1st Apr 2008 16:31
EMC Computer Systems (UK) Limited01 April 2008 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY ORINDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE AVIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION. April 1, 2008 RECOMMENDED CASH OFFER OF 23.1 PENCE PER SHARE FOR CONCHANGO PLC ("CONCHANGO") BY EMC COMPUTER SYSTEMS (UK) LIMITED ("EMC") Summary • The Boards of Conchango and EMC are pleased to announce that they have reached agreement on the terms of a recommended cash offer of 23.1 pence (the "Offer Price") per Conchango Share for the entire issued and to be issued share capital of Conchango. • The Offer values the entire issued and to be issued share capital of Conchango at approximately £42.0 million. • The Offer Price represents: • a premium of approximately 44% to the Closing Price of 16.0 pence perConchango Share on March 31, 2008, being the last Business Day prior to the dateof this announcement; and • a premium of approximately 24% to the average Closing Price of 18.7pence per Conchango Share for the period commencing on January 15, 2008, beingthe date of admission of Conchango to AIM and ended on March 31, 2008, being thelast Business Day prior to the date of this announcement. • The Conchango Directors, who have been so advised by FinnCap, unanimously consider the terms of the Offer to be fair and reasonable. In providing such advice, FinnCap has taken into account the commercial assessments of the Conchango Directors. Accordingly, the Conchango Directors will unanimously recommend to Conchango Shareholders that they accept the Offer, as the Conchango Directors have themselves irrevocably undertaken to do in respect of their own beneficial holdings of 123,765,336 Conchango Shares in aggregate, representing 68.4% of the Issued Share Capital. • EMC has received further irrevocable undertakings to accept or procure the acceptance of the Offer from Southwind Limited, Colin Bird, Herald Investments Management Limited, Iyas Alqasem, Chris Saul and Williams de Broe in respect of their holdings of 12,152,472, 2,826,447, 2,365,000, 1,732,258, 1,578,185 and 1,283,000 Conchango Shares, respectively, representing 21,937,362 Conchango Shares, in aggregate and, approximately 12.1% of the Issued Share Capital. • Accordingly, EMC has received irrevocable undertakings in respect of, in aggregate, 145,702,698 Conchango Shares, representing approximately 80.5% of the Issued Share Capital. These irrevocable undertakings will remain binding in the event of a competing offer being made for Conchango, and will cease to be binding only if the Offer lapses or is withdrawn. • If the Offer becomes or is declared wholly unconditional, Michael Altendorf and Richard Thwaite have agreed that EMC shall withhold the Escrow Amount from the consideration otherwise payable to them and place such amount in a stakeholders' account. The Escrow Amount shall become payable to Michael Altendorf and Richard Thwaite upon the satisfaction of certain revenue targets for the business in the 20 months after the closing of the Offer. EMC shall also be entitled to draw upon the Escrow Amount if there is a breach of certain warranties or indemnities given by Michael Altendorf and Richard Thwaite to EMC. • Separately today, Conchango announced its results for the year ended December 31, 2007. • With 2007 revenues of $13.23 billion and approximately 37,700 employees, EMC Corporation, EMC's ultimate parent company, is the world's leading developer and provider of information infrastructure technology and solutions that enable organisations of all sizes to transform the way they compete and create value from their information. EMC Corporation is listed on the New York Stock Exchange and is a component of the S&P 500 Index. • Conchango is a growing consultancy and systems integrator which specialises in innovative technologies. Conchango provides clients with complete solutions through business consulting, business intelligence, enterprise architecture and systems integration, assisting customers to deliver value from emerging digital channels. Conchango was admitted to AIM on January 15, 2008. • Conchango offers a strong strategic fit with EMC Corporation's growing Global Services business, through the expansion of EMC Corporation's international footprint, and through Conchango's expertise in technology consulting to customers in the United Kingdom and across Europe. In particular, Conchango's complementary Microsoft consulting services capability will enhance EMC Corporation's existing U.S. and international practice in this area. The combination of EMC Corporation's global reach and Conchango's strong reputation and presence in the United Kingdom will deliver benefits to both businesses' current and future customers and stakeholders, and will reinforce EMC Corporation's end-to-end information infrastructure offerings. • EMC expects the Offer to become wholly unconditional immediately following the posting of the Offer Document, which may enable Conchango Shareholders who wish to dispose of their Conchango Shares for capital gains tax purposes during the present tax year to do so. Commenting on the Offer, Howard Elias, President, EMC Global Services andResource Management Software Group, said: "We believe this offer represents a fair value for Conchango shareholders and atremendous opportunity to accelerate and expand Conchango's technologyconsulting services in the UK and over time, throughout Europe. The addition ofConchango will mark another key milestone in the evolution of EMC's rapidlygrowing consulting services organisation, significantly expanding our globalcapabilities to design, build and deliver integrated solutions for ourcustomers' most critical business applications. Conchango and its talentedemployees have a proven track record of delivering many of the United Kingdom'slargest data integration projects using highly scalable tools and methodologies.By combining Conchango with our own well-established Microsoft consultancypractice begun in the U.S., we will be well-positioned to further expand ourjoint capabilities to more customers and establish a strong foundation for agrowing consultancy practice in the UK and throughout Europe." Richard Thwaite, co-founder and joint Managing Director of Conchango, commentingon behalf of Conchango, said: "Conchango has had a tremendous few years, where we have seen the return on ourstrategy of helping enterprise clients in our target sectors make the most ofthe rapidly evolving technology landscape. By helping our clients to besuccessful we have grown our business to be one of the leaders in the UK and thenext stage in our strategy is to expand upon this success in