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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Freedom4 | LSE:FFG | London | Ordinary Share | GB0005846018 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.10 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMFFG RNS Number : 8589U Freedom4 Group PLC 01 July 2009 1 July 2009 Freedom4 Group plc (the "Company") Proposed acquisitions of Daisy and Vialtus for GBP123 million Proposed placing of GBP83 million Freedom4 Group plc, (FFG.L) has conditionally agreed to acquire Daisy, the SME value-added reseller, and the assets of Vialtus, the mid-market managed solutions provider, ("the Acquisitions"), in conjunction with a proposed Placing to raise up to GBP83 million. Summary of the Transactions * Acquisition of the entire issued capital of Daisy for GBP30 million in cash and the issue to Daisy Vendor and Optionholders of 63,750,000 Consolidated Ordinary Shares (see below), valued at GBP51.0 million * Acquisition of entire issued capital of Vialtus for GBP13 million in cash and the issue of 36,250,000 Consolidated Ordinary Shares, valued at GBP29 million * A proposed Placing by Freedom4 Group to raise up to GBP83 million (before expenses) through the issue of Placing Shares to provide funding for the Acquisitions and for possible future acquisitions * Proposed share consolidation on the basis of 1 Consolidated Ordinary Share of 2.0p each for every 20 Unconsolidated Ordinary Shares of 0.1p * Under AIM rules, the Acquisitions constitute a Reverse Takeover of the Company and are therefore subject to shareholder approval * Hard irrevocable undertakings have been received from 32% of the shareholder base * Liberum Capital Ltd is acting as nominated adviser and broker to the Company Strategic Rationale * The fragmented nature of UK SME and mid-market telecommunications market with its current depressed valuations, present significant opportunities for the new, enlarged group * The strategy of the Enlarged Group is to create, through a combination of further acquisitions and organic growth, one of the largest UK providers to the SME and mid-market of telecommunications services and solutions * Daisy and Vialtus will provide the right platform for potential further growth through a combination of consolidation and integration expertise, critical mass, customer scale, broad product offering and strong operational capability * The senior management team have significant experience of creating shareholder value in the telecoms sector through both organic and acquisitive growth The Enlarged Group * Following completion, the Group's market capitalisation will be approximately GBP204.4 million * Matthew Riley, CEO of Daisy, will be appointed Chief Executive Officer * Freedom4 Group plc will be renamed Daisy Group plc * The Enlarged Group intends to provide its SME and mid-market customers with a converged product set including access, hosting, voice, mobile and managed services About Daisy Daisy is a SME value-added reseller which provides voice and data access, billing and wholesale managed services. Daisy's services delivery platform is scalable and will be central to the Enlarged Group. Daisy has achieved great success in terms of customer management with very low churn rates. Operating from its UK-based call centre in Nelson, Lancashire, the company has in excess of 30,000 customers and has 176 full time employees. The company also operates a green policy and has taken steps to becoming a carbon neutral business by offsetting its annual carbon expenditure. About Vialtus Vialtus is a mid-market managed solutions company providing voice and data access, managed and complex hosting services, and core networks and hosting facilities. The company offers its clients end-to-end solutions and has 5,270 customers and 177 employees. Peter Dubens, Non-Executive Chairman of Freedom4 Group plc, commented: "We are seeing an opportunity in the UK telecoms services market at the moment where the fragmented nature and depressed valuations in the sector create conditions which are well-suited for generating value through consolidation. Our experience in making carefully chosen acquisitions and integrating them properly gives us confidence in our ability to generate further value for our shareholders. One of the major strengths of Daisy is the unified brand and operating system which will be key to the Group's future success." Matthew Riley, CEO of Daisy, added, "Over the last 8 years, Daisy has grown to be a substantial provider of cost effective communications services, with over 30,000 SME customers. With 24 acquisitions during this time, the management at Daisy has honed its consolidation and integration skills, maintaining customer service levels and creating a truly scalable operational platform. "Daisy and Vialtus are two highly synergistic businesses; we believe that together they will be able to provide SME and mid-market customers with an effective and attractive one-stop-shop offer, and provide us with the solid foundations for our plans for future growth." This summary should be read in conjunction with the full text of the following announcement. For further details, contact: +--------------------------------------------------+---------------------+ | Freedom4 Group plc | Tel: 020 7766 6909 | | Peter Dubens, Non-Executive Chairman | | | Stewart Porter, Chief Financial Officer | | | | | +--------------------------------------------------+---------------------+ | Daisy | Tel: 01282 608909 | | Matthew Riley, Chief Executive Officer | | | Katharine Butler, PR Executive | | | | | +--------------------------------------------------+---------------------+ | Liberum Capital Limited | Tel: 020 3100 2224 | | Steve Pearce | | | Tom Fyson | | | | | +--------------------------------------------------+---------------------+ | Financial Dynamics | Tel: 020 7831 3113 | | Juliet Clarke / Ed Bridges / Erwan Gouraud | | | | | +--------------------------------------------------+---------------------+ EXPECTED TIMETABLE +-------------------------------------------------------------------------+----------------------------+ | Latest time and date for receipt of Forms of Proxy for the General | 10.00 a.m. 18 July 2009 | | Meeting | | +-------------------------------------------------------------------------+----------------------------+ | | | +-------------------------------------------------------------------------+----------------------------+ | General Meeting | 10.00 a.m. 20 July 2009 | +-------------------------------------------------------------------------+----------------------------+ | | | +-------------------------------------------------------------------------+----------------------------+ | Record Date for the Share Consolidation | 6.00 p.m. 20 July 2009 | +-------------------------------------------------------------------------+----------------------------+ | | | +-------------------------------------------------------------------------+----------------------------+ | Completion of the Acquisitions and Admission | 8.00 a.m. 21 July 2009 | +-------------------------------------------------------------------------+----------------------------+ | | | +-------------------------------------------------------------------------+----------------------------+ | Dealings in the Enlarged Share Capital to commence on AIM and CREST | 8.00 a.m. 21 July 2009 | | accounts credited | | +-------------------------------------------------------------------------+----------------------------+ | | | +-------------------------------------------------------------------------+----------------------------+ | Definitive share certificates for the New Ordinary Shares in | 4 August 2009 | | certificated form and replacement certificates for the Existing | | | Ordinary Shares despatched by | | +-------------------------------------------------------------------------+----------------------------+ Each of the dates in the above timetable is subject to change at the absolute discretion of the Company and Liberum KEY STATISTICS +---------------------------------------------------------------------------------+--------------------+ | Number of Unconsolidated Ordinary Shares in issue at the date of this document | 1,034,867,898 | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Number of New Ordinary Shares being issued pursuant to the Acquisitions | 100,000,000 | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | as a percentage of the Enlarged Share Capital | 39.1 per cent. | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Number of New Ordinary Shares being issued pursuant to the Placing | 103,750,000 | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | as a percentage of the Enlarged Share Capital | 40.6 per cent. | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | New Ordinary Shares as a percentage of the Enlarged Share Capital | 79.7 per cent. | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Total number of Consolidated Ordinary Shares in issue immediately following | 255,493,395 | | Admission | | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Total number of New Warrants in issue immediately following Admission | 4,612,500 | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Placing Price | 80p | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Gross proceeds of the Placing | GBP83.0 million | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Estimated net proceeds of the Placing receivable by the Company | GBP79.7 million | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | Market capitalisation of the Company at the Placing Price immediately following | GBP204.4 million | | Admission | | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | ISIN number | GB00B61G9L20 | +---------------------------------------------------------------------------------+--------------------+ | | | +---------------------------------------------------------------------------------+--------------------+ | AIM symbol of Enlarged Group | DAY.L | +---------------------------------------------------------------------------------+--------------------+ Proposed Share Consolidation, acquisitions of Daisy and the Vialtus Assets, Placing, and Admission of Enlarged Share Capital to AIM 1. Introduction On 4 June 2009, the Company announced that it was in talks regarding the possible acquisition of two businesses which may or may not lead to a transaction which might constitute a reverse takeover under the AIM Rules. Those talks culminated in the announcement today that Freedom4 has conditionally agreed to acquire Daisy and the Vialtus Assets. Daisy and the Vialtus Business are leading independent UK providers of telecommunications services and solutions to the SME and midmarket. The Company's strategy is to create, through a combination of acquisitions and organic growth, one of the largest UK providers of telecommunications services and solutions to the SME and mid-market, which will provide its customers with a combined product set including access, hosting, voice, managed services and mobile telephony, all from a single customer service and billing platform. The Daisy Acquisition comprises the purchase of the entire issued capital of Daisy. The consideration for the Daisy Acquisition is to be satisfied by GBP30 million in cash and the issue to the Daisy Vendor and to the Daisy Optionholders of a total of 63,750,000 Consolidated Ordinary Shares in the Company (the Daisy Completion Shares). At the Placing Price, the Daisy Completion Shares will be valued at GBP51.0 million in aggregate. The Vialtus Acquisition comprises the purchase of the Vialtus Assets in consideration of the payment by the Company of GBP13.0 million in cash plus the issue to the Vialtus Vendor of a total of 36,250,000 Consolidated Ordinary Shares in the Company (the Vialtus Completion Shares). At the Placing Price, the Vialtus Completion Shares will be valued at GBP29.0 million in aggregate. In conjunction with the Acquisitions, the Company is proposing to raise not less than GBP83.0 million (before expenses) through the issue of Placing Shares pursuant to the Placing, to provide funding for the Acquisitions, and for possible future acquisitions which will be undertaken as a part of the Enlarged Group's consolidation strategy and for the repayment of certain indebtedness of Daisy to Bank of Scotland plc. Immediately following Completion and Admission, the Enlarged Group's market capitalisation (at the Placing Price) will be approximately GBP204.4 million. Under the AIM Rules, the Acquisitions constitute a Reverse Takeover of the Company. Accordingly, the Acquisitions are conditional, inter alia, on the approval by the Shareholders of the Resolutions at the GM. The issue of the Placing Shares and the Completion Shares on completion of the Placing and the Acquisitions will result in a dilution of the Existing Ordinary Shares as a percentage of the Enlarged Share Capital. However, the Independent Directors believe that the Proposals are justified given the potential for the Enlarged Group to create long-term value for Shareholders. The 103,750,000 New Ordinary Shares to be issued pursuant to the Placing, at a Placing Price of 80 pence per new Ordinary Share, will represent approximately 40.6 per cent. of the Enlarged Share Capital. The 100,000,000 New Ordinary Shares to be issued pursuant to the Acquisitions will represent approximately 39.1 per cent. of the Enlarged Share Capital. The aggregate 203,750,000 New Ordinary Shares to be issued in connection with the Proposals will represent approximately 79.7 per cent. of the Enlarged Share Capital. It is also proposed that, conditional on Completion, the name of the Company will be changed to Daisy Group plc and that the financial reporting year end of the Company will be changed from 31 December to 31 March. In addition, the Company is proposing to undertake a share capital restructuring, through the Share Consolidation, to consolidate every 20 Unconsolidated Ordinary Shares of 0.1 pence into one Consolidated Ordinary Share of 2 pence. If the Resolutions are duly passed at the GM then it is expected that the Enlarged Share Capital will be re-admitted to trading on AIM on 21 July 2009. The purpose of this document is to provide you with details of the Proposals, to explain why the Proposals are considered to be in the best interests of Shareholders and to ask you to vote in favour of the Resolutions required to implement the Proposals, which will be proposed at the GM convened for 20 July 2009, notice of which is set out at the end of this document. 2. Background to and reasons for the Acquisitions Freedom4 was founded in 2002, following the reverse takeover of Zipcom plc by shareholders of Transigent Limited. Between 2002 and 2007 Freedom4 successfully consolidated 14 UK telecommunications/internet companies becoming one of the leading providers of broadband and web hosting services in the UK. In September 2007 Freedom4 sold certain of its subsidiaries carrying on a broadband and voice business to Tiscali UK Limited for GBP210 million, on a cash and debt free basis, before adjustments. In April 2008 Freedom4 sold its web hosting and data solutions businesses, trading as Host Europe and consisting of the Host Europe Group, to Oakley L.P. for GBP120 million (on a cash and debt free basis). Following the sale of the Host Europe Group, which included certain of the current subsidiaries of Vialtus, Freedom4's sole business activity was the development of wireless communications solutions through its 52 per cent. shareholding in Freedom4 Limited, the wireless telecommunications joint venture between Freedom4 and Intel Capital. The joint venture's principal asset is ownership of a national UK spectrum licence to provide