26th Jun 2007 07:03
Spring Group PLC26 June 2007 NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN OR INTO AUSTRALIA, CANADA ORJAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. 26 June 2007 For immediate release Recommended Cash Offer by Spring (Corporate) Limited (a wholly owned subsidiary of Spring Group plc) for the entire issued and to be issued share capital of Glotel plc • The Spring Board and the Glotel Independent Directors are pleased to announce that they have reached agreement on the terms of a recommended cash offer to be made by Spring (Corporate) Limited for the entire issued and to be issued share capital of Glotel. Spring (Corporate) Limited is a wholly owned subsidiary of Spring, newly established for the purpose of making the Offer. • The Offer values each Glotel Share at 70 pence and the existing issued share capital and in the money options of Glotel at approximately £27.2 million. • The Glotel Independent Directors unanimously recommend that the Glotel Shareholders accept the Offer as they have irrevocably undertaken to accept or procure the acceptance of the Offer in respect of their entire beneficial holdings of 9,766,928 Glotel Shares, representing, in aggregate, approximately 25.1 per cent. of Glotel's existing issued share capital. • Spring has also received an irrevocable undertaking from Andy Baker, Chief Executive Officer of Glotel, to accept or procure the acceptance of the Offer in respect of his entire beneficial holding of 9,336,064 Glotel Shares, representing, in aggregate, approximately 24.0 per cent. of Glotel's existing issued share capital. • Spring has also received letters of intent to accept or procure the acceptance of the Offer from certain Glotel institutional shareholders who hold, in aggregate, 6,882,910 Glotel Shares, representing approximately 17.7 per cent. of Glotel's existing issued share capital. • Accordingly, irrevocable undertakings and letters of intent to accept or procure the acceptance of the Offer have been received by Spring in respect of, in aggregate, 25,985,902 Glotel Shares representing approximately 66.9 per cent. of Glotel's existing issued share capital. • The Offer represents a premium of approximately: • 26.7 per cent. to the Closing Price of 55.25 pence per Glotel Share on 25 June 2007, being the latest practicable date prior to the Announcement; and • 20.0 per cent. to 58.33 pence, being the average Closing Price of a Glotel Share for the six months ended on 25 June 2007, being the latest practicable date prior to the Announcement. • Pursuant to the Share Subscription Agreement, upon the Offer becoming unconditional, Andy Baker, Chief Executive of Glotel, has agreed to apply £2.0 million of the proceeds receivable by him under the Offer to subscribe for 2,849,002 new Spring Shares, representing approximately 1.7 per cent. of the enlarged Spring issued share capital following his subscription, at 70.2 pence each, being the average closing middle market quotation of a Spring Share for the last five days up to the close of business on 25 June 2007, the last Business Day prior to this Announcement. • In view of the interests that Andy Baker will have in Spring, the Glotel Independent Directors (Les Clark, Jonathan Brooks, Glyn Hirsch and Sir Robin Saxby) alone have considered the approach from Spring and the terms of the Offer. • The Glotel Independent Directors, who have been so advised by Baird, consider the terms of the Offer to be fair and reasonable. In providing advice to the Glotel Independent Directors, Baird has taken into account the commercial assessments of the Glotel Independent Directors. • The Acquisition constitutes a Class 1 Transaction (as defined in the Listing Rules) for Spring. Accordingly the Offer is conditional, inter alia, on the approval of Spring Shareholders at the Spring EGM. It is expected that the Circular containing the Notice of Spring EGM will be sent to Spring Shareholders as soon as is reasonably practicable. • Altium is acting as Financial Adviser and Broker to Spring. Baird is acting as Rule 3 Financial Adviser to Glotel. Commenting on the Offer, Peter Searle, Chief Executive Officer of the SpringGroup, said: "The acquisition of Glotel advances Spring's growth strategy by extendingSpring's geographic and vertical market presence. Glotel provides Spring with astrong telecoms recruitment business, a profitable and sizeable business in theUnited States, and a platform for growth in Europe and Australia. Theacquisition is a good strategic fit and will be earnings enhancing in the firstfull year of ownership*" Commenting on the Offer, Les Clark, Chairman of Glotel said: "The two businesses combined will benefit from increased scale, market presenceand synergies and will be a powerful force in IT and telecoms recruitment inEurope the United States and Australia." There will be a presentation for analysts at 11.15am this morning at FinancialDynamics. For further details, please contact Claire Rowell on +44 (0)20 78313113. Enquiries: Spring--------Amir Eilon (Chairman) Tel: +44 (0)20 7300 9000Peter Searle (Chief Executive Officer)Peter Darraugh (Finance Director) Glotel--------Les Clark (Chairman) Tel: +44 (0)20 7484 3000Jonathan Brooks (Finance Director) Altium (Financial Adviser and Broker to Spring)-------------------------------------------------Ben Thorne Tel: +44 (0)20 7484 4040Marc MilmoSam Fuller Financial Dynamics (Public Relations adviser to Spring)---------------------------------------------------------Ben Atwell Tel: +44 (0)20 7831 3113John Gilbert Baird (Rule 3 and Financial Adviser to Glotel)------------------------------------------------David Silver Tel: +44 (0)20 7488 1212 \* This statement regarding earnings enhancement does not constitute a profitforecast nor should it be taken to mean that the earnings per share of Springfor the current or future years will necessarily match or exceed the historicalreported earnings per share of Spring and no forecast is intended or implied. This summary should be read in conjunction with the full text of the attachedAnnouncement. The Offer will be subject to the conditions set out in Appendix Ito the attached Announcement and the full conditions and further terms whichwill be set out in the Offer Document, which is expected to be issued shortly. Appendix II contains the sources and bases of information used in the attachedAnnouncement and details of the irrevocable undertakings and letters of intentto accept the Offer received by Spring. Appendix III contains the definitions of certain expressions used in this summary and the attached Announcement. Altium, which is authorised and regulated by the Financial Services Authority inthe United Kingdom, is acting exclusively for Spring and no one else inconnection with the Offer and will not be responsible to anyone other thanSpring for providing the protections afforded to clients of Altium nor forproviding advice in relation to the Offer, the content of this summary and theattached Announcement or any other matter or arrangement referred to herein. Baird, which is authorised and regulated by the Financial Services Authority inthe United Kingdom, is acting exclusively for Glotel and no one else inconnection with the Offer and will not be responsible to anyone other thanGlotel for providing the protections afforded to clients of Baird nor forproviding advice in relation to the Offer, the content of this summary and theattached Announcement or any other matter or arrangement referred to herein. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANOFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES NOR THE SOLICITATION OF ANY VOTE ORAPPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUE OR TRANSFER OFTHE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION INCONTRAVENTION OF ANY APPLICABLE LAW. THE OFFER WILL BE MADE SOLELY BY MEANS OFTHE OFFER DOCUMENT AND THE FORM OF ACCEPTANCE ACCOMPANYING THE OFFER DOCUMENT. The Offer in the United States will be made pursuant to an exemption from certain US tender offer rules provided by Rule 14d-1(c) under the Exchange Act. The availability of the Offer to Glotel Shareholders who are citizens orresidents of jurisdictions outside the United Kingdom may be affected by thelaws of their relevant jurisdiction. Such persons should inform themselves of,and observe, any applicable legal or regulatory requirements of theirjurisdiction. If you remain in any doubt, you should consult your professionaladviser in the relevant jurisdiction without delay. Any acceptance or other response to the Offer should be made only on the basisof information referred to in the Offer Document which Spring (Corporate)Limited intends to despatch as soon as is reasonably practicable to GlotelShareholders and, for information only, to participants in the Glotel ShareOption Schemes. Spring will prepare the Circular which will be sent to Spring Shareholders assoon as is reasonably practicable. Spring Shareholders may obtain a further freecopy of the Circular, when it becomes available, from the offices of NortonRose, 3 More London Riverside, London, SE1 2AQ. The Directors of Spring accept responsibility for the information contained inthis summary and the attached Announcement other than information relating tothe Glotel Group, the Glotel Directors and their immediate families, relatedtrusts and controlled companies. To the best of the knowledge and belief of theSpring Board (who have taken all reasonable care to ensure that such is thecase), the information contained in this summary and the attached Announcementfor which they accept responsibility is in accordance with the facts and doesnot omit anything likely to affect the import of such information. The Directors of Glotel accept responsibility for the information in thissummary and the attached Announcement relating to them and their immediatefamilies, related trusts and controlled companies and the Glotel Group. Further Information on the Offer The availability of the Offer to Glotel Shareholders who are not resident in theUnited Kingdom may be affected by the laws of relevant jurisdictions. GlotelShareholders who are not resident in the United Kingdom will need to informthemselves about and observe any applicable requirements. This summary and the attached Announcement have been prepared for the purposes of complying with English law, the City Code and the Listing Rules and information disclosed may not be the same as that which would have been disclosed if this summary and the attached Announcement had been prepared in accordance with the laws of jurisdictions outside England. The Offer will be subject to the applicable rules and regulations of theFinancial Services Authority, the London Stock Exchange and the City Code. