16th Feb 2007 07:00
Not for release, publication or distribution in or into or from Australia, Canada, Japan, the Republic of South Africa or the United States of America or any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction (each a 'Restricted Jurisdiction').
16 February 2007 TEP Exchange Group PLC ("TEP" or the "Company") Proposed Capital Reorganisation, Placing of 75,659,496 New Ordinary Shares at 0.2p per share and Placing and Open Offer of 99,797,077 New Ordinary Shares at 0.2p per share and Notice of Extraordinary General Meeting Summary
- Placing and Open Offer to raise ‚£350,000 (before expenses) to reduce debt and fund the extension and development of the Company's electronic trading platform for its current range of products into the German and, subsequently, other European markets.
- Pursuant to the Placing, a total of 175,456,573 New Ordinary Shares will be issued at 0.2 pence per New Ordinary Share.
- Following the proposed Capital Reorganisation and Placing the Company will have 399,999,999 New Ordinary Shares in issue
This summary should be read in conjunction with, and is subject to, the accompanying full text of this announcement. The conditions and certain further terms of the Open Offer are set out in this announcement.
It is expected that the circular to Shareholders and the Application Form will be dispatched today, other than in relation to a Restricted Jurisdiction.
Enquiries:
TEP Exchange Group PLC Tel: 07860 743425 George Kynoch, Non-Executive Chairman Tel: 01244 615 628 Paul Sands, Director John East & Partners Limited Tel: 020 7628 2200 John East/Bidhi Bhoma
If you are in any doubt about the action you should take, you are recommended to seek your own personal financial advice immediately from your stockbroker, bank manager, solicitor, accountant or independent financial adviser authorised under the Financial Services and Market Act 2000 if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser.
This announcement does not constitute, or form any part of, an offer or invitation to purchase any securities or a solicitation or an offer to buy any securities, pursuant to the Open Offer or otherwise. The Open Offer will be made solely by the circular to be sent to Shareholders, an advertisement to be published in the London Gazette and the Application Form, which will contain the full terms and conditions of the Open Offer, including details of how the Open Offer may be accepted.
Portfolio Design Group International Limited and Close Horizons Limited accept responsibility for the information in this Announcement relating to each of them, respectively. The Independent Directors, comprising George Kynoch and Moses Kraus, accept responsibility for the recommendation and opinions of the Independent Directors relating to the Proposals contained in this Announcement. The Directors accept responsibility for all of the other information in this Announcement. To the best of the knowledge and belief of Portfolio Design Group International Limited, Close Horizons Limited, the Directors and the Independent Directors (who have taken all reasonable care to ensure such is the case) the information contained in this Announcement for which they are respectively responsible is in accordance with the facts and does not omit anything likely to affect the import of such information.
This announcement contains definitions of certain expressions used in this announcement.
The availability of the Open Offer to Shareholders who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions in which they are located. Shareholders who are not resident in the United Kingdom should inform themselves about and observe any applicable legal or regulatory requirements in their jurisdictions. The Open Offer is not being made, and will not be made, directly or indirectly, in or into, or by use of mail, or by any means or instrumentality (including, without limitation, by means of telephone, facsimile, telex, internet or other forms of electronic communication) of interstate or foreign commerce, or by any facilities of a national securities exchange of, Australia, Canada, Japan, the Republic of South Africa or the United States of America or any other Restricted Jurisdiction and the Open Offer will not be capable of acceptance by any such use, means, instrumentality or facility or from within those jurisdictions. Accordingly, copies of this announcement, the circular to Shareholders, the Application Form and any related offering documents are not being, and must not be, mailed, transmitted or otherwise forwarded, distributed or sent, in whole or in part, in, into or from Australia, Canada, Japan, the Republic of South Africa or the United States of America or any other Restricted Jurisdiction. Custodians, nominees and trustees should observe these restrictions and should not send or distribute copies of this announcement, the circular to Shareholders, the Application Form and any related offering documents in, into or from Australia, Canada, Japan, the Republic of South Africa or the United States of America.
John East & Partners, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company and for no-one else in connection with the proposed Placing and Open Offer and other matters and will not be responsible to anyone other than the Company for providing the protections afforded to customers of John East & Partners nor for giving advice in relation to the Placing and Open Offer or any other matter referred to in this announcement.
