9th May 2008 08:37
Mentor Graphics Corporation09 May 2008 Not for release, publication or distribution, in whole or in part, in, into orfrom the United States, Canada, Australia or any other jurisdiction where to doso would constitute a violation of the relevant laws of such jurisdiction. ANNOUNCEMENT FOR IMMEDIATE RELEASE 9 May 2008 CASH OFFER FOR FLOMERICS GROUP PLC ("FLOMERICS" OR THE "COMPANY") BY MENTORGRAPHICS CORPORATION ("MENTOR") Summary The Board of Mentor is pleased to announce the terms of a cash offer, to be madeby Mentor, to acquire the whole of the issued and to be issued share capital ofFlomerics. Under the terms of the Offer, Flomerics Shareholders will receive, for eachFlomerics Share held, 104 pence in cash. Flomerics Shareholders will also be entitled to receive the final dividend of1.6 pence per Flomerics Share recommended to be paid in respect of the yearended 31 December 2007. The Offer values the entire issued and to be issued share capital of Flomericsat approximately £25.52 million (including the dividend). The Offer, including the dividend, represents a premium of approximately 19 percent. to the Closing Price of 89 pence per Flomerics Share on 8 May 2008, beingthe last Business Day prior to this announcement, and a premium of 109 per cent.to the Closing Price of 50.5 pence per Flomerics Share on 13 March 2008, beingthe day before the announcement of Mentor's acquisition of a 20.1 per cent.interest (at that date) in Flomerics from Pricap. Cenkos Securities plc ("Cenkos") is acting as financial adviser and CanaccordAdams Limited ("Canaccord") is acting as co-financial adviser to Mentor. This summary should be read in conjunction with the full text of the followingannouncement and the Appendices and with the full further terms and conditionsto be set out in the Offer Document and Form of Acceptance. Appendix I sets outthe conditions and principal further terms of the Offer. Appendix II containssource notes relating to certain information contained in this announcement.Certain terms used in this announcement are defined in Appendix III. Enquiries: Mentor Dennis Weldon Ryerson Schwark Tel: +1 503 685 7000 Cenkos Securities plc Nicholas Wells Tel: +44 20 7397 8900 Bell Pottinger Corporate & Financial David Rydell Olly Scott Tel: +44 20 7861 3232 Terms used in this summary shall have the meaning given to them in the fullannouncement. Cenkos, which is authorised and regulated in the United Kingdom by the FinancialServices Authority, is acting exclusively for Mentor and no one else inconnection with the Offer and will not be responsible to anyone other thanMentor for providing the protections afforded to its customers or for providingadvice in relation to the Offer or in relation to the contents of thisannouncement or any transaction or arrangement referred to herein. Canaccord, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Mentor and no one elsein connection with the Offer and will not be responsible to anyone other thanMentor for providing the protections afforded to its customers or for providingadvice in relation to the Offer or in relation to the contents of thisannouncement or any transaction or arrangement referred to herein. This announcement is not intended to and does not constitute, or form any partof, an offer or an invitation to purchase, subscribe for or otherwise acquire,sell or dispose of any securities or the solicitation of any vote or approval inany jurisdiction pursuant to the Offer or otherwise. The Offer will be madesolely through the Offer Document and the Form of Acceptance, which willtogether contain the full terms and conditions of the Offer, including detailsof how to accept the Offer. Any acceptance or other response to the Offershould be made only on the basis of the information contained in the OfferDocument and the Form of Acceptance. The laws of relevant jurisdictions mayaffect the availability of the Offer to persons not resident in the UnitedKingdom. Persons who are not resident in the United Kingdom, or who are subjectto the laws of any jurisdiction other than the United Kingdom, should informthemselves about and observe any applicable legal and regulatory requirements.The Offer Document will be available for public inspection at the offices ofCenkos. The Offer will not be made, directly or indirectly, in or into the United Statesor by use of mails of, or any means or instrumentality (including, withoutlimitation, facsimile transmission, telephone or internet) of inter-state orforeign commerce of, or any facilities of a national, state or other securitiesexchange of the United States, nor will it be made directly or indirectly in orinto Canada or Australia and the Offer will not be capable of acceptance by anysuch use, means, instrumentality or facilities or from within the United States,Canada or Australia or any other such jurisdiction if to do so would constitutea violation of the relevant laws of such jurisdiction. Accordingly, copies ofthis announcement are not being, will not be and must not be mailed or otherwiseforwarded, distributed or sent in, into or from the United States, Canada orAustralia or any other such jurisdiction if to do so would constitute aviolation of the relevant laws of such jurisdiction and persons receiving thisannouncement (including without limitation custodians, nominees and trustees)must not mail, or otherwise forward, distribute or send it in, into or from theUnited States, Canada or Australia or any other such jurisdiction if to do sowould constitute a violation of the relevant laws of such jurisdiction. Cautionary statement regarding forward-looking statements This announcement may contain forward-looking statements concerning Mentor.Generally the words 'will', 'may', 'should', 'continue', 'believes', 'expects','intends', 'anticipates' or similar expressions identify forward-lookingstatements. The forward-looking statements involve risks and uncertainties thatcould cause actual results to differ materially from those suggested by them.Many of these risks and uncertainties relate to factors that are beyond Mentor'sabilities to control or estimate precisely, such as future market conditions andthe behaviours of other market participants, and therefore undue reliance shouldnot be placed on such statements which speak only as at the date of thisannouncement. Mentor assumes no obligation and does not intend to update theseforward-looking statements, except as required pursuant to applicable law. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the'City Code'), if any person is, or becomes, 'interested' (directly orindirectly) in one per cent. or more of any class of 'relevant securities' ofFlomerics, all 'dealings' in any 'relevant securities' of Flomerics (includingby means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 pm(London time) on the London Business Day following the date of the relevanttransaction. This requirement will continue until the date on which the Offerbecomes, or is declared, unconditional as to acceptance, lapses or is otherwisewithdrawn or on which the 'offer period' otherwise ends. If two or more personsact together pursuant to an agreement or understanding, whether formal orinformal, to acquire an 'interest' in 'relevant securities' of Flomerics theywill be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevantsecurities' of Flomerics by Mentor or Flomerics 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, you should consult the Panel. Not for release, publication or distribution, in whole or in part, in, into orfrom the United States, Canada, Australia or any other jurisdiction where to doso would constitute a violation of the relevant laws of such jurisdiction. ANNOUNCEMENT FOR IMMEDIATE RELEASE 9 May 2008 CASH OFFER FOR FLOMERICS GROUP PLC ("FLOMERICS" OR THE "COMPANY") BY MENTORGRAPHICS CORPORATION ("MENTOR") 1. Introduction The Board of Mentor is pleased to announce the terms of a cash offer, to be madeby Mentor, to acquire the whole of the issued and to be issued share capital ofFlomerics. The Offer values each issued Flomerics Share at 104 pence and the entire issuedand to be issued share capital of Flomerics at approximately £25.52 million(including the dividend). 2. Summary of the Offer Under the Offer, which will be subject to the terms and conditions set out belowand in Appendix I to this announcement and the further terms and conditions tobe set out in the Offer Document and the Form of Acceptance, FlomericsShareholders will receive: 104 pence in cash for each Flomerics Share Flomerics Shareholders will also be entitled to receive the final dividend of1.6 pence per Flomerics Share recommended to be paid in respect of the yearended 31 December 2007. The Offer, which is wholly in cash, values the entire issued and to be issuedshare capital of Flomerics at approximately £25.52 million (including thedividend). The Offer, including the dividend, represents a premium of approximately 19 percent. to the Closing Price of 89 pence per Flomerics Share on the last BusinessDay prior to this announcement, and a premium of 109 per cent. to the ClosingPrice of 50.5 pence per Flomerics Share on 13 March 2008, being the day beforethe announcement of Mentor's acquisition of a 20.1 per cent. interest (at thatdate) in Flomerics from Pricap. Flomerics Shareholders will be entitled to receive the final dividend of 1.6pence per Flomerics Share recommended to be paid in respect of the year ended 31December 2007. In all other respects the Flomerics Shares will be acquiredfully paid with full title guarantee and free from all liens, charges, equitableinterests, mortgages, encumbrances, rights of pre-emption and any other thirdparty rights or interests of any nature together with all rights now andhereafter attaching thereto, including, without limitation, the right to receiveand retain in full all dividends and other distributions (if any) announced,declared, made or paid thereafter. 3. Background to and reasons for the Offer Mentor is Flomerics' largest investor, holding, or having agreed to acquire, atotal of 29.84 per cent. of Flomerics Shares in issue at the date of the Offer. On 14 March 2008 it was announced that Mentor had acquired Pricap's entireinterest in Flomerics Shares at a price of 104 pence per share. This interestrepresented 20.1 per cent. of Flomerics' issued share capital as at that date.At the time of this purchase Pricap was Flomerics' largest investor and held aseat on the Flomerics Board. Subsequently, Mentor agreed to acquire additionalshares representing 9.84 per cent. of the issued share capital at a price of 104pence per share from various shareholders including some of Flomerics' largerinstitutional investors. Supported by the above purchases from shareholders and in particular thepurchase from Pricap, Mentor believes that the offered price of 104 pence pershare represents excellent value for Flomerics Shareholders and fully reflectsthe potential of Flomerics' assets. The Board of Mentor considers the acquisition of Flomerics to be an attractiveopportunity to broaden the market for Mentor's products as Flomerics' technologyand products are complementary to Mentor's existing suite of electronic designautomation software products and services. Mentor believes that under its ownership and management, and with Mentor'ssuperior financial resources, the potential and success of Flomerics'technology, technical expertise, and customer relationships can be bettercultivated and significantly enhanced. An acquisition of Flomerics by Mentor isconsistent with Flomerics' vision of focusing on and growing its electronicscooling and fluid flow simulation business. Mentor has met with Flomerics' senior management to discuss Mentor's ownershipinterest in Flomerics and to ask whether the Flomerics Board might recommend anoffer by Mentor to acquire the entire issued and to be issued share capital ofFlomerics to Flomerics Shareholders. Flomerics' senior management rejected thisapproach. In light of the recent sales by shareholders to Mentor at a price of 104 penceper share, Mentor has decided to pursue the transaction on a unilateral basis. The Offer, including the dividend, represents a premium of approximately 19 percent. to the Closing Price of 89 pence per Flomerics Share on 8 May 2008, beingthe last Business Day prior to this announcement and a premium of 109 per cent.to the Closing Price of 50.5 pence per Flomerics Share on 13 March 2008, beingthe day before the announcement of Mentor's acquisition of a 20.1 per cent.interest (at that date) in Flomerics from Pricap. 