new markets. We arethrilled to become part of EMC which gives us the platform for expansionthroughout Europe and also access to the expertise and wider resources of theglobal EMC team. We look forward to this next exciting stage in our developmentand the benefits we believe it will bring to our clients, our employees and ourbusiness partners." Enquiries: EMC Michael Gallant, Tel: +1 508 293 6357 (Media relations) EMC Investor Relations, Tel +1 866 362 6973 (Investor relations) Investec Bank (UK) Limited (Financial adviser to EMC) Tel: +44 (0) 207 597 5117 Ben Poynter Andrew Pinder Conchango Tel: +44 (0) 1784 222 222 Alan Griffin FinnCap (Financial adviser to Conchango) Tel: +44 (0) 207 600 1658 Geoff Nash Clive Carver The above summary should be read in conjunction with, and is subject to, thefull text of this announcement. Terms used in the summary have the meaning givento them in Appendix III to this announcement. This announcement is not intended to and does not constitute, or form any partof, any offer to sell or any solicitation of any offer to purchase or subscribefor any securities or the solicitation of any vote or approval in anyjurisdiction. Any acceptance or other response to the Offer should be made onlyon the basis of the information contained or referred to in the Offer Documentand the Form of Acceptance. The laws of relevant jurisdictions may affect theavailability of the Offer to persons not resident in the United Kingdom. Personswho are not resident in the United Kingdom, or who are subject to the laws ofany jurisdiction other than the United Kingdom, should inform themselves aboutand observe any applicable legal or regulatory requirements of theirjurisdiction. The Offer Document will be available for public inspection. Unless otherwise determined by EMC, the Offer will not be made, directly orindirectly, in, into or from or by the use of mails of, or by any means ofinstrumentality (including, without limitation, telephonically orelectronically) of interstate or foreign commerce of, or through any facilitiesof a national securities exchange of any jurisdiction if to do so wouldconstitute a violation of the relevant laws of such jurisdiction and the Offer,when made, should not be accepted by any such use, means, instrumentality orfacilities or from or within any such jurisdiction. Accordingly, copies of this announcement are not being, and must not be, mailedor otherwise forwarded, distributed or sent in, into or from any jurisdiction ifto do so would constitute a violation of the relevant laws of such jurisdictionand persons receiving this announcement (including, without limitation,custodians, nominees and trustees) must not mail or otherwise forward,distribute or send it in, into or from any such jurisdiction. Doing so mayrender invalid any purported acceptance of the Offer. Investec, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for EMC and no one else inconnection with the Offer and will not be responsible to anyone other than EMCfor providing the protections afforded to its customers or for providing advicein relation to the Offer, the contents of this announcement or any transactionor arrangement referred to herein. FinnCap, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Conchango and no oneelse in connection with the Offer and will not be responsible to anyone otherthan Conchango for providing the protections afforded to its customers or forproviding advice in relation to the Offer, the contents of this announcement orany transaction or arrangement referred to herein. In accordance with normal UK market practice, EMC or its nominees or brokers(acting as agents) may from time to time make certain purchases of, orarrangements to purchase, Conchango Shares, other than pursuant to the Offer,before or during the period in which the Offer remains open for acceptance.These purchases may occur either in the open market at prevailing prices or inprivate transactions at negotiated prices. Any information about such purchaseswill be disclosed as required in the UK. Forward-looking statements This announcement includes certain ''forward-looking statements''. Thesestatements are based on the current expectations of the management of Conchangoand EMC Corporation (as applicable) and are naturally subject to uncertainty andchanges in circumstances. The forward-looking statements contained herein mayinclude statements about the expected effects on EMC Corporation or Conchango ofthe Offer, the expected timing and scope of the Offer, anticipated earningsenhancements, estimated cost savings and other synergies, costs to be incurredin achieving synergies, other strategic options and all other statements in thisdocument other than historical facts. Forward-looking statements include,without limitation, statements typically containing words such as ''intends'',''expects'', ''anticipates'', ''targets'',''estimates'' and words of similarimport. By their nature, forward-looking statements involve risk and uncertaintybecause they relate to events and depend on circumstances that will occur in thefuture. There are a number of factors that could cause actual results anddevelopments to differ materially from those expressed or implied by suchforward-looking statements. These factors include, but are not limited to, thesatisfaction of the condition to the Offer, and EMC Corporation's abilitysuccessfully to integrate the operations and employees of Conchango, as well asadditional factors, such as changes in economic or market conditions, changes inthe level of capital investment, success of business and operating initiativesand restructuring objectives, customers' strategies and stability, changes inthe regulatory environment, fluctuations in interest and exchange rates, theoutcome of litigation, government actions, natural phenomena such as floods,earthquakes and hurricanes, delays or reductions in information technologyspending, EMC Corporation's ability to protect its proprietary technology,competitive factors (including, but not limited to, pricing pressures and newproduct introductions), the relative and varying rates of product price andcomponent cost declines and the volume and mixture of product and servicesrevenues, component and product quality and availability, the transition to newproducts, the uncertainty of customer acceptance of new product offerings andrapid technological and market change and insufficient, excess or obsoleteinventory. Other important factors disclosed previously and from time to time inEMC Corporation's filings with the U.S. Securities and Exchange Commission andunknown or unpredictable factors could also cause actual results to differmaterially from those in the forward-looking statements. Neither Conchango norEMC Corporation undertakes any obligation to update publicly or reviseforward-looking statements, whether as a result of new information, futureevents or otherwise, except to the extent legally required. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in one per cent or more of any class of"relevant securities" of Conchango, all "dealings" in any "relevant securities"of Conchango (including by means of an option in respect of, or a derivativereferenced to, any such "relevant securities") must be publicly disclosed by nolater than 3.30 p.m. (London time) on the London business day following the dateof the relevant transaction. This requirement will continue until the date onwhich the Offer becomes, or is declared, unconditional as to acceptances, lapsesor is otherwise withdrawn or on which the "offer period" otherwise ends. If twoor more persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an "interest" in "relevant securities" ofConchango, they will be deemed to be a single person for the purposes of Rule8.3 of the City Code. Under the provision of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Conchango by EMC or Conchango or by any of their respective"associates", must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8 of the City Code, you shouldconsult the Panel. NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY ORINDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE AVIOLATION OF THE RELEVANT LAWS IN THAT JURISDICTION. April 1, 2008 RECOMMENDED CASH OFFER OF 23.1 PENCE PER SHARE FOR CONCHANGO PLC ("CONCHANGO") BY EMC COMPUTER SYSTEMS (UK) LIMITED ("EMC") 1. INTRODUCTION The boards of Conchango and EMC are pleased to announce that they have reachedagreement on the terms of a recommended cash offer of 23.1 pence per ConchangoShare for the entire issued and to be issued share capital of Conchango. The Conchango Board will unanimously recommend to Conchango Shareholders thatthey accept the Offer. EMC has received irrevocable undertakings to accept the Offer in respect of, inaggregate, 145,702,698 Conchango Shares, representing approximately 80.5% of theIssued Share Capital. The formal Offer will be set out in the Offer Document, which is expected to bedespatched to Conchango Shareholders on the date of this announcement. 2. OFFER Under the Offer, which will be on and subject to the terms and the condition setout below and in Appendix I to this announcement and to be set out in the OfferDocument and the Form of Acceptance, Conchango Shareholders will receive: 23.1 pence in cash for each Conchango Share. The Offer, which is wholly in cash, values the entire issued and to be issuedshare capital of Conchango at approximately £42.0 million. The Offer Price represents: • a premium of approximately 44% to the Closing Price of 16.0 pence per Conchango Share on March 31, 2008, being the last Business Day prior to the date of this announcement; and • a premium of approximately 24% to the average Closing Price of approximately 18.7 pence per Conchango Share for the period commencing on January 15, 2008, being the date of admission of Conchango to AIM and ending on March 31, 2008, being the last Business Day prior to the date of this announcement. The Conchango Shares will be acquired by EMC fully paid up and free from allliens, charges, equitable interests, encumbrances, rights of pre-emption and anyother third party rights or interests whatsoever and together with all rightsnow or hereafter attaching thereto, including voting rights and, withoutlimitation, the right to receive and retain in full all dividends, interests andother distributions (if any) announced, declared, made or paid on or after thedate of this announcement. The Offer extends to all Conchango Shares unconditionally allotted, issued andfully paid on the date of the Offer and all Conchango Shares which areunconditionally allotted or issued and fully paid before the date on which theOffer closes (or such earlier date as EMC may, subject to the City Code decide,not being earlier than the date on which the Offer becomes unconditional as toacceptances). The UK Government has announced significant proposed changes to the UK capitalgains tax regime with effect for disposals of capital assets occurring on orafter 6 April 2008. The changes include the withdrawal of the current taperrelief for chargeable capital gains and the introduction of a single rate ofcapital gains tax (18% for the tax year 2008-2009). The proposals are not yetlaw and may be subject to change. Assuming that, immediately following the posting of the Offer Document today,EMC receives valid acceptances pursuant to the irrevocable undertakings toaccept the Offer which it has received, the Offer will become whollyunconditional and should enable Conchango Shareholders who also accept the Offerand wish to dispose of their Conchango Shares for capital gains tax purposesbefore 6 April 2008 to do so. Such Conchango Shareholders should ensure thatvalid acceptances are received by Capita Registrars before that date. 3. ESCROW AMOUNT If the Offer becomes or is declared wholly unconditional, Michael Altendorf andRichard Thwaite have agreed that EMC shall withhold the Escrow Amount from theconsideration otherwise payable to them and place such amount in a stakeholders'account. The Escrow Amount shall become payable to Michael Altendorf and RichardThwaite upon the satisfaction of certain revenue targets for the business in the20 months after the closing of the Offer. EMC shall also be entitled to drawupon the Escrow Amount if there is a breach of certain warranties or indemnitiesgiven by Michael Altendorf and Richard Thwaite to EMC. 4. RECOMMENDATION The Conchango Board, which has been so advised by FinnCap, unanimously considersthe terms of the Offer to be fair and reasonable. In providing its advice,FinnCap has taken into account the commercial assessments of the ConchangoDirectors. Accordingly, the Conchango Directors will unanimously recommend to ConchangoShareholders that they accept the Offer, as the Conchango Directors havethemselves irrevocably undertaken to do in respect of their beneficial holdingsof 123,765,336 Conchango Shares in aggregate, representing approximately 68.4%of the Issued Share Capital. 