Proposed Capital Reorganisation, Placing of 75,659,496 New Ordinary Shares at 0.2p per share and Placing and Open Offer of 99,797,077 New Ordinary Shares at 0.2p per share
Introduction
The Company announces it intends to expand its business both geographically and in the range of products it can offer and that the first phase of such will, subject to approval of the Proposals, take place in Germany. Therefore the Company proposes to raise approximately ‚£350,000, before expenses, by means of the Placing and Open Offer to reduce debt and to fund the extension and development of its electronic trading platform for its current range of products into the German and, subsequently, other European markets.
The Company also proposes entering into an agreement with PINVEX Limited, a company controlled by Abraham Weitz, to develop a property related product offering on the Company's exchange. The Company entered into an outsourcing arrangement with Surrenda-link in 2002, which was subsequently amended in 2004, and it is now proposed that the terms of this agreement should be updated. These proposed arrangements with both Surrenda-link and PINVEX Limited constitute related party transactions for the purposes of the AIM Rules.
In order to enable the Company to satisfy the issue of shares pursuant to the Placing and the potential issue of shares on exercise of the Warrants and which otherwise require the shares to be issued at a discount to nominal value, the Company needs to carry out a capital reorganisation and to obtain its authorities to allot and issue the New Ordinary Shares which will arise as a result of the Proposals. Further, as members of the Concert Party have conditionally agreed to subscribe for the Placing Shares, subject to the rights of Qualifying Shareholders to apply for Offer Shares under the Open Offer, this would increase the Concert Party's shareholding to a maximum of 58.03 per cent. of the Enlarged Issued Ordinary Share Capital. Since the Concert Party currently holds 48.17 per cent. of the existing ordinary share capital of the Company, the Concert Party would, in the absence of a waiver from the provisions of Rule 9 of the Code being granted by the Panel, be obliged to make a general offer for the Company. The Panel has agreed, subject to Resolution numbered 3 being passed on a poll by the Independent Shareholders at the EGM, to waive this obligation.
Shareholders' approval of the Proposals will be sought at the EGM, at which resolutions necessary to enable the Proposals to be implemented will be proposed. Notice of the EGM, which will be held at 11.00 a.m. on 14 March 2007, is set out in the circular to be posted to Shareholders.
Background to and reasons for the Proposals
To date, Surrenda-link has been funding the Company through debt and equity finance under the terms of the Original Agreement. Surrenda-link is currently owed in excess of ‚£490,000 by TEP in respect of fees for outsourcing services. In December 2003, Surrenda-link advanced a short term loan of ‚£40,000 to the Company. Due to TEP's cash flow constraints, this loan remains outstanding. Surrendalink continues to give financial support to the Company by not seeking payment of its outstanding fees for outsourcing services. However, the Board wishes to reduce the Company's current reliance on Surrenda-link to finance its working capital requirements. The Board has therefore agreed with Surrenda-link that approximately ‚£200,000 of outstanding fees due to them will be paid from the proceeds of the Placing and Open Offer.
Accordingly, the Company is proposing to raise approximately ‚£350,000 by the Placing and Open Offer at the Placing Price. In addition to the partial payment of the outstanding fees due to Surrendalink, these funds will assist TEP in extending and developing its electronic trading platform into the German and, in the future, other European markets. The Proposals will also strengthen the Company's balance sheet.
It is also proposed to issue the Warrants to SGI and PINVEX, subject to performance conditions, to subscribe for up to a total of 35,000,000 New Ordinary Shares at 0.2p per share.
The Board is aware that both the Placing and Open Offer and Warrant issue are at a discount to the current market price of the Company's shares. However, the Independent Directors are of the opinion that the Placing and Open Offer constitutes the Company's best method of raising the required finance.
Set out below is more information on the commercial arrangements.
TEP GmbH
TEP's electronic platform is to be launched initially in Germany and, subsequently, in other European markets. The Company has established a wholly owned subsidiary in Germany, TEP GmbH, which, using the Company's software, will enable German IFAs to deal in British endowment policies for their clients. John Murphy, the company secretary, and George Kynoch will be directors of TEP GmbH. SGI has assisted the Company in establishing its German operations.
SGI is owned and run by experienced professionals who have a successful track record in Germany of creating and selling financial investment products to both financial institutions and independent financial advisers.