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Glotel, all "dealings" in any "relevant securities" of thatcompany (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 Business Day following the date of therelevant transaction. This requirement will continue until the date on which theOffer becomes, or is declared, unconditional as to acceptances, lapses or isotherwise withdrawn or on which the "offer period" otherwise ends. If two ormore persons act together pursuant to an agreement or understanding, whetherformal or informal, to acquire an "interest" in "relevant securities" of Glotel,they will be deemed to be a single person for the purpose of Rule 8.3 of theCode. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Glotel by Spring or Glotel, or by any of their respective"associates", must be disclosed by no later than 12.00 noon (London time) on theBusiness 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 price of securities. Inparticular, a person will be treated as having an "interest" by virtue of theownership or control of securities, or by virtue of any option in respect of, orderivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8 of the Code, you should contact anindependent financial adviser authorised under the Financial Services andMarkets Act 2000 or consult the Panel's website or contact the Panel ontelephone number +44 (0)20 7638 0129. In accordance with Rule 2.10 of the Code, Glotel confirms that it has 38,856,398ordinary shares of 5 pence each in issue and admitted to trading on the OfficialList under the UK ISIN code GB0006782147. NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION IN OR INTO AUSTRALIA, CANADA ORJAPAN OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DO SO. 26 June 2007 Recommended Cash Offer by Spring (Corporate) Limited (a wholly owned subsidiary of Spring Group plc) For the entire issued and to be issued share capital of Glotel plc 1. INTRODUCTION The Spring Board and the Glotel Independent Directors are pleased to announcethat they have reached agreement on the terms of a recommended cash offer to bemade by Spring (Corporate) Limited for the entire issued and to be issued sharecapital of Glotel. The Glotel Independent Directors, who have been so advised by Baird, considerthe terms of the Offer to be fair and reasonable and unanimously recommend thatthe Glotel Shareholders accept the Offer and they have irrevocably undertaken toaccept or procure the acceptance of the Offer in respect of their entirebeneficial holdings of 9,766,928 Glotel Shares, which, in aggregate, representapproximately 25.1 per cent. of the existing issued share capital of Glotel. Inproviding advice to the Glotel Independent Directors, Baird has taken intoaccount the commercial assessments of the Glotel Independent Directors. In view of his continuing involvement in the business and prospective interestin Spring, Andy Baker has not taken part in the Glotel Independent Directors'decision to recommend that Glotel Shareholders accept the Offer. The GlotelIndependent Directors are Les Clark, Jonathan Brooks, Glyn Hirsch and Sir RobinSaxby. Andy Baker has also irrevocably undertaken to accept or procure the acceptanceof the Offer in respect of his entire beneficial holding of 9,336,064 GlotelShares, representing, in aggregate, approximately 24.0 per cent. of Glotel'sexisting issued share capital. Spring has received letters of intent to accept the offer from GlotelShareholders in respect of, in aggregate, 6,882,910 Glotel Shares, representingapproximately 17.7 per cent. of Glotel's existing issued share capital. Furtherdetails of these irrevocable undertakings and letters of intent are given inparagraph 3 below and in Appendix II of this Announcement. The Offer Document will be posted to Glotel Shareholders as soon as isreasonably practicable. 2. SUMMARY OF THE TERMS OF THE OFFER The Offer, which will be subject to the terms and conditions set out in AppendixI to this Announcement and the further terms and conditions to be set out in theOffer Document and, in respect of certificated Glotel Shares, the Form ofAcceptance, will be made on the following basis: For each Glotel Share 70 pence in cash The Offer values the existing issued share capital of Glotel at approximately£27.2 million and represents a premium of: • 26.7 per cent. to the Closing Price of 55.25 pence per Glotel Share on 25 June 2007, being the latest practicable date prior to the Announcement; and • 20.0 per cent. to 58.33 pence, being the average Closing Price of a Glotel Share for the six months ended on 25 June 2007, being the latest practicable date prior to the Announcement. The Glotel Shares will be acquired pursuant to the Offer fully paid and freefrom all liens, charges, equitable interests, encumbrances, rights ofpre-emption and any other third party rights or rights of any nature whatsoeverand together with all rights now and hereafter attaching to them, including,without limitation, the right to receive in full and retain all dividends andother distributions (if any) declared, made or paid in respect of Glotel Shareson or after 25 June 2007. Full acceptance of the Offer, assuming the exercise of all outstanding optionswith an exercise price of less than 70 pence per share under the Glotel ShareOption Schemes before the Offer closes, will result in the payment to GlotelShareholders of approximately £27.2 million in cash. 3. IRREVOCABLE UNDERTAKINGS TO ACCEPT THE OFFER Spring has received irrevocable undertakings to accept, or procure theacceptance of, the Offer from the Independent Glotel Directors (and theirconnected persons) who hold, in aggregate, 9,766,928 Glotel Shares representingapproximately 25.1 per cent. of the existing issued share capital of Glotel.These undertakings will remain binding even if a higher competing offer is madefor Glotel, unless the Offer lapses or is withdrawn. Spring has also received an irrevocable undertaking from Andy Baker to accept orprocure the acceptance of the Offer in respect of his entire beneficial holdingof 9,336,064 Glotel Shares, representing, in aggregate, approximately 24.0 percent. of Glotel's existing issued share capital. Spring has also received letters of intent from certain Glotel institutionalshareholders who hold, in aggregate, 6,882,910 Glotel Shares representing 17.7per cent. of the existing issued share capital of Glotel. Accordingly, irrevocable undertakings and letters of intent to accept the Offerhave been received by Spring in respect of, in aggregate, 25,985,902 GlotelShares representing approximately 66.9 per cent. of Glotel's existing issuedshare capital. Further details of these irrevocable undertakings and letters of intent are setout in Appendix II to this Announcement. 4. BACKGROUND TO AND REASONS FOR THE OFFER In March 2007, Spring outlined its strategy of expanding into new vertical andgeographical markets through both organic and acquisitive growth. This strategy consisted of three primary business changes. Firstly, in order toachieve a stable platform for growth, key hires were targeted with a view tostrengthening the management team. Secondly, Spring aimed to grow each of itsthree business lines either organically or through acquisition by investing inhigh margin, high value, mainly niche businesses. Key target sectors includeFinance, Engineering and Speciality IT. The final aim was to expandgeographically and establish a worldwide platform for growth. Key targetgeographies were the US, as the largest professional services market in theworld, mainland Europe, followed by Central Europe's new economies and theemerging markets of Asia-Pacific and Indochina. The Spring Board believe that the acquisition of Glotel advances Spring's growthstrategy. Glotel is a niche, high-margin recruitment business servicing thetelecoms industry with established operations in both the US and Europe. In the US, Spring will gain a successful management team run by Andy Baker(co-founder of Glotel) with a complete back office and compliance team and afootprint of 11 offices with a blue chip client base. Spring aims to importGlotel's sophisticated US "hybrid solutions" model into the UK in order to helpincrease Spring's margins in Europe. The Spring Board envisage that the UKoperation will work alongside Spring's own telecoms business, Triage, giving theEnlarged Group cost savings whilst acquiring a skilled technical sales team andcustomer and contractor base. In Northern Europe, Spring will gain access tooperations in Holland, Belgium and Germany to add to Italy which Spring startedorganically in April 2007. This will expand Spring's European capabilities.Spring will also benefit from Glotel's knowledge and experience of internationaltaxation compliance issues which will assist the Enlarged Group's internationalgrowth strategy. 5. RECOMMENDATION In view of the interest that Andy Baker will have in Spring pursuant to theShare Purchase Agreement, the Glotel Independent Directors alone have consideredthe approach from Spring and the terms of the Offer. The Glotel Independent Directors, who have been so advised by Baird, considerthe terms of the Offer to be fair and reasonable. In providing its advice to theGlotel Independent Directors, Baird has taken into account the commercialassessments of the Glotel Independent Directors. Accordingly, the Glotel Independent Directors unanimously recommend that theGlotel Shareholders accept the Offer. The Glotel Independent Directors haveirrevocably undertaken to accept or procure the acceptance of the Offer inrespect of their entire beneficial holdings of 9,766,928 Glotel Shares, which,in aggregate, represent approximately 25.1 per cent. of the existing issuedshare capital of Glotel. 