4. Information on Flomerics Flomerics is an AIM-listed, world-leading player in the rapidly-expanding fieldsof "virtual prototyping" and Computer-Aided Engineering. Flomerics providesengineering simulation software and consultancy services for analysis of fluidflow and heat transfer. Using Flomerics' software and consultancy services,customers accelerate their design processes, optimise their proposed designs,eliminate mistakes and dramatically reduce costs by predicting product behaviourbefore building physical prototypes. Flomerics' approach to engineering analysisis drastically different from traditional analysis because the software isdesigned to be embedded deeply into the design process and used by mainstreamdesign engineers, not only by analysis specialists. Flomerics' software products and services are based around three distinct linesof business: • Electronics Cooling • Engineering Fluid Dynamics • Heating, Ventilation and Air-Conditioning For the financial year ended 31 December 2007, Flomerics reported, for itscontinuing operations, turnover of £14.6 million, profit of £0.2 million beforetax and impairment of goodwill and a fully diluted loss per share of (9.65)p. 5. Information on Mentor Mentor is a NASDAQ-listed technology leader in electronic design automation.Mentor provides software and hardware design solutions that enable its customersto develop better electronic products faster and more cost effectively. Mentormarkets its products and services worldwide, primarily to companies in themilitary/aerospace, communications, computer, consumer electronics,semiconductor, networking, multimedia and transportation industries. Throughthe diversification of its customer base among these various customer markets,Mentor attempts to reduce its exposure to fluctuations within each market.Mentor sells and licenses its products through a direct sales force and achannel of distributors and sales representatives. In addition to corporateoffices in the USA, Mentor has sales, support, software development andprofessional service offices worldwide, including approximately 180 employees inthe UK engaged in engineering and sales. The electronic systems that Mentor's customers create with its products includeprinted circuit boards, integrated circuits, embedded software solutions andwire harness systems. Mentor's products are used in the design and developmentof many electronic products, including automotive electronics, video gameconsoles, digital cameras, cellular telephones, computer network hubs androuters, personal computers and products enabled with the Bluetooth short-rangewireless radio and networking technology. Mentor's products enable engineers toovercome increasingly complex electronic design challenges by improving theaccuracy of complex designs and shrinking product time-to-market schedules. For the financial year ended 31 January 2008, Mentor reported turnover of $879.7million, profit of $74.3 million before tax and amortisation of purchasedtechnology and other identified intangibles and fully diluted earnings per shareof $0.32. 6. Financing for the Offer The consideration payable under the Offer will be funded using Mentor's existingcash resources. Cenkos, in its capacity as financial adviser to Mentor, has confirmed that thenecessary financial resources are available to Mentor to enable it to satisfy infull the consideration payable by Mentor under the terms of the Offer. 7. Management and employees The Mentor Board confirms that, following the Offer becoming unconditional inall respects, the existing employment rights, including pension rights, of allemployees of Flomerics will be fully safeguarded. 8. Flomerics Share Option Schemes The Offer extends to any Flomerics Shares unconditionally allotted or issued andfully paid whilst the Offer remains open for acceptance (or by any such earliertime and/or date as Mentor may, subject to the City Code, determine). Appropriate proposals will be made to the Flomerics Optionholders in connectionwith the Offer. Details of the proposals will be set out in a letter toFlomerics Optionholders which will be sent in due course. 9. Disclosure of interests in Flomerics As at the close of business on 8 May 2008 (the latest practicable Business Dayprior to the date of this announcement), Mentor was interested in approximately29.84 per cent. of the existing issued share capital of Flomerics. Save as set out above, neither Mentor nor any of the directors of Mentor, has aninterest in, or has any right to subscribe for, any relevant securities ofFlomerics, nor are they party to any short positions (whether conditional orabsolute and whether in the money or otherwise) relating to relevant securitiesof Flomerics, including short positions under derivatives, agreements to sell orany delivery obligations or rights to require another person to take delivery. Neither Mentor nor any of the directors of Mentor, has borrowed or lent anyrelevant securities of Flomerics nor does any such person have any arrangementin relation to relevant securities of Flomerics. For these purposes "arrangement" includes any indemnity or option arrangement,any agreement or understanding, formal or informal, of whatever nature, relatingto relevant securities of Flomerics which may be an inducement to deal orrefrain from dealing in such securities. 10. Compulsory acquisition, de-listing and re-registration If the Offer becomes or is declared wholly unconditional and Mentor receivesacceptances under the Offer in respect of, and/or Mentor otherwise acquires, 90per cent. or more of the Flomerics Shares to which the Offer relates, Mentorintends to exercise its rights pursuant to the provisions of sections 974 to 991(inclusive) of the Companies Act 2006 to acquire compulsorily any remainingFlomerics Shares to which the Offer relates on the same terms as the Offer. Subject to Mentor acquiring, by virtue of the Offer or otherwise, FlomericsShares carrying 75 per cent. of the voting rights of Flomerics, and subject tothe Offer becoming or being declared unconditional in all respects, Mentorintends to give notice in accordance with the AIM Rules for the cancellation ofthe admission to trading of Flomerics Shares on AIM. It is intended thatFlomerics Shares will cease to be admitted to trading on AIM shortly after theOffer is declared wholly unconditional. De-listing would significantly reducethe liquidity and marketability of any Flomerics Shares which are not acquiredby Mentor. 