Hydro International PLC Publication and Posting of the Scheme Document (2417E)

TIDMHYD

RNS Number : 2417E

Hydro International PLC

14 July 2016

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

Recommended Acquisition

of

Hydro International plc ("Hydro")

by

Ely Acquisition Limited ("Hanover Bidco")

(an investment vehicle ultimately owned by Hanover Active Equity Fund LP)

to be effected by means of a

Scheme of Arrangement under Part 26 of the Companies Act 2006

PUBLICATION AND POSTING OF THE SCHEME DOCUMENT

On 17 June 2016, the Board and the Hanover Bidco Directors announced that they had reached agreement on the terms of a recommended acquisition by Hanover Bidco of the entire issued and to be issued share capital of Hydro not already owned by Hanover Bidco or the Hanover Bidco Group.

The Acquisition will, if approved at the relevant meetings and subject to the satisfaction or waiver of the other Conditions set out in the Scheme Document, be effected by means of a court-sanctioned scheme of arrangement between Hydro and Scheme Shareholders under Part 26 of the Companies Act 2006. In compliance with section 897 of the Companies Act, full details of the Scheme are set out in the Explanatory Statement in Part 2 of the Scheme Document.

Under the Scheme, Scheme Shareholders will be entitled to receive for each Scheme Share 194 pence in cash.

As an alternative to receiving some or all of the Cash Consideration, Scheme Shareholders (other than Restricted Scheme Shareholders) will, subject to certain conditions and terms, be able to elect to receive Loan Notes on the basis of GBP1 of nominal value of Loan Notes for each GBP1 of Cash Consideration.

Accordingly, Hydro announces that it is today posting to Scheme Shareholders a scheme document (the "Scheme Document") in relation to the Acquisition, setting out, amongst other things, the full terms and conditions of the Scheme, an explanatory statement pursuant to section 897 of the Companies Act 2006, an expected timetable of principal events, notices of the Court Meeting and General Meeting and details of the actions to be taken by Hydro Shareholders, together with the Forms of Proxy for the Court Meeting, the General Meeting and a Loan Note Form of Election. Hydro is today also posting the Scheme Document to participants in the Hydro Share Schemes together with details of the proposals being made to such participants.

As further detailed in the Scheme Document, to become Effective the Scheme requires, amongst other things, that the required majority of Scheme Shareholders vote in favour of the Scheme at the Court Meeting and that the required majority of Hydro Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

Notices convening the Court Meeting and the General Meeting to be held at the offices of Bond Dickinson LLP, 4 More London Riverside, London, SE1 2AU are set out in the Scheme Document. The Court Meeting will be held at 11.00 a.m. on 8 August 2016 and the General Meeting will be held at 11.15 a.m. on the same date (or, if later, as soon thereafter as the Court Meeting has been concluded or adjourned). Forms of Proxy for use at such meetings are enclosed with the Scheme Document.

Upon the Scheme becoming Effective, it will be binding on all Scheme Shareholders irrespective of whether or not they attended or voted at the Court Meeting or the General Meeting (and if they attended, and voted, whether or not they voted in favour). An application will be made for cancellation of the admission to trading of the Hydro Shares on AIM. It is expected that such cancellation will take place on the day following the Effective Date. Further details of the expected timetable of principal events are set out below and in the Scheme Document.

It is important that, for the Court Meeting, as many votes as possible are cast so that the Court may be satisfied that there is a fair and reasonable representation of the Scheme Shareholders' opinion. Scheme Shareholders are therefore strongly urged to submit their Forms of Proxy (or the electronic equivalent) (once received) as soon as possible in accordance with the instructions for so doing.

Capitalised terms in this announcement (the "Announcement") shall, unless otherwise defined, have the same meanings as set out in the Scheme Document. Copies of this Announcement and the Scheme Document will be available (subject to certain restrictions relating to persons in Restricted Jurisdictions) on Hydro's website at http://plc.hydro-intl.com and Hanover Bidco's website at www.hanoverinvestors.com up to and including the Effective Date. The contents of Hydro's website are not incorporated into, and do not form part of, this Announcement.