6. INFORMATION ON SPRING AND SPRING (CORPORATE) LIMITED Spring is a technology staffing and workforce management company operating inthree business streams through seven brands. IT Staffing - contracting services and Permanent recruitmentThe core Spring business, and the largest business in the Spring Group, remainsits IT staffing business. Through brands such as "Best", "Spring Technology" and"Spring Telecoms" it provides a range of comprehensive and scalable technologystaffing solutions designed to meet its clients' contingent, permanent, nationaland international technology staffing needs. It offers a wide range ofspecialist and managed IT services across a broad spectrum of market sectors inthree practice areas: development; testing and application; and infrastructuresupport. IT Staffing - hy-phen RPO and Spring IT solutionsUnder its hy-phen brand, Spring offers services that are tailored to itsclient's specific needs through a managed service programme that providescentral co-ordination for the entire recruitment process. This often encompassesadvice to hiring managers on their requirements, pay rates and ongoingbenchmarking together with supply chain management and campaign management. In addition, Spring has created a solutions business which has involved thecompany moving from its traditional transaction based service relationship withits clients into a more strategic and consulting capacity to help its clientsunderstand their potential future skill requirements. General StaffingSpring operates a national network of general temporary and permanent officesthrough its "Spring Personnel" and "Elizabeth Hunt" brands. The general staffingbusiness provides staff into a broad range of industries from clerical andsecretarial staff through to engineering and industrial staff. Spring (Corporate) Limited is a newly incorporated company specifically formedfor the purpose of implementing the Offer. Spring (Corporate) Limited, which isincorporated in England, is a wholly owned subsidiary of Spring. The Directorsof Spring (Corporate) Limited are Peter Searle and Peter Darraugh (bothexecutive directors of Spring). 7. INFORMATION ON GLOTEL Glotel, which is listed on the Official List, was founded in 1989 by Andy Bakerand Les Clark and has grown to become a specialist provider of telecom,networking and information technology consultants with a network of 16 officesthroughout Europe, the US and the Asia-Pacific region. Its client base includesmajor telecoms equipment suppliers and operators, large users of internationalnetworks as well as many other companies who need temporary staff for theirinformation technology departments. Glotel's service offerings are split into three core business streams; contractstaffing; permanent placements and "Hybrid" staffing solutions. Contract StaffingGlotel's core business remains its contract staffing business wherebycontractors are hired out to customers on a time and materials basis and ispredominantly focused on the telecommunications market; both fixed line,wireless operators and wireless vendors. Contractors are typically engaged atclient sites for three to twelve months although for certain project basedcontracts, the period can be longer. Permanent StaffingGlotel has grown its permanent staffing presence by utilizing its legacyrelationships from its contract staffing teams as well as by trying to access anew client base. "Hybrid" Staffing solutionsAs well as pure staff provision, Glotel has expanded into the provision ofsolutions for its clients which incorporates certain levels of projectmanagement with contract staffing. This added value offering is currentlyfocused on Glotel's US operations where there is demand for the management oflarger teams of temporary contractors working on specific projects. Contractorsare supplied on a time basis but there are delivery criteria with specificsolutions being tailored to the clients' requirements. A cornerstone of Glotel's strategy is to differentiate itself from itscompetitors by offering a global service so as to enable companies that operateinternationally to deal with one supplier. To this end, Glotel has adopted aregional structure consisting of Europe, the Middle East and Africa ('EMEA'),North America and Asia-Pacific, each with their own local management teams. EMEA represents approximately 12.6 per cent. of the Glotel Group's operatingprofit for the year ended 31 March 2007. The majority of the EMEA business isderived from the UK where the company provides contractors into the telecoms andpublic sector sectors as well as a small but expanding permanent placementbusiness into the telecoms industry. The company has also made progressinternationally by supplying engineers to telecommunications infrastructureprojects in several countries in Eastern Europe, the Middle East (includingSaudi Arabia, the Yemen, Kuwait and Pakistan) and Africa. The US business is the most profitable division with Glotel US representingapproximately 85.8 per cent. of the Glotel Group's operating profit in the yearended 31 March 2007. The US business operates out of 11 office locationsthroughout the US and is divided into three core units: telecommunicationscontract staffing, IT contract staffing and the Hybrid solutions business, whichhas been steadily increasing its contribution to this part of the Gloteloperations. The Asia-Pacific region is based in Australia but also has operations in NewZealand and India. This business provides contract and permanent staff into thetelecoms and IT space. In the year ended 31 March 2007, the Asia-Pacificbusiness contributed approximately 1.6 per cent. of the Glotel Group's operatingprofit. In the results announced today by Glotel for its financial year ended 31 March2007, Glotel had revenues of £120.3 million, gross profit of £23.0 million,profit before tax of £2.1 million, gross assets of £34.0 million and net assetsof £21.0 million. 8. CURRENT TRADING AND PROSPECTS GlotelIn the audited financial results for the year ended 31 March 2007, announced byGlotel on 26 June 2007, it was stated: "The last financial year was disappointing but is now well behind us. We haveadjusted our cost base in the UK and Australia so that these businesses will bebetter able to cope with the lower margin market conditions of these countriesand we remain committed to developing our US business which remains by far themost profitable region for the group. We have had a good start to the year andlook forward to being part of a larger group which will give us much-neededscale, especially in the UK" SpringIn the first half of 2007 Spring has made good progress in executing its statedgrowth strategy. The Company has completed the reorganisation of the businessinto three distinct operating units, with managing directors appointed to runeach area. Furthermore, investment has been made into each of these businesslines through the recruitment of over 70 additional sales headcount, andgeographic growth plans have commenced through the opening of an office in Rome.The Spring Board expects that these factors will combine to deliver increasedvolumes in the second half of 2007. The acquisition of Glotel advances Spring's strategy of opening up newgeographies and expanding into other high value market opportunities. Despite the significant amount of change and investment involved in executingits growth strategy, Spring's trading in the first half of the year has been inline with the Spring Board's expectations. Enlarged GroupThe Spring Directors believe that a combination of Spring and Glotel provides anexcellent opportunity for both groups to capitalise on the benefits of beingpart of the Enlarged Group. The Spring Directors believe that the Acquisitionwill be earnings neutral for Spring in the current financial year and earningsenhancing for Spring in the first full financial year following Completion(before amortisation of intangible assets and one-off integration costs)* andin view of the benefits outlined above the Spring Board is confident of thefinancial and trading prospects of the Enlarged Group. 9. MANAGEMENT, EMPLOYEES AND LOCATIONS The Boards of Spring and Glotel have had detailed discussions with regard tointegrating their respective businesses. Both Boards believe that synergiesexist between the two companies which, once realised, will enable the EnlargedGroup to be more competitive on a global stage through a combination of itsincreased size and economies of scale. To maximise the benefits of operational gearing and to create the best careeropportunities for staff in both companies, best practices will be adopted acrossthe Enlarged Group. This process will likely result in a degree of back officerationalisation and will also include the departure of the Glotel IndependentDirectors who have, pursuant to the appropriate letters of resignation and/orcompromise agreements, undertaken to resign (without compensation) upon theOffer becoming, or being declared, wholly unconditional. For Glotel employees in the US and Asia-Pacific there will be minimal changes inmanagement and company structure. In the UK, there will be a number of changesdue to the relative sizes of Glotel and Spring, but this will also makeavailable to Glotel employees the significant career opportunities associatedwith being part of a much larger group. Any restructuring or redundancies that may take place will be subject to allapplicable consultation obligations under relevant laws. Furthermore, Spring has indicated that it does not currently intend to effect amaterial change in any conditions of employment for Glotel employees and hasgiven assurances to the Glotel Independent Directors that the existingemployment rights, including pension rights, of all Glotel employees will befully safeguarded upon the Offer becoming, or being declared, whollyunconditional. Andy Baker, Chief Executive of Glotel, will become Chief Executive Officer USAoperations upon the Offer becoming, or being declared, wholly unconditional. 