11. Other The availability of the Offer to persons not resident in the UK may be affectedby the laws of the 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 thejurisdiction of the English courts. The Offer will be subject to the applicablerequirements of the City Code. Appendix I sets out the conditions and principal 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. The full terms of the Offer will be set out in the Offer Document and Form ofAcceptance which will be posted to Flomerics Shareholders as soon as practicableand, in any event (save with the consent of the Panel) within 28 days of thedate of this announcement. Enquiries: Mentor Dennis Weldon Ryerson Schwark Tel: +1 503 685 7000 Cenkos Securities plc Nicholas Wells Tel: +44 20 7397 8900 Bell Pottinger Corporate & Financial David Rydell Olly Scott Tel: +44 20 7861 3232 Cenkos, which is authorised and regulated in the United Kingdom by the FinancialServices Authority, is acting exclusively for Mentor no one else in connectionwith the Offer and will not be responsible to anyone other than Mentor forproviding the protections afforded to its customers or for providing advice inrelation to the Offer or in relation to the contents of this announcement or anytransaction or arrangement referred to herein. Canaccord, which is authorised and regulated in the United Kingdom by theFinancial Services Authority, is acting exclusively for Mentor no one else inconnection with the Offer and will not be responsible to anyone other thanMentor for providing the protections afforded to its customers or for providingadvice in relation to the Offer or in relation to the contents of thisannouncement or any transaction or arrangement referred to herein. This announcement is not intended to and does not constitute, or form any partof, an offer or an invitation to purchase, subscribe for or otherwise acquire,sell or dispose of any securities or the solicitation of any vote or approval inany jurisdiction pursuant to the Offer or otherwise. The Offer will be madesolely through the Offer Document and the Form of Acceptance, which willtogether contain the full terms and conditions of the Offer, including detailsof how to accept the Offer. Any acceptance or other response to the Offershould be made only on the basis of the information contained in the OfferDocument and the Form of Acceptance. The laws of relevant jurisdictions mayaffect the availability of the Offer to persons not resident in the UnitedKingdom. Persons who are not resident in the United Kingdom, or who are subjectto the laws of any jurisdiction other than the United Kingdom, should informthemselves about and observe any applicable legal and regulatory requirements.The Offer Document will be available for public inspection at the offices ofCenkos. The Offer will not be made, directly or indirectly, in or into the United Statesor by use of the mails of, or by any means or instrumentality (including,without limitation, facsimile or other electronic transmission, telex ortelephone) of inter-state or foreign commerce of, or any facility of, anational, state or other securities exchange of, the United States, nor will itbe made directly or indirectly in or into Canada or Australia and the Offer willnot be capable of acceptance by any such use, means, instrumentality or facilityor from within the United States, Canada or Australia or any other suchjurisdiction if to do so would constitute a violation of the relevant laws ofsuch jurisdiction. Accordingly, copies of this announcement are not being, willnot be and must not be mailed or otherwise forwarded, distributed or sent in,into or from the United States, Canada or Australia or any other suchjurisdiction if to do so would constitute a violation of the relevant laws ofsuch jurisdiction and persons receiving this announcement (including withoutlimitation custodians, nominees and trustees) must not mail, forward, distributeor send it in, into or from the United States, Canada or Australia or any othersuch jurisdiction if to do so would constitute a violation of the relevant lawsof such jurisdiction. Cautionary statement regarding forward-looking statements This announcement may contain forward-looking statements concerning Mentor.Generally the words 'will', 'may', 'should', 'continue', 'believes', 'expects','intends', 'anticipates' or similar expressions identify forward-lookingstatements. The forward-looking statements involve risks and uncertainties thatcould cause actual results to differ materially from those suggested by them.Many of these risks and uncertainties relate to factors that are beyond Mentor'sabilities to control or estimate precisely, such as future market conditions andthe behaviours of other market participants, and therefore undue reliance shouldnot be placed on such statements which speak only as at the date of thisannouncement. Mentor assumes no obligation and does not intend to update theseforward-looking statements, except as required pursuant to applicable law. Dealing disclosure requirements Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the'City Code'), if any person is, or becomes, 'interested' (directly orindirectly) in one per cent. or more of any class of 'relevant securities' ofFlomerics, all 'dealings' in any 'relevant securities' of Flomerics (includingby means of an option in respect of, or a derivative referenced to, any such 'relevant securities') must be publicly disclosed by no later than 3.30 pm(London time) on the London Business Day following the date of the relevanttransaction. This requirement will continue until the date on which the Offerbecomes, or is declared, unconditional as to acceptance, lapses or is otherwisewithdrawn or on which the 'offer period' otherwise ends. If two or more personsact together pursuant to an agreement or understanding, whether formal orinformal, to acquire an 'interest' in 'relevant securities' of Flomerics theywill be deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the City Code, all 'dealings' in 'relevantsecurities' of Flomerics by Mentor or Flomerics 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, you should consult the Panel. Not for release, publication or distribution, in whole or in part, in, into orfrom the United States, Canada, Australia or any other jurisdiction where to doso would constitute a violation of the relevant laws of such jurisdiction. APPENDIX I CONDITIONS AND PRINCIPAL FURTHER TERMS OF THE OFFER The Offer will be subject to the following conditions: (a) valid acceptances being received (and not, where permitted,withdrawn) by not later than 3.00 pm on the first closing date of the Offer (orsuch later time(s) and/or date(s) as Mentor may, with the consent of the Panelor in accordance with the rules of the City Code, decide) in respect of not lessthan 90 per cent. (or such lesser percentage as Mentor may decide) in nominalvalue of the Flomerics Shares to which the Offer relates and not less than 90per cent. (or such lesser percentage as Mentor may decide) of the voting rightscarried by the Flomerics Shares to which the Offer relates, provided that,unless agreed by the Panel, this condition will not be satisfied unless Mentorand/or its wholly-owned subsidiaries have acquired or agreed to acquire(pursuant to the Offer or otherwise), directly or indirectly, Flomerics Sharescarrying, in aggregate, over 50 per cent. of the voting rights then normallyexercisable at general meetings of Flomerics on such basis as may be required bythe Panel (including for this purpose, to the extent (if any) required by thePanel, any voting rights attaching to any shares which are unconditionallyallotted or