WiMAX communications at the 3.6 GHz frequency band. After Freedom4's disposal of the web hosting and data solutions businesses, and the return of GBP155 million to Shareholders, the Company had significant reserves of cash and cash equivalents on its balance sheet, including the GBP17.5 million loan notes owed by Host Europe Group Limited (a wholly owned subsidiary of Oakley L.P.) to the Company pursuant to an arrangement under which part of the consideration for the acquisition of the Host Europe Group was deferred. The net cash and cash equivalents (including the Loan Notes receivable and accrued interest) on the Freedom4 balance sheet at 31 December 2008 was GBP23.2 million. In March 2008 the Company stated that it was its intention to distribute to its Shareholders the proceeds of the redemption of the Loan Notes. However, the Existing Directors continue to see the potential for shareholder value creation in Freedom4 Limited. They also believe that the substantial cash reserves and cash equivalents of the Company leave it well positioned to undertake a consolidation strategy in the telecommunications services market. If the Resolutions are passed, cash received by the Company on the future redemption of the Loan Notes will not be distributed to Shareholders. If the Resolutions are not passed at the GM or Completion does not occur for any other reason, the Existing Directors will consider other options for the future of the Company which may include a distribution of capital to Shareholders on redemption of the Loan Notes. The Directors believe that the current fragmented nature of the UK SME and mid-market telecommunications market, and the current depressed valuations of some quoted and non-quoted operators, present significant consolidation opportunities for the Enlarged Group. The Existing Directors have carried out a detailed review of the UK business telecommunications market and the operators within that market. They have identified Daisy and Vialtus as the platform for potential further growth due to their combination of consolidation and integration expertise, critical mass, customer scale, a broad product offering and strong operational capability. The UK telecommunications market focused on SME and mid-market customers is fragmented and includes many smaller operators which are typically privately owned. The Enlarged Group will have the benefit of being able to offer Consolidated Ordinary Shares as consideration for acquisitions from private owners and hence exposing them to the strategy and performance of the Enlarged Group. In addition, equity participation is expected to assist with the retention of ambitious management teams brought in from any future acquisitions. The Directors believe that, given current economic conditions, acquisitions may be available at advantageous prices. In many cases, the Directors expect that any customer bases acquired will be serviced largely from the existing operational platform of the Enlarged Group enabling the Enlarged Group to benefit from cost efficiencies. Following completion of the Acquisitions, the Directors believe that the Enlarged Group will be well positioned to pursue a consolidation strategy. Their intention is to acquire further SME and mid-market telecommunications operators, funded by a combination of cash, debt and Consolidated Ordinary Shares. 3. Role of Peter Dubens in the Acquisitions and with the Vialtus Vendor The holding entity of the Vialtus Vendor and Host Europe Seven Limited (being, along with the Vialtus Vendor, a seller of shares in Vialtus, to the Company pursuant to the First Vialtus Acquisition Agreements) is Oakley L.P., a private equity fund which acquired certain current subsidiaries of Vialtus from Freedom4 as part of the acquisition of the Host Europe Group in April 2008. In August 2007, OCIL raised GBP100 million in a placing and its shares were admitted to trading on AIM. OCIL was established to provide investors with exposure to the investment strategy being pursued by Oakley L.P.. In October 2007, OCIL committed EUR140 million to the first closing of Oakley L.P.. Peter Dubens, who is Non Executive Chairman of Freedom4, is a director of OCIL (although he owns no shares in OCIL). Peter Dubens is also interested in the Vialtus Vendor and Host Europe Seven Limited by virtue of his personal commitment of EUR15 million to the first closing of Oakley L.P. (representing approximately 6.07 per cent. of the total commitments to Oakley L.P.). Peter Dubens is a director of Oakley Capital (Bermuda) Limited, Oakley L.P.'s investment manager, which is the entity responsible for making the investment decision as to whether the Vialtus Assets are sold. Peter Dubens has participated in the investment manager's discussions as to whether to proceed with the disposal of the Vialtus Assets and on what terms. Peter Dubens is a director of and shareholder in Oakley Capital Limited, investment adviser to Oakley L.P.. Oakley Capital Limited provides investment advice, arranges and negotiates investment transactions on behalf of Oakley L.P. and Oakley Capital (Bermuda) Limited and generally represents Oakley Capital (Bermuda) Limited in relation to various matters. Peter Dubens, along with others, participates in Oakley L.P.'s profits by means of a carried interest (in addition to his participation as a limited partner in Oakley L.P.). The Company holds no shares in OCIL and has itself made no commitment to invest in Oakley L.P. Peter Dubens has not taken part in decisions of Freedom4 relating to the Vialtus Acquisition. Accordingly, an independent committee of the Board, comprising all of the Independent Directors and chaired by Christina Kennedy, was established to consider any proposals in relation to the Vialtus Acquisition. Peter Dubens has therefore not taken part, inter alia, in the acquisition process relating to the Vialtus Assets within the Company, the decision to propose the Resolution relating to the approval of the Vialtus Acquisition, nor in the recommendation given in relation to that Resolution. These matters have been dealt with by the Independent Directors. Peter Dubens, who owns 58,333,334 Unconsolidated Ordinary Shares, being approximately 5.4 per cent. of the Existing Ordinary Shares of the Company, has also undertaken to abstain from voting on the Resolution relating to the approval of the Vialtus Acquisition. It is proposed that Peter Dubens will be the Executive Chairman of the Enlarged Group. 4. Information on Freedom4 Freedom4 is a provider of wireless telecommunications services in the UK. Following the disposal of the group's broadband and voice divisions in 2007 and the disposal of the web hosting and data solutions businesses in 2008, Freedom4's remaining trading businesses focus on providing wireless broadband services, and comprise a WiMAX joint venture with Intel (Freedom4 Limited), and a WiFi aggregation business (Freedom4 WiFi Limited). Freedom4 has a 52 per cent. share in Freedom4 Limited, which owns 84 MHz of licensed spectrum in the 3.6 GHz frequency band. This is the largest block of licensed spectrum in the UK which is designated for wireless broadband access, and provides national coverage. Freedom4 Limited has built WiMAX networks, comprising 42 base stations, of which 15 are live, in three initial target cities (Manchester, Milton Keynes and Warwick). The 3.6 GHz spectrum licence currently permits only fixed wireless broadband access, but Freedom4 Limited has submitted a request to Ofcom for a variation in the licence to allow it to offer mobile WiMAX services. Under the same licence Freedom4 Limited also owns 84 MHz of licensed spectrum in the 4.0 GHz frequency band, and four further licences provide ownership of 2x 112 MHz of licensed spectrum in the 28 GHz frequency band. These blocks of spectrum also provide Freedom4 Limited with national coverage and are suitable for provision of high capacity fixed link data traffic backhaul. Freedom4 WiFi Limited has agreements with major WiFi operators which provide access to over 4,000 "hot-spots" in the UK including hotel chains and airports. In addition Freedom4 WiFi Limited has international roaming agreements which provide access to approximately 55,000 WiFi "hotspots" worldwide. Freedom4 WiFi Limited also has an agreement with a UK telecoms operator and at the end of 2008 launched a combined 3G and WiFi access service, to provide customers with the best available data connection while on the move. Freedom4's strategy is to focus on becoming a leading provider of wireless broadband communications, providing a multi-technology mobile broadband service. At the same time Freedom4 is closely aligning the financial profile of the business of Freedom4 Limited to reflect the development of the market. 