10. MANAGEMENT ARRANGEMENTS The Spring Board would like Andy Baker to remain financially involved in thebusiness and as a result Andy Baker has entered into the Share SubscriptionAgreement with Spring. Under the terms of the Share Subscription Agreement, AndyBaker has agreed to apply £2.0 million of the proceeds receivable by him underthe Offer (representing an estimated 30.6 per cent. of the gross proceedsreceivable by him under the Offer) to subscribe for 2,849,002 new Spring Sharesat 70.2p each, being the average closing middle market quotation for a SpringShare for the last five days up to the close of business on 25 June 2007, thelast Business Day prior to the Announcement. On completion of the ShareSubscription Agreement, it is expected that Andy Baker will beneficially ownapproximately 1.7 per cent. of the enlarged issued share capital of Spring. TheSpring Shares acquired by Andy Baker will be subject to a two year lock inperiod. Andy Baker has irrevocably undertaken to accept the Offer in relation tohis entire holding of Glotel Shares. Further details of the Share Subscription Agreement will be set out in the OfferDocument. 11. GLOTEL SHARE OPTION SCHEMES The Offer will extend to any Glotel Shares issued or unconditionally allotted orissued fully paid (or credited as fully paid) whilst the Offer remains open foracceptance (or until such earlier date as, subject to the City Code, Spring(Corporate) Limited may decide, being not earlier than the date on which theOffer becomes or is declared unconditional as to acceptances, or if later, thefinal closing date of the Offer), including those allotted or issued as a resultof the exercise of options under the Glotel Share Option Schemes. Spring (Corporate) Limited intends to make appropriate proposals to the holdersof options under the Glotel Share Option Schemes upon the Offer becoming orbeing declared unconditional in all respects, to the extent that such optionshave not been exercised. 12. INTERESTS IN GLOTEL SHARES Save for the irrevocable undertakings referred to in paragraph 3 above, neitherSpring nor any of its directors nor, so far as the directors of Spring areaware, any person acting in concert with Spring for the purposes of the Offer,owns or controls or holds any option to purchase, or has any arrangement inrelation to Glotel Shares or securities convertible or exchangeable into GlotelShares or options (including traded options) in respect of, or has entered intoany derivative referenced to, any such shares. For these purposes, "arrangement"includes any indemnity or option arrangement, any agreement or understanding,formal or informal, of whatever nature, relating to Glotel Shares which may bean inducement to deal or refrain from dealing in such shares. 13. FINANCING THE OFFER Full acceptance of the Offer, assuming the exercise of all outstanding optionswith an exercise price of less than 70p per Glotel Share under the Glotel ShareOption Schemes and the acceptance of the Offer by the resultant shareholdersbefore the Offer closes, will result in the payment of approximately £27.2million in cash. The cash consideration payable under the terms of the Offer is to be financedfrom the internal cash resources of the Spring Group. Altium is satisfied thatsufficient financial resources are available to Spring (Corporate) Limited tosatisfy the consideration payable as a result of full acceptance of the Offer. 14. INDUCEMENT FEE Pursuant to the Inducement Fee Agreement, Glotel has agreed to pay an inducementfee to Spring of £271,994, (representing approximately 1 per cent. of the OfferPrice based on the fully diluted equity share capital of Glotel) (excluding VATto the extent recoverable) if: (a) any member of the Glotel Board or the Glotel Board withdraws or adversely modifies, or makes subject to conditions or qualification the unanimous recommendation of the Offer; (b) the Offer lapses or is withdrawn and before the lapse or withdrawal of the Offer a third party offer is announced and is publicly recommended by the Glotel Directors; or (c) following the Announcement, Glotel causes the non-fulfilment or non-satisfaction of any of the conditions of the Offer (subject to the Panel permitting Spring (Corporate) Limited to invoke such non-fulfilment or non-satisfaction of the conditions to cause the Offer to lapse). Pursuant to Rule 21.2 of the City Code, Baird and Glotel have confirmed to thePanel that they consider the inducement fee to be in the best interests ofGlotel Shareholders. 15. SPRING SHAREHOLDER APPROVAL The Acquisition constitutes a Class 1 Transaction (as defined in the ListingRules) for Spring. Accordingly Spring will be required to seek the approval ofthe Spring Shareholders for the Acquisition at the Spring EGM. It is expectedthat the Circular containing the Notice of Spring EGM will be sent to SpringShareholders as soon as is reasonably practicable. The Spring Board have irrevocably undertaken to vote in favour of the Resolution(s) to be proposed at the Spring EGM in respect of its own beneficial holdingsof, in aggregate, 1,299,035 Spring Shares, representing approximately 0.8 percent. of the existing issued share capital of the Company as at 25 June 2007,being the last practicable day before this Announcement. Spring has also received an irrevocable undertaking from ET Training LLC to votein favour of the Resolution(s) in respect of its own beneficial holdings of, inaggregate, 59,757,868 Spring Shares, representing approximately 37.1 per cent.of the existing issued share capital of the Company as at 25 June 2007, beingthe last practicable day before this Announcement. 16. COMPULSORY ACQUISITION AND DELISTING If Spring (Corporate) Limited receives acceptances under the Offer in respectof, and/or otherwise acquires 90 per cent. or more in value of the Glotel Sharesto which the Offer relates (and not less than 90 per cent. of the voting rightscarried by Glotel Shares), and if all other conditions of the Offer have beensatisfied or waived (to the extent that they are capable of being waived),Spring (Corporate) Limited intends to exercise its rights pursuant to theprovisions of Part 28 of the Companies Act 2006 to acquire compulsorily anyremaining Glotel Shares in respect of which acceptances have not then beenreceived on the same terms as the Offer. If the Offer becomes or is declared unconditional in all respects, andsufficient acceptances under the Offer are received and subject to anyapplicable requirements of the UK Listing Authority, Spring (Corporate) Limitedintends to procure that Glotel makes applications to cancel the listing ofGlotel Shares on the Official List and to cancel admission to trading in GlotelShares on the London Stock Exchange's market for listed securities. De-listingwould significantly reduce the liquidity and marketability of any Glotel Sharesnot assented to the Offer at that time and the value of any such Glotel Sharesmay be affected as a consequence. It is anticipated that cancellation of the listing on the Official List and ofadmission to trading on the London Stock Exchange's market for listed securitieswill take effect no earlier than 20 Business Days after the earlier of (i) thedate on which Spring (Corporate) Limited has, by virtue of its shareholdings andacceptances of the Offer, acquired or agreed to acquire issued share capitalcarrying 75 per cent. of the voting rights of Glotel and (ii) the first date ofissue of compulsory acquisition notices under Chapter 3 Part 28 of the CompaniesAct 2006. Spring (Corporate) Limited will notify Glotel Shareholders when therequired threshold has been attained and confirm that the notice period hascommenced and the anticipated date of cancellation. It is also intended that, following the Offer becoming or being declaredunconditional in all respects and after the de-listing and cancellation referredto above becoming effective, Glotel will be re-registered as a private companyunder the relevant provisions of the Act. 17. GENERAL The Offer Document will be sent to Glotel Shareholders as soon as is reasonablypracticable. The Circular and Notice of Spring EGM will also be sent to SpringShareholders as soon as is reasonably practicable. The Offer will be subject to the conditions set out in Appendix I. The bases andsources of certain financial information contained in this Announcement are setout in Appendix II. Certain terms used in this Announcement are defined inAppendix III. Enquiries: Spring--------Amir Eilon (Chairman) Tel: + 44 (0) 20 7300 9000Peter Searle (Chief Executive Officer)Peter Darraugh (Finance Director) Glotel--------Les Clark (Chairman) Tel: +44 (0)20 7484 3000Jonathan Brooks (Finance Director) Altium (Financial Adviser and Broker to Spring)-------------------------------------------------Ben Thorne Tel: +44 (0)20 7484 4040Marc MilmoSam Fuller Financial Dynamics (Public Relations adviser to Spring)---------------------------------------------------------Ben Atwell Tel: +44 (0)20 7831 3113John Gilbert Baird (Rule 3 and Financial Adviser to Glotel)------------------------------------------------David Silver Tel: +44 (0)20 7488 1212 \* This statement regarding earnings enhancement does not constitute a profitforecast nor should it be taken to mean that the earnings per share of Springfor the current or future years will necessarily match or exceed the historicalreported earnings per share of Spring and no forecast is intended or implied. Altium, which is authorised and regulated by the Financial Services Authority inthe United Kingdom, is acting exclusively for Spring and no one else inconnection with the Offer and will not be responsible to anyone other thanSpring for providing the protections afforded to clients of Altium nor forproviding advice in relation to the Offer, the content of this Announcement orany other matter or arrangement referred to herein. Baird, which is authorised and regulated by the Financial Services Authority inthe United Kingdom, is acting exclusively for Glotel and no one else inconnection with the Offer and will not be responsible to anyone other thanGlotel for providing the protections afforded to clients of Baird nor forproviding advice in relation to the Offer, the content of this Announcement orany other matter or arrangement referred to herein. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANOFFER TO SUBSCRIBE FOR OR BUY ANY SECURITIES NOR THE SOLICITATION OF ANY VOTE ORAPPROVAL IN ANY JURISDICTION, NOR SHALL THERE BE ANY SALE, ISSUE OR TRANSFER OFTHE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT IN ANY JURISDICTION INCONTRAVENTION OF ANY APPLICABLE LAW. THE OFFER WILL BE MADE SOLELY BY MEANS OFTHE OFFER DOCUMENT AND THE FORM OF ACCEPTANCE ACCOMPANYING THE OFFER DOCUMENT. The Offer in the United States will be made pursuant to an exemption from certain US tender offer rules provided by Rule 14d-1(c) under the Exchange Act. The availability of the Offer to Glotel Shareholders who are citizens orresidents of jurisdictions outside the United Kingdom may be affected by thelaws of their relevant jurisdiction. Such persons should inform themselves of,and observe, any applicable legal or regulatory requirements of theirjurisdiction. If you remain in any doubt, you should consult your professionaladviser in the relevant jurisdiction without delay. Any acceptance or other response to the Offer should be made only on the basisof information referred to in the Offer Document which Spring (Corporate)Limited intends to despatch as soon as is reasonably practicable to GlotelShareholders and, for information only, to participants in the Glotel ShareOption Schemes. Spring will prepare the Circular which will be sent to Spring Shareholders assoon as is reasonably practicable. Spring Shareholders may obtain a further freecopy of the Circular, when it becomes available, from the offices of NortonRose, 3 More London Riverside, London, SE1 2AQ. The Directors of Spring accept responsibility for the information contained inthis summary and the attached Announcement other than information relating tothe Glotel Group, the Glotel Directors and their immediate families, relatedtrusts and controlled companies. To the best of the knowledge and belief of theSpring Board (who have taken all reasonable care to ensure that such is thecase), the information contained in this summary and the attached Announcementfor which they accept responsibility is in accordance with the facts and doesnot omit anything likely to affect the import of such information. The Directors of Glotel accept responsibility for the information in thissummary and the attached Announcement relating to them and their immediatefamilies, related trusts and controlled companies and the Glotel Group. Further Information on the Offer The availability of the Offer to Glotel Shareholders who are not resident in theUnited Kingdom may be affected by the laws of relevant jurisdictions. GlotelShareholders who are not resident in the United Kingdom will need to informthemselves about and observe any applicable requirements. This Announcement has been prepared for the purposes of complying with Englishlaw, the City Code and the Listing Rules and information disclosed may not bethe same as that which would have been disclosed if this Announcement had beenprepared in accordance with the laws of jurisdictions outside England. The Offer will be subject to the applicable rules and regulations of theFinancial Services Authority, the London Stock Exchange and the City Code. Dealing Disclosure Requirements Under the provisions of Rule 8.3 of the Code, if any person is, or becomes,"interested" (directly or indirectly) in 1% or more of any class of "relevantsecurities" of Glotel, all "dealings" in any "relevant securities" of thatcompany (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 Business Day following the date of therelevant transaction. This requirement will continue until the date on which theoffer becomes, or is declared, unconditional as to acceptances 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 Glotel, they willbe deemed to be a single person for the purpose of Rule 8.3. Under the provisions of Rule 8.1 of the Code, all "dealings" in "relevantsecurities" of Glotel by Spring or Glotel, or by any of their respective"associates", must be disclosed by no later than 12.00 noon (London time) on theBusiness 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 price of securities. Inparticular, a person will be treated as having an "interest" by virtue of theownership or control of securities, or by virtue of any option in respect of, orderivative referenced to, securities. Terms in quotation marks are defined in the Code, which can also be found on thePanel's website. If you are in any doubt as to whether or not you are requiredto disclose a "dealing" under Rule 8 of the Code, you should contact anindependent financial adviser authorised under the Financial Services andMarkets Act 2000 or consult the Panel's website or contact the Panel ontelephone number +44 (0)20 7638 0129. In accordance with Rule 2.10 of the Code, Glotel confirms that it has 38,856,398ordinary shares of 5 pence each in issue and admitted to trading on the OfficialList under the UK ISIN code GB0006782147. APPENDIX I Conditions and Further Terms of the Offer The Offer will be subject to the following conditions: (a) valid acceptances of the Offer being received (and not, where permitted, withdrawn) by no later than 1.00 p.m. on the first closing date of the Offer (or such later time(s) and/or date(s) as Spring (Corporate) Limited may, subject to the rules of the Code, decide) in respect of not less than 90 per cent. of the Glotel Shares to which the Offer relates and not less than 90 per cent. of the voting rights carried by those Glotel Shares (or in each case such lesser percentage as Spring (Corporate) Limited may decide), provided that this condition shall not be satisfied unless Spring (Corporate) Limited and/or its wholly-owned subsidiaries shall have acquired or agreed to acquire, pursuant to the Offer or otherwise, Glotel Shares carrying in aggregate more than 50 per cent. of the voting rights normally exercisable at a general meeting of Glotel including for this purpose (to the extent, if any, required by the Panel) any such voting rights attached to any Glotel Shares unconditionally allotted or issued before the Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of conversion or subscription rights or otherwise and for the purposes of this condition: (i) the expression "Glotel Shares to which the Offer relates" shall be construed in accordance with sections 974 to 991 CA 2006; (ii) Glotel Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue; and (iii)valid acceptances shall be deemed to have been received in respect of Glotel Shares which are treated for the purposes of section 979(8) CA 2006 as having been acquired or contracted to be acquired by Spring (Corporate)Limited by virtue of acceptances of the Offer; (b) the passing at the Spring EGM (or at any adjournment thereof) of all such resolutions as may be necessary to approve, implement and effect the Offer and the acquisition by Spring (Corporate) Limited of Glotel pursuant thereto; (c) no central bank, government or governmental, quasi-governmental, supranational, statutory, regulatory, environmental or investigative body, court, trade agency, professional association, institution, employee representative body, or any other such body or person whatsoever in any jurisdiction (each a "Third Party" and all collectively "Third Parties") having decided or given notice of a decision to take, institute or threaten any material action, proceeding, suit, investigation, enquiry or reference, or having required any action to be taken, or otherwise having done anything, or having enacted, made or proposed and there not continuing to be outstanding any statute, regulation, decision or order which would or might reasonably be expected to: (i) make the Offer or its implementation or the acquisition or proposed acquisition by Spring (Corporate) Limited of all or any Glotel Shares, or the acquisition or proposed acquisition of control of Glotel, by any member of the Wider Spring Group, void, illegal or unenforceable under the laws of any relevant jurisdiction, or otherwise, directly or indirectly, restrain, restrict, prohibit, challenge, delay, hinder or otherwise interfere with the same, or impose additional adverse conditions or obligations with respect thereto, or otherwise challenge or require amendment to the terms of the Offer or any such acquisition; (ii) require, prevent or delay the divestiture, or alter the terms envisaged for any proposed divestiture, by any member of the Wider Spring Group or by any member of the Wider Glotel Group of all or any portion of their respective businesses, assets or properties or impose any limitation on the ability of any of them to conduct their respective businesses (or any part of them) or to own or manage their respective assets or properties or any part of them to an extent in any such case which is material to Spring in the context of the Offer; (iii)impose any limitation on, or result in a delay in, the ability of any member of the Wider Spring Group, directly or indirectly, to acquire or to hold or to exercise effectively all or any rights of ownership in respect of shares, loans or other securities (or the equivalent) in any member of the Wider Glotel Group or to exercise management control over any such member to an extent which, is material in the context of Spring Group taken as a whole or, as the case may be, the Glotel Group taken as a whole; (iv) otherwise adversely affect in any material respect any or all of the businesses, assets, liabilities, profits or prospects of any member of the Wider Spring Group or any member of the Wider Glotel Group; (v) save pursuant to the Offer or sections 974 to 991 CA 2006 require any member of the Wider Spring Group or the Wider Glotel Group to acquire, or offer to acquire, any shares or other securities (or the equivalent) in, or any asset owned by, any member of the Wider Glotel Group or the Wider Spring Group to an extent which is material in the