Timetable

The expected timetable of principal events for the implementation of the Scheme is set out below. If any of the key dates set out in the expected timetable changes, an announcement will be made through a Regulatory Information Service.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

All times shown in this document are London times, unless otherwise stated.

 
 Event                                        Time and/or date 
 Latest time for lodging Forms 
  of Proxy for the: 
 Court Meeting (blue form)              11.00 a.m. on 6 August 
                                                          2016 
 General Meeting (white form)           11.15 a.m. on 6 August 
                                                          2016 
 Voting Record Time for the              8.00 p.m. on 6 August 
  Court Meeting and the General                           2016 
  Meeting 
 Court Meeting                          11.00 a.m. on 8 August 
                                                          2016 
 General Meeting                        11.15 a.m. on 8 August 
                                                          2016 
 The following dates are indicative 
  only and are subject to change 
 Last day of dealings in, and                   10 August 2016 
  for registration of transfers 
  of, and disablement in CREST 
  of, Hydro Shares 
 Latest time for lodging of            11.00 a.m. on 10 August 
  green Forms of Election and                             2016 
  TTE Instructions in respect 
  of the Loan Note Alternative 
 Dealings in Hydro Shares suspended     7.30 a.m. on 11 August 
                                                          2016 
 Court Hearing to sanction                      11 August 2016 
  the Scheme 
 Scheme Record Time                     6.00 p.m. on 12 August 
                                                          2016 
 Expected Effective Date of                     15 August 2016 
  the Scheme 
 Cancellation of admission              7.00 a.m. on 16 August 
  to trading of Hydro Shares                              2016 
  on AIM 
 Latest date for despatch of                 Within 14 days of 
  cheques or settlement through             the Effective Date 
  CREST in respect of the Cash 
  Consideration and despatch 
  of Loan Notes certificates 
  (if applicable). 
 Longstop Date                        17 October 2016 or 
                                       such later date (if 
                                       any) as Hydro and 
                                       Hanover Bidco may 
                                       agree and (if required) 
                                       the Panel and the 
                                       Court may allow 
 

The Court Meeting and the General Meeting will both be held at the offices of Bond Dickinson LLP, 4 More London Riverside, London, SE1 2AU.

Enquiries:

Hanover Investors Management LLP

 
 Matthew Peacock      Tel: [phone] 
 Thomas Russell 
 Fredrick Lundqvist 
 

Panmure Gordon (UK) Limited (Financial adviser to Hanover Bidco)

 
 Dominic Morley            Tel: [phone] 
 Charles Leigh-Pemberton 
 

Hydro International plc

 
 Michael Jennings, Chief        Tel: [phone] 
  Executive 
 Tony Hollox, Chief Financial 
  Officer 
 

Arden Partners plc (Financial adviser to Hydro)

 
 Steven Douglas      Tel: [phone] 
 Patrick Caulfield 
 

Further information

This Announcement is not intended to and does not constitute, or form part of, any offer to sell or subscribe for or an invitation to purchase or subscribe for any securities or the solicitation of any vote or approval in any jurisdiction pursuant to the Acquisition or otherwise, nor shall there be any sale, issuance or transfer of securities of Hydro in any jurisdiction in contravention of applicable law.

Any vote in respect of the Acquisition should only be made on the basis of the information contained in the Scheme Document, which will contain the full terms and conditions of the Acquisition and the Scheme (including details of how to vote). Hydro Shareholders are advised to read the formal documentation in relation to the Acquisition carefully once it has been dispatched.

Please be aware that addresses, electronic addresses and certain other information provided by Hydro Shareholders, persons with information rights and other relevant persons in connection with the receipt of communications from Hydro may be provided to Hanover Bidco during the offer period as required under Section 4 of Appendix 4 of the Code.

Panmure Gordon, which is authorised and regulated by the FCA in the United Kingdom, is acting for Hanover Bidco and no-one else in connection with the Acquisition and will not be responsible to anyone other than Hanover Bidco for providing the protections afforded to clients of Panmure Gordon nor for providing advice in relation to the Acquisition.