issued before the Offer becomes or is declared unconditional as toacceptances, whether pursuant to the exercise of conversion or subscriptionrights or otherwise); and for this purpose (i) the expression "Flomerics Sharesto which the Offer relates" shall be construed in accordance with Part 28 ofthe Companies Act; (ii) Flomerics Shares which have been unconditionallyallotted shall be deemed to carry the voting rights which they will carry onissue (iii) valid acceptances shall be treated as having been received inrespect of any Flomerics Shares which are treated for the purposes of Part 28 ofthe Companies Act as having been acquired or contracted to be acquired by Mentorby virtue of acceptances of the Offer and; (iv) shares that cease to be held intreasury are Flomerics Shares to which the Offer relates; (b) the German Federal Cartel Office (Bundeskartellamt) havingapproved the Offer, or deemed to have approved it due to the expiry of relevantwaiting periods, either without conditions or subject to conditions all of whichare reasonably satisfactory to Mentor; (c) no government or governmental, quasi-governmental,supranational, statutory or regulatory body, or any court, institution,investigative body, association, trade agency or professional or environmentalbody or (without prejudice to the generality of the foregoing) any other personor body in any jurisdiction (each, a "Relevant Authority") having decided totake, instituted, implemented or threatened any action, proceedings, suit,investigation or enquiry or enacted, made or proposed any statute, regulation ororder or otherwise taken any other step or done any thing, and there not beingoutstanding any statute, legislation or order, that would or might reasonably beexpected to: (i) restrict, restrain, prohibit, delay, impose additionalconditions or obligations with respect to, or otherwise interfere with theimplementation of, the Offer or the acquisition of any Flomerics Shares byMentor or any matters arising therefrom; (ii) result in a material delay in the ability of Mentor, orrender Mentor unable, to acquire some or all of the Flomerics Shares; (iii) require, prevent, materially delay or adversely affect thedivestiture by any member of the Wider Mentor Group or any member of the WiderFlomerics Group of all or any portion of their businesses, assets or property orimpose any limitation on the ability of any of them to conduct their respectivebusinesses or own their respective assets or properties or any part thereof; (iv) impose any material limitation on the ability of any member ofthe Wider Mentor Group to acquire or hold or exercise effectively, directly orindirectly, all rights of all or any of the Flomerics Shares (whether acquiredpursuant to the Offer or otherwise); (v) except pursuant to Part 28 of the Companies Act require anymember of the Wider Mentor Group or the Wider Flomerics Group to offer toacquire any shares or other securities or rights thereover in any member of theWider Flomerics Group (other than in Flomerics) owned by any third party; (vi) make the Offer or its implementation or the proposedacquisition of Flomerics or any member of the Wider Flomerics Group or of anyFlomerics Shares or any other shares or securities in, or control of, Flomerics,illegal, void or unenforceable in or under the laws of any jurisdiction; (vii) impose any limitation on the ability of any member of theWider Mentor Group or the Wider Flomerics Group to co-ordinate its business, orany part of it, with the business of any other member of the Wider Mentor Groupor the Wider Flomerics Group; (viii) result in any member of the Wider Mentor Group or WiderFlomerics Group ceasing to be able to carry on business in a manner in which itpresently does so; or (ix) otherwise adversely affect any or all of the business, assets,prospects or profits of any member of the Wider Mentor Group or the WiderFlomerics Group or the exercise of rights over shares of any company in theFlomerics Group, to an extent material to the Wider Flomerics Group taken as awhole; and all applicable waiting and other time periods during which such RelevantAuthority could institute, implement or threaten any such action, proceeding,suit, investigation, enquiry or reference or otherwise intervene having expired,lapsed or been terminated; (d) all authorisations, orders, grants, consents, clearances,licences, permissions and approvals, in any jurisdiction, necessary orappropriate for or in respect of the Offer, the proposed acquisition of anyshares or securities in, or control of, Flomerics or any member of the WiderFlomerics Group by any member of the Wider Mentor Group being obtained in termsreasonably satisfactory to Mentor from all appropriate Relevant Authorities or(without prejudice to the generality of the foregoing) from any persons orbodies with whom any members of the Wider Flomerics Group or the Wider MentorGroup has entered into contractual arrangements and such authorisations, orders,grants, consents, clearances, licences, permissions and approvals remaining infull force and effect and there being no intimation of any intention to revokeor not to renew the same and all necessary filings having been made, allappropriate waiting and other time periods (including extensions thereto) underany applicable legislation and regulations in any jurisdiction having expired,lapsed or been terminated and all necessary statutory or regulatory obligationsin any jurisdiction in respect of the Offer or the proposed acquisition ofFlomerics by Mentor or of any Flomerics Shares or any matters arising therefromhaving been complied with; (e) there being no provision of any agreement, instrument,permit, licence or other arrangement to which any member of the Wider FlomericsGroup is a party or by or to which it or any of its assets may be bound orsubject which, as a consequence of the Offer or the acquisition of Flomerics orbecause of a change in the control or management of Flomerics or any member ofthe Flomerics Group or otherwise would or could reasonably be expected to resultin: (i) a material amount of any money borrowed by, or of otherindebtedness, actual or contingent, of, or grant available to, any member of theWider Flomerics Group becoming or being capable of being declared repayableimmediately or earlier than the repayment date stated in such agreement,instrument or other arrangement or the ability of any member of the WiderFlomerics Group to incur a material amount of indebtedness being withdrawn,inhibited or adversely affected; (ii) any mortgage, charge or other security interest beingcreated over the whole or any part of the business, property or assets of anymember of the Wider