The Company will levy a commission of approximately three per cent. of the transaction value of the British endowment policies transacted on TEP's electronic platform, in Germany and other European markets.
The Company proposes to issue the SGI Warrants to SGI, which may only be exercised if the income of the Company and TEP GmbH, arising from introductions from SGI, in any two consecutive financial periods, beginning on 1 January 2007 and ending on 31 December 2011, shall exceed ‚£250,000 per annum. The rationale behind the proposed grant of the SGI Warrants is to give an incentive to SGI to create future profits and positive cash flows for the Company.
Surrenda-link
Previously, under the terms of the Original Agreement, Surrenda-link was entitled to both a fixed and variable fee but, in return, Surrenda-link reimbursed funds to the Company to cover specific overheads. Under the new arrangements, no fixed fee is payable (and the parties have been operating on this basis since the end of 2004), and the contribution towards overheads has been reduced to a maximum of ‚£20,000 per quarter to cover certain corporate costs which is reimbursed from revenues paid to the Company. Surrenda-link is now responsible for all other operational costs. The variable fee payable to Surrenda-link is based on the percentages of the total amounts invoiced (exclusive of VAT) to the Company's end-users in respect of their use of the TEP exchange and ranges from 60 to 85 per cent. based on the level of sales turnover. In respect of the financial year ending 31 December 2007, the variable fee payable to Surrenda-link will be reduced down to between 39 and 55.25 per cent. of sales excluding sales generated from launching TEP's electronic trading platform in Germany and other European markets. In compensation for this agreed reduction in the variable fee in respect of the current financial period, Surrenda-link will also be entitled to receive 50 per cent. of the profit before tax of the Group in excess of ‚£150,000. The intent of this arrangement is to incentivise Surrenda-link to maximise the profitability of the Group in 2007.
The new arrangements with Surrenda-link will be for an initial period ending on 31 December 2008, subject to early termination in certain circumstances, and will continue thereafter unless and until terminated on six months notice by either party. Under the Surrenda-link Agreement, Surrenda-link undertakes to endeavour to maximise the sales turnover of TEP through the introduction of additional products and services. Surrenda-link will be entitled to receive a negotiated share of the sales turnover from these new products and services as part of its variable fee arrangement.
Under the terms of the Original Agreement, Surrenda-link would be entitled to receive a variable percentage of the commissions that would be generated from launching the new electronic trading platform in Germany and other European markets. Surrenda-link has agreed to carve out from the Surrenda-link Agreement its entitlement to receive a variable percentage of the commissions generated and will, instead, agree to a one third share of the commissions to be generated from this new activity.
This will mean that TEP will effectively receive two per cent. of the transaction value of the British endowment policies transacted on TEP's electronic platform operating in Germany and other European markets.
PINVEX
In January 2006, Abraham Weitz stepped down as an executive director of the Company and became a non-executive director.
Abraham Weitz has established PINVEX to develop property related financial products. PINVEX wishes to advertise its products to IFAs. Accordingly, the Company and PINVEX have entered into the PINVEX Agreement to advertise these products on the Company's website, in consideration for which the Company will receive commission payments.
This project is still at an early stage and the revenue potential for TEP under the PINVEX Agreement is dependent upon a number of factors. However, the Directors are of the view that this project, which is the first foray into a new area, may lead to a meaningful new source of revenue for TEP. As part of the terms of the PINVEX Agreement, the Company proposes to issue the PINVEX Warrants to PINVEX, which will be exercisable in the event that the income of the Company arising under the PINVEX Agreement in each of any two consecutive financial periods of the Company, beginning on 1 January 2007 and ending on 31 December 2011, shall exceed ‚£100,000. The rationale behind the proposed grant of the PINVEX Warrants is to give an incentive to Abraham Weitz to create future profits and positive cash flows for the Company.
Capital Reorganisation
The share capital of the Company currently comprises one class of shares, the Existing Ordinary Shares, of which 224,543,426 are currently in issue and paid up and 175,456,574 are unissued. It is proposed pursuant to Resolution 1 that:
(i) each of the issued Existing Ordinary Shares will be subdivided and redesignated into one New Ordinary Share and one Deferred Share; and
(ii) each of the unissued Existing Ordinary Shares will be subdivided and redesignated into one NewOrdinary Share and one Deferred Share.