5. Information on the Daisy Group Daisy was established in 2001 to provide cost-effective communication services to business customers across the UK. Daisy's range of solutions includes fixed and mobile voice, data and IP, standard and specialist non-geographic numbers, line rental and broadband, anti-virus and antispam, laptops and utilities. Daisy now has more than 30,000 SME customers and operates from Lancashire. Daisy provides its services through two divisions: Daisy Communications and Tempest, the Daisy billing and wholesale managed services division. Both are supported in the UK by its call centre in Lancashire. 6. Information on the Vialtus Group Vialtus is a provider of managed IP hosting and connectivity solutions to over 5,000 SME and midmarket companies in the UK. The Vialtus Business has been operating as one of three distinct business divisions within the Host Europe Group. The Host Europe Group was acquired from Freedom4 by Oakley L.P. in April 2008. Vialtus operates an end to end "Data Centre to Device" service strategy, offering a practical model for easily scalable and often virtualised resources to be provided as a single service over the internet to mid-market companies. 7. Details of the Placing The Company is expected to raise GBP83.0 million (gross) pursuant to the Placing through the issue of the Placing Shares to new and existing institutional investors at the Placing Price. Under the Placing Agreement, Liberum has agreed, as agent for the Company, conditional, inter alia, on Admission taking place not later than 1 August 2009 (or such later date as Liberum and the Company may agree, but not later than 31 August 2009) to use its reasonable endeavours to procure placees for the Placing Shares, in each case at the Placing Price. The Placing Agreement contains provisions entitling Liberum to terminate the Placing at any time prior to Admission in certain circumstances. The Placing is not underwritten. 8. Details of the Acquisitions The Acquisitions are inter-conditional, such that the Daisy Acquisition may not complete unless the Vialtus Acquisition completes, and vice versa. In view of the size of the Acquisitions, in relation to Freedom4, the Acquisitions constitute a Reverse Takeover of Freedom4 under the AIM Rules. As such, the Acquisitions are subject to the approval of Shareholders, which is being sought at the General Meeting convened for 20 July 2009. Subject to such approval and to satisfaction of the other conditions relating to the Acquisitions, completion of the Acquisitions is expected to take place on 21 July 2009, the expected date of Admission. Further details of each of the Acquisitions are as follows: The Daisy Acquisition Under the terms of the Daisy Acquisition Agreement, Freedom4 has conditionally agreed to acquire all of the issued shares of Daisy at Completion. The Daisy Acquisition Agreement is conditional on approval of the Resolutions, satisfaction of each of the conditions to which the Placing Agreement and the Vialtus Acquisition Agreements are respectively subject (other than any such conditions relating to Admission or to the Daisy Acquisition Agreement having become unconditional) and Admission occurring. The Daisy Optionholders have elected to exercise the respective Daisy Options held by them and thereby to acquire up to 5,734 new shares of Daisy. Matthew Riley is currently interested in the entire issued share capital of Daisy. The Daisy Optionholders will each enter into an Optionholder Agreement for the purposes of selling to the Company the relevant shares in Daisy acquired by them. Completion of the sale of shares in Daisy pursuant to the Optionholder Agreements will take place immediately following the sale and purchase of shares in Daisy pursuant to the Daisy Acquisition Agreement. The consideration payable by the Company in connection with the acquisition of all of the issued shares of Daisy shall be allocated as follows: * Matthew Riley - GBP27.6 million in cash and 61,218,610 Daisy Completion Shares * Daisy Optionholders - in aggregate, GBP2.4 million in cash and 2,531,390 Daisy Completion Shares The Vialtus Acquisition Under the terms of the Vialtus Acquisition Agreements, further details of which are set out in paragraph 19.1 of Part VIII of this document, Freedom4 has conditionally agreed to acquire all of the issued shares of Vialtus and those shares in Vialtus Solutions Limited not already owned by Vialtus at Completion. The Company has also agreed to acquire, by way of assignment, debt owed by Vialtus Solutions Limited to the Vialtus Vendor. The Vialtus Vendor and Host Europe Seven Limited are continuing subsidiaries of Oakley L.P.. The Vialtus Acquisition Agreements are conditional on approval of the Resolutions, satisfaction of each of the conditions to which the Placing Agreement and the Daisy Acquisition Agreement are respectively subject (other than any such conditions relating to Admission or to the Vialtus Acquisition Agreements having become unconditional) and Admission occurring. The consideration payable to the Vialtus Vendor in connection with the sale of those shares in Vialtus Solutions Limited not already owned by Vialtus and the assignment of GBP29.0 million of the Vialtus Debt under the terms of the Second Vialtus Acquisition Agreement comprises the Vialtus Completion Shares. The consideration due to the Vialtus Vendor in connection with the assignment of the balance of GBP13.0 million of the Vialtus Debt comprises GBP13.0 million in cash. The consideration payable to the Vialtus Vendor and Host Europe Seven Limited in connection with the sale of all of the issued shares of Vialtus is GBP2 in aggregate. 9. Share Capital Restructuring The Board is proposing to undertake a restructuring of the share capital of the Company. In order to consolidate the number of shares in issue and to allow the Proposals to proceed at an appropriate pricing, it is proposed to carry out the Share Consolidation. Under the Share Consolidation, it is proposed that the issued and unissued Unconsolidated Ordinary Shares will be consolidated so that every 20 Unconsolidated Ordinary Shares of 0.1p each will be consolidated into one Consolidated Ordinary Share of 2p. Shareholders with a holding of Unconsolidated Ordinary Shares which is not exactly divisible by 20 will have their holdings rounded down to the nearest whole number of Consolidated Ordinary Shares. Holders of fewer than 20 Unconsolidated Ordinary Shares will not be entitled to receive any Consolidated Ordinary Shares following the Share Consolidation. Any fractions arising from the Share Consolidation will be aggregated and sold for the benefit of the Company. All Existing Warrants and options (in each case, to the extent not terminated) granted under the Share Option Scheme will be consolidated in the same way as the Unconsolidated Ordinary Shares. The New Warrants will relate to Consolidated Ordinary Shares. The rights attaching to the Consolidated Ordinary Shares will be identical