context of the Spring Group taken as a whole or, as the case may be, the Glotel Group taken as a whole; (vi) result in a material delay in the ability of Spring (Corporate) Limited, or render it unable, to acquire some or all of the Glotel Shares or require a divestiture by Spring (Corporate) Limited or any member of the Wider Spring Group of any shares or other securities (or the equivalent) in Glotel; (vii)limit the ability of any member of the Wider Spring Group or the Wider Glotel Group to coordinate or integrate its business, or any part of it, with the business or any part of the business of any other member of the Wider Spring Group or of the Wider Glotel Group; or (viii)result in any member of the Wider Glotel Group or the Wider Spring Group ceasing to be able to carry on business under any name which it presently does so, and all applicable waiting and other time periods during which any such Third Party could decide to take, institute, implement or threaten any action, proceeding, suit, investigation, enquiry or reference under the laws of any mrelevant jurisdiction or enact any such statute, regulation, order or decision or take any steps having expired,lapsed or been terminated; (d) all authorisations, orders, recognitions, grants, consents,licences, confirmations, clearances, certificates, exemptions, permissions and approvals ("Authorisations") necessary or reasonably appropriate in any jurisdiction for or in respect of the Offer or the proposed acquisition of all or any Glotel Shares or other securities in, or control of, Glotel by any member of the Wider Spring Group having been obtained on terms and in a form reasonably satisfactory to Spring (Corporate) Limited from all appropriate Third Parties or persons with whom any member of the Wider Glotel Group has entered into contractual arrangements and all such Authorisations, together with all Authorisations necessary or reasonably appropriate to carry on the business of any member of the Wider Glotel Group remaining in full force and effect at the time at which the Offer becomes otherwise unconditional and there being no indication of any intention to revoke, withdraw, suspend, restrict, withhold or modify or not to grant or renew any of the same; (e) all filings or applications having been made in connection with the Offer, and all appropriate waiting periods (including extensions thereof) in respect of the Offer or its implementation under any applicable legislation or regulations in any jurisdiction having expired, lapsed or been terminated (as appropriate) and all statutory or regulatory obligations in any jurisdiction having been complied with in connection with the Offer or the acquisition by any member of the Wider Spring Group of any shares or other securities in, or control of, Glotel; (f) save as fairly disclosed in writing to Spring or as publicly announced to a Regulatory Information Service prior to 25 June 2007, there being no provision of any agreement, authorisation, arrangement, lease, licence, permit or other instrument to which any member of the Wider Glotel Group is a party or by or to which any such member or any of its assets may be bound, entitled or subject, which in consequence of the Offer or the proposed acquisition by Spring (Corporate) Limited or any member of the Wider Spring Group of any shares or other securities (or the equivalent) in Glotel or because of a change in the control or management of Glotel or any member of the Wider Glotel Group, would or might reasonably be expected to result in: (i) any monies borrowed by or any other indebtedness (actual or contingent) of, or grant available to, any member of the Wider Glotel Group, being or becoming repayable or being capable of being declared repayable immediately or prior to their or its stated maturity date or repayment date or the ability of any such member to borrow monies or incur any indebtedness being withdrawn, prohibited or inhibited or becoming capable of being withdrawn, prohibited or inhibited; (ii) any such agreement, authorisation, arrangement, licence, permit or other instrument or the rights, liabilities, obligations or interests of any member of the Wider Glotel Group thereunder being terminated or adversely modified or affected or any obligation or liability arising or any adverse action being taken or arising thereunder; (iii)any assets or interests of any member of the Wider Glotel Group being or falling to be disposed of or charged or ceasing to be available to any such member or any right arising under which any such asset or interest could be required to be disposed of or charged otherwise than, in any such case, in the ordinary course of business; (iv) the creation or enforcement of any mortgage, charge or other security interest over the whole or any part of the business, property or assets of any member of the Wider Glotel Group, or any such mortgage, charge or other security interest (whenever arising or having arisen) becoming enforceable or being enforced; (v) the rights, liabilities, obligations or interests of any member of the Wider Glotel Group in, or the business of any such member with, any person, company, firm or body (or any agreements relating to any such interest or business) being terminated, or adversely modified or adversely affected; (vi) the value of any member of the Wider Glotel Group or its financial or trading position or profits or prospects being prejudiced or adversely affected; or (vii)the creation or assumption of any liability, actual or contingent, by any member of the Wider Glotel Group, and no event having occurred which, under any provision of any agreement, authorisation, arrangement, lease, licence, permit or other instrument to which any member of the Wider Glotel Group is a party or by or to which any such member or any of its assets are bound, entitled or subject, would be reasonably likely to result in any of the events referred to in sub-paragraph (i) to (vii) of this paragraph (f) and in each case, to an extent which is material in the context of the Wider Glotel Group taken as a whole; (g) save as fairly disclosed in writing to Spring or as otherwise publicly announced to a Regulatory Information Service prior to 25 June 2007 no member of the Wider Glotel Group having, since 31 March 2007: (i) (save as between Glotel and wholly-owned subsidiaries of Glotel, or for Glotel Shares issued pursuant to the exercise of options granted under the Glotel Share Option Schemes prior to 25 June 2007) issued or agreed to issue or authorised or proposed or announced its intention to authorise or propose the issue of additional shares of any class or securities convertible into or exchangeable for, shares of any class or rights, warrants or options to subscribe for, or acquire, any such shares or convertible securities; (ii) (save for Glotel Shares held in treasury and sold or transferred pursuant to the exercise of options granted under the Glotel Share Option Schemes prior to 25 June 2007, sold or transferred or agreed to sell or transfer any Glotel Shares held in treasury; (iii)recommended, declared, paid or made or proposed to recommend, declare, pay or make any bonus issue, dividend or other distribution whether payable in cash or otherwise other than dividends (or other distributions whether payable in cash or otherwise) lawfully paid or made by any wholly-owned subsidiary of Glotel to Glotel or any of its wholly-owned subsidiaries; (iv) other than pursuant to the Offer (and save for transactions between Glotel and its wholly-owned subsidiaries or other than in the ordinary course of business) implemented, effected, authorised or proposed or announced its intention to implement, effect, authorise or propose any merger, demerger, reconstruction, amalgamation, scheme, commitment or acquisition or disposal of assets or shares or loan capital (or the equivalent thereof) in any undertaking or undertakings in any such case; (v) (save for transactions between Glotel and its wholly-owned subsidiaries or other than in the ordinary course of business) disposed of, or transferred, mortgaged or created any security interest over any asset or any right, title or interest in any asset or authorised, proposed or announced any intention to do so; (vi) (save as between Glotel and its wholly-owned subsidiaries) made or authorised or proposed or announced an intention to propose any change in its loan capital; (vii)(save as between Glotel and its wholly-owned subsidiaries) issued, authorised, or proposed or announced an intention to authorise or propose, the issue of or made any change in or to the terms of any debentures or become subject to any contingent liability or incurred or increased any indebtedness other than in the ordinary course of business; (viii)purchased, redeemed or repaid, or announced any proposal to purchase, redeem or repay, any of its own shares or other securities or reduced or made any other change to or proposed the reduction or other change to any part of its share capital; (ix) entered into, implemented, effected, varied, authorised, proposed or announced its intention to enter into, any reconstruction, amalgamation, scheme, commitment or other transaction or arrangement otherwise than in the ordinary course of business; (x) entered into or varied or terminated or authorised, proposed or announced its intention to enter into or vary any contract, arrangement,agreement transaction or commitment (whether in respect of capital expenditure or otherwise) which is of a long term, onerous or unusual nature or magnitude or which is or is likely to be restrictive on the business of any member of the Wider Glotel Group or the Wider Spring Group or which involves or is likely to involve an obligation of such a nature or magnitude or which is other than in the ordinary course of business; (xi) entered into or varied the terms of, or made any offer (which remains open for acceptance) to enter into or vary the terms of, any contract, service agreement or arrangement with any director or senior executive of any member of the Wider Glotel Group save for salary increases, bonuses or