5. BACKGROUND TO AND REASONS FOR THE RECOMMENDATION OF THE OFFER Conchango offers a strong strategic fit with EMC Corporation's growing GlobalServices business, through the expansion of EMC Corporation's internationalfootprint, and through Conchango's expertise in technology consulting tocustomers in the United Kingdom and across Europe. In particular, Conchango'scomplementary Microsoft consulting services capability will enhance EMCCorporation's existing U.S. and international practice in this area. Thecombination of EMC Corporation's global reach and Conchango's strong reputationand presence in the United Kingdom will deliver benefits to both businesses'current and future customers and stakeholders, and will reinforce EMCCorporation's end-to-end information infrastructure offerings. EMC Corporation believes that Conchango's strong reputation and presence in theUnited Kingdom in the field of high-end technology consulting will acceleratethe expansion of EMC Corporation's own Global Services offerings into the UnitedKingdom, in particular in application consulting services focused on Microsofttechnologies. Conchango's strengths in this field are complementary to and haveno material overlap with EMC Corporation's current service offerings andcapabilities in the United Kingdom. Conchango brings a long and successfulhistory of working with Microsoft in the United Kingdom to EMC Corporation'sexisting Microsoft services presence in the United States and worldwide, and theOffer demonstrates EMC Corporation's continued commitment to this serviceoffering. Overall, the combination of the two businesses will increase theend-to-end business value of EMC Corporation's information infrastructureofferings, in the United Kingdom, Europe and globally. The Conchango Board believes that Conchango will benefit significantly frombeing part of the EMC Group in a way that it would not as an independentcompany. In particular, EMC Corporation has the financial resources andmanagerial expertise to invest actively in the future development and growth ofthe business. The Conchango Board believes that the combination with EMCCorporation will benefit Conchango's customers by allowing Conchango to addressmore broadly its customers' technology needs. Further, the Conchango Boardbelieves that Conchango's employees will be afforded a wider range of career anddevelopment opportunities as part of EMC Corporation. EMC Corporation intends to integrate the Conchango business into its GlobalServices organisation shortly after the closing of the Offer. As part of thisintegration, EMC Corporation intends that Conchango adopt certain standardprocedures and practices in use within the EMC Group, and may transfer theassets of the Conchango business on an arm's length basis to a wholly ownedsubsidiary of EMC Corporation. The Offer of 23.1 pence per Conchango Share provides Conchango Shareholders withan opportunity to realise their entire investment in the Company for a cashpremium of approximately 44% over the Closing Price of 16.0 pence per ConchangoShare on March 31, 2008, being the last Business Day prior to this announcement. 6. IRREVOCABLE UNDERTAKINGS EMC has received irrevocable undertakings to accept the Offer in respect of, inaggregate, 145,702,698 Conchango Shares, representing approximately 80.5% of theIssued Share Capital. Of this total: • the Conchango Directors, Michael Altendorf, Richard Thwaite, Richard Poole, Alan Griffin and John Herring have irrevocably undertaken to accept the Offer in respect of their own beneficial holdings of 59,680,345, 59,680,345, 2,870,765, 992,806 and 541,075 shares, respectively, representing 123,765,336 Conchango Shares, in aggregate, and approximately 68.4% of the Issued Share Capital. These irrevocable undertakings will remain binding in the event of a competing offer being made for Conchango and will cease to be binding only if the Offer closes, lapses or is withdrawn; and • EMC has received further irrevocable undertakings from Southwind Limited, Colin Bird, Herald Investments Management Limited, Iyas Alqasem, Chris Saul and Williams de Broe in respect of their holdings of 12,152,472, 2,826,447, 2,365,000, 1,732,258, 1,578,185 and 1,283,000 Conchango Shares, respectively, representing 21,937,362 Conchango Shares, in aggregate and, approximately 12.1% of the Issued Share Capital. These irrevocable undertakings will remain binding in the event of a competing offer being made for Conchango and will cease to be binding only if the Offer lapses or is withdrawn. 7. INFORMATION ON THE EMC GROUP EMC Corporation (the ultimate parent company of EMC) was founded in 1979, islisted on the New York Stock Exchange and is a component of the S&P 500 Index.EMC Corporation is the world's leading developer and provider of informationinfrastructure technology and solutions that enable organisations of all sizesto transform the way they compete and create value from their information. As atDecember 31, 2007, EMC Corporation had approximately 37,700 employees worldwide.EMC Corporation is represented by more than 100 sales offices and distributionpartners in more than 80 countries. For the year ended December 31, 2007, EMC Corporation's consolidated net saleswere US$13.23 billion, its consolidated net income was US$1.67 billion and itsconsolidated net assets were US$12.71 billion. For the year ended December 31,2006, EMC Corporation's consolidated net sales were US$11.16 billion, itsconsolidated net income was US$1.23 billion and its consolidated net assets wereUS$10.33 billion. EMC was originally incorporated in 1986. Its primary activities involve its roleas agent in distributing and providing sales support with respect to EMCproducts manufactured by other members of the EMC Group. In addition to sales ofhardware and software in the United Kingdom, EMC also provides support relatingto the maintenance and implementation of such hardware and software. For the year ended December 31, 2006, EMC's total turnover was £61.71 million,its net profit was £3.08 million and its net assets were £25.72 million. For theyear ended December 31, 2005, EMC's total turnover was £51.18 million, its netprofit was £2.94 million and its net assets were £20.56 million. 8. INFORMATION ON THE CONCHANGO GROUP Conchango is a growing business consultancy and systems integrator whichspecialises in innovative technologies. Conchango provides clients with completesolutions through business consulting, business intelligence, enterprisearchitecture and systems integration, assisting customers to deliver value fromemerging digital channels. Conchango was admitted to AIM on January 15, 2008. Comparing the results for the year ended December 31, 2004 with those for theyear ended December 31, 2007, the business of Conchango has achieved revenuegrowth of 148% resulting in 2007 turnover of £37.8 million. Profit before taxhas increased by 424% over the same period to £2.8 million in 2007. 