Arden Partners, which is authorised and regulated by the FCA in the United Kingdom, is acting for Hydro and no-one else in connection with the Acquisition and will not be responsible to anyone other than Hydro for providing the protections afforded to clients of Arden Partners nor for providing advice in relation to the Acquisition.

Overseas jurisdictions

The availability of the Loan Notes in, and the release, publication or distribution of this Announcement in or into, jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this Announcement comes who are not resident in the United Kingdom should inform themselves about, and observe, any applicable restrictions. Hydro Shareholders who are in any doubt regarding such matters should consult an appropriate independent adviser in the relevant jurisdiction without delay. Any failure to comply with such restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Acquisition disclaim any responsibility or liability for the violation of such restrictions by any person.

This Announcement has been prepared for the purposes of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Notes to US investors in Hydro

This Announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia). This Announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States.

Shareholders of Hydro in the United States should note that the Acquisition relates to the shares of an English company and is proposed to be made by means of a scheme of arrangement provided for under, and governed by, English law. Neither the proxy solicitation nor the tender offer rules under the US Securities Exchange Act of 1934, as amended, will apply to the Scheme. US shareholders of Hydro will only receive Cash Consideration in connection with the Acquisition and may not elect to receive any Loan Notes.

The Scheme will be subject to the disclosure requirements and practices applicable in the UK to schemes of arrangement, which differ from the disclosure requirements of the US proxy solicitation rules and tender offer rules. Financial information included in this Announcement and the Scheme Document has been or will be prepared in accordance with, where relevant, International Financial Reporting Standards as adopted by the European Union and accounting standards applicable in the UK and may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the United States.

Hydro and Hanover Bidco are each organised under the laws of England. All of the officers and directors of Hydro and Hanover Bidco are residents of countries other than the United States. It may not be possible to sue Hydro or Hanover Bidco in a non-US court for violations of US securities laws. Furthermore, it may be difficult to compel Hydro, Hanover Bidco and their respective affiliates to subject themselves to the jurisdiction and judgment of a US court.

Notes regarding Loan Notes

The Loan Notes to be issued pursuant to the Scheme have not been and will not be registered under the US Securities Act of 1933, as amended, or under the relevant securities laws of any state or territory or other jurisdiction of the United States or the relevant securities laws of Japan and the relevant clearances have not been, and will not be, obtained from the securities commission of any province of Canada. No prospectus in relation to the Loan Notes has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission. Accordingly, the Loan Notes are not being, and may not be, offered, sold, resold, delivered or distributed, directly or indirectly in or into the United States, Canada, Australia or Japan or any other jurisdiction if to do so would constitute a violation of relevant laws of, or require registration thereof in, such jurisdiction (except pursuant to an exemption, if available, from any applicable registration requirements or otherwise in compliance with all applicable laws).

Disclosure requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1 per cent. or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th Business Day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th Business Day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 per cent. or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the Business Day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on [phone] if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Forward-looking statements

This Announcement contains certain forward-looking statements, including statements regarding Hanover Bidco's and Hydro's plans, objectives and expected performance. Such statements relate to events and depend on circumstances that will occur in the future and are subject to risks, uncertainties and assumptions. There are a number of factors which could cause actual results and developments to differ materially from those expressed or implied by such forward looking statements, including, among others the enactment of legislation or regulation that may impose costs or restrict activities; the re-negotiation of contracts or licences; fluctuations in demand and pricing in the water services industry; fluctuations in exchange controls; changes in government policy and taxations; industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this Announcement.

Publication of this Announcement

A copy of this Announcement will be available subject to certain restrictions relating to persons resident in Restricted Jurisdictions on www.hanoverinvestors.com and www.hydro-int.com.

The contents of Hydro's website and the Hanover Investors website are not incorporated into and do not form part of this Announcement.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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July 14, 2016 09:56 ET (13:56 GMT)