in all respects to those of the Unconsolidated Ordinary Shares. The Share Consolidation will mean that the Consolidated Ordinary Shares will have a nominal value of 2p each. The total number of Existing Ordinary Shares held by Shareholders on Admission will be [51,743,394] (although this number could vary due to fractional entitlements which may arise as a result of the Share Consolidation). Authority for the Share Consolidation will be sought by the proposal of Resolution 1 at the General Meeting. Following the Share Consolidation, replacement share certificates will be despatched to Shareholders in respect of newly denominated Existing Ordinary Shares held in certificated form. Share certificates are expected to be despatched by 4 August 2009. Existing certificates will be void. In respect of Existing Ordinary Shares held in uncertificated form, CREST accounts will be credited with the newly denominated Existing Ordinary Shares on the record date for the Share Consolidation, being 20 July 2009. The issue and allotment of the New Ordinary Shares will increase the issued share capital of the Company by 394 per cent. In order to accommodate the New Ordinary Shares and to give the Company flexibility to effect future allotments of Consolidated Ordinary Shares (in accordance with the appropriate shareholder authorities) it is proposed that the authorised share capital of the Company be increased from GBP4,000,000 to GBP10,000,000 by the creation of 300,000,000 additional Consolidated Ordinary Shares. Authority for the increase in the authorised share capital of the Company will be sought by the proposal of Resolution 2 at the General Meeting. 10. Details of Admission and settlement Application will be made to the London Stock Exchange for admission of the Enlarged Share Capital to trading on AIM. It is expected that Admission will become effective and that trading in the Enlarged Share Capital will commence on 21 July 2009. If, for whatever reason, the Proposals are not approved or completed it is anticipated that the current suspension of trading of the Existing Ordinary Shares will be lifted, the Existing Ordinary Shares will thereafter continue to trade on AIM and the Existing Directors will examine other options for the Group's future. The Articles permit the Company to issue shares in uncertificated form. CREST is a computerized share transfer and settlement system which allows shares and other securities to be held in electronic form rather than paper form. Accordingly, settlement of transactions in Existing Ordinary Shares and the New Ordinary Shares following Admission may take place within the CREST system if the relevant Shareholder so wishes. Persons acquiring Consolidated Ordinary Shares as part of the Placing may elect to receive Consolidated Ordinary Shares in uncertificated form if, but only if, that person is a "system-member" (as defined in the CREST Regulations) in relation to CREST. CREST is a voluntary system and Shareholders can continue to hold their Ordinary Shares in certificated form and to continue dealing based on share certificates and stock transfer forms. 11. New Board and key employees New Board Peter Dubens - Executive Chairman (aged 42) Peter Dubens is the founder of a privately owned asset management and advisory group comprising private equity, fund of funds, corporate finance, capital introduction and venture capital operations. Peter is the Managing Director of Oakley Capital Limited, the investment adviser to Oakley L.P., a European middle-market private equity fund specialising in turnarounds, restructurings and consolidation opportunities. During the last 20 years Peter has acquired, restructured and consolidated public and private companies. Most recently as executive chairman, he led the formation of two public companies, being 365 Media Group plc and Pipex Communications plc (now Freedom4 Group plc). The 365 Media platform consolidated 12 businesses within the online sports information and gambling industry and the Pipex platform consolidated 14 businesses within the telecoms and internet industries. 365 Media was sold for over GBP102 million to BSkyB and the main operating divisions of Pipex were sold for approximately GBP330 million, on a cash and debt free basis, before adjustments. Peter Dubens is, at the date of this document, non executive chairman of the Company. Following Admission, Peter will continue as chairman in an executive capacity. Matthew Riley - CEO (aged 35) Matthew Riley established Daisy in 2001 and has led the company through rapid growth to become one of the UK's leading business communication providers to the SME and mid market. Daisy is regularly recognised for outstanding growth in independent surveys and awards programmes. Prior to establishing Daisy, Matthew began his career as a sales executive at FH Brown, achieving rapid promotion to Regional Area Sales Manager and subsequently Regional Manager in 1997. He then joined German telecoms company DeTeWe AG, progressing to UK Sales Manager in 1999. Matthew subsequently established and sold three start-up companies before founding Daisy. Matthew's achievements with Daisy have been independently recognised through the award of Ernst & Young's UK Young Entrepreneur of the Year Award in 2007. In the same year he was also the inaugural winner of the Bank of Scotland Entrepreneur Challenge, securing a GBP5 million interest free loan from Bank of Scotland and mentoring from Sir Philip Green. Stewart Porter - CFO & Company Secretary (aged 56) Stewart Porter is a Chartered Accountant and holds a Bachelor of Science degree in Electrical Engineering. Stewart was a founding director of Zipcom plc (now Freedom4 Group plc) in 2000 and has been instrumental in the development of the Group over this period. Prior to this, Stewart spent eight years at Cable & Wireless in a number of senior financial positions most recently as Finance Director for Global Markets, the division of Cable & Wireless responsible for serving the Group's multinational customers. Subsequently he was closely involved with a number of telecommunications sector start-ups around Europe. Mike Read - CEO - Freedom4 Wireless Broadband (aged 61) Mike Read has over 30 years experience in the communications and internet industry. He started his career in British Telecom where he focused mainly on international activities. This culminated in him playing a key role in Concert, the US-based joint venture between British Telecom and MCI, and later leading all of British Telecom's global engineering and operational activities. In the mid 1990s, Mike joined ANS (an AOL company) to lead sales, marketing and product management in the rapidly expanding internet market, in advance of its eventual sale to Worldcom. In 1999 he became President of OneMain.com, a US NASDAQ-listed ISP roll-up, building the company to approximately 900,000 customers through organic growth and the purchase of 30 companies. OneMain was sold to Earthlink in September 2000. Mike returned to the UK to lead XO Europe as CEO. After a strategic review in October 2002, the business was sold and became a cornerstone of Freedom4; Mike became CEO of the larger AIM-listed company which was later renamed Pipex Communications plc. Laurence Blackall (age 58) Laurence Blackall has had a 30 year career in the information, media and communication industries. After an early career that included Virgin and the SEMA Group, Mr Blackall was appointed a director of Frost & Sullivan and a vice-president of McGraw Hill. Mr Blackall was also CEO of AIM listed Internet Technology Group, which he founded in 1995, and Chairman of Boat International Publications. Mr Blackall was also instrumental in the creation of Pipex Communication plc (now Freedom4). He is also a director of OCIL. Mr Blackall has an MA in marketing and currently holds a number of directorships in public