9. FINANCING FOR THE OFFER Full acceptance of the Offer will result in an aggregate cash consideration ofapproximately £42.0 million becoming payable by EMC. EMC will fund the Offer from cash made available to it, upon demand, by EMCCorporation. Investec, financial adviser to EMC, is satisfied that EMC will havesufficient cash resources available to it to satisfy, in full, the cashconsideration payable to Conchango Shareholders under the Offer. EMC does notintend that the payment of interest, or repayment of, or security for, anyliability (contingent or otherwise) will depend to any significant extent on thebusiness of Conchango. 10. NON-SOLICITATION EMC has entered into an arrangement with Michael Altendorf and Richard Thwaiteunder which they have undertaken, among other things, that: • until such time as the Offer closes, lapses or is withdrawn (whichever is the earlier), they will not, directly or indirectly, solicit or (except where required by their fiduciary duties as a director of Conchango or by their duties under the City Code and, in each case, only in response to an unsolicited approach) encourage, any person to make an offer for any shares or other securities of Conchango or enter into discussions with, or provide any information to, any person making such an offer; • (except where required by their fiduciary duties as a director of Conchango or by their duties under the City Code), they will not knowingly take any action which is designed to or may be prejudicial to the successful outcome of the Offer or which would or might have the effect of preventing the condition in the Offer from being fulfilled; and • they will promptly notify EMC in the event that they receive an approach from a third party which may lead to an offer for Conchango and will keep EMC informed of any such approach. 11. DIRECTORS, MANAGEMENT AND EMPLOYEES EMC Corporation plans to run Conchango and its existing business on anintegrated basis and believes that the combination of Conchango's expertise withEMC Corporation's global reach will be of benefit to the enlarged business, theemployees and customers. EMC Corporation attaches great importance to the skills, experience and industryknowledge of the existing management and employees of Conchango, who havecontributed to Conchango's success to date, and whom EMC Corporation wouldanticipate playing an important role in the development of the enlargedbusiness. EMC Corporation believes that the Conchango employees will benefitfrom a broader range of opportunities for personal and professional developmentas part of a larger, more diverse and financially stronger group. Accordingly,it is EMC Corporation's intention to continue to retain as far as reasonablypracticable Conchango's existing operating and employment structure. Following the Offer becoming or being declared unconditional in all respects,the existing employment rights of the employees of Conchango will besafeguarded. It is intended that the current non-executive directors of Conchango will resignupon or after the Offer becoming or being declared unconditional in allrespects. 12. CONCHANGO ENTERPRISE MANAGEMENT INCENTIVE SCHEME The Offer extends to any Conchango Shares issued or unconditionally allottedprior to the date on which the Offer closes (or such earlier date or dates asEMC may, subject to the City Code, or with the consent of the Panel, determine),including any which are so unconditionally allotted or issued pursuant to theexercise of options granted under the Conchango Enterprise Management IncentiveScheme. Conchango has operated the Conchango Enterprise Management Incentive Schemesince 2002, pursuant to which options over ordinary shares are issued to certaindirectors and employees. To the extent options granted under the Conchango Enterprise ManagementIncentive Scheme have not been exercised prior to the date on which the Offercloses, it is intended that appropriate proposals will be made to ConchangoOptionholders, subject to the Offer becoming or being declared unconditional inall respects. 13. DISCLOSURE OF INTERESTS IN CONCHANGO Save for the irrevocable undertakings referred to in paragraph 6 of thisannouncement, neither EMC, nor (so far as EMC is aware) any person acting, ordeemed to be acting, in concert with EMC for the purposes of the Offer has: (i) any interest in, or a right to subscribe for, ConchangoShares or in any securities convertible or exchangeable into Conchango Shares("Relevant Conchango Securities"); (ii) any short position in Relevant Conchango Securities (whetherconditional or absolute and whether in the money or otherwise), including anyshort position under a derivative, any agreement to sell or any deliveryobligation or right to require another person to purchase or take delivery; or (iii) borrowed or lent any Relevant Conchango Securities (exceptfor any borrowed Conchango Shares which have been either on-lent or sold) or hasany arrangement in relation to Relevant Conchango Securities. For these purposes, "arrangement" includes any agreement to sell or any deliveryobligation or right to require another person to purchase or take delivery andborrowing or lending of Conchango Shares. An "arrangement" also includes anyindemnity or option arrangement, any agreement or understanding, formal orinformal, of whatever nature, relating to Conchango Shares, which may be aninducement to deal or refrain from dealing in such securities. "Interest"includes any long economic exposure, whether conditional or absolute, to changesin the price of securities and a person is treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. There are no arrangements of the kind referred to in Note 6(b) on Rule 8 of theCity Code which exists between EMC or any person acting, or presumed to beacting, in concert with EMC, and any other person nor between Conchango or anyassociate of Conchango and any other person. In view of the requirement for confidentiality, EMC has not made enquiries ofcertain persons who may be deemed by the City Code to be acting in concert withit for the purpose of the Offer. 