Flomerics Group otherwise than solely by operation of law inthe ordinary course of business or any such security (whenever arising) beingenforced; (iii) any such agreement, instrument, permit, licence or otherarrangement, or any right, interest, liability or obligation of any member ofthe Wider Flomerics Group therein, being terminated or adversely modified oraffected to an extent material to the Wider Flomerics Group taken as a whole orany action being taken or obligation or liability arising thereunder to anextent material to the Wider Flomerics Group taken as a whole; (iv) the value of any member of the Wider Flomerics Group or itsfinancial or trading position being prejudiced or adversely affected in a mannerwhich would be material in the context of the Wider Flomerics Group taken as awhole; (v) any material asset or, other than in the ordinary course ofbusiness, any asset of the Wider Flomerics Group being charged or disposed of orceasing to be available to any member of the Wider Flomerics Group; (vi) the rights, liabilities, obligations or interests or businessof any member of the Wider Flomerics Group in or with any other person, firm orcompany (or any arrangement relating to such interest or business) beingterminated, modified or adversely affected in a manner that is material to theWider Flomerics Group taken as a whole; (vii) any liability (actual or contingent) which is material to theWider Flomerics Group taken as a whole being created or accelerated; (viii) any member of the Wider Flomerics Group ceasing to be able tocarry on business under any name under which it currently does so; (f) since 31 December 2007 and save as Publicly Announced nomember of the Flomerics Group having: (i) issued or agreed to issue or authorised or proposed theissue of additional shares of any class or issued or authorised or proposed theissue of or granted securities convertible into or rights, warrants or optionsto subscribe for or acquire such shares or convertible securities or redeemed,purchased or reduced or announced any intention to do so or made any otherchange to any part of its share capital, save for options granted or awards madepursuant to the Flomerics Share Option Schemes and Flomerics Shares allottedupon exercise of options, and save as between Flomerics and its wholly ownedsubsidiaries; (ii) sold or transferred or agreed to sell or transfer anytreasury shares; (iii) recommended, declared, paid or made or proposed torecommend, declare, pay or make any dividend, bonus or other distribution otherthan dividends lawfully paid to Flomerics or wholly-owned subsidiaries ofFlomerics; (iv) authorised or proposed or announced its intention to proposeany acquisition or disposal or transfer of assets or shares or any change in itsshare or loan capital (other than between Flomerics and its wholly ownedsubsidiaries); (v) issued or authorised or proposed the issue of any debenturesor incurred or increased any indebtedness or contingent liability (other thanbetween Flomerics and its wholly owned subsidiaries) and in each such case whichis material in the context of the Wider Flomerics Group; (vi) disposed of or transferred, mortgaged or encumbered anymaterial asset or any right, title or interest in any material asset or enteredinto or varied any contract, commitment or arrangement (whether in respect ofcapital expenditure or otherwise) which is of a long term or unusual nature orwhich involves or could involve an obligation of a nature or magnitude which ismaterial or authorised or proposed (other than between Flomerics and its whollyowned subsidiaries); (vii) entered into or varied or proposed to enter into or vary anycontract, reconstruction, amalgamation, arrangement or other transaction whichis of a long term or unusual or onerous nature or is otherwise than in theordinary course of business (other than between Flomerics and its wholly ownedsubsidiaries) and in each such case which is material in the context of theWider Flomerics Group; (viii) entered into, or varied the terms of, any contract or agreementwith any of the directors or senior executives of Flomerics; (ix) taken or proposed any corporate action or had any legalproceedings started or threatened against it for its winding-up, dissolution orreorganisation or for the appointment of a receiver, administrator,administrative receiver, trustee or similar officer of all or any of its assetsand revenues; (x) waived or compromised any claim which is material in thecontext of the Wider Flomerics Group taken as a whole other than in the ordinarycourse of business; (xi) in any respect which is material in the context of the WiderFlomerics Group taken as a whole: (i) taken any action with respect to, adopt, enter into, terminate or amend anyseverance, change in control, retirement, retention, welfare, incentive orsimilar agreement, arrangement or benefit plan for the benefit or welfare of anycurrent or former director, officer, employee or consultant or any collectivebargaining agreement, (ii) increased in any respect the compensation or fringebenefits of, or pay any bonus to, any director, officer, employee or consultant,(iii) amended or accelerated the payment, right to payment or vesting of anycompensation or benefits, including any outstanding options or restricted stockawards, (iv) granted any awards under any bonus, incentive, performance or othercompensation plan or arrangement or benefit plan, including the grant of stockoptions, stock appreciation rights, stock based or stock related awards,performance units or restricted stock, or the removal of existing restrictionsin any benefit plans or agreements or awards made thereunder; (xii) made any amendment to its memorandum or articles ofassociation or other incorporation documents; (xiii) made or agreed or consented to: (A) any significant change to: (I) the terms of the trust deeds constituting the pension scheme(s) established for its directors, employees or their dependants; or (II) the benefits which accrue or to the pensions which are payablethereunder; or (III) the basis on which qualification for, or accrual or entitlementto, such benefits or pensions is calculated or determined; or (IV) the basis upon which the liabilities (including pensions) or suchpension schemes are funded or made; or (B) any change to the trustees including the appointment of a trustcorporation; (xiv) entered into any contract, transaction or arrangement which isrestrictive to any significant extent on the business of any member of the WiderFlomerics Group or the Wider Mentor Group; (xv) otherwise than in the ordinary course of business, entered intoor joined any group, organisation or consortium