variations of terms in the ordinary course of business; (xii)terminated or varied the terms of any agreement or arrangement between any member of the Wider Glotel Group and any other person in a manner which would or might reasonably be expected to have a material adverse effect on the financial position or prospects of the Wider Glotel Group taken as a whole; (xiii)proposed, agreed to provide or modified the terms of any share option scheme, incentive scheme or other benefit relating to the employment or termination of employment of any person employed in the Wider Glotel Group; (xiv)save in relation to changes made or agreed as a result of, or arising from, changes to legislation made or agreed or consented to any significant change to the terms of the trust deeds and rules constituting the pension scheme(s) established for its directors, employees or their dependants or to the benefits which accrue, or to the pensions which are payable, thereunder, or to the basis on which qualification for, or accrual or entitlement to, such benefits or pensions are calculated or determined or to the basis upon which the liabilities (including pensions) of such pension schemes are funded or made, or agreed or consented to, any change to the trustees, including the appointment of a trust corporation; (xv) been unable, or admitted in writing that it is unable, to pay its debts or having stopped or suspended (or threatened to stop or suspend) payment of its debts generally or ceased or threatened to cease to carry on all or a substantial part of its business; (xvi)(other than in respect of a member of the Wider Glotel Group which is dormant and was solvent at the relevant time) taken or proposed any corporate action, or had any legal proceedings threatened or instituted against it for its winding-up (voluntarily or otherwise), dissolution or reorganisation or for the appointment of a receiver, administrative receiver, administrator, trustee or similar officer of all or any part of its assets or revenues or any analogous or equivalent steps or proceedings in any relevant jurisdiction having been taken or had any such person appointed; (xvii)waived or compromised or settled any claim otherwise than in the ordinary course of business; (xviii)made any alteration to its memorandum or articles of association or other constitutional documents; or (xix)entered into any contract, agreement, commitment or arrangement or passed any resolution or made any offer (which remains open for acceptance) with respect to or announced any intention to, or to propose to, effect any of the transactions, matters or events referred to in this condition; (h) save as fairly disclosed in writing to Spring or as otherwise publicly announced to a Regulatory Information Service prior to 25 June 2007, since 31 March 2007: (i) no adverse change or deterioration having occurred in the business, assets, financial or trading position or profits or prospects of any member of the Wider Glotel Group; (ii) no litigation, arbitration proceedings, prosecution or other legal proceedings or investigations having been threatened in writing, announced, instituted or remaining outstanding by, against or in respect of any member of the Wider Glotel Group or to which any member of the Wider Glotel Group is or may become a party (whether as a claimant, defendant or otherwise) and no enquiry or investigation by any Third Party against or in respect of any member of the Wider Glotel Group having been commenced, announced or threatened in writing by or against or remaining outstanding in respect of any member of the Wider Glotel Group; (iii)no contingent or other liability having arisen or become apparent to any member of the Wider Spring Group which would or might reasonably be expected to adversely affect any member of the Wider Glotel Group and which is material in the context of the Wider Glotel Group taken as a whole; and (iv) no steps having been taken and no omissions having been made which are likely to result in the withdrawal, cancellation, termination or modification of any licence held by any member of the Wider Glotel Group, which is necessary or reasonably appropriate for the proper carrying on of its business and the withdrawal, cancellation, termination or modification of which is likely to adversely affect and which is material in the context of the Wider Glotel Group taken as a whole; (i) save as fairly disclosed in writing to Spring or as otherwise publicly announced to a Regulatory information Service prior to 25 June 2007 Spring not having discovered after 25 June 2007: (i) that any financial, business or other information concerning the Wider Glotel Group publicly announced or disclosed at any time by or on behalf of any member of the Wider Glotel Group to the Wider Spring Group, is materially misleading, contains a material misrepresentation of any fact or omits to state a fact necessary to make that information not materially misleading and which is, in any case material in the context of the Wider Glotel Group; (ii) that any present member of the Wider Glotel Group or any partnership, company or other entity in which any member of the Wider Glotel Group has a significant economic interest and which is not a subsidiary undertaking of Glotel, is subject to any material liability, contingent or otherwise, which is not disclosed in the annual accounts for Glotel for the year ending 31 March 2007 and which is, in any case material in the context of the Wider Glotel Group; (iii)that any past or present member of the Wider Glotel Group has not complied with all applicable legislation, regulations or other requirements of any relevant jurisdiction with regard to the use, treatment, storage, disposal, discharge, spillage, leak or emission of any waste or hazardous substance or any substance likely to impair the environment or harm human health, or otherwise relating to environmental matters or that there has otherwise been a material emission, discharge, disposal, spillage or leak of waste or hazardous substance or any substance likely to impair the environment or harm human health (whether or not the same constituted a non-compliance by any person with any such legislation or regulations, and wherever the same may have taken place) on or from any land or property of any description or other asset now or previously owned, occupied or made use of by any past or present member of the Wider Glotel Group which would, in any case, be likely to give rise to any material liability (whether actual or contingent) on the part of any member of the Wider Glotel Group and which is, in any case material in the context of the Wider Glotel Group; or (iv) that there is or is likely to be any material liability (whether actual or contingent) on the part of any member of the Wider Glotel Group to make good, repair, reinstate or clean up any property of any description or other asset now or previously owned, occupied or made use of by any past or present member of the Wider Glotel Group, under any environmental legislation, regulation, notice, circular or order of any Third Party and which is, in any case material in the context of the Wider Glotel Group. For the purposes of these conditions the "Wider Glotel Group" means Glotel andits subsidiary undertakings, associated undertakings and any other undertakingin which Glotel and/or such undertakings (aggregating their interests) have asignificant interest and the "Wider Spring Group" means Spring and itssubsidiary undertakings, associated undertakings and any other undertaking inwhich Spring and/or such undertakings (aggregating their interests) have asignificant interest and for these purposes "subsidiary undertaking","associated undertaking" and "undertaking" have the meanings given by the Act,other than paragraph 20(1)(b) of Schedule 4A to that Act which shall be excludedfor this purpose, and "significant interest" means a direct or indirect interestin more than twenty per cent. of the equity share capital (as defined in theAct). Spring (Corporate) Limited reserves the right to waive, in whole or in part, allor any of conditions (c) to (i) inclusive. Conditions (c) to (i) must besatisfied as at, or waived on or before midnight (London time), on the twentyfirst day after the later of the first closing date of the Offer and the date onwhich condition (a) is fulfilled (or in each case such later date as the Panelmay agree). Spring (Corporate) Limited shall be under no obligation to waive (if capable ofwaiver) or treat as fulfilled any of conditions (c) to (i) inclusive by a dateearlier than the latest date specified above for the fulfilment thereof,notwithstanding that the other conditions of the Offer may at such earlier datehave been fulfilled and that there are, at such earlier date, no circumstancesindicating that any of such conditions may be incapable of fulfilment. If Spring (Corporate) Limited is required by the Panel to make an offer forGlotel Shares under the provisions of Rule 9 of the Code, Spring (Corporate)Limited may make such alterations to the above conditions of the Offer,including condition (a), as are necessary to comply with the provisions of thatRule. The Offer will lapse if it is referred to the Competition Commission or theEuropean Commission initiates proceedings under Article 6(1)(c) of the MergerRegulation, or following a referral under Article 9(1) of the Merger Regulation,there is a subsequent reference to the Competition Commission before 1.00 p.m.(London time) on the first closing date of the Offer or the time and date onwhich the Offer becomes or is declared unconditional as to acceptances,whichever is the later. In such circumstances, the Offer will cease to becapable of further acceptance and persons accepting the Offer and Spring(Corporate) Limited shall thereupon cease to be bound by Forms of Acceptancedelivered on or before the date on which the Offer so lapses. APPENDIX II Bases and Sources (a) Unless otherwise stated, the financial information relating to Glotel has been extracted or derived, without material adjustment, from the Glotel Audited Accounts and the audited consolidated financial statements for Glotel for the year ended 31 March 2007. (b) References to existing issued share capital are references to Glotel Shares in issue on 25 June 2007 (being the last practicable business date prior to the date of the Announcement), being 38,856,398 Glotel Shares. (c) The value attributed to the existing issued and to be issued share capital of Glotel is based upon the 38,856,398 Glotel Shares being in issue on 25 June 2007 (being the latest practicable date prior to the release of this Announcement) and on options under the Glotel Share Option Schemes which have an exercise price lower than the Offer Price per Glotel Share having been exercised. (d) Glotel Share prices have been derived from the London Stock Exchange and represent the Closing Price on the relevant date. (e) The Offer premium of 20.0 per cent. to the average Closing Price of 58.33 pence over the six month period from 27 December 2006 to 25 June 2007 inclusive, as stated in this Announcement, has been calculated using Closing Prices on each Business Day over the relevant period. (f) The Glotel Directors have given irrevocable undertakings to accept or procure the acceptance of the Offer in respect of the following Glotel Shares owned by them or their connected persons: Name Number of Percentage of Glotel existing Shares issued share capitalLes Clark 9,716,680 25.0%Glyn Hirsch 10,124 0.03%Sir Robin Saxby 40,124 0.1%Andy Baker 9,336,064 24.0%---------------- ---------------- ----------------Total 19,102,992 49.2% These undertakings shall lapse if the Offer is withdrawn or lapses. These undertakings will, however, remain binding even if a higher offer is made by a third party. In addition, Spring has received non-binding letters of intent to accept orprocure the acceptance of the Offer from Henderson Global Investors in respectof 4,116,774 Glotel Shares representing, in aggregate, 10.6 per cent. of theexisting issued share capital of Glotel Shares and Unicorn Asset Management inrespect of 2,766,136 Glotel Shares, representing, in aggregate, 7.1 per cent. ofthe existing issued share capital of Glotel. APPENDIX III Definitions The following definitions apply throughout this Announcement, unless the contextotherwise requires: "Acquisition" the proposed acquisition of the whole of the issued and to be issued share capital of Glotel by Spring (Corporate) Limited by means of the Offer; "Act" or "Companies the Companies Act 1985 (as amended);Act" "Altium" Altium Capital Limited, being the financial adviser to Spring; "Andy Baker" Andrew Arthur Edward Baker, the Chief Executive Officer of Glotel; "Announcement" this announcement made by Spring under Rule 2.5 of the City Code regarding the proposed acquisition of Glotel by means of the Offer; "authorisations" authorisations, orders, recognitions, grants, consents, licences, confirmations, clearances, permissions and approvals; "Baird" Robert W. Baird Limited; "Board" the board of the Spring Directors or the Glotel Directors as the context requires; "Business Day" a day on which the London Stock Exchange is open for normal business; "CA 2006" the Companies Act 2006; "certificated" or a share or other security which is not in uncertificated"in certificated form (that is not held in CREST);form" "Circular" the document to be sent to Spring Shareholders containing the Notice of the Spring EGM; "Closing Price" the closing middle market quotation of a Glotel Share for the day to which such price relates, as derived from the Daily Official List of the London Stock Exchange for that day; "Code" or "City Code" the City Code on Takeovers and Mergers; "Completion" the completion of the Acquisition; "Enlarged Group" the Spring Group as enlarged by the Acquisition; "Exchange Act" the US Securities Exchange Act of 1934, as amended; "Form of Acceptance" the form of acceptance, election and authority (in respect of certificated Glotel Shares) relating to the Offer which accompanies the Offer Document; "FSA" Financial Services Authority; "FSMA" the Financial Services and Markets Act 2000 (as amended); "Inducement Fee the agreement dated 29 May 2007 between Spring and GlotelAgreement" pursuant to which, inter alia, Glotel has agreed to pay an inducement fee to Spring in an amount of 1 per cent. of the Offer Price in certain circumstances as more fully set out in paragraph 14 of Part II of this Announcement; "Listing Rules" the listing rules and regulations of the UK Listing Authority (as amended); "London Stock the London Stock Exchange plc, together with anyExchange" successors thereto; "Offer" the recommended cash offer to be made by Spring (Corporate) Limited to acquire the entire issued and to be issued share capital of Glotel, on and subject to the terms and conditions set out in the Offer Document and (in respect of certificated Glotel Shares) in the Form of Acceptance and (where the context permits) any subsequent revision, variation, extension or renewal thereof; "Offer Document" the document containing the Offer to Glotel Shareholders by Spring (Corporate) Limited which will be posted as soon as is reasonably practicable; "Offer Period" the period commencing on 26 June 2007 (the date of this Announcement), and ending on the date which is the latest of (i) the first closing date of the Offer, (ii) the date on which the Offer becomes or is declared unconditional as to acceptances and (iii) the date on which the Offer lapses or is withdrawn; "Offer Price" 70 pence per Glotel Share; "Official List" the official list of the UK Listing Authority; "Overseas Glotel Shareholders resident in, or nationals or citizensShareholders" of, jurisdictions outside the UK or who are custodians, nominees and trustees for, citizens or nationals of such other jurisdictions; "Panel" the Panel on Takeover and Mergers; "Glotel" Glotel plc; "Glotel Director" a director of Glotel; "Glotel Group" Glotel, its subsidiaries and subsidiary undertakings; "Glotel Independent the Glotel Directors other than Andy Baker;Directors" "Glotel Shareholders" holders of Glotel Shares; "Glotel Share Option the Glotel Group plc Performance Related Share Scheme andSchemes" the Glotel Group plc Sharesave Scheme; "Glotel Shares" ordinary shares of five pence each in the capital of Glotel; "Regulatory any of the services on the list of Regulatory InformationInformation Service" Services maintained by the FSA; "Relevant Securities" Glotel Shares or any other securities conferring voting rights and any other securities convertible into or exchangeable for rights to subscribe for, or options in respect of, or derivatives referenced to, any of the foregoing; "Resolution(s)" the resolution(s) to be put to the Spring Shareholders at the Spring EGM and set out in the Notice of the Spring EGM; "Restricted Canada, Australia, Japan or any other jurisdiction whereJurisdiction" extension or acceptance of the Offer would violate the law of that jurisdiction; "Share Subscription the subscription agreement dated 25 June 2007 and enteredAgreement" into between Andy Baker and Spring in relation to the subscription by Andy Baker for the Spring Subscription Shares, further details of which will be contained in the Offer Document; "Spring" or "Company" Spring Group plc; "Spring (Corporate) a wholly owned subsidiary of Spring, newly established forLimited" the purpose of making the Offer; "Spring Director" a director of Spring; "Spring EGM" the extraordinary general meeting of Spring to be held at Norton Rose, 3 More London Riverside, London SE1 2AQ to approve the proposed acquisition by Spring (Corporate) Limited of the entire issued and to be issued share capital of Glotel and to authorise the Spring Directors to take all necessary or appropriate steps and do all necessary or appropriate things to implement, complete or to procure the implementation or completion of the Offer and/or Acquisition; "Spring Group" Spring, its subsidiaries and subsidiary undertakings; "Spring Shareholders" holder of Spring Shares; "Spring Subscription the 2,849,002 new Spring Shares to be issued to Andy BakerShares" pursuant to the terms of the Share Subscription Agreement; "Spring Shares" ordinary shares of ten pence each in the capital of Spring; "subsidiary", have the meanings given to them by the Companies Act (but"subsidiary for these purposes ignoring paragraph 20(1)(b) of Scheduleundertaking", 4A to the Companies Act) and "substantial interest" meansassociated a direct or indirect interest in 20 per cent. or more ofundertaking" and the equity capital of an undertaking;"undertaking" "third party" person, firm, company or body; "UK" or "United the United Kingdom of Great Britain and Northern Ireland;Kingdom" "UK Listing the FSA acting in its capacity as competent authority forAuthority" or "UKLA" the purpose of Part VI of FSMA; "uncertificated" or means recorded on the register of members of Glotel as"in uncertificated being held in uncertificated form;form" "United States" or the United States of America, its territories and"US" possessions, any state of the United States and the District of Columbia; "Wider Glotel Group" Glotel and its subsidiary undertakings, associated undertakings and any other undertaking in which Glotel and /or such undertakings (aggregating their interest) have a significant interest; and "Wider Spring Group" Spring and its subsidiary undertakings, associated undertakings and any other undertaking in which Spring and /or such undertakings (aggregating their interest) have a significant interest. All references to legislation in this Announcement are to English legislation,unless the contrary is indicated. Any reference to any provision of anylegislation should include any amendment, modification, re-enactment orextension thereof. The singular shall include the plural and vice versa, and words importing themasculine gender shall include the feminine or neutral gender. References to "£", "Sterling", "p", "penny" and "pence" are to the lawfulcurrency of the United Kingdom. References to time are to London time. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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