and private UK companies. Christina Kennedy - Independent Non Executive Director (aged 60) Christina Kennedy has a Masters Degree in Business Administration and is a Fellow of the Chartered Institute of Secretaries. Until a few years ago she worked on a consultancy basis at board level acting as Company Secretary in a variety of listed companies, including AIM, FTSE 250 and overseas companies with a secondary listing. She has more recently held roles as a non executive director. Christina's industry experience is wide ranging and includes manufacturing, leisure and service companies. She has worked in a consultancy capacity as corporate governance Adviser for a major UK pension fund and therefore has a good understanding of investors' governance requirements. Christina's experience has involved her working with boards on acquisitions; restructuring; board compositions and appointments; directors' service contracts and remuneration issues; long term incentive schemes; share options and risk management issues related to internal control requirements. Ian McKenzie - Non Executive Director (aged 58) Ian McKenzie has spent more than 40 years in the telecommunication and broadcast industry working in various international markets. He initially worked with British Telecom in a number of senior positions, leading divisions to successfully target business and consumer markets with voice, data, broadband and complex solution services, both in the UK and Europe. His final position was as chief operating officer in the Asia Pacific Region. He then joined Kingston Communications as chief operating officer, which he left in 2002. Ian then worked as an advisor and consultant for various private equity investors and took non executive chairman roles with a number of businesses, including Karneval Media and executive chairman of Invitel in Hungary both of which have been sold. He is currently non executive chairman of Daisy Communications Ltd, Ceské Radiokomunikace in the Czech Republic and Multicom Security AB in Sweden. He also works as a Senior Telecommunications Advisor to GMT Communications Partners LLP. Ian brings with him a wealth of experience from telecommunications, media and broadcast sectors targeting business, small-medium enterprises and consumer markets. Key employees after Admission Maria Cappella - Vialtus CEO (aged 42) With more than 22 years of IT and telecoms experience as a transformation manager, Maria has held senior positions in sales, marketing, merchandising, purchasing and product management for a number of public and private organisations. Part of the founding management team of the PC World superstore chain, Maria entered the Service Provider market in the mid 1990's assisting in the IPO of Internet Technology Group, and was instrumental in its sale to XO Communications in 2000. Appointed Vialtus CEO in April 2008, Maria has a strong strategy and leadership style based upon her extensive knowledge of the market and its drivers. Riki Kinnaird - Vialtus CFO (aged 38) Riki Kinnaird holds a Bachelor of Commerce Degree and a Post Graduate Diploma in marketing and management from the University of Otago, New Zealand. Riki was appointed CFO of Vialtus in August 2008 having previously held the role of Head of Strategic Planning at British Telecom Openreach. Riki has held senior financial and commercial positions at a number of international telecommunications companies including COLT and Equant/Orange Business Services and has also provided consultancy services to Vodafone plc. Over his career Riki has established a strong reputation for cost and profit transformation. Anthony Riley - Daisy CFO (aged 41) Anthony Riley is CFO of Daisy. Anthony studied at the University of Sheffield, gaining a first class honours degree in Economics. Following graduation he joined Deloitte in the audit and assurance department, where he spent three years undertaking his Association of Chartered Accountants qualification and a futher two years in supervisory and management roles. He has over 13 years experience of senior financial roles within industry. Anthony joined JJB Sports plc in 1995 and was promoted to Associate Finance Director in 1999. He played a key role for JJB in the integration of the Sports Division business following its acquisition in 1998. Anthony joined Homeserve Claims Management Limited as Finance Director in 2002. He helped guide the company through a six year period of significant continued growth. Anthony was appointed CFO of Daisy in August 2008. 12. Financial Information for Freedom4 Group plc The annual reports, including audited consolidated accounts (including their respective audit reports), of Freedom4 for the financial years ending 31 December 2006, 31 December 2007 and 31 December 2008 are incorporated in this document by reference. These accounts are available online at www.freedom4group.com. 13. Current trading of Vialtus and Daisy and prospects of the Enlarged Group. Vialtus unaudited revenue and EBITDA for the quarter ending 31 March 2009 were GBP9.3 million and GBP1.4 million respectively. Daisy unaudited revenue for the quarter ending 31 March 2009 was GBP13.6 million. Unaudited EBITDA for the same period was GBP2.0 million which includes one off director bonuses and payments of GBP0.9million. Both businesses are currently trading ahead of the quarter ending 31 March 2009 run rate at unaudited EBITDA level. The Directors are confident that there will be considerable opportunities for the Enlarged Group to increase revenues across its core business streams in particular from cross selling from the Enlarged Group's expanded suite of services. It is also expected that the Enlarged Group will considerably improve its group financial performance in the current financial year from identified cost savings. These savings are expected partly from reduction in duplicated functions and partly from efficiencies created by the Acquisitions. The increased financial strength and scale resulting from the Acquisitions and Placing will position the Enlarged Group as an entity that can lead the consolidation opportunities that exist within the markets in which it operates. Indeed, the Directors have already identified a number of potential complementary acquisitions and will seek to bring some of these to fruition during the course of this year. 14. Current market of the Enlarged Group The UK business telecommunications market has grown consistently since 2002, with a gradual decline in voice revenues being more than offset by the growth in mobile and corporate data revenues. According to Ofcom, total UK revenues from business telecoms were GBP13.2 billion in 2007, compared with GBP11.3 billion in 2002. In 2007 the combined business voice and data market segments accounted for GBP6.5 billion of UK business telecoms revenues. Given the current concentration of UK mobile revenues among the five major mobile network operators, the Existing Directors believe that the fixed voice and corporate data segments represent the Enlarged Group's addressable market. British Telecom remains the UK's largest business telecommunications company with a 61 per cent. share of the network access and call revenues market, followed by Virgin Media, the second largest operator, with 4 per cent. (Ofcom 2008). Other operators account for the remaining 35 per cent. of the market, with aggregate revenues of GBP1.2 billion in 2007. The Existing Directors believe that this category provides a useful indication of the size of the potential market consolidation opportunity for the Enlarged Group following Admission. The UK SME and mid-market telecommunications market is fragmented and includes many smaller operators which are typically privately owned. Freedom4 estimates that there are more than 25 licensed operators in the UK with revenues of between GBP10 million and GBP100 million focusing on the business telecommunications market. The Existing Directors also believe these smaller operators have typically focused on a more limited product proposition than the Enlarged Group's proposed offering. As a result, customers of acquired businesses could, in many cases, not have been offered a fully converged access, hosting, voice, managed services and mobile product offering on one bill and from a single customer service platform. 