The Capital Reorganisation will result in Shareholders holding one New Ordinary Share and one Deferred Share for each Existing Ordinary Share currently held. The New Ordinary Shares will have substantially the same rights (including voting and dividend rights and rights on a return of capital) as the Existing Ordinary Shares save that their nominal value will be reduced to 0.01p. The Deferred Shares will have minimal rights attaching to them and will be effectively worthless. No application will be made for the Deferred Shares to be admitted to trading on AIM. The rights attaching to the Deferred Shares are set out in Resolution 6 contained in the notice of EGM set out in the circular to Shareholders.
No new certificates will be issued to those Shareholders who have elected to hold Existing Ordinary Shares in certificated form. No share certificates will be issued in respect of the Deferred Shares. Share certificates in respect of Existing Ordinary Shares will continue to be valid.
The Placing and Open Offer
The Company is proposing to raise approximately ‚£350,000 (before expenses) by the issue of the Placing Shares and Offer Shares pursuant to the Placing and Open Offer. Accordingly, 175,456,573 Placing Shares have been conditionally placed with members of the Concert Party and certain other investors, of which 99,797,077 Placing Shares are subject to the right of Qualifying Shareholders to apply for their allocation of Offer Shares under the Open Offer at a price of 0.2p per Offer Share, payable in full on application and free of all expenses, pro rata to their existing shareholdings on the basis of:
4 Offer Shares for every 9 Existing Ordinary Shares
held at the close of business on the Open Offer Record Date and so on in proportion for any greater number of Existing Ordinary Shares then held. Entitlements to Offer Shares will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements will not be allotted to Shareholders but will be aggregated and issued pursuant to the Placing.
The Open Offer is subject to the satisfaction, amongst other matters, of the following conditions on or before 15 March 2007, (or such later date being not later than 30 March 2007, as the Company may decide):
(i) the due passing without amendment of the Resolutions;
(ii) the subscription monies for the New Ordinary Shares pursuant to the Placing and Open Offer being received in full by the Company;
(iii) the Placing becoming unconditional in all respects and the commitments under the Placing Letters not having been terminated in accordance with their terms; and
(iv) Admission becoming effective by 8.00 am on 15 March 2007, (or such later time or date not being later than 9.30 am on 30 March 2007, as the Company may decide).
The Offer Shares and the Placing Shares will, when issued and fully paid, rank pari passu in all respects with the New Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of Admission.
The Open Offer has been structured so as to allow existing Shareholders to subscribe for New Ordinary Shares at the Placing Price pro rata to their existing holdings. Existing Shareholders may not apply for more than their pro rata entitlements to Offer Shares. To the extent not subscribed by existing Shareholders, Open Offer entitlements will lapse and the related Offer Shares will be issued pursuant to the Placing.
Details of the Placees are set out below:
At present Firm Maximum Maximum Placing participation following completion of in Placing Placing Name of No. of Percentage No. of No. of No. of Percentage Placee of of Enlarged Existing Existing Placing Placing New Ordinary Issued Ordinary Ordinary Ordinary Shares Shares Shares Shares Shares Share Capital
Surrenda-link 100,671,279 44.83 15,659,496 110,590,278 211,261,557 52.82
Close 7,500,000 3.34 10,000,000 13,333,333 20,833,333 5.21 Horizons SGI - - 40,000,000 40,000,000 40,000,000 10.00 PINVEX - - 10,000,000 10,000,000 10,000,000 2.50 Total 108,171,279 48.17 75,659,496 173,923,611 282,094,890 70.53
If Qualifying Shareholders do not apply for their entitlements under the Open Offer, this will result in the Concert Party acquiring up to 123,923,611 Placing Shares, which would increase its shareholding to a maximum of 58.03 per cent of the Enlarged Issued Ordinary Share Capital. Since the Concert Party currently holds approximately 48 per cent. of the existing ordinary share capital of the Company, the Concert Party would, in the absence of a waiver from the provisions of Rule 9 of the Code being granted by the Panel, be obliged to make a general offer for the Company. The Panel has agreed, subject to Resolution numbered 3 being passed on a poll by the Independent Shareholders at the EGM, to waive this obligation.