14. COMPULSORY ACQUISITION, DE-LISTING AND REREGISTRATION If EMC receives acceptances of the Offer in respect of, and/or otherwiseacquires, 90% or more of the Conchango Shares to which the Offer relates, EMCintends to exercise its rights pursuant to the provisions of the Companies Actto acquire the remaining Conchango Shares to which the Offer relates on the sameterms as the Offer. Assuming the Offer becomes or is declared unconditional in all respects andsubject to any applicable requirements of the London Stock Exchange, EMC intendsto procure the making of an application by Conchango to the London StockExchange for the cancellation of admission of the Conchango Shares from AIM. Ifthis withdrawal occurs, it will significantly reduce the liquidity andmarketability of any Conchango Shares not assented to the Offer. It isanticipated that the withdrawal from trading will take effect on the earlier of(i) 20 Business Days after the date on which EMC has, by virtue of itsshareholdings and acceptances of the Offer, acquired or agreed to acquire issuedshare capital carrying 75 per cent. of the voting rights of Conchango and (ii)the first date of issue of compulsory acquisition notices under the CompaniesAct. The AIM Rules normally require the consent of at least 75% of the votescast by a company's shareholders in general meeting to a cancellation ofadmission of its shares to trading on AIM. However, the London Stock Exchangehas indicated that, provided EMC is the owner of not less than 75% of the entireissued ordinary share capital of Conchango before the proposed date ofcancellation and, provided that Conchango formally seeks derogation from thisrequirement, the passing of such a resolution will not be required. Inconnection with the cancellation of listing, EMC intends that Conchangowithdraws from CREST. It is currently intended that, following the Offer becoming or being declaredunconditional in all respects and after the cancellation of admission of theConchango Shares from AIM, Conchango will be re-registered as a private companyunder the relevant provisions of the Companies Act. 15. OTHER The Offer Document and Form of Acceptance is expected to be posted to ConchangoShareholders and, for information only, to participants in the ConchangoEnterprise Management Incentive Scheme today. The full terms and conditions ofthe Offer will be set out in the Offer Document and Form of Acceptance. Indeciding whether or not to accept the Offer, Conchango Shareholders should relyon the information contained in, and follow the procedures described in, theOffer Document and Form of Acceptance. The availability of the Offer to persons not resident in the UK may be affectedby the laws of their relevant jurisdiction. Any persons who are subject to thelaws of any jurisdiction other than the UK should inform themselves about andobserve any applicable legal or regulatory requirements of their jurisdiction.Further details in relation to overseas shareholders will be contained in theOffer Document. The Offer will be governed by English law and will be subject to the exclusivejurisdiction of the English courts. The Offer will be subject to the applicablerequirements of the City Code, the Panel, the London Stock Exchange and otherlegal or regulatory requirements. The Offer will comply with the provisions ofthe City Code. Appendix I sets out the condition and certain further terms of the Offer.Appendix II contains source notes relating to certain information contained inthis announcement. Certain terms used in this announcement are defined inAppendix III to this announcement. Enquiries: EMC Michael Gallant, Tel: +1 508 293 6357 (Media relations) EMC Investor Relations, Tel +1 866 362 6973 (Investor relations) Investec Bank (UK) Limited (Financial adviser to EMC) Tel: +44 (0) 207 597 5117 Ben Poynter Andrew Pinder Conchango Tel: +44 (0) 1784 222 222 Alan Griffin FinnCap (Financial adviser to Conchango) Tel: +44 (0) 207 600 1658 Geoff Nash Clive Carver This announcement is not intended to and does not constitute, or form any partof, any offer to sell or any solicitation of any offer to purchase or subscribefor any securities or the solicitation of any vote or approval in anyjurisdiction. Any acceptance or other response to the Offer should be made onlyon the basis of the information contained or referred to in the Offer Documentand the Form of Acceptance. The laws of relevant jurisdictions may affect theavailability of the Offer to persons not resident in the United Kingdom. Personswho are not resident in the United Kingdom, or who are subject to the laws ofany jurisdiction other than the United Kingdom, should inform themselves aboutand observe any applicable legal or regulatory requirements of theirjurisdiction. The Offer Document will be available for public inspection. Unless otherwise determined by EMC, the Offer will not be made, directly orindirectly, in, into or from or by the use of mails of, or by any means ofinstrumentality (including, without limitation, telephonically orelectronically) of interstate or foreign commerce of, or through any facilitiesof a national securities exchange of any jurisdiction if to do so wouldconstitute a violation of the relevant laws of such jurisdiction and the Offer,when made, should not be accepted by any such use, means, instrumentality orfacilities or from or within any such jurisdiction. Accordingly, copies of thisannouncement are not being, and must not be, mailed or otherwise forwarded,distributed or sent in, into or from any jurisdiction if to do so wouldconstitute a violation of the relevant laws of such jurisdiction and personsreceiving this announcement (including, without limitation, custodians, nomineesand trustees) must not mail or otherwise forward, distribute or send it in, intoor from any such jurisdiction. Doing so may render invalid any purportedacceptance of the Offer. Investec, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for EMC and no one else inconnection with the Offer and will not be responsible to anyone other than EMCfor providing the protections afforded to its customers or for providing advicein relation to the Offer, the contents of this announcement or any transactionor arrangement referred to herein. FinnCap, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Conchango and no oneelse in connection with the Offer and will not be responsible to anyone otherthan Conchango for providing the protections afforded to its customers or forproviding advice in relation to the Offer, the contents of this announcement orany transaction or arrangement referred to herein. In accordance with normal UK market practice, EMC or its nominees or brokers(acting as agents) may from time to time make certain purchases of, orarrangements to purchase, Conchango Shares, other than pursuant to the Offer,before or during the period in which the Offer remains open for acceptance.These purchases may occur either in the open market at prevailing prices or inprivate transactions at negotiated prices. Any information about such purchaseswill be disclosed as required in the UK. Forward-looking statements This announcement includes certain ''forward-looking statements''. Thesestatements are based on the current expectations of the management of Conchangoand EMC Corporation (as applicable) and are naturally subject to uncertainty andchanges in circumstances. The forward-looking statements contained herein mayinclude statements about the expected effects on EMC Corporation or Conchango ofthe Offer, the expected timing and scope of