15. Strategy of the Enlarged Group The strategy of the Enlarged Group is to create, through a combination of further acquisitions and organic growth, one of the largest UK providers to the SME and mid-market of telecommunications services and solutions. The Enlarged Group intends to provide its customers with a product set including access, hosting, voice, managed services and mobile. The Enlarged Group intends to provide a comprehensive portfolio of products from a single operating platform and on a single bill. The Directors believe that, with the exception of British Telecom, few, if any, other independent UK business telecommunications operators currently provide such a comprehensive offering to SME and mid-market customers. In addition, the Enlarged Group will seek to cross-sell new products to existing customers and to create a "one-stop-shop" for converged communications solutions. The Directors believe that such an offering will also help to reduce customer churn. The Enlarged Group will pursue two strategies in order to seek to achieve growth. Firstly, the Directors will seek to increase organic growth through a combination of improved customer management to reduce churn; a focus on cross-selling and up-selling to existing customers to encourage them to take more products; and through a focus on direct and indirect sales channels. Secondly, the Enlarged Group will seek to grow through targeted acquisitions, designed to increase customer scale and expand the product portfolio. The Directors believe that the Enlarged Group will benefit from acquisitions in two ways: through cost efficiencies and through opportunities to cross-sell and up-sell to new and existing customers. The Directors believe that several independent quoted and unquoted telecommunications operators could be potential acquisition targets and, given current economic conditions, such acquisitions may be achievable at competitive prices. The Directors are undertaking discussions which may lead to further acquisitions soon after Admission. The Directors expect that these acquisitions will be funded through the assumption of debt by the Enlarged Group and/or through the issue of further new Consolidated Ordinary Shares (both to raise cash and as consideration). The Directors believe the size of the Enlarged Group could enable it to negotiate improved supplier pricing and terms, the most important of which would be network products including lines, call minutes and data circuits. In the medium term the Enlarged Group will seek to create further growth opportunities through the migration of customers onto Next Generation IP products including hosted applications such as Voice over IP. The increased scale of the combined revenue and customer bases of the Enlarged Group will, the Directors believe, provide a stronger platform to take advantage of the take-up of these Next Generation IP products and services. 16. Lock-in arrangements Matthew Riley, Peter Dubens and the Vialtus Vendor have undertaken to the Company and Liberum, subject to certain exceptions (including the ability to accept a takeover offer for the Company and to give an irrevocable undertaking to accept a takeover offer for the Company), not to dispose of or transfer any Consolidated Ordinary Shares in which they are interested at Admission until one month following publication of the Company's audited accounts for the period ended 31 March 2010. The aggregate number of Consolidated Ordinary Shares subject to such lock-in arrangements is 100,385,276 representing approximately 39.0 per cent. of the Enlarged Share Capital. 17. Dividend policy The Directors intend to retain earnings in the short term to fund the development and growth of the Enlarged Group's business. The Directors will consider whether to pay a dividend at an appropriate time. 18. Corporate governance The Directors recognise the value of the Combined Code. Following Admission, the Enlarged Group will continue to endeavour to comply with the Combined Code, as appropriate for a company of its size and resources. The Company has an audit committee and a remuneration committee with formally delegated duties and responsibilities. Following Admission, the audit committee will be chaired by Laurence Blackall and its other members will be Ian McKenzie and Christina Kennedy. The audit committee receives and reviews reports from management and the Company's auditors relating to the annual and interim accounts and the accounting and internal control systems in use by the Company and its subsidiaries. Following Admission, the remuneration committee will be chaired by Christina Kennedy and its other members will be Laurence Blackall and Ian McKenzie. The remuneration committee reviews the scale and structure of the Directors' and senior managers' remuneration and the terms of their service contracts (including the grant of options to such persons under the Share Option Scheme). The remuneration and terms and conditions of appointment for the non executive Directors will be a matter for the New Board. The Company will take all reasonable steps to ensure compliance by the Directors and employees with the provisions of the AIM Rules relating to dealings in securities of the Company and the Company has adopted a share dealing code for this purpose. The New Board will comply with Rule 19 of the AIM Rules relating to directors' dealings and will take all reasonable steps to ensure compliance by the Enlarged Group's "applicable employees" (as defined in the AIM Rules). 19. Share Options and Warrants The Directors recognise the importance of ensuring that employees of the Enlarged Group are well motivated and identify closely with the future success of the Enlarged Group. The Company has an existing share option scheme, being the Share Option Scheme, details of which are set out in paragraph 13 of Part VIII of this document. Following Admission, the Company intends to introduce new share based incentive arrangements for management and employees. The nature and structure of such arrangements have yet to be determined and the Company is currently taking advice on such matters. As at the date of grant of any options or warrants, the total number of Ordinary Shares which have been or may be issued under arrangements for the grant of warrants, the Share Option Scheme and any new share based incentive arrangements pursuant to options and warrants granted in the ten year period ending on the relevant date of grant may not exceed 15 per cent. of the issued ordinary share capital of the Company at that date. Certain of the Existing Directors and others hold Existing Warrants to subscribe for Unconsolidated Ordinary Shares of the Company. Details of the Existing Warrants are set out in paragraph 19.1 of Part VIII of this document. The Board has agreed with the Existing Directors who hold Existing Warrants that, subject to Completion occurring, the Existing Warrants held by the Existing Directors shall be cancelled and that the Existing Directors concerned shall be granted New Warrants in respect of an aggregate 2,000,000 Consolidated Ordinary Shares. In addition, the Board has agreed with Matthew Riley and with Ian McKenzie that, subject to Completion occurring, they shall be granted New Warrants in respect of 2,500,000 and 112,500 Consolidated Ordinary Shares respectively. Details of the New Warrants are set out in paragraph 19.1 of Part VIII of this document. Resolution 5 includes