The Independent Directors, who in aggregate beneficially hold 3,449,167 Existing Ordinary Shares, equivalent to 1.54 per cent. of the Existing Ordinary Shares, have an aggregate entitlement under the Open Offer to 1,532,962 Offer Shares. The Independent Directors, being Moses Kraus and George Kynoch, intend to take up their full entitlement under the Open Offer. 18,909,698 Existing Ordinary Shares are held by the M Kraus Family Foundation pursuant to the terms of which Moses Kraus and his family are potential beneficiaries, however, the M Kraus Family Foundation has independent trustees and is not controlled by Mr Kraus.
Current trading and future prospects
The trading results from the current business activities of the Group for the year ended 31 December 2006 were in line with the Directors' expectations. However, the planned financial benefits from expanding the business of the Group were not achieved primarily as a result of TEP GmbH not being set up as quickly as the Board had hoped.
The Directors are pleased with the outcome of the negotiations that have taken place with Surrendalink, in particular the agreed reduction in the variable fee to be paid to Surrenda-link in the future and the resultant impact that this will have on trading results and cash flow.
The Group has recently received VAT assessments. The assessments are being challenged. In the event that the challenge is unsuccessful, or only partially successful, there will be a significant impact on both the Group's trading results and future cash flow.
Directors
George Kynoch (Non-Executive Chairman), has over 30 years' experience in industry and was Chief Executive of G & G Kynoch plc (the predecessor of Kynoch Group plc, now called Bioquell PLC, the Officially Listed designer and manufacturer of healthcare equipment for use in contamination control). He was Grampian Industrialist of the Year in 1988 and received the Highland Business Award. Mr Kynoch was the Scottish Office Industry and Local Government Minister from 1995 to 1997, while serving as a Member of Parliament for Kincardine and Deeside between 1992 and 1997. He is chairman of OCZ Technology Group, Inc., ToLuna Plc and Mercury Group plc and a non-executive director of Talent Group plc, all of which are admitted to trading on AIM.
Paul Sands (Managing Director), has 20 years' experience in the UK Life Assurance and Financial Services market. He is Chief Executive of Portfolio Design Group (the parent company of Surrendalink), which he established in 1990 and under his direction the company has grown to a position of considerable prominence in the market for traded endowment policies (TEPs). Mr Sands is a director of various TEP related funds, designed and created by Surrenda-link, and is a former Chairman of the Association of Policy Market Makers (APMM). Mr Sands has also recently been appointed as a non-executive director to Smart Move Pensions plc.
Abraham Weitz (Non-Executive Director), has many years of experience in the property industry, having joined Highdorn Co. Limited, a property management company, in early 1992. Mr Weitz has for some time had an interest in merging the new e-commerce ideas with more traditional business and is joint founder of the Company.
Moses Kraus (Non-Executive Director), has been an active participant in the TEP market for several years. After finishing Rabbinical and Talmudic studies in 1980, Mr Kraus was a teacher in a religious school in Zurich between 1981 and 1985. In 1983 he trained as a life insurance salesman in his spare time, with Winterthur Insurance in Zurich, where he was first exposed to the endowment policy market. In 1984 he became a significant shareholder in Caruso AG, which was formed in 1983 to sell life insurance and associated products. It currently holds endowment policies with a value of approximately CHF 200 million in its clients' portfolios. Mr Kraus' shareholding in Caruso AG has now reduced to less than 10 per cent and he has no executive role in that company. He moved from Switzerland to the United Kingdom in 1994 with residential status of "Person of Independent Means" which prevented him from working as an employee or engaging in business in the United Kingdom until he obtained indefinite residence in March 1999. He founded TEP Exchange Group PLC in November 1999.
David Roxburgh (Non-Executive Director), a member of the Institute of Certified Public Accountants in Ireland and is Managing Director of the Fitzwilton Group of Companies. One of Fitzwilton's investments is a 36 per cent. shareholding in Portfolio Design Group (the parent company of Surrendalink). The business of Portfolio Design Group includes the purchase, sale and valuation of secondary life policies, the valuation and procurement of US traded senior life interest policies and investment adviser on specialist investment products. Outside of the Fitzwilton Group, Mr. Roxburgh is a Non-Executive Director of Waterford Crystal Limited (the world renowned luxury branded company).