whereby Flomerics is obligatedto provide intellectual property; (xvi) entered into any contract, commitment or agreement with respectto any of the transactions or events referred to in this condition (f); or (xvii) been unable or admitted that it is unable to pay its debts orhaving stopped or suspended (or threatened to stop or suspend) payment of itsdebts generally or ceased or threatened to cease carrying on all or asubstantial part of its business; (g) since 31 December 2007 and save as Publicly Announced: (i) no litigation, arbitration, prosecution or other legalproceedings having been instituted, announced or threatened or remainingoutstanding by or against any member of the Wider Flomerics Group or to whichany member of the Wider Flomerics Group is or may become a party (whether asclaimant, defendant or otherwise in each such case which is material in thecontext of the Wider Flomerics Group); (ii) no adverse change having occurred in the business, assets,financial or trading position, profits or prospects of any member of the WiderFlomerics Group which is material in the context of the Wider Flomerics Grouptaken as a whole; (iii) no steps having been taken which would or are reasonablylikely to result in the withdrawal, cancellation, termination or modification ofany licence held by any member of the Wider Flomerics Group which is necessaryfor the proper carrying on of its business; (iv) no enquiry or investigation by, or complaint or reference to,any Relevant Authority against or in respect of the Wider Flomerics Group havingbeen threatened, announced, implemented or instituted or remaining outstandingby, against or in respect of, any member of the Wider Flomerics Group; or (v) otherwise than in the ordinary course and in the context ofthe Offer, no material liability (actual, contingent or otherwise) havingarisen. (h) Mentor not having discovered that: (i) any business, financial or other information concerning anymember of the Flomerics Group disclosed, publicly by or on behalf of any memberof the Flomerics Group, either contains a misrepresentation of fact or omits tostate a fact necessary to make the information contained therein not misleadingwhich in either such case, is material in the context of the Wider FlomericsGroup taken as a whole; or (ii) any member of the Wider Flomerics Group is subject to anyliability, actual or contingent, which is not disclosed in the annual report andaccounts of Flomerics for the financial year ended 31 December 2007 or which hasbeen Publicly Announced and which is material in the context of the WiderFlomerics Group taken as a whole; or (iii) any member of the Wider Flomerics Group is subject to anyliability, actual or contingent, which is improperly disclosed in the annualreport and accounts of Flomerics for the financial year ended 31 December 2007or which has been Publicly Announced, which is material in the context of theWider Flomerics Group taken as a whole and which requires a restatement of suchannual report and accounts and any annual reports and accounts of Flomerics inany previous financial years; (i) Mentor not having discovered that: (i) any past or present member of the Wider Flomerics Group hasnot complied with all applicable legislation or regulations of any jurisdictionwith regard to the storage, disposal, discharge, spillage, leak or emission ofany waste or hazardous substance or any substance likely to impair theenvironment or to harm human health or otherwise relating to environmentalmatters (which non-compliance might give rise to any liability (whether actualor contingent) on the part of any member of the Wider Flomerics Group) or thatthere has otherwise been any such disposal, discharge, spillage, leak oremission (whether or not the same constituted a non-compliance by any personwith any such legislation or regulations and wherever the same may have takenplace) which in any such case might give rise to any liability (whether actualor contingent) on the part of any member of the Wider Flomerics Group; (ii) there is or is likely to be any liability (whether actual orcontingent) to make good, repair, reinstate or clean up any property now orpreviously owned, occupied or made use of by any past or present member of theWider Flomerics Group or any controlled waters under any environmentallegislation, regulation, notice, circular or order of any Relevant Authority orthird party or otherwise; (iii) circumstances exist (whether as a result of the making ofthe Offer or otherwise) which might lead to any Relevant Authority institutingor any member of the Wider Flomerics Group or the Wider Mentor Group beingrequired to institute, an environmental audit or take any other steps which inany such case might result in any actual or contingent liability to improve orinstall new plant or equipment or make good, repair, re-instate or clean up anyland or other asset now or previously owned, occupied or made use of by anymember of the Wider Flomerics Group; (iv) the Wider Flomerics Group has not complied with any applicablelaw or regulation governing the conduct of its business in any respect which ismaterial in the context of the Wider Flomerics Group taken as a whole; (v) any contract, agreement or other arrangement is or may berestrictive to a material extent on the business of any member of the WiderFlomerics Group or the Wider Mentor Group which is material in the context ofthe Wider Flomerics Group taken as a whole; or (vi) the conduct of the business of the Wider Flomerics Groupinfringes the intellectual property rights of any third party in any respectwhich is material in the context of the Wider Flomerics Group taken as a whole. Mentor reserves the right to waive all or any of conditions (b) to (i)(inclusive) above, in whole or in part. Conditions (b) to (i) (inclusive) mustbe satisfied as at, or waived on or before, 21 days after the later of the firstclosing date of the Offer and the date on which condition (a) is fulfilled (orin each case such later date as the Panel may agree) provided that Mentor shallbe under no obligation to waive or treat as satisfied any of conditions (b) to(i) (inclusive) by a date earlier than the latest date specified above for thesatisfaction thereof notwithstanding that the other conditions of the Offer mayat such earlier date have been waived or fulfilled and that there are at suchearlier date no circumstances indicating that any of such conditions may not becapable of fulfilment. The Offer will be on terms and will be subject, inter alia, to the conditionswhich are set out in this Appendix and those terms will be set out in the formalOffer Document and Form of Acceptance. If Mentor is required by