authority for the Directors to allot shares pursuant to the New Warrants and Resolution 6 includes a waiver of statutory pre-emption rights in connection with the issue of the New Warrants. Upon Completion occurring, the outstanding options held by certain of the Existing Directors will be cancelled and will not at that time be replaced. The New Warrants are designed as an incentivisation related to the future performance of the Company's share price. The Existing Warrants were granted at an early stage in the process of establishing Freedom4 as a leading provider of broadband and web hosting services. This process culminated in the sale by Freedom4 of its subsidiaries carrying on a broadband and voice business to Tiscali UK Limited in 2007 and the sale of the Host Europe Group to Oakley L.P. in 2008. The remuneration committee of the Company considers that, in the light of the proposed Acquisitions and the Company's strategy to become one of the largest UK providers of telecommunications services and solutions to the SME and midmarket, it is appropriate for the Existing Warrants and options for certain Directors to be cancelled and for the New Warrants to be issued at a time and on terms which reflect the beginning of a new strategic direction for the Company and the addition of new management to the Board. Options have been granted under the Share Option Scheme in respect of 40,587,666 Unconsolidated Ordinary Shares. Following Admission and the cancellation of the options held by the Existing Directors, options will remain outstanding under the Share Option Scheme in respect of 10,500 Consolidated Ordinary Shares. Existing Warrants have been granted under the Existing Warrant Instruments in respect of 66,580,000 Unconsolidated Ordinary Shares. Following Admission and the cancelation of the Existing Warrants held by the Existing Directors and the grant of the New Warrants, Existing Warrants and New Warrants will remain outstanding under respectively certain of the Existing Warrant Instruments and the New Warrant Instruments in respect of 4,906,500 Consolidated Ordinary Shares. 20. General Meeting Set out at the end of this document is a notice convening the General Meeting of the Company to be held at the offices of SJ Berwin LLP, 10 Queen Steet Place, London, EC4R 1BE at 10.00 a.m. on 20 July 2009 at which the following resolutions will be proposed as ordinary or special resolutions (as the case may be): 1. to approve the Share Consolidation (ordinary resolution); 2. to increase the authorised share capital of the Company (ordinary resolution); 3. to approve the Daisy Acquisition (ordinary resolution); 4. to approve the Vialtus Acquisition (ordinary resolution); 5. to authorise the Directors generally to allot shares (including for the purposes of the Placing, the Acquisitions and the issue of the New Warrants) (ordinary resolution); 6. to waive statutory pre-emption rights in connection with the allotment of Consolidated Ordinary Shares pursuant to the above authority (special resolution); and 7. to change the name of the Company to Daisy Group plc (special resolution) The attention of Shareholders is also drawn to the section entitled "Irrevocable Undertakings" below and to the recommendations and voting intentions of the Existing Directors as set out in the section entitled "Action to be taken" below. 21. Irrevocable Undertakings Irrevocable undertakings to vote in favour of the Resolutions to approve and implement the Proposals have been received from the Existing Directors (other than Peter Dubens) and their connected persons in respect of their entire aggregate holding of 167,100 Unconsolidated Ordinary Shares (representing approximately 0.02 per cent. of the Existing Ordinary Shares). An irrevocable undertaking to vote in favour of the Resolutions (other than the resolution numbered 4 to approve the Vialtus Acquisition in respect of which Peter Dubens has agreed not to vote) has also been received from Peter Dubens in respect of his entire holding of 58,333,334 Unconsolidated Ordinary Shares (representing approximately 5.64 per cent. of the Existing Ordinary Shares). Irrevocable undertakings to vote in favour of the Resolutions to approve and implement the Proposals have also been received from certain other Shareholders in respect of 272,194,968 Unconsolidated Ordinary Shares (representing approximately 26.30 per cent. of the Existing Ordinary Shares). In addition, non-binding letters of intent to vote in favour of the Resolutions to approve and implement the Proposals have been received from certain other Shareholders in respect of 162,634,005 Unconsolidated Ordinary Shares (representing approximately 15.70 per cent. of the Existing Ordinary Shares). Accordingly, irrevocable undertakings to vote in favour of the Resolutions (other than the Resolution numbered 4 to approve the Vialtus Acquisition) to approve and implement the Proposals have been received in respect of a total of 330,695,402 Unconsolidated Ordinary Shares (representing approximately 31.96 per cent. of the Existing Ordinary Shares). Irrevocable undertakings and non-binding letters of intent to vote in favour of the Resolutions (other than Resolution 4 to approve the Vialtus Acquisition) to approve and implement the Proposals have been received in respect of a total of 493,329,407 Unconsolidated Ordinary Shares (representing approximately 47.67 per cent. of the Existing Ordinary Shares). Irrevocable undertakings to vote in favour of the Resolution numbered 4 to approve the Vialtus Acquisition have been received in respect of a total of 272,362,068 Unconsolidated Ordinary Shares (representing approximately 26.32 per cent. of the Existing Ordinary Shares). Irrevocable undertakings and non-binding letters of intent to vote in favour of Resolution 4 to approve the Vialtus Acquisition have been received in respect of a total of 434,996,073 Unconsolidated Ordinary Shares (representing approximately 42.03 per cent. of the Existing Ordinary Shares). 22. Taxation If you are in any doubt as to your tax position, or are subject to tax in a jurisdiction other than the United Kingdom, you should contact your professional adviser immediately. 23. Treasury shares On 30 June 2009 the Company cancelled 41,138,559 ordinary shares held in treasury therefore the Company's total issued share capital at today's date is 1,034,867,898 ordinary shares of 0.1 pence each and holds no ordinary shares in treasury. 24. Recommendation and voting intentions Given the extent of his interests in the Vialtus Acquisition, Peter Dubens, the Non Executive Chairman of the Company, has not participated in the Board's deliberations with regard to the Vialtus Acquisition. The Existing Directors consider that the Daisy Acquisition, the Placing and the Share Consolidation are in the best interests of the Company and Shareholders as a whole. The Independent Directors consider that the Vialtus Acquisition is in the best interests of the Company and Shareholders as a whole. Accordingly, the Independent Directors unanimously recommend that Shareholders vote in favour of the Resolution numbered 4 to approve the Vialtus Acquisition to be proposed at the General Meeting, as they have irrevocably undertaken to do in respect of their own shareholdings, which in aggregate amount to 0.02 per cent. of the Existing Ordinary Shares. The Existing Directors unanimously recommend that Shareholders vote in favour of the Resolutions (other than the Resolution numbered 4 to approve the Vialtus Acquisition) to be proposed at the General Meeting, as they have irrevocably undertaken to do in respect of their own shareholdings, which in aggregate amount to 5.56 per cent. of the Existing Ordinary Shares. This information is provided by RNS The company news service from the London Stock Exchange END ACQURRURKSRNOUR
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