Independent Directors Recommendation
Abraham Weitz is a director of PINVEX which is both a Placee and a party to the PINVEX Agreement. Accordingly, Abraham Weitz has taken no part in the deliberation by the Board with regard to the Placing, the issue of the PINVEX Warrants and the PINVEX Agreement. Paul Sands is a director of Surrenda-link and accordingly he has taken no part in the deliberation by the Board with regard to the Placing and the Surrenda-link Agreement. David Roxburgh is a director of Portfolio Design Group, the parent company of Surrenda-link, and accordingly he has taken no part in the deliberations by the Board with regard to the Placing and the Surrenda-link Agreement.
The Independent Directors, who have been so advised by the Company's adviser, John East & Partners, consider that the Proposals are fair and reasonable insofar as Shareholders are concerned. John East & Partners has taken into account the Independent Directors' commercial assessment, other than Messrs Weitz, Sands and Roxburgh, of the Proposals.
The Independent Directors, believe that the Proposals, including the waiver of the obligation on the Concert Party to make a general offer to Shareholders under Rule 9 of the Code, are in the best interests of the Company and its Shareholders, and accordingly recommend Shareholders to vote in favour of the Resolutions as they intend to do in respect of their aggregate shareholding of 3,449,167 Ordinary Shares, equivalent to approximately 1.54 per cent of the issued share capital of the Company.
Expected timetable of events Open Offer Record Date Close of business on 14 February 2007 Despatch of circular to Shareholders 16 February 2007 Open Offer Entitlements credited to CREST stock 19March 2007accounts of Qualifying CREST Shareholders
Recommended latest time for requesting withdrawal 4.30 p.m. on 5 March 2007 of Open Offer Entitlements from CREST
Latest time for depositing Open Offer Entitlements 3.00 p.m. on 7 March 2007 into CREST
Latest time and date for splitting Application 3.00 p.m. on 8 March 2007 Forms (to satisfy bona fide market claims)
Latest time and date for receipt of completed 11.00 a.m. on 12 MarchApplication Forms and payment in full under the 2007Open Offer or settlement of relevant CREST instruction (as appropriate)
Latest time and date for receipt of completed Forms 11.00 a.m. on 12 March of Proxy
2007 Extraordinary General Meeting 11.00 a.m. on 14 March 2007 Capital Reorganisation Record Date Close of business on 14 March 2007 Admission and commencement of dealings in the New 15 March 2007Ordinary Shares Expected date for crediting of New Ordinary Shares 15 March 2007to CREST stock accounts in uncertificated form Expected date of despatch of definitive by 15 March 2007certificates for New Ordinary Shares in certificated form Definitions The following definitions apply throughout this announcement unless the context requires otherwise: "Admission" the admission of the Enlarged Issued Ordinary Share Capital to trading on AIM becoming effective in accordance with the AIM Rules "AIM" the AIM Market of the London Stock Exchange "AIM Rules" the rules published by the London Stock Exchange relating to AIM, as amended from time to time "Application Form" the application form accompanying the circular to Shareholders to be used by Qualifying Shareholders in connection with the Open Offer "Capital Reorganisation" the proposed consolidation and sub-division of each Existing Ordinary Share into one New Ordinary Share and one Deferred Share "Capital Reorganisation the close of business on 14 February 2007 Record Date" "Close Horizons" Close Horizons Limited, a limited liability company registered and incorporated on the Isle of Man (formerly Surrenda-link (IOM) Limited) "Code" the City Code on Takeovers and Mergers "Company" or "TEP" TEP Exchange Group PLC "Concert Party" Portfolio Design Group and Close Horizons "Deferred Shares" the non-voting deferred shares of 0.99p each in the capital of the Company to be created by the Capital Reorganisation "Directors" or "the Board" the directors of the Company "EGM" or "Extraordinary the extraordinary general meeting of the CompanyGeneral Meeting" convened for 11.00 a.m. on 14 March 2007 "Enlarged Issued Ordinary the 399,999,999 New Ordinary Shares in issue Share Capital" following completion of the Proposals "Existing Ordinary the ordinary shares of 1p each in the capital of the Company, of which 224,543,426 are in issue Shares" at the date of this announcement "Form of Proxy" the form of proxy accompanying the circular to Shareholders for use in connection with the EGM "Group" the