the Panel to make an offer for Flomerics Shares underthe provisions of Rule 9 of the City Code, Mentor may make such alterations tothe conditions as are necessary to comply with the provisions of that Rule. The Offer will lapse if it is referred to the Competition Commission before (inany such case) the later of the first closing date of the Offer and the datewhen the Offer becomes or is declared unconditional as to acceptances. Mentor reserves the right to elect to implement the acquisition of Flomerics,with the consent of the Panel if required, by way of scheme of arrangement underPart 26 of the Companies Act. In such event, such scheme will be implemented onthe same terms (subject to appropriate amendment). APPENDIX II BASES AND SOURCES OF INFORMATION (a) The maximum value placed by the Offer on the entire issued and to beissued ordinary share capital of Flomerics and other statements made byreference to the existing issued share capital of Flomerics is based upon the22,857,450 Flomerics Shares in issue on 8 May 2008 (being the last practicableBusiness Day prior to publication of this announcement) and on 1,328,000Flomerics Shares to be issued in accordance with the Flomerics Option Scheme, asset out in the annual accounts and report of Flomerics for the financial yearended 31 December 2007. (b) The Closing Prices of Flomerics Shares represent the closing middlemarket prices for Flomerics Shares on the relevant dates. APPENDIX III DEFINITIONS The following definitions apply throughout this announcement, unless the contextrequires otherwise: "AIM" AIM, the market of that name operated by the London Stock Exchange "AIM Rules" the AIM Rules for Companies published by the London Stock Exchange "Associate" has the meaning given in section 988 of the Companies Act "Board of Mentor" the board of directors of Mentor "Business Day" a day, not being a public holiday, Saturday or Sunday, on which clearing banks in London are open for normal business "Canaccord" Canaccord Adams Limited, co-financial adviser to Mentor "Cenkos" Cenkos Securities plc, financial adviser to Mentor "City Code" The City Code on Takeovers and Mergers "Closing Price" the closing middle market quotation of a Flomerics Share as derived from the Daily Official List "Companies Act" the Companies Act 1985 and Companies Act 2006, as applicable and as amended "Competition Commission" the UK Competition Commission "Flomerics Directors" or "Directors of Flomerics" or the board of directors of Flomerics"Board of Flomerics" "Flomerics Group" Flomerics Group plc and its subsidiary undertakings "Flomerics Optionholders" or "Optionholder" a holder of options or awards under a Flomerics Share Option Scheme "Flomerics Share Option Schemes" means any schemes or arrangements adopted by Flomerics pursuant to which any options in respect of Flomerics Shares have been or may be issued. "Flomerics Share(s)" the existing unconditionally allotted or issued and fully paid ordinary shares of 1 penny each in the capital of Flomerics and any further such shares which are unconditionally allotted or issued fully paid, or credited as fully paid, before the date on which the Offer closes (or before such earlier date as Mentor may, subject to the City Code, decide not being earlier than (a) the date on which the Offer becomes or is declared unconditional as to acceptances or (b), if later, the first closing date of the Offer) but excluding in both such cases any such shares held or which become held in treasury "Flomerics Shareholders" the holders of Flomerics Shares "Flomerics" or the "Company" Flomerics Group plc "Form of Acceptance" the form of acceptance which will accompany the Offer Document "Holder" a registered holder of Flomerics Shares "Listing Rules" the rules and regulations made by the Financial Services Authority in its capacity as the UK Listing Authority under the Financial Services and Markets Act 2000 and contained in the UK Listing Rules publication of the same name "London Stock Exchange" London Stock Exchange plc "Mentor" Mentor Graphics Corporation and its subsidiary undertakings "NASDAQ" NASDAQ (originally an acronym for National Association of Securities Dealers Automated Quotations system) the American electronic stock market owned and operated by The Nasdaq Stock Market, Inc "Offer Document" the formal document to be sent to holders of Flomerics Shares containing the Offer "Offer Period" the period commencing on 9 May 2008 and ending on the date on which the Offer becomes or is declared wholly unconditional or lapses or is withdrawn "Offer" the offer to be made by Mentor by way of a cash offer to acquire all of the issued and to be issued Flomerics Shares on the terms and subject to the conditions to be set out in the Offer Document and the Form of Acceptance and, where the context so requires, any subsequent revision, variation, extension or renewal thereof "Panel" The Panel on Takeovers and Mergers "Pound Sterling" or "£" UK pound sterling (and references to "pence" shall be construed accordingly) "Pricap" Pricap Venture Partners AG "Publicly Announced" announced publicly and delivered to a Regulatory Information Service "Registrar of Companies" the Registrar of Companies in England and Wales "Regulatory Information Service" any of the services set out in Schedule 12 of the Listing Rules "Relevant Authority" has the meaning given in sub paragraph (c) of Appendix 1 of this announcement "subsidiary", "subsidiary undertaking", "associated shall be construed in accordance with the Companiesundertaking" or "undertaking" Act "Substantial Interest" a direct or indirect interest in 20 per cent. or more of the voting or equity capital (or equivalent) of an undertaking "United Kingdom" or the "UK" United Kingdom of Great Britain and Northern Ireland and its dependent territories "United States", "US" or "USA" the United States of America, its territories and possessions, any state of the United States and the District of Columbia "Wider Flomerics Group" Flomerics and the subsidiaries and subsidiary undertakings of Flomerics and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Flomerics Group is interested or any undertaking in which Flomerics and such undertakings (aggregating their interests) have a Substantial Interest) "Wider Mentor Group" Mentor and the subsidiaries and subsidiary undertakings of Mentor and associated undertakings (including any joint venture, partnership, firm or company in which any member of the Mentor Group is interested or any undertaking in which Mentor and such undertakings (aggregating their interests) have a Substantial Interest) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Flowtech Fluid.