the Offer, anticipated earningsenhancements, estimated cost savings and other synergies, costs to be incurredin achieving synergies, other strategic options and all other statements in thisdocument other than historical facts. Forward-looking statements include,without limitation, statements typically containing words such as ''intends'',''expects'', ''anticipates'', ''targets'',''estimates'' and words of similarimport. By their nature, forward-looking statements involve risk and uncertaintybecause they relate to events and depend on circumstances that will occur in thefuture. There are a number of factors that could cause actual results anddevelopments to differ materially from those expressed or implied by suchforward-looking statements. These factors include, but are not limited to, thesatisfaction of the condition to the Offer, and EMC Corporation's abilitysuccessfully to integrate the operations and employees of Conchango, as well asadditional factors, such as changes in economic or market conditions, changes inthe level of capital investment, success of business and operating initiativesand restructuring objectives, customers' strategies and stability, changes inthe regulatory environment, fluctuations in interest and exchange rates, theoutcome of litigation, government actions, natural phenomena such as floods,earthquakes and hurricanes, delays or reductions in information technologyspending, EMC Corporation's ability to protect its proprietary technology,competitive factors (including, but not limited to, pricing pressures and newproduct introductions), the relative and varying rates of product price andcomponent cost declines and the volume and mixture of product and servicesrevenues, component and product quality and availability, the transition to newproducts, the uncertainty of customer acceptance of new product offerings andrapid technological and market change and insufficient, excess or obsoleteinventory. Other important factors disclosed previously and from time to time inEMC Corporation's filings with the U.S. Securities and Exchange Commission andunknown or unpredictable factors could also cause actual results to differmaterially from those in the forward-looking statements. Neither Conchango norEMC Corporation undertakes any obligation to update publicly or reviseforward-looking statements, whether as a result of new information, futureevents or otherwise, except to the extent legally required. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code, if any person is, or becomes,"interested" (directly or indirectly) in one per cent. or more of any class of"relevant securities" of Conchango, all "dealings" in any "relevant securities"of Conchango (including by means of an option in respect of, or a derivativereferenced to, any such "relevant securities") must be publicly disclosed by nolater than 3.30 p.m. (London time) on the London business day following the dateof the relevant transaction. This requirement will continue until the date onwhich the Offer becomes, or is declared, unconditional as to acceptances, lapsesor is otherwise withdrawn or on which the "offer period" otherwise ends. If twoor more persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an "interest" in "relevant securities" ofConchango, they will be deemed to be a single person for the purposes of Rule8.3 of the City Code. Under the provision of Rule 8.1 of the City Code, all "dealings" in "relevantsecurities" of Conchango by EMC or Conchango or by any of their respective"associates", must be disclosed by no later than 12.00 noon (London time) on theLondon business day following the date of the relevant transaction. A disclosure table, giving details of the companies in whose "relevantsecurities" "dealings" should be disclosed, and the number of such securities inissue, can be found on the Panel's website at www.thetakeoverpanel.org.uk "Interests in securities" arise, in summary, when a person has long economicexposure, whether conditional or absolute, to changes in the price ofsecurities. In particular, a person will be treated as having an "interest" byvirtue of the ownership or control of securities, or by virtue of any option inrespect of, or derivative referenced to, securities. Terms in quotation marks are defined in the City Code, which can also be foundon the Panel's website. If you are in any doubt as to whether or not you arerequired to disclose a "dealing" under Rule 8 of the City Code, you shouldconsult the Panel. APPENDIX I CONDITION AND CERTAIN FURTHER TERMS OF THE OFFER The Offer, which will be made by EMC, will comply with the rules and regulationsof the London Stock Exchange and the City Code. Part A: Condition of the Offer The Offer will be subject to the condition that valid acceptances have beenreceived (and not, where permitted, withdrawn) by not later than 3.00 p.m. onthe first closing date of the Offer (or such later time(s) and/or date(s) as EMCmay, with the consent of the Panel or in accordance with the City Code, decide)in respect of not less than 72% (or such lower percentage as EMC may, subject tothe City Code, decide) in nominal value of the Conchango Shares to which theOffer relates provided that, unless agreed by the Panel, this condition shallnot be satisfied unless EMC and/or any of its wholly-owned subsidiaries shallhave acquired or agreed to acquire, whether pursuant to the Offer or otherwise,Conchango Shares carrying in aggregate more than 50% of the voting rights thennormally exercisable at general meetings of Conchango. For the purposes of this condition: (i) the Conchango Shares which have been unconditionallyallotted but not issued before the Offer becomes or is declared unconditional asto acceptances, whether pursuant to the exercise of any outstanding subscriptionor conversion rights or otherwise, shall be deemed to carry the voting rightsthey will carry on being entered into the register of members of Conchango; (ii) the expression "Conchango Shares to which the Offer relates"shall be construed in accordance with Chapter 3 of Part 28 of the Companies Act2006; and (iii) valid acceptances shall be deemed to have been received inrespect of the Conchango Shares which are treated for the purposes of section979(8) of the Companies Act 2006 as having been acquired or contracted to beacquired by EMC by virtue of acceptances of the Offer. EMC expects the Offer to become wholly unconditional immediately following theposting of the Offer Document, which may enable Conchango Shareholders who wishto dispose of their Conchango Shares for capital gains tax purposes during thepresent tax year to do so. If EMC is required by the Panel to make an offer for Conchango Shares under theprovisions