Shares which are the subject of the Placing and which do not qualify for VCT tax relief "Options" the options over Ordinary Shares granted to Christopher Mottershead, Colin McKinlay, Nishma Robb, Steve Diederich and David Oak "Option Agreements" the option agreements between Christopher Mottershead, Colin McKinlay, Nishma Robb, Steve Diederich and David Oak "Ordinary Shares" ordinary shares of 2 pence each in the capital of the Company "Original Admission" the original admission of Ordinary Shares to AIM on 3 October 2005 "Panel" the Panel on Takeovers and Mergers "Placees" the subscribers of Placing Shares pursuant to the Placing "Placing" the conditional placing by Daniel Stewart on behalf of the Company of the Placing Shares pursuant to the Placing Agreement "Placing Agreement" the placing agreement dated 12 September 2006 between the Company, the Directors and Daniel Stewart "Placing Price" 126 pence per Placing Share "Placing Shares" the 4,206,349 new Ordinary Shares which are the subject of the Placing (consisting of the VCT Placing Shares and the Non-VCT Placing Shares) "Proposals" the proposals set out in this document (including those which require the approval of Shareholders at the EGM) relating to the Acquisition, Admission, the Waiver, the increase in nominal capital, the authority to issue and allot Ordinary Shares and the amendment to borrowing powers "Resolutions" the resolutions set out in the Notice of the EGM attached to the admission document "Shareholder" a holder of Ordinary Shares "Starline" Starline Project Services Ltd, incorporated under the laws of the Isle of Man with company number 102280C incorporated on 8 March 2001 "Support Agreement" The support agreement between the Company, ExchangeCo, CallCo and CanCo the City Code on Takeovers and Mergers issued and regulated by the Panel "Takeover Code" "Travelzest" or the "Company" Travelzest plc "VCT" venture capital trust "VCT Placing Shares" the 952,381 new Ordinary Shares which are the subject of the Placing and qualify for VCT tax relief "Vendors" the shareholders of Itravel2000.com being Shane G. Carroll, Jonathan G. Carroll, Jeffrey D. Mackenzie, J. Brian Hewlitt and CanCo "Waiver" the waiver by the Panel of the obligation of CanCo to make a general offer under Rule 9 of the Takeover Code "Warrant Holders" Christopher Mottershead, Midicorp and Merchant Securities Limited "Warrant Instrument" the warrant instrument more fully described in the admission document This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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