Company and its subsidiary undertakings "IFA" an independent financial adviser "Independent Directors" George Kynoch and Moses Kraus "Independent Shareholders" holders of Existing Ordinary Shares, excluding Surrenda-link, Close Horizons and their associates "John East & Partners" John East & Partners Limited "London Stock Exchange" London Stock Exchange plc "New Horizons" New Horizons Nominees Limited, which owns the whole of the issued share capital of Close Horizons "New Ordinary Shares" the new ordinary shares of 0.01p each in the capital of the Company arising from the Capital Reorganisation "Offer Shares" the 99,797,077 New Ordinary Shares to be issued by the Company for subscription under the Open Offer "Open Offer" the conditional offer to Qualifying Shareholders to subscribe for the Offer Shares at the Placing Price, as described in the circular to Shareholders "Open Offer Entitlements" an entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to an Open Offer "Open Offer Record Date" the close of business on 14 February 2007 "Original Agreement" an outsourcing agreement entered into between the Company and Surrenda-link dated 13 December 2002 and amended in 16 December 2004 "Panel" the Panel on Takeovers and Mergers "PINVEX" PINVEX Limited, a limited liability company incorporated in England and Wales "PINVEX Agreement" an agreement between the Company and PINVEX dated 15 February 2007 relating to the marketing of property related products on the Company's platform "PINVEX Warrants" warrants to subscribe for a total of 10,000,000 New Ordinary Shares on the terms and conditions set out in the PINVEX Warrant Instrument "PINVEX Warrant Instrument" a deed issued by the Company proposed to be dated 14 March 2007 constituting the PINVEX Warrants "Placees" SGI, Surrenda-link, Close Horizons and PINVEX "Placing" the conditional placing of 175,456,573 New Ordinary Shares at the Placing Price pursuant to the Placing Letters "Placing Letters" conditional letters dated 14 February 2007 issued to Placees "Placing Price" 0.2p per Placing Share "Placing Shares" the 175,456,573 New Ordinary Shares placed conditionally with the Placees, 99,797,077 of which are subject to recall by Qualifying Shareholders under the Open Offer "Portfolio Design Group or Portfolio Design Group International Limited, a "PDGI" company incorporated in England and Wales "Proposals" the Capital Reorganisation, the Placing and Open Offer, the issue of the Warrants, the Rule 9 Waiver and other proposals set out in this announcement and the circular to Shareholders "Qualifying CREST Qualifying Shareholders whose Existing Ordinary Shareholders" Shares on the register of members of the Company on the Open Offer Record Date are held in uncertificated form "Qualifying non-CREST Qualifying Shareholders whose Existing Ordinary Shareholders" Shares on the register of members of the Company on Open Offer Record Date are held in certificated form "Qualifying Shareholders" holders of Existing Ordinary Shares at the Open Offer Record Date excluding certain overseas shareholders who are entitled to participate in the Open Offer "Resolutions" the resolutions contained in the notice of the Extraordinary General Meeting set out in the circular to Shareholders "Rule 9 Waiver" the agreement by the Panel to waive the obligation on the Concert Party to make a general offer to all Shareholders pursuant to Rule 9 of the Code subject to approval, by way of a poll vote, of the Independent Shareholders at the EGM "Shareholders" holders of Existing Ordinary Shares "SGI" Strategic German Investment Limited, a limited liability company incorporated in England and Wales "SGI Warrants" warrants to subscribe for a total of 25,000,000 New Ordinary Shares on the terms and conditions set out in the SGI Warrant Instrument "SGI Warrant Instrument" a deed issued by the Company proposed to be dated 14 March 2007 constituting the SGI Warrants "Shareholders" holders of Existing Ordinary Shares "Surrenda-link" Surrenda-link Limited, a wholly owned subsidiary of Portfolio Design Group "Surrenda-link Agreement" an outsourcing agreement entered into between the Company and Surrenda-link dated 15 February 2007, which supersedes and replaces the Original Agreement "TEP GmbH" TEP Exchange Group GmbH, a limited liability company incorporated in Germany and which is a wholly owned subsidiary of TEP "Warrants" the SGI Warrants and/or the PINVEX Warrants, as the case may be "Warrant Instruments" the SGI Warrant Instrument and the PINVEX Warrant Instrument "Warrantholders" holders of Warrants
TEP EXCHANGE GROUP PLCRelated Shares:
Doriemus