of Rule 9 of the City Code, EMC may make such alterations to theabove condition as are necessary to comply with the provisions of that Rule. Part B: Certain further terms of the Offer If the Offer lapses, it will cease to be capable of further acceptance.Conchango Shareholders who have already accepted the Offer shall then cease tobe bound by acceptances delivered on or before the date on which the Offerlapses. The Offer will be governed by English law, the rules and regulations of theFinancial Services Authority, the Panel and the City Code and be subject to theexclusive jurisdiction of the English courts, to the condition set out in Part Aabove and the further terms set out in this Part B, and to the terms and thecondition set out in the Offer Document and related Form of Acceptance. The Offer will not be made, directly or indirectly, in or into, or by use of themails of, or by any means or instrumentality (including, without limitation,facsimile transmission, telex, telephone or e-mail) of interstate or foreigncommerce of, or of any facility of a national securities exchange of anyjurisdiction if to do so would constitute a violation of the relevant laws insuch jurisdiction and the Offer will not be capable of acceptance by any suchuse, means, instrumentality or facility or from within any such jurisdiction. Conchango Shares will be acquired under the Offer by EMC fully paid, free fromall liens, charges, equitable interests, encumbrances, rights of pre-emption andany other third party rights or interests whatsoever and together with allrights now or hereafter attaching thereto, including voting rights and, withoutlimitation, the right to receive and retain in full all dividends, interests andother distributions (if any) announced, declared, made or paid on or after thedate of this announcement. In accordance with Rule 2.10 of the City Code, Conchango confirms that, at theclose of business on the date of this announcement, it will have the followingsecurities in issue: 180,966,465 ordinary shares of 1 pence ISIN GB0008823493each APPENDIX II BASES OF CALCULATION AND SOURCES OF INFORMATION In this announcement, unless otherwise stated or the context otherwise requires,the following bases and sources have been used: Historic share Closing Prices are sourced from the AIM appendix to the DailyOfficial List and represent the closing middle market prices for ConchangoShares on the relevant dates. The Offer value is calculated by multiplying the Offer Price by the entireissued and to be issued share capital of Conchango of 181,724,173 ConchangoShares, being the Issued Share Capital and the number of Conchango Sharescapable of being issued to satisfy existing options under the ConchangoEnterprise Management Incentive Scheme. Unless otherwise stated, the financial information on Conchango is extracted orderived without material adjustment from the annual report and accounts of theConchango Group for the year ended December 31, 2007. APPENDIX III DEFINITIONS The following definitions apply throughout this announcement, unless the contextrequires otherwise: "AIM" the Alternative Investment Market"AIM Rules" the rules of the Alternative Investments Market as the published and amended by the London Stock Exchange from time to time"Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks in London are open for normal business"City Code" the City Code on Takeovers and Mergers"Closing Price" the closing middle market quotation of a Conchango Share as derived from the Daily Official List on any particular day"Companies Act" the Companies Act 2006, to the extent in force, and otherwise the Companies Act 1985"Conchango" or the means Conchango plc"Company""Conchango Board" or the board of directors of Conchango"Conchango Directors""Conchango Enterprise the enterprise management incentive scheme underManagement Incentive which there are currently 757,708 options inScheme" issue, granted in 2002, at an exercise price of 14 pence per Conchango Share"Conchango Shareholders" the registered holders of Conchango Shares"Conchango Shares" includes: (a) the existing unconditionally allotted or issued and fully paid ordinary shares of 1 pence each in the capital of Conchango; and (b) any further ordinary shares of 1 pence each in the capital of Conchango which are unconditionally allotted or issued and fully paid, or credited as fully paid, before the date on which the Offer closes (or before such earlier date as, subject to the City Code, Conchango may determine, not being earlier than (i) the date on which the Offer becomes or is declared unconditional as to acceptances or (ii) if later, the first closing date of the Offer) but excludes any treasury shares"Daily Official List" the daily official list of the London Stock Exchange "EMC" EMC Computer Systems (UK) Limited, a private limited company incorporated in England and Wales with registered number 2051360 or the EMC Group, as the context may require"EMC Corporation" a corporation existing under the laws of the State of Delaware"EMC Group" EMC Corporation and its subsidiaries"Escrow Amount" £4.5 million"FinnCap" JMFinn Capital Markets Limited, nominated advisor and financial advisor to Conchango"Form of Acceptance" the form of acceptance relating to the Offer, which will accompany the Offer Document"Investec" Investec Bank (UK) Ltd"Issued Share Capital" the entire issued share capital of Conchango of 180,966,465 ordinary shares of 1 pence each at the date of this announcement"London Stock Exchange" The London Stock Exchange plc"Offer" the cash offer to be made by EMC recommended by the Conchango Directors to acquire the entire issued and to be issued share capital of Conchango on the terms and subject to the conditions to be set out in the Offer Document and (in relation to Conchango Shares held in certificated form) the Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal thereof"Offer Document" the formal document to be sent to Conchango Shareholders containing the Offer"Offer Price" 23.1 pence per Conchango Share"Panel" The Panel on Takeovers and Mergers"Pound Sterling" or "£" means the lawful currency of the United Kingdom (and references to "pence" shall be construed accordingly)"subsidiary", "subsidiary shall be construed in accordance with theundertaking", "associated Companies Act, other than paragraph 20(1)(b) ofundertaking" or Schedule 4A to the Companies Act 1985 which shall"undertaking" be excludedUnited Kingdom" or "UK" the United Kingdom of Great Britain and Northern Ireland and its